Retail and Home Furnishing Market in India

Presentation Structure

Retail Market in India Home Furnishings Market Overview Key Players in Home Furnishing Market

Summary
Indian retail market is growing rapidly driven by increased economic growth and high private consumption. Indian retail market is estimated to be US$ 336 Billion and is expected to reach US$ 590 Billion by 2012. Share of organized which is currently estimated to 3.5% is expected to reach 16% by 2012. Large investments to the tune of US$ 35 Billion is expected in the Indian retail market. Most of the investments would happen in the hypermarket and supermarket segments leading to increased competition in this segment.

Summary
Urban home furnishing retail market is estimated to be Rs 9,300 Cr. (US$ 2.3 Billion). The market is expected to reach Rs 20, 000 Cr (US$ 5 Billion) by 2012. Institutional home furnishing market in India is estimated to be Rs 530 Cr (US$ 132 Million) and is expected to reach Rs 1,000 Cr (US$ 250 Million) by 2012. Bed and Bath contribute to two third of the market (Rs 6,600 Cr.). Current and upholstery market is currently estimated to be Rs 2,000 Cr. Only 6% of the home furnishing market is currently organized. Most of the organized players focusing on bed and bath. Curtain and Upholstery still dominated by regional players like Jagdish Store, Bharat Furnishing, Pride etc.

Presentation Structure

Retail Market in India Home Furnishings Market Overview Key Players in Home Furnishing Market

Indian Retail Buoyed By High GDP Growth

10% 9% 8% 6.4% 6.6% 5.4% 5.2% 5.6% 6.0% 6.0% 6.8% 9.0% 9.4%

Real Growth Rate

7% 6% 5% 4% 3% 2% 1% 0% 1997 1998 1999 2000

2001

2002

2003

2004

2005

Source :Central Statistical Organization (CS0)

Projections of 8% sustainable real GDP growth rate till 2020 promise high growth potential for Indian Retail
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2006

India Experiencing Rapid Economic Growth

14,000 12,000
GDP (US$ bn)

13,245 10.7%

12.00% 10.00% 8.00%

Real Growth Rate

9.4% 10,000 8,000 6,000 4,367 4,000 2,630 2,000 China India Russia Brazil UK Japan US
Source :Central Statistical Organization (CS0)

6.7% 6.00% 4.00% 2.0% 2.00% 0.00%

3.7%

2.8% 2,374

2.3%

916

979

1,068

9.4% growth rate makes India the second fastest growing economy in the world
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Led By The Growth In Services Sector

% Increase in growth over the previous year

120% 107% 100%

80% 55% 2005-06 40% 21% 20% 13% 14% 6% 0% Tourist Arrivals
Source: Govt.of India

60% 37% 21% 7% 41%

2006-07

Passenger Cars Sales

Commercial Vehicle Sales

Domestic Air Passengers

New Cell Phone Connections

Services sector adding to GDP in a significant manner

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..With High Private Consumption

GDP US$ 916 billion

Food Apparel Beverages Footwear Consumer durables Appliances Stationery Kitchen utensils Furniture Furnishings Sports goods Health & Beauty Personal Care Jewellery Timing

Private Consumption US$ 570 Billion (62%)

Public Spending and Capital Formation US$ 346 Billion (38%)

Transport
Retail US$ 336 Billion (59%) Non Retail US$ 234 Billion (41%)

Communication Recreation Cultural Services Education Rent

Modern retail US$ 12 billion 8% of urban retail spends

Urban (5,100 towns) US$ 151 Billion (45%)

Utilities Other Services

Rural (6,27,000 villages) US$ 185 Billion (55%)

Modern retail Negligible

Source: Central Statistical Organization (CS0) Conversion rate: 1 US$ = 40.86 Rs.

About US$ 590 Billion Retail Market By 2012

GDP* US$ 1,614 billion

Private Consumption US$ 969 Billion (60%)

Public Spending and Capital Formation US$ 646 Billion (40%)

Retail US$ 590 Billion (61%)

Non Retail US$ 379 Billion (39%)

Urban US$ 280 Billion (47.5%)

Modern retail US$ 88 billion 31% of urban retail spends

Rural US$ 310 Billion (52.5%)

Modern retail US$ 9 billion 3% of rural retail spends

*All figures are in nominal terms after taking into account inflation

Source: Technopak Analysis

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Rapid Transformation Anticipated

Current Size & Future Projections for Indian Retail Market

1200 1000 US$ Billion 800 600 400 200 0 12 2007 17 2008 29 2009 Total Retail 51 2010 74 2011 Organized Retail 97 2012 2017 336 376 421 471 527 590 1011

282

Source: Technopak Analysis

And may reach a share of 28% by 2017

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Format-wise Share Of Investments In Indian Retail

Format-wise Break-up of Expected Investments in Indian Retail in Next 6-7 Years Other Formats 23% Department Stores 2%

Supermarkets 34%

Warehouse / Cash & Carry 9%

Hypermarkets 32%

*other formats include specialty stores in Apparel, Footwear, Watches, Furniture & Furnishings , Toys, Convenience formats etc Source: Various Sources

Majority of investment slated for hypermarkets and supermarkets

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Presentation Structure

Retail Market in India Home Furnishings Market Overview Key Players in Home Furnishing Market

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Home Furnishings Market..

