Study on Organised retail: Pantaloon Retail Industries Limited

Essay by scoobydoobydoo173University, Master'sA+, February 2007

download word file, 10 pages 5.0

Downloaded 92 times

Target Company: Pantaloon Retail Industries Limited

Industry: Organized Retail

Analysis of the Industry

Indian Retail Industry is undergoing transformation. The consumer demographics and lifestyle is changing. There is an increase in purchasing power, greater investment in real estate development and availability of sourcing options from with in India and abroad. This is driving the change from unorganized, small and local players like grocers, convenience store, paan-beedi shops to organized retail which stands for modern formats like shopping malls, supermarkets and department stores.

The traditional unorganized Indian retail industry, consists of over 15 million outlets, is estimated to provide employment to over 18 million people. The retail market pegged at USD180 billion (2005) has been growing at a steady rate of over 5% per year and accounts for around 10% of the country's GDP. Organized retailing is estimated to represent USD6.7 billion, accounting for only close to 4% of the overall market.

The top ten cities account for 96% of total organized retail, of which the top six cater to 82%.

The jump in organized retail industry from 1 % of total retail market in 1999, to representing 6% of the total retail market in 2005 shows the tremendous growth that this industry is undergoing currently.

Demographic and Macroeconomic characteristics of India which influence the trend in favour of organized retail are:

1.Large and growing population: Indian population is 1065 million and is expected to grow at 1.7 % this year. It is a young population with 35 % of the people below 14 years of age and median age as 24 years. Youth are generally early adopters of modern products and concepts, thus a promising consumer base for new retail formats.

2. The income and buying power is on the rise: The per capita income has steadily been rising.