Case Study Document

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The Indian Retail Market

Introduction
Organized modern retail in India has witnessed tectonic changes in the last decade. There have
been quite a few factors facilitating these paradigm shifts growing incomes, urbanization and
a huge shift in consumer attitude are some of them.
However, there is no dearth of challenges for organized retailers in the country a fragmented
industry, fluctuating real estate prices and the emergence and proliferation of e-commerce
have been key factors. This has therefore made it imperative for key players to re-invent and
disrupt their own models to sustain themselves.
Statistically, over 14 million outlets operate in the country and only 4 per cent of them are
larger than 500 sq. ft in size. India has about 11 shop outlets for every 1000 people. These are
typically family owned and operated stores, which lack the scale to grow. Hence, the sector
presents a dire need of more investments towards its moderation Manisha Bapna, Images
Group

Demand Factor

Supply Factor

Fig 1: Growing Value Proposition in Indian Retail Industry: Source KPMG Indian Retail
Industry

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Indian Retail Landscape

The Indian Retail Industry currently accounts for over 10 per cent of the countrys GDP and 8%
of employment- in a country which is the worlds fifth largest global retail destination those are
significant volumes. The industry is also one of Indias most dynamic and fast paced.
Size of Pie
As per a BCG report, Indias retail market is expected to grow by 100% to USD 1 trillion in 2020
from USD 60 billion in 2015 with income growth and urbanization being two key factors in this
growth. The report also provides significant reasons to rejoice for modern retail which is
expected to grow at 20% compared to the overall sectoral growth of 12%. Organized retail
penetration is still significantly low in the top cities of the country standing at 19% in 2014.
Evolution of Retail in India

Initiation Pre 1990s

Conceptualization
- 1990-05
Retailers identify
potential in the
market
Mostly in apparel

Expansion
2005-10
Significant
investment by
large Indian
corporates
Entry in food
segment

Consolidation
2010 onwards
Entry on international players
FDI in single brand retail upto 100%

Manufacturer
outlets

Fig 2: Evolution of Retail in India Source IBEF

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Retail Formats in India

Changing Landscape
Retail Format
Exclusive Branded Retail Shops
Multi-Brand Retail Shops
Convergence Retail Outlets
E-Tailers

USP

Exclusive Showroom of Manufacturer or Franchisee

Complete range of products of brand available
Focus on most brands of particular category
More Choices for Consumer available
Display most of convergence products , electronics & IT
One stop shop for consumers
Online facility for products and brands across categories
Highly convenient with 24x7 access

Key Strategies Adopted by Indian Retailers

Deep Discounting
with no frills
facilities

Partnership Model
to enable value
added services at
low costs

Leveraging Supply
Chain Advantages

Exclusive Services
for additional price

Fig 3: Price Discounts(y) vs Value Added Services Offered (x)

Changing Indian Retail Landscape
Changing demographics and various external factors have played a huge role in the rapidly
changing Indian retail landscape. The Indian retail sector landscape has been gradually changing
catalysed by
-

Rising Income & Consumer Expenditure

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PDI per capita - CAGR (2013-2018)%

The past five years have seen rising income level across segments, resulting in rise in disposable
incomes which in turn has led to rise to consumer expenditure. Consumer expenditure is
expected to be USD 3.6 million in 2020, compared to USD 1.4 million in USD 2015 at a CAGR of
23.5%. The overall retail market is expected to grow to USD 1.3 trillion in 2020 from USD 600
billion in 2015
20

15
India
10

Indonesia

Russia

5
Brazil

0
5.00

10.00

15.00

20.00

PDI - CAGR (2013-2018)%

Fig 4: Indias personal disposable income growth with other emerging markets
-

Online Retail & E-commerce

EY estimates peg online retail in India to grow to USD 70 billion from USD 6 billion (almost 10
times current size), expanding from 10% to 15% of the overall retail sector. Online retail is
expected to be at par with the physical stores in the next five years. India is expected to
become the worlds fastest growing e-commerce market, driven by robust investment in the
sector and rapid increase in the number of internet users. Indias e-commerce market is
estimated to expand to over US$ 100 billion by 2020 from US$ 3.5 billion in 2014.
-

Growth in Tier-II and Tier-III Market

Rising number of Tier II and Tier III cities has enhanced supermarket space in the country.
Supermarkets are expected to grow to 8500 in 2016 from 500 in 2006
Key Retail Clusters India
Greater Mumbai
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Delhi NCR
Bengaluru
Hyderabad
Kolkata
Chennai
Ahmedabad
Pune-Pimpri-Chinchwad
Surat
Jaipur

Trends across Major Retailers in India

Etailers entering the Retail Space in India
Paytm plans to set up 30,00050,000 retail outlets where its customers can load cash on
their digital wallets. The company is also looking to enrol retailers mostly kirana stores
as merchants for accepting digital payments.
FashionAndYou has opened three distribution hubs in Surat, Mumbai and Bengaluru to
accelerate deliveries
International Retailers Making Major Investments
Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 402.0 million) in a fruit
and vegetable processing unit, an integrated meat processing unit, and a modern
shopping mall in Hyderabad, Telangana
Wal-Mart India Private Ltd, a wholly owned subsidiary of Wal-Mart Stores Inc., plans to
open 500 stores in India in the next 1015 years
British retail major Tesco invested Rs 850 crore (US$ 133.8 million) in multi-brand retail
trading by forming an equal joint venture with Tata group company Trent; to form the
joint venture, Tesco purchased 50 per cent stake in Trent Hypermarket Ltd (THL). THL
operates the Star Bazaar retail business in India
Consolidation by E-commerce Players
DataWind partnered with HomeShop18 to expand its retail footprint in the country.
Under the partnership, HomeShop18 and DataWind would jointly launch special sales
programmes across broadcast, mobile and internet media to provide greater access to
the latters tablet range
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 With an aim to strengthen its advertising segment, Flipkart acquired mobile ad network
AdiQuity, which has a history of mobile innovations and valuable experience in the ad
space
Amazon, the world's largest online retailer, is readying a US$ 5.0 billion war chest to
make India its biggest market outside the US