Urban home textiles market is estimated to be Rs 9,300 Crores and expected to grow to Rs 20,000 Crores by 2012. Only 6% of the market is organized. Bed and Bath constitute about two thirds of the market. Home Furnishings Market-Size Break-up 2007
Kitchen Rs 300Cr 3% Others, Rs 800Cr. 9%

Upholstery Rs 1000 Cr, 11% Bed Rs 5000Cr 53%

Curtains Rs 1000 Cr 11%

Bath Rs 1200 Cr 13%

Source: Technopak Analysis

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Home Furnishing Market

Organized Market

Unorganized Market

Category Specific Retailers

General Retailers

Small Niche Players 2,000-3,000sqft

Small Niche Players 2,000 to 3,000 sq.ft

Hypermarket

Street Markets

AUOR 5,000 to 10,000 sq.ft

Department Stores

Others

Source: Milagrow Analysis

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94% share of Market Size

Home Furnishings Retail Market Structure

Presentation Structure

Retail Market in India Home Furnishings Market Overview Key Players in Home Furnishing Market

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Key Players in Organized Sector

Bombay Dyeing Jagdish Store Seasons Big Bazar Shoppers Stop Fab India Atmosphere Westside Lifestyle Vishal Megamart Welhome Bharat Furnishings Maspar

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Expansion Plan of Existing Retailers

Department Stores / Hyper Markets including home furnishings
Shoppers Stop to open 30 new stores in 12 new cities
The new stores will increase its total retail area to 5.5-6.0 million square feet by 2010/11 from 1.2 million square feet in 2007

Lifestyle plans to invest $500-million on expansion plans till 2010 to expand in retail, hyper-markets, leisure and hospitality businesses in India.
It would add 26-Lifestyle and 10-Home Centers by 2010 end

Piramyd Retail Ltd, plans to have around 25 Piramyd Megastores by 2009 from the current 7 stores, requiring an investment of Rs 20 crore in each store Big Bazaar plans to increase its store count to 120 by June 2008 and 225 by 2010
Plans to reach a turnover of Rs 5,000 crore by June 2008 from the current Rs 2000 Crores

Vishal Mega Mart currently has 70 stores across the country and has plans to increase its retail space in one million square feet by adding 43 more stores by 2008 end

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Expansion Plans of Existing Retailers

Specialty Home Furnishings Retailers
Bombay Dyeing
Plans to open about 150 exclusive retail stores in the coming two years. Also plans to have presence in nine malls across the country. Plan to invest Rs 60 crore to launch 100 company owned stores over a period of next 3 years Plans to renovate 100 stores out of their existing 400 franchisee outlets Bombay Dyeing textile segment aims to touch a turnover of Rs 800 crore by end 2010 from a current turnover of Rs 360 Cr. Global Expansion
They are planning to supply to specialty retailer bed, Bath and Beyond and also at Wal-Mart, Target and Macy's. Have own distribution or tie up with someone to enter the US market. However, only the sheet sets would be sold under the Bombay Dyeing brand

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Expansion Plans of Existing Retailers

Atmosphere
Company expects its retail division (Atmosphere) to account for 20% of the fabric division turnover for FY08 which is currently at ~ 10% To expand in domestic as well as international market. Plans to reach 25 outlets by 2008. To start with is planning to open stores in Hong Kong and Middle East Countries Has embarked on a 400 Crore greenfield project at the Hassan SEZ to manufacture Bed Linen products for Domestic & International Markets

Seasons furnishings:
Has tied up with a host of international brands for sale in India
The brands that the group will introduce as an exclusive franchisee include Fabricut from the US, Jero from Paris & Warwick from the UK. All the brands will be sold at international prices at Seasons exclusive outlets called Club Class The brands will be positioned at a premium level and priced between Rs. 5,000 and Rs. 50,000 per meter

Apart from the new format, the group is also expanding its existing manufacturing and retail capacities and plans to get into some new product categories, such as velvet furnishings Expanding to gain ground in the international market. Has tied up with leading Asian retail chains, including Serbantic in Indonesia and Singapore, Fella Interiors in Malaysia, and Shell Canvas in the Philippines. Is also in talks with some other retail majors for getting into Dubai, Sharjah, Abu Dhabi and Jordan

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About Milagrow
Milagrow Business and Knowledge Solutions is a 'Venture Catalyst Firm promoted by renowned startup and turnaround expert Rajeev Karwal as Founder & CEO, Dr. Jagdish Sheth as Mentor and Prof. Anil Gupta as Value Ombudsman. Milagrow follows its unique mPartnering model and promises individual and personalized attention to your business, leveraging on its rich management capital. Comprehending the needs of the MSMEs, Milagrow nurtures the partners with SMEs by offering services in the following practices:

General Management Practice Start-up

Scale-up Turnaround Operational Excellence CEO Mentoring BOT (Build-OperateTransfer)

Industry Specific
Consumer Durables, Telecom & IT Practice Retail Practice Consumer Goods Practice

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Contact us
Email id : venture.catalyst@milagrow.in Website : www.milagrow.in

Disclaimer
The contents of this presentation are based on information generally available to the public from sources believed to be reliable. No representation is made that it is timely, accurate or complete. Milagrow has taken due care and caution in compilation of data as this has been obtained from various sources including which it considers reliable and first hand. However, Milagrow does not guarantee the accuracy, adequacy or completeness of any information and it is not responsible for any errors or omissions or for the results obtained from the use of such information and especially states that it has no financial liability whatsoever to the subscribers / users of this report. The information herein, together with all estimates and forecasts, can change without notice.

Copyright 2007 Milagrow Business and Knowledge Solutions Pvt. Ltd. All Rights Reserved.

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