PRESENTATION ON BIG BAZAAR

1. PRESENTATION ON BIG BAZAAR Presentation by Gurdeep Singh Pushpak Pandey Shaleen Agarwal Rohan Tandon Richa Kohli

2. Agenda Retailing : An overview Indian retail The change factor FDI in Indian retailing Why FDI ? How FDI ? Big Bazaar- Company Profile - Customer Segment - Vision and Mission - Swot analysis - BCG Matrix - Porter 5 Forces Model

3. Retailing: An overview • Retailing • World’s largest private industry • US$ 6.6 trillion sales annually • Fortune 100 • 9 Retailers • Carrefour, Ahold, Home Depot, Kroger, Metro, Kmart-Sears, Target, Albertsons’ • Indian Retailing • Largest employer after agriculture - 8%* of population • Highest outlet density in world • Around 12 mn outlets • Still evolving as an industry • Long way to go An overview

4. Evolution of Indian retail Modern Formats/ International Historic/Rural Reach Traditional/Pervasive Reach Government Supported Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Khadi Stores Cooperatives Convenience Stores Mom and Pop/Kiranas Weekly Markets Village Fairs Melas Source of Entertainment Availability/ Low Costs / Distribution Shopping Experience/Efficiency Neighborhood Stores/Convenience

5. Evolution of Indian retail • Informal retailing Sector • Typically small retailers. • Evasion of taxes • Difficulty in enforcing tax collection mechanisms • No monitoring of labor laws • Formal Retailing Sector • Typically large retailers • Greater enforcement of taxation mechanisms • High level of labor usage monitoring Indian retail

6. Categories of Indian retail • Corporate Houses • Tatas: Tata Trent • RPG group: Food World, Health and Glow, etc • ITC: Wills Life Style • Rahejas(ShoppersStop), Hiranandani(Haiko), DLF(DT cinemas) etc. • Dedicated brand outlets • Nike, Reebok, Zodiac etc • Multi-brand outlets • Vijay Sales, Viveks etc • Manufacturers/ Exporters • Pantaloons, Bata, Weekender Indian retail

7. Classifying Indian retail • Modern Format retailers • Supermarkets (Foodworld) • Hypermarkets (Big Bazaar) • Department Stores (S Stop) • Specialty Chains (Ikea) • Company Owned Company Operated • Traditional Format Retailers • Kiranas: Traditional Mom and Pop Stores • Kiosks • Street Markets • Exclusive /Multiple Brand Outlets Indian retail

8. Large Indian retailers • Hypermarket • Big Bazaar • Giants • Shoprite • Star • Department store • Lifestyle • Pantaloons • Piramyds • Shoppers Stop • Trent • Entertainment • Fame Adlabs • Fun Republic • Inox • PVR Indian retailers

9. The changing Indian consumer • Greater per capita income • Increase in disposable income of middle class households • 20.9%* growth in real disposable income in ’99-’03. • Growing high and middle income population • Growing at a pace of over 10%* per annum over last decade • Affordability growth • Falling interest rates • Easier consumer credit • Greater variety and quality at all price points Indian consumer †From Euromonitor Retail Survey

10. The changing Indian consumer • The urban consumer • Getting exposed to international lifestyles • Inclined to acquiring asset • More discerning and demanding than ever • No longer need-based shopping • Shopping is a family experience • Changing Mindset • Increasing tendency to spend • Post Liberalization children coming of age • 100 mn 17-21 year olds*. Tend to spend freely. • Greater levels of education Indian consumer *Data from NCAER

11. Anticipated growth • Market size • Current market size is roughly US$ 286 bn* • 96% of the 12 Million stores are less than 500 Sq. ft. • Forecast Growth rate for the retailing industry is roughly 8.3% for 2003-2008 • Sales from large format stores would rise by 24-49%** • Formal and modern format retailing would enjoy rapid growth Anticipated growth

12. Industry dynamics • Low domestic competition • Because of fragmented nature of industry • Lack of exposure to global best practices • Low entry barriers for unorganized retailing • Moderate entry barriers for organized retailing • Wholesale system under-invested leading to 20-40% wastage • Non level playing field issues • Wide differences in treatment of small and large retailers Industry dynamics

13. Industry dynamics issues • Real Estate Costs • Supply Chain Inconsistency • Poor Infrastructure • Lack of Skilled Manpower

14. Growth factors • Growth determining factors • Government Policy • Infrastructure development • GDP growth • Employment generation and job creation • In several new sunrise industries • Implies greater purchasing power Growth factors

15. The Indian advantage • India ranked 1st in the Global A.T Kearney Retail Development Index • India • Russia • China Advantage India

