arvind singhal

Information about arvind singhal

Published on February 4, 2008

Author: Candelora

Source: authorstream.com

Content

Organized Retailing :  Organized Retailing Challenges & Opportunities ! Arvind Singhal Chairman – KSA Technopak TIEcon 2003 New Delhi 18th December 2003 Structure of the presentation:  Structure of the presentation Changing India & Change Drivers Opportunities in Retail (in India) Emerging Trends : Retailing Winnable Practices: Retailer - Consumer Interface Retail Operations Retailer – Supplier Relationship Changing India:  Changing India & Key Drivers of Change Many Drivers:  Many Drivers Demographics Increased Global Exposure Increased Discretionary Incomes across wider spectrum of population, across wider geography Changes in Lifestyle Many Drivers:  Many Drivers Demographics Increased Global Exposure Increased Discretionary Incomes across wider spectrum of population, across wider geography Changes in Lifestyle Demographics:  Demographics Youngest Population in the world Over 65% of population below 35 Years old Over 50% of population below 20 Years old Contrast with: Europe : Declining in many countries (Russia, Italy) USA : Immigration helping in holding up the growth Japan: Aging and soon to decline China: Currently young but sharp aging to set in next 20 years Working population is growing unlike other countries:  Working population is growing unlike other countries Rise in the middle would expand opportunities as 20-49 is the best segment for most retailers and consumer good marketers Working population driving consumerism:  Both ability to pay and the willingness to pay constitute “Demand”       Figures in % Source: Statistical Outline of India Ability to pay Willingness to pay Working population driving consumerism Demographics:  Demographics Young Population has no : Baggage of the past Nehru, Gandhi, Partition etc. are “things you read in history books” much the same way you read Born in an era of more open consumerism New Generation icons are modern achievers (Bill Gates, Narayan Murthy, Sachin Tendulkar, Shahrukh Khan, Aishwarya Rai etc.) Demographics:  Demographics Young Population : Is Confident and Optimistic about their Future Is Willing to experiment Has “transient” loyalties to Brands Admires & Appreciates “Youth” and “Modernity” Many Drivers:  Many Drivers Demographics Increased Global Exposure Increased Discretionary Incomes across wider spectrum of population, across wider geography Changes in Lifestyle Increased Global Exposure:  Increased Global Exposure The young Indian population has an unparalleled exposure to the outside world on account of various factors: 75% or more have access to Color TV More than 250,000 Young IT and Other Professionals have worked “On-Site” in any given year in North America, Europe and Japan Over 80,000 Indian students are currently studying in the US, UK, Australia and other Countries Over 150,000 Indian’s currently working in BPO / ITES area, vicariously getting some exposure to “life” outside India Increased Global Exposure:  Increased Global Exposure Multiplier effect of this exposure – due to the close knit nature of Indian society – is far in excess of what these absolute numbers may show Real Impact is already being seen in a number of ways: Majority of new entrepreneurial business start-ups are now from first generation, very young entrepreneurs Likewise, average age of the successful fast track senior managers in successful companies already down to late 20’s / early 30’s since the young are perceived as more “global” and “dynamic” Increased Global Exposure:  Increased Global Exposure Far quicker adoption to “global” trends and lifestyles and products / services Substantially higher expectations on delivery of “value” from the products and services Far more assertive consumers! Many Drivers:  Many Drivers Demographics Increased Global Exposure Increased Discretionary Incomes across wider spectrum of population, across wider geography Changes in Lifestyle Increased Discretionary Incomes..:  Increased Discretionary Incomes.. Interesting phenomenon of not only “Double Income” families but “multiple income” families: Young professionals in new generation services e.g. IT, Retail, Food Services, Finance and Insurance Services etc. are in age profile of 20 – 28 and are typically still staying with the Parents (who may have their own parents still staying with them) Only one House Rent Cheque to be made, and only One kitchen to run Substantially more spending power available than reflected by mere “per capita” income indicators Increased Discretionary Incomes..:  Increased Discretionary Incomes.. Spending further enhanced by increased risk-appetite for credit (in turn, reflected in the confidence of the “youth”) Personal Credit off take has increased from about Rs 50,000 Crores in 2000 to about Rs 160,000 Crores in 2003 giving an unprecedented boom to high ticket item purchases e.g. durables, automobiles and housing Increased “Globalization” of high end employment (to augment the low end employment in the Gulf) further spreading availability of spending power to beyond the main Metro’s and Mini Metro’s Next round of ITES shall take employment to hinterland of India e.g. Dehradun, Chandigarh, Jaipur, Goa : locations