Agenda

• Market Potential in the Current Scenario

• Customer Analysis

• Understanding the other players

• Government Regulations to deal with

• Getting the Resources right!

What are the 5 important Questions we are
trying to address in the current update?

1. What is the potential that is existing for Ann Taylor in the Indian
market?

2. Who are your Customers?

3. How are you going deal with your Competitors?

4. Are the Government regulations & Tax laws well understood?

5. Getting our Resources right. What are the most important

necessities?
Agenda

• Market Potential in the Current Scenario

• Customer Analysis

• Understanding the other players

• Government Regulations to deal with

• Getting the Resources right!

Indian Retail Sector – An Overview
India Retail Growth (USD bn)
2500
Expected to 2009 Country GRDI Score
grow from 5% to Rank
2000
about 25% of the
1 India 68
total retail market
1500 2 Russia 60
3 China 56
1000
4 UAE 56
500
Source: The 2009 A.T. Kearney Global Retail Development Index
0
2003 2008 2013 2018

Organized
Source: India Retail Report 2009 Retail Retail GDP

Indian Retail market ~ USD 410 bn; constitutes ~ Clothing & Accessories segment dominates the
60% of private consumption & ~ 35% of India’s organized retail sector contributing over 38 per cent
GDP of the organized retail pie

Domestic apparel retailing industry ~ US$ 2.7 Domestic organized garment retailing clocked a
billion likely to grow at 5-7% in 2009-10. growth of 13-14 per cent for year ended March 2009.

With Indian GDP expected to grow at 7-8% in the next coming years, the retail market is
expected to touch USD 860 billion by 2018
 Indian Apparel Market
8000 Apparel Industry
1800
12%
6000
1400
Men’s Wear Women’s Wear Kid’s Wear
4000
1000 (38.8%) (34.9%) (26.3%)
600 2000

200 0
2005 2006 2007 2008 2009
Source: Images Yearbook 2009
Vol (mn units) Value (bn Rs.)
12% growth in Apparel market since 2005 Women’s wear valued at 485 bn Rs.

Population Growth across age Group Per Capita Net National Product (NNP) at Current
1600
Prices (Rs)
1400 173
143 40000
1200 98 118
33283
83
1000
800 30000
747 810 859 899
671
600
400 20000 16688
200 356 346 340 336 327
0 10000 5440
2006 2011 2016 2021 2026 255 359 742 1748
0
60+ years 15-59 years 0-14 years 1950- 1960- 1970- 1980- 1990- 2000- 2007-
Source: India Retail Report 2009 51 61 71 81 91 01 08
2nd largest working population, with 50% in 14% growth pa in corporate salaries, per capita
20-60 years range income doubled from start of last decade
Indian apparel competitive landscape – 1/4
Indian apparel competitive landscape – 2/4

Buyer Power Supplier Power

Indian apparel competitive landscape – 3/4

New Entrant Substitute Threat

Indian apparel competitive landscape – 4/4

Rivalry
Agenda

• Market Potential in the Current Scrnario

• Customer Analysis

• Understanding the other players

• Government Regulations to deal with

• Getting the Resources right!

The below are the most important factors
which the probable TG looks for..

Key
success
factors

Right Sizes and Comfortable Right pricing & Attractive

Color options Clothes New collections Accessories

Key
Enablers
Understanding Creating a Niche Efficient cost
Consumer Behaviour brand structure
A simple strategy to differentiate Ann Taylor at the
initial stages of set up in India
” For me, I do not mind going
M&S Zara Ann Taylor
out of my way to find the
1. Comfort shop, but what matters most
is the Quality of fitting &
Material and service at the
2. Cost center!”

3. Looks - Vijaya Rekha, Customer,

Zara

4. Sizes
”There is a huge demand for
women’s clothing. But the
5. Channel Availability most important factors are
Word of Mouth & Branding in
6. Brand Respect this segment!”
- Analyst, Evaluaserve
7. Options

Low High

Create EXCLUSIVITY & get the PRICING right! Simple mantra for
success in Indian market
Agenda

• Market Potential in the Current Scrnario

• Customer Analysis

• Understanding the other players

• Government Regulations to deal with

• Getting the Resources right!

