Pantaloon Retail (India) Ltd Report
Pantaloon Retail (India) Ltd
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It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle Class. It was started as a hypermarket format head quartered in Jogeshwari, Mumbai with approx. 50,000 sqftof space. Its values and missions are to be the best in Value Retailing by providing the cheapest prices and hence go the tag-line“Is se sasta aur achcha kahin nahin” It sells variety of merchandise at affordable rates, the prices of which it claims are lowest in the city. Usually the items are clubbed together for offers as on the lines of Wal-Mart and Carrefour, offer weekend discounts and works on the same economy model as Wal-Mart and has considerable success in many Indian cities and small towns. It currently operates out of more than 150 stores and top 25 stores register a cumulative foot fall of 30 lakh a month on an average. There is always a ‘first mover advantage’ in an upcoming sector. In India, that advantage goes to “Big Bazaar.” It has brought about many changes in the buying habits of people. It has created formats which provide all items under one roof at low rates, or so it claims. Also, with the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including Home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise you. First Food Bazaar format was added as Shop-In-Shop within Big Bazaar in the year 2002.Big Bazaar and Food Bazaar blend the look, feel and touch of Indian Bazaar with modern retail concepts of choice, convenience and quality. And this is just the beginning. Big Bazaar plans to add much more to complete your shopping experience. In India Big Bazaar is considered as WAL-Mart of India because of similarities in its strategies with those of Wal-Mart.
Mission And Vision
Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner.
We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development.
INDUSTY ANALYSIS PORTER FIVE ANALYSIS
In India, the retail industry accounts for about $350 billion and is growing at a rate of 7% perannum. The organized retail sector or modern retail as it is popularly known, comprises less than2% of this currently. However, things are changing and rapidly at that. After Kishor Biyani’sforay and tremendous success in this sector almost all the major industrial houses have followedsuit. The industry is witnessing tremendous growth and there seems to be enough room for allthe players in this attractive industry. For any player in this segment, whether it is small or big ithas to undergo threat analysis for its sustenance as described below:
BMI India Retail Report forecasts that total retail sales will grow from INR18.85trn(US$392.63bn) in 2011 to INR26.64trn (US$674.37bn) by 2014. Strong underlying economicgrowth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth. India’s retail market isgrowing at a faster rate of 7% and is expected to increase to 15% in 2015. These faster growingretail segment has attracted many major players like Future group, Reliance Retail, Aditya BirlaGroup , Vishal Retails,Bharti and Walmart, Godrej, ITC etc. Big Bazzar which is a part of Futuregroup will face a tough competition from the other players.
Threat of entrants
Allowing 100% FDI in single brand retailing and 51% FDI in multibrand retailing has attractedmany foreign players as well as domestic players to enter into retail industry. The key growthareas include the urban, luxury segment on one end of the spectrum and serving the rural sector
on the other. In addition, government policy encouraging FDI in the segment has resulted in aplethora of international retailers keen on entering the market; American retail giant Wal-Marthas tied-up with Bharti Enterprises and global coffee giant Starbucks' has tied up with PVRLimited. In addition, Carrefour, Boots and others are also expected to come in.
he top retailcompanies in India include the Raheja Group, Reliance Retail, Tata Trent, Future Group, RPGRetail, and Ebony Retail Holdings.Reforms by India in opening up its economy have greatly improved trade prospects, but majorbarriers still exist such as regulatory issues, supply chain complexities, inefficient infrastructure,and automatic approval not being allowed for foreign investment in retail. But, some of these areset to change with FDI in multi-brand retail set for approval. So for all retail players in Indiathreat of new entrants is very high.
Bargaining Power of Suppliers
The bargaining power of suppliers varies depending upon the target segment, the formatfollowed, and products on offer. The unorganized sector has a dominant position, stillcontributing 95% of the total retail market. There are few players who have a slight edge overothers on account of being established players and enjoying brand distinction. Since it is a capitalintensive industry, access to capital also plays an important part for expansion in the space. BigBazaar has many local suppliers which provide it flexibility. Due to entry of big players likeWal-mart and other Indian players suppliers are getting more options. So they are demandingmore price for their product which is a threat towards Big Bazaar if they are not maintaining longterm relationship with their suppliers. Also Big Bazaar has very big suppliers like P&G and HULwhich requires different strategy for maintaining relationship. As they have huge market share inFMCG products and most of the retail players want their product, so they play a monopolisticrole. So we can say that the bargaining power of supplier is very high.
Bargaining power of customers
Indian customers are very much price sensitive. Along with that because of more number of players in the market they are getting more options ot choose. . Switching cost is very low asthey have wide option available with them easily. Because of wide availability of internet, Indianyoung population is showing more interest towards e-shopping which also provide them freehome delivery. So bargaining power of customers is very high.
Threat of substitutes
The major threat to organized retail sector is the unorganized retail sector wich still continues tobe 90% of total retail market. Mom and Pop stores present at convenient places help easy accessto customers. Along with that unorganized retail stores provide the credit facility which is notavailable in the organized retail sector. Unorganized retial sector also provide free home delivery to the customers. All these facilities attract customers. But as now a days organized retail sectoris expanding at faster rate with wider option available at convenient place and price, which isattracting customers. Hence this threat is considered as low. Availability of bank credit cards hasattracted more young customers to shop from organized retails. Statistics says that 25-30%annual growth in retail loans and credit cards in 2011