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International Perspective on Developments in Retailing Major Impact and Implications for India

International Perspective on Developments in Retailing Major Impact and Implications for India Sue J F Evans. Retailers belong to a place called…. … a population of mastodons … always ready for cannibalism … invading green pastures worldwide … healthier than ever. Wal-Mart. P. Morris.

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International Perspective on Developments in Retailing Major Impact and Implications for India

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  1. International Perspectiveon Developments in Retailing Major Impact and Implications for India Sue J F Evans

  2. Retailers belong to a place called…

  3. … a population of mastodons … always ready for cannibalism … invading green pastures worldwide … healthier than ever

  4. Wal-Mart P. Morris 73 Carrefour Ahold Home Depot Nestlé 50 Retailers Kroger Unilever 46 Suppliers Metro Sears Target P&G 39 Albertson's Retailers – A population of mastodons: Nine retailers belong to Global Fortune 100 Global Fortune 100- Ranking and 2001 revenues in $bn - Ranking

  5. … have bought over … • ASDA • PromodésComptoirs Modernes • Laurus • Jeronimo Martins (Brazil) • Docks de France Retailers: Always ready for cannibalism • Wal-Mart • Carrefour • Casino • CBD • Auchan

  6. Retailers: Invading green pastures worldwide International presence of top 20 retailers

  7. Retailers: Healthier than ever Return On Capital Employed (ROCE)- 2001 -

  8. Major trends • Cannibalism will accelerate • Retailers are pushed to look for new "green pastures” • Genetic mutation – retailers succeed in building brands

  9. Retailers Suppliers Cannibalism: Suppliers still have the largest slice of the cake, but retailers will fill the gap rapidly… Comparison of ROCE among retailers and suppliers2001

  10. …And will emulate the concentration that has already taken place amongst suppliers Market shares in France - 2001 volumes, in % - Suppliers Retailers

  11. Green Pastures : Retailers have already entered the obvious geographies and reached critical mass

  12. To help retailers prioritize their expansion plans, A.T. Kearney has recently published the Global Retail Development Index • Based on expert interviews and extensive local data • Covering 180 countries worldwide • Driven by three major questions Is the country economically viable? • Economic stability • Political risk • Debt, credit balance • … Is the retail market attractive? • Modern retail area per inhabitant • Number of international retailers in the country When do I have to go there? • Modern retail area growth rate compared to GDP growth rate

  13. On the radar screen To consider To avoid Malaysia Israel Philippines Brazil India ranks number 6… and is already very seriously on the radar screen of major retailers GRDI 2002 Index between 0 and 100

  14. = 100% private label = big results Genetic Mutation: When retailers succeed in building powerful brands Results +10% Sales evolution1st half 2002/2001(pro forma) Other supermarkets4.2% Leader Price Concept • Part of the Casino Group • Surface : 1,000 sqm • # SKU : 2,800 (mostly food) • ONLY PRIVATE LABEL • Pricing : Nielsen index 90 • Assortment : deep 6% Other supermarkets3.9% Operating margin% • France (100) • Poland (70) • Thailand • Argentina • Benelux Global expansion(# stores)

  15. Implications for India • Be ready! … retail mastodons will enter the Indian "green pastures"

  16. “Organised” retail in India will inevitably grow as income levels and urban concentration increase Organized retail penetration (%) Organized retail penetration (%) GDP URBANISATION Brazil Brazil China China Poland Poland Malaysia Malaysia Thailand Thailand Urban concentration (% of pop. In top 8 cities) Indonesia Indonesia India India Per capita GDP ($) By 2007, the Top 10 states in India would have an average per capita GDP c $5,000

  17. Implications for India • Be ready! • Be realistic! …. Small players can flourish in the changing environment if they adapt themselves

  18. Evidence from other emergent markets shows that traditional outlets will survive CHINA Retail structure in number of outlets (absolute numbers) 12,936,000 10,122,000 Source: Euromonitor

  19. Implications for India • Be ready! • Be realistic! • Be resilient! … Indian retailers can benefit from adopting latest retail management techniques to improve efficiencies

  20. AND DON'T FORGET… … dinosaurs sometimes disappear !!

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