Foreign Players in Indian Market
Brand Year Store Count Expansion plans Women Wear market is around INR 35,0
of crore
Entry Nightwear
17%
S Oliver 2007 5 stores in Delhi, Mumbai, 70 POS outlet, 39 Ethnic wear
Gurgaon & Pune standalone and 38 shop- Causal Wear 47%
22%
in-shop outlets by 2012
Mango 2001 6 stores in Delhi,Mumbai, 4 stores in 2010
Bnagalore & Gurgaon
Formal Wear
M&S 2002 17 stores 50 stores by 2014 13%
14%
Tommy 2004 51 stores -23 35 standalone & shop-in- 52% 62%
67% 64%
50%
Hifiger standalone,3factory outlets & shop by 2010
86%
25 shop-in-shop outlets 50%
48% 36%
33% 36%
Espirit 2005 50 stores in Mumbai, Delhi, Plans new outlet
Ahmedabad, Chennai, rt irt it s s ns ns
s hi h u k irt l e a
S S e
Chandigarh, Pune, T- e n rn s /S oo J
te r W
Huderabad & Bangalore ov e
W es o us
W Tr
Diesel 2010 Two stores in Mumbai 30 stores over the next 5
years
Urban-Unbranded Urban-Branded
Zara 2010 3 stores in Delhi & Mumbai Plans of exapnsion
The Rs 2,000 crore premium fashion retail segment is expected to grow at 25-30 per cent
annually over the next five years to Rs 6,000 crore, Women Wear is the highest growing
segment, where all the foreign player are targeting
* Segment data taken from Tecnhopak
Major Competitors

●
From franchise with plant retail to JV with Reliance Retail on 51:49

Marks & Spencer

●
India is the top International priority, plan to expand to 50 stores across India, £850 million investment to
support growth strategy
●
Started 39% procurement from India to compete in price, plan to source 70% locally
●
It also cut prices by 20-30% across categories and repositioned itself as a mid-to-premium segment retailer
●
Plans to diversify in café, food retail etc.

Mango
●
Franchise partnership , sourcing works in consignment basis, franchise is not responsible for unsold goods
●
The brand rationalised prices, cutting them by nearly 25%. And finally seen a 20-25% increase in sales
●
Plans of expansion in tier 2 cities, increase their investment to 100 crores
●
Focusing to increase awareness about the brand by opening flagship stores and attain ‘critical mass’ by
having more stores and larger presence

Zara
JV with Tata Trent on 51:49
●

Expects to grow at CAGR of 6.7% in the period 2009-13

●

●
Price already competitive, churn inventory twice a week to keep itself up-to-date with latest trends
Due to various challenges the company faces, store expansion will remain slow
●

All major players focusing on reduction in price to compete; with 40% import duty on apparel
Additional concerns include the relative lack of seasonal variation and the distinct, consolidated style
●

of dress among Indian women which differs greatly to Zara’s existing ranges
price points become high, so they have to cut price; but with their expansion and growth
strategy all players are now focusing on local sourcing to remain competitive
* Source Thirdeyesight
Agenda

• Market Potential in the Current Scrnario

• Customer Analysis

• Understanding the other players

• Government Regulations to deal with

• Getting the Resources right!

 Stringent Government Policies for retail FDI

• FDI upto 51% has been allowed in retail trade of ‘single brand’ products with
prior government approval and under certain condition:
• Products to be sold should be of a ‘single brand’ only
• Products should be sold under the same brand internationally–‘Single Brand’
product retailing would cover only products that are branded during manufacturing
• Variable stamp duties are applied on transfer of property from state to state
• City urban planning prohibits bigger commercial plots, rigid building and
zoning laws for procurement of retail space.
Currently Permitted Routes

Ann Taylor can enter the Indian Apparel Market through one of the following ways:

CASH & CARRY

FRANCHISING JOINT VENTURE DISTRIBUTION MANUFACTURING
(wholesale trade)

* Source SBI Capital report on Indian Apparel retail sector 2010

Agenda

• Market Potential in the Current Scrnario

• Customer Analysis

• Understanding the other players

• Government Regulations to deal with

• Getting the Resources right!

Resources
Possible entry options for Ann Taylor according to the FDI regulations
• Joint venture with 51% stake
• Franchising Suppliers:
Ann Taylor has not owned any
manufacturing facility even in US. It
has following options
• Extend relationship with current
Indian suppliers
• Comprehensive database of 1750
Indian garment suppliers available
– Assess and choose the best

Design: Use the existing team from

US for western clothing

Tie-up with Indian designers

for Sarees
Merchandising – Vendors’ advantages owing to
their geographic location
Comparative position of different states for attractiveness to Apparel
industry
Selling space and distribution network

Store location selection basis:

• Target group size is large
• Growth of working women
Chandigarh population
• Higher levels of consumption
• Growing number of shopping
malls
• Venue for