10-RETAIL+INDUSTRY+PROJECT - DGPESTLE ANALYSIS- RETAIL...

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DGPESTLE ANALYSIS- RETAIL INDUSTRY COMPANY: SUBHIKSHA
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Demographics : India is the world’s 4th largest economy as regards GDP(in PPP terms) and is expected to rank 3rd by 2010, just behind the US and China. The country is on the brink of becoming an economic powerhouse ready to unleash its largely untapped potential for those who are willing to take the right step forward. In the retail sector, in spite of a 1.07 billion strong population, the target consumer base for most retailers in India stands at about 405 million. Of this, about 30 million have a combined purchasing capacity of USD 230 billion. The country’s 6 million ‘rich’ population shops worth USD 28.36 billion every year. The retail sector in India is highly fragmented and organized retail in the country is at a very nascent stage. There are about 12 million retail outlets spread across India, earning it the epithet of a “nation of shopkeepers.” More than 80% of these 12 million outlets are run by small family businesses which use only household labour. Traditionally, small- store (kirana ) retailing has been one of the easiest ways to generate self-employment, as it requires limited investment in land, capital and labour. Consequently, India has one of the highest retail densities in the world at 6% (12 million retail shops for about 209 million households). In India presently transitioning segmental and income demographics with booming middle class households armed with greater disposable incomes currently comprise 8% of the total number of households. This figure is expected to increase to 13% by 2010 growing annually at around 15%. Disposable incomes too are expected to rise at an average of 8.5% p.a. till 2015. These conditions are favorable for retail business. Subhiksha caters mainly to the needs of middle and lower income groups as they wanted to attract not the top end customer but the aam aadmi. Subhiksha was one of the early entrants in retail market. They entered retail market in year 1997 with capital of 5 Crores. Organized retail was new concept then. The first question when they started was why would customer come to their store abandoning the existing store? It had to be the price they thought, because ultimately there is no difference between the branded products like say Boost or Surf or such things. So, Subhiksha decided to sell branded products at a lower price. Also mostly women are involved in purchases of grocery items and they are quite price-conscious. So Subhiksha offers goods at lowest possible prices. Geographic : Besides the 6 metros, India has 61 other cities with populations greater than 0.5 million – these cities represent 80% of India’s population and contribute about 14% to the country’s GDP. Even though the 6 metros have the greatest concentration of India’s wealth, the other 61 cities have consistently outpaced the metros in growth rates since
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1995. These cities are witnessing higher incomes and a fundamental change in consumer mindset. Increasing awareness levels in Tier II cities are eroding the earlier difference
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10-RETAIL+INDUSTRY+PROJECT - DGPESTLE ANALYSIS- RETAIL...

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