16. THE SIZE OF THE OPPORTUNITY

17. FDI in Indian retailing • Current Indian FDI Regime • FDI not permitted in retail trade sector, except in: • Private labels • Hi-Tech items / items requiring specialized after sales service • Medical and diagnostic items • Items sourced from the Indian small sector (manufactured with technology provided by the foreign collaborator) • For 2 year test marketing (simultaneous commencement of investment in manufacturing facility required) FDI in Retail not permitted

18. FDI in Indian retailing • Metro Group of Germany • Cash-and-carry wholesale trading • Proposal faced strong opposition • Entities established prior to 1997 • Allowed to continue with their existing foreign equity components. • No FDI restrictions in the retail sector pre-1997 • Foodworld • 51:49 JV between RPG and Dairy Farm International, • Leading food retailer in India now • Mc Donalds Current FDI

20. Hypermarket The chain of retail stores of the Pantaloon Retail (India) Ltd. 89 outlets in India Headquarter in Mumbai Focusing on Value of Money

21. COMPANY PROFILE Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India’s leading business houses with multiple businesses spanning across the consumption space. While retail forms the core business activity of Future Group, group subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics. Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square feet of retail space in 71 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and is listed on the Indian stock exchanges. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian bazaars with the choice and convenience of modern retail.

22. In 2008, Big Bazaar opened its 100th store, marking the fastest ever organic expansion of a hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, Hyderabad and Bangalore. The group’s speciality retail formats include, books and music chain, Depot, sportswear retailer, Planet Sports, electronics retailer, eZone, home improvement chain, Home Town and rural retail chain, Aadhaar, among others. It also operates popular shopping portal. Future Capital Holdings, the group’s financial arm provides investment advisory to assets worth over $1 billion that are being invested in consumer brands and companies, real estate, hotels and logistics. It also operates a consumer finance arm with branches in 150 locations.

23. Customer Segment Big Bazaar target to upper middle class and higher customers. The large and growing young working population is a preferred customer segment. Big Bazaar specially target working women and home maker who are the primary decision maker.

24. Mission & 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

25. SWOT ANALYSIS • STRENGTHS • EVERY DAY LOW PRICING • GOOD INFRASTRUCTURE • CONSUMER PREFERENCES • DIVERSE MARKET COVERAGE • AWRENESS ABOUT THE BRAND HIGH AMONG MASSES • OPPORTUNITIES • SUB URBAN UNTAPPED MARKET • “ONE STOP” CONCEPT UNKNOWN YET • EVOLVING CONSUMER ORIENTATION • CO BRANDING AND FRANCHISING FOR FASTER GROWTH

26. SWOT ANALYSIS • WEAKNESS • LOW PERCEPTION AMONG CONSUMERS • LESS AVAILABILITY OF STORES • SUPPLY CHAIN BOTTLENECKS-(FRAGMENTED MARKETS) • THREATS • NEW ENTRANTS AND FOREIGN PLAYERS • UNORGANISED RETAIL MARKET

27. 5 FORCES PORTER MODEL • RIVALRY AMONG COMPETITORS • RELIANCE,MORE,VISHAL,NEXT,SPENCERS • NEW ENTRANTS • WALMART,CARREFOUR,METRO,IKEA • FOREIGN PLAYERS ALLOWED TO SOME EXTENT • BARGAINING POWER OF SUPPLIERS • SUPPLIERS HAVE A HUGE UNORGANISED SECTOR TO CATER TO

28. Contd… • BARGAINING POWER OF CONSUMERS • PRICE SENSITIVE CONSUMERS • MORE AVAILABLE CHOICES • THREAT OF SUBSITUTES • UNORGANIZED RETAIL

29. BCG MATRIX

30. MARKETING ‘7 P’s ANALYSIS

32. PRICING §Value Pricing (EDLP) § Promotional Pricing • Low Interest Pricing • Psychological Pricing • Special Event Pricing (Republic Day) § Differentiated Pricing • Time Pricing § Bundling

33. PRICING COMPARISION

34. TIME PRICING

35. PSYCHOLOGICAL PRICING LOW INTEREST FINANCING

36. PROMOTION •“SAAL KE SABSE SASTE 3 DIN” •FUTURE CARD (Discount Upto 3%) •SHAKTI CARD •JUNK SWAP OFFER •BRAND AMBASSADOR: M.S. DHONI •ADVERTISMENT (Print Ads, T.V., Radio) •POINT OF PURCHASE PROMOTION •GIFT TO EVEY 100th CUSTOMER (Seasonal)

37. BANNERS AND POSTERS

38. PEOPLE •People Are The Customers Which Are The Biggest Asset Of A Company. •Well Trained Staff. •Appearance. •Presently Around 10000 Workers Are Working And Around 500 Workers Are Recruited Every Month. •High Security For Safety Of Customers.

39. Problems ahead Reduction in consumer spending Slow construction of malls Difficulty in raising working capital High rentals Lowering margins New emerging competitors

40. THANK YOU