having availability of graduate, English speaking young adults at low cost Many Drivers:  Many Drivers Demographics Increased Global Exposure Increased Discretionary Incomes across wider spectrum of population, across wider geography Changes in Lifestyle Changes In Lifestyle..:  Changes In Lifestyle.. With the advantage of Youth, More Globalization, and Better Discretionary Spending incomes, lifestyle changes provide multiple new opportunities in terms of: New Products and Services (e.g. Ready to Eat Food, Entertainment Centers, Time / Labor Saving devices and services e.g. Washing Machines etc.) New Channels of Distribution (e.g. Malls, Multiplexes, Home Delivery and Multi-Level Marketing etc.) New Value Propositions in terms of Fashion, Convenience, Reliability, Quality etc. rather than merely “Price” Opportunities in Retail:  Opportunities in Retail Increasing by the day ! Many Missing / Under Served Categories:  Many Missing / Under Served Categories Food & Grocery / Food Services Furniture & Furnishings Consumer Durables Specialty e.g. Children’s Wear / Accessories / Toys Footwear Health, Beauty & Well-Being Lingerie & Intimate Apparel Sports / Outdoor Goods / Leisure Hardware Many Missing / Under Served Formats:  Many Missing / Under Served Formats Discounters / Mass Merchants Specialty : Category Killers Catalog Factory Outlets / Malls Etc. Emerging Trends in Retail:  Emerging Trends in Retail (In Indian Context) Implications for Indian Retailers:  Implications for Indian Retailers Size Matters! Competition shall be on Global level Flexibility in Format Development & Product Category Selection shall be a Key Success Factor Global Supply Chain Development shall also be a Key Success Factor Winning Retail Propositions of Tomorrow….:  Winning Retail Propositions of Tomorrow…. Differentiation opportunity Time Retail Strategies revolve around these basic factors Many Opportunities …… ….But Will Change Over Time:  ….But Will Change Over Time While Product differentiation would play a significant role, the gap will diminish due to ease in global sourcing for all competitors Experience in terms of the Look and Feel of the Store would be important, but again, the gap will diminish over time Superior Price - Value offerings would continue to be a major differentiator Additionally, Convenience of “Proximity” & “Appropriate Assortment” would emerge soon as a differentiator and initiate opening of small footprint stores (as chains) as well as Catalog / Internet shall make a major Impact even in India Organized Retail Poised To Boom …:  Organized Retail Poised To Boom … Many enablers: Frenetic development of high quality retail space across India Increased interest of Investors in funding Retail projects Increased interest of International Brands & Retailers to enter India Exceptional response of Indian consumers to “modern” retail options Best Practices ?:  Best Practices ? Best Practices …..:  Best Practices ….. Changes far too recent to allow emergence of true “best practice” examples in India Adapting “global” best practices in the Indian business environment a bit premature at this juncture (either the consumer is not ready with spending power or the business does not yet have the management and financial resource) Hence, at this stage, look at “winnable” practices in the Indian context Winnable Practices (In Indian Context):  Winnable Practices (In Indian Context) Retailer – Consumer Interface Retail – Consumer Interface:  Retail – Consumer Interface Location As close to home as feasible for most product categories Ambience Cleanliness, Climate Control Self Service Assortment Focused for specific consumer segments Retail – Consumer Interface:  Retail – Consumer Interface Availability Right Product Right Size / Style / Color Information Signage Speed of Service Information Check-Out Return & Exchange Policy Winnable Practices (In Indian Context):  Winnable Practices (In Indian Context) Retail Operations Retail Operations:  Retail Operations IT Enabled Demand Forecasting Merchandise Planning & Management Replenishment Price Optimization Efficiencies at POS Dynamic Category / Brand Management Private Label Strategy & Efficiencies Winnable Practices (In Indian Context):  Winnable Practices (In Indian Context) Retailer – Supplier Interface Collaborating With Buyers:  Technology allows supply chain members to collaborate in: Collaborating With Buyers Degree of business impact Implementation (standards and volatility) LOW HIGH EASY DIFFICULT Product tracking POS Fashion / Lifestyle trends Planning forecasting Product design Product specs TiEcon 2003 KSA analysis To Conclude …..:  To Conclude ….. Key Messages:  Key Messages India & Indians are changing rapidly Understanding Consumer critical in spotting new opportunities in Retail Conditions conducive for rapid growth of organized retail Many opportunities – categories and formats! Thank You !:  Thank You ! For further dialogue, please contact : :  Arvind Singhal Chairman KSA Technopak India Pvt Ltd. A-5 Pamposh Enclave New Delhi 110 048 Phone : +91-11- 2629 1111 Fax : +91-11- 2629 1112 Email : [email protected] Web : www.ksa-technopak.com & www.kurtsalmon.com ©KSA•Technopak For further dialogue, please contact :

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