2/3/2011

new uelhl/lndla 1
8ole of AarlculLure ln lndlan 8eLall
u v 8am kumar
vlce resldenL - lood & Consumer uurables
Spencers 8eLall LlmlLed
8C Croup
G|oba| G.A. tour - New De|h| 2
nd
March 2011
CrowLh Cf lndlan 8eLall .
Indian Retail expected to grow by over 9% p.a. in the next 10 years
*Projected
Source: Technopak Analysis, CSO & Other Sources
www.globalgap.com
Source
2/3/2011
new uelhl/lndla 2
8apld 1ransformauon AnuclpaLed
25% share
Source: Technopak Analysis
And may reach a share of 25% by 2017.. indicate strong general trade also
16%
share
3.5% share
SLrona fundamenLals for boLh urban & rural Consumpuon
GD
U5$ 935 b||||on
r|vate Consumpnon
US$ 580 8||||on
(62)
ub||c 5pend|ng and Cap|ta|
Iormanon
US$ 355 8||||on (38)
keta||
U5$ 342 8||||on
(59)
Non keta||
U5$ 238 8||||on
(41)
Urban (5,100 towns)
U5$ 154 8||||on
(45)
kura| (6,27,000 v|||ages)
U5$ 188 8||||on
(55)
Modern retail US$ 12 billion
8% of urban retail spends
Modern retail
Negligible
Food
Apparel
Beverages
Footwear
Consumer
durables
Appliances
Stationery
Kitchen utensils
Furniture
Furnishings
Sports goods
Health & Beauty
Personal Care
Jewellery
Timing
Transport
Communication
Recreation
Cultural
Services
Education
Rent
Utilities
Other Services
Source: Central Statistical Organization (CS0) and Technopak Analysis
Conversion rate: 1 US$ = 40.86 Rs.
2/3/2011
new uelhl/lndla 3
AbouL uS$ S30 8llllon 8eLall MarkeL 8v 2012
GD*
U5$ 1,450 b||||on
r|vate Consumpnon
U5$ 870 8||||on
(60)
ub||c 5pend|ng and Cap|ta|
Iormanon
U5$ 580 8||||on (40)
keta||
U5$ 530 8||||on
(61)
Non keta||
U5$ 340 8||||on
(39)
Urban
U5$ 252 8||||on
(47.5)
kura|
U5$ 278 8||||on
(52.5)
Modern retail US$ 78 billion
31% of urban retail spends
Modern retail US$ 9 billion
3% of rural retail spends
Source: Technopak Analysis
*All figures are in nominal terms after taking into account inflation
AbouL uS$ 800 8llllon 8eLall MarkeL 8v 2017
GD*
U5$ 2,175 b||||on
r|vate Consumpnon
U5$ 1,305 8||||on
(58)
ub||c 5pend|ng and Cap|ta|
Iormanon
U5$ 646 8||||on (42)
keta||
U5$ 800 8||||on
(61)
Non keta||
U5$ 505 8||||on
(39)
Urban
U5$ 400 8||||on
(50)
kura|
U5$ 400 8||||on
(50)
Modern retail US$ 165 billion
41% of urban retail spends
Modern retail US$ 35 billion
9% of rural retail spends
Source: Technopak Analysis
*All figures are in nominal terms after taking into account inflation
2/3/2011
new uelhl/lndla 4
lndla - Craanlsed &unoraanlsed 8eLall
2007 2010 (Lsnmate) 2012 (Lsnmate)
1oLal 8eLall MarkeL
Slze
342 408 S30
Craanlsed 8eLall
Slze
12 (4) 26 (6) 87 (16)
unoraanlsed 8eLall
Slze
330 (96) 382 (94) 443 (86)
llas ln uSu 8n.
Whlle oraanlsed reLall share ls expecLed Lo quadraple from 4 (ln 2007) Lo 16 (ln
2012), ln absoluLe Lerms Lhe unoraanlsed reLall markeL would have arown 34 ln Lhe
same perlod . lL conunues Lo be a bla sllce
Lvolvlna 8eLall cusLomer
2/3/2011
new uelhl/lndla S
1 8llllon+ opulauon ln 1he World's ?ounaesL CounLrv
AL 24 vears, lndla has Lhe lowesL medlan aae of populauon ln Lhe world
S0 of lndla's populauon ls less Lhan 2S vears & 70 ls less Lhan 3S vears
Median Age of Population (in years)
* Source: Central Statistical Organization, Population
Division, United Nations
Proportion of Young Population
(< 25 years)**
India 53%
China 42%
Indonesia 30%
USA 30%
Brazil 29%
Japan 27%
Germany 26%
Modern 8eLall ln lndla : Share Cf CaLeaorles
Lo alve an ldea of how new caLeaorles are evolvlna.
Source: Technopak Analysis
2/3/2011
new uelhl/lndla 6
SLC Aae
CusLomer aroup composluon
Average No. of people in the family:4.1
Cccupauon of Maln Larner of Pousehold
customers at all India level:
one third in the age band of 25-34 years,
nearly half of customer groups have presence of female,
two third are from SEC A and 64% of households have main earner working as Businessman/executive
customers in retail are young & upwardly mobile
Uk8AN kL1AIL 5nCLk - CCkL kCIILL
oung.
We|| |nformed.
n|gh d|sposab|e |ncome.
nas |ess nme to shop.
5hops ma|n|y w|th spouse & k|ds.
5hopp|ng |s enterta|nment
Cpen to exper|ment.
2/3/2011
new uelhl/lndla 7
Uk8AN kL1AIL 5nCLk - NLLD & A5IkA1ICN
Var|enes & Cpnons.
Cua||ty & Ireshness nea|th
Var|enes & Cpnons.
Lduta|nment
rompt serv|ce Acnvanon Lxper|ence
Uk8AN kL1AIL 5nCLk - IU1UkI51IC 1kLND5
k1L & k1C Ch|||ed & Irozen 5afe food
nome Mea| kep|acement 5pec|a|ty r|vate |abe|
2/3/2011
new uelhl/lndla 8
Uk8AN kL1AIL 5nCLk - VALUL CCNCICU5
Var|enes & Cpnons.
Va|ue for Money D|scounts Conven|ence
Communicating pricing aggressively is important to build right pricing perception
Strong Value messaging in stores
Key Strategies & Execution Build Value Equation
2/3/2011
new uelhl/lndla 9
kL1AIL - CnALLLNGL5
5ma|| Vo|ume Urban concentranon nuge 5kU s|ze
ower cost n|gh rea| estate pr|ce No econom|es of sca|e
8eLall - An lmporLanL sLakeholder
ln Aarl value chaln
2/3/2011
new uelhl/lndla 10
lood as a caLeaorv ls complex , challenalna
and excluna !
LeL us look aL Lhe kev dvnamlcs
ke|anve bus|ness matr|x
1he four food caLeaorles.
0
0,S
1
1,S
2
2,S
3
Worklna
CaplLal
8equlremenL
oLenual for
1opllne
CrowLh
oLenual for
Cross
Maralns
oLenual for
lnnovauon
lmporLance
of 8ackward
lnLearauon
ulerenuauo
n
Iru|ts & Vegetab|es
l&v
0
0,S
1
1,S
2
2,S
3
Worklna
CaplLal
8equlremenL
oLenual for
1opllne
CrowLh
oLenual for
Cross Maralns
oLenual for
lnnovauon
lmporLance of
8ackward
lnLearauon for
ulerenuauon
Non veg foods
l&M 0
0,S
1
1,S
2
2,S
3
Worklna
CaplLal
8equlremenL
oLenual for
1opllne
CrowLh
oLenual for
Cross Maralns
oLenual for
lnnovauon
lmporLance of
8ackward
lnLearauon for
ulerenuauon
Da|ry , 8akery & frozen foods
8lS
0
0,S
1
1,S
2
2,S
3
Worklna
CaplLal
8equlremenL
oLenual for
1opllne
CrowLh
oLenual for
Cross Maralns
oLenual for
lnnovauon
lmporLance of
8ackward
lnLearauon for
ulerenuauon
5tap|e foods
SLaples
2/3/2011
new uelhl/lndla 11
kL1AIL - 5LLD 8kLAkLk5
oor hand||ng oor nau|age oor storage
Inemc|ent va|ue cha|n oor |nfrastructure Ma|pracnces
CA1LGCk 5UL CnAIN
Conso||danon Centre
D|str|bunon Centre
5tores
Conso||danon Centre
5tores
IAkM &
5CUkCL
MAkkL1
NA1ICNAL
5CUkCING
MAkkL1
CConso C e
Mode| - I
(nub & 5poke Mode|)
Mode| - I I
(D5 Mode|)
2/3/2011
new uelhl/lndla 12
FRESH VALUE CHAIN
Farms
Collection
Points
Whole Sale
Market
Semi Whole
Sale Market
Retail
Market
Customers
D
a
y