SHOPPERS STOP: The Story So Far

The foundation of Shoppers Stop was laid on October 27, 1991 by the K. Raheja Corporation Group of
Companies. Being amongst India's biggest hospitality and real estate players, the Group crossed yet
another milestone with its lifestyle venture - Shoppers Stop.
From its inception, Shoppers Stop has progressed from being a single brand shop to becoming a Fashion
and Lifestyle store for the family. Today, Shoppers Stop is a household name, known for its superior
quality products, services and above all, for providing a complete shopping experience.
With an immense amount of expertise and credibility, Shoppers Stop has become the highest
benchmark for the Indian retail industry. The companys continuing expansion plans aim to help
Shoppers Stop meet the challenges of the retail industry, in an even better manner.
Shoppers Stop in the only retailer from India to become a member of the prestigious Intercontinental
Group of Department Stores (IGDS), which has the likes of Selfridges (United Kingdom), Karstadt
(Germany), Matahari (Indonesia).
With an unparalleled assortment of the leading international and national brands along with our private
and exclusive brands in clothing for men, women, and kids; accessories, fragrances, cosmetics,
footwear; home furnishing and dcor products, our stores aim to provide shoppers a truly international
shopping destination.
Experienced professional management; supported by world-class systems and practices; and a talented
pool of associates share the passion for making every shoppers visit a memorable one. Our efforts have
been appreciated and recognized, which is evident by the several accolades that continue to be
showered every year.
At Shoppers Stop we believe in a world of limitless possibilities. We always
set benchmarks, cross limits, achieve the impossible and celebrate our successes. We endeavour to Start
Something New in performance. Start Something New in products. Start Something New in customer
service. Start Something New in Life.

Shoppers Stop has many Firsts to its credit, such as

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First to create a Store brand in 1994.

First to create a Retail Loyalty Program in 1994.
First to obtain the permission in 1996, to open the stores for 365 days a year.
First to launch a co-branded Credit Card in retail, in the country.
First retailer to go to B School for recruiting fresh talent in 1994.

SHOPPERS STOP'S SOME MAJOR MILESTONES

YEAR

MILESTONE

1991

Shoppers Stop began the organised retail revolution in India with the launch of Mens
ready-to-wear at Andheri, Mumbai.
Loyalty Program - First Citizen's Club and the exclusive brand Stop was launched.
Opened the second store in Bangalore.
Shoppers Stop celebrated the 'Festival of Britain' at the stores.
Launched 'Parikrama', a festival to celebrate Indian traditions and culture.
Was awarded the prestigious IGDS membership. Initiated the 'Customer Care Associate'
term for all associates.
Crossword became a part of Shoppers Stop.
First Retailer to adopt Enterprise Resources Planning (ERP) in association with J.D.
Armstrong.
Mr. B.S.Nagesh won the 'CEO of the Year' award and SSL won the Retailer of the Year
award at CMAI Awards.
Lycra Images Fashion awarded SSL as 'The Best Retail Chain of the year'.
Won the 'Most favoured Retail Destination of the Year', award from Images Retail.
Homestop store opens at Bengaluru. SSL IPO oversubscribed by 17.25 times.
Mothercare launched in India by SSL
Created movie merchandise for Om Shanti Om.
SSL repositioned itself as a 'Bridge to Luxury' store with a new logo and tagline 'Start
Something New'.
Was awarded the 'Best Visual Merchandising' by VMRD Retail Design.
Mr. Govind Shrikhande was awarded 'The Most Admired Fashion Retail Professional of the
Year' award.
Received the 'Department Store of the Year Award' at the Star Retail Award.
50th SSL store opened at Gopalan Mall, Bangaluru. The 'I Pledge to Serve' campaign was
initiated.
Chosen as 'India's Most Respected Retail Company', by Business World Magazine.
Awarded the 'Best Employer Brand Award' at the ceremony held in Singapore.
Has 75 operational SSL stores. (till Oct. 15). On 27th October - Foundation Day, SSL fed 1 lac
poor children across the country.

1994
1995
1996
1997
1998
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

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Expectations from Participating Students

As a consultant to the Innovation team of SHOPPERS STOP you are expected to:
1. Conduct a comprehensive research into the global retail landscape focusing on:
a. Innovations in the retail space by Indian and international retailers both in the
online and brick and mortar space. Innovations could include innovative
strategy, retail format, mix etc.
b. Force-rank these innovations basis their business success
c. Private Labels launched by retail brands across the world and do a SWOT analysis
on them
d. Disruptive strategies used by boutique and small retailers across the world
e. Threat and/or opportunities for Shoppers Stop from these disruptions
f. Key Tier II & III towns which have significant demographic advantage for retail
expansion
Basis your research, help SHOPPERS STOP identify its strategy for the next 5 years in line with
their vision To be an inspirational Omni Channel destination, transforming customers lives
through fashion and delightful shopping experiences every time.
2. Your solution would need to focus on
a. BRAND DEVELOPMENT: How does SHOPPERS STOP create No. 1 private brands
in department stores.
b. HUMAN RESOURCES: How to make SHOPPERS STOP a Great Place to Work.
c. DISRUPTION: How does SHOPPERS STOP create disruption in the current market
scenario
d. DIGITAL: How does SHOPPERS STOP make its Online presence stronger.

Your strategy should be backed up by cost-benefit and profitability analysis and any other
relevant documents.

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All the Best!

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