-

2

D
a
y

-

1

D
a
y

0

5 7 KMs
150 200 KMs
10 - 15 KMs
5 7 KMs
< 1 KMs
V
E
G
E
T
A
B
L
E
S

F
L
O
W

FRESH VALUE CHAIN
F
R
U
I
T
S

F
L
O
W

Local Seasonal Imported
Farms/Orchids Farms/Orchids Overseas
Collection Point Collection Point Importer
Whole sale
Market
Cold Storage
Whole sale
Market
Semi Wholesale
Market
Retail Market
Customer
Day-7
Day-5
Day-3
Day-2
Day-0
10-15 kMs
80-100 kMs
10-15 kMs
5-7 kMs
< 1 kMs
10-15 kMs
1000+ kMs
10-15 kMs
Day -15
Day-5
Day-3
Day-35
Day-5
Day-3
10000+ kMs
1000+ kMs
10-15 kMs
2/3/2011
new uelhl/lndla 13
8aw perlshable caLeaorles - dlerenuaLed experlence
Craanlsed reLall enabllna non vea caLeaorv movlna up Lhe value chaln
2/3/2011
new uelhl/lndla 14
Seasonality / Geographical / Varietal Spread
Market Intelligence / Dynamic Pricing
Right pricing
FRESHNESS
Supply Chain efficiency
Price Management
Centralized sourcing
Wastage
Price Risk
Procurement
Risk
E
x
t
e
n
d
e
d

S
h
e
l
f

l
i
f
e

Better farm reach, transportation & quality management will govern the fresh produce supply chain
Key competency development
FRESH CATEGORY ARCHITECTURE -
Wav forward
redlcLable supplv of produce
8eLall lndusLrv musL paruclpaLe ln creauna a
demand - supplv chaln
1echnoloav usaae
1ralnlna aL source Lo mlnlmlse wasLaae
lreelna fresh produce from AMC reaulauon
Move up Lhe value chaln Lhru value addluons
2/3/2011
new uelhl/lndla 1S
1hanks for vour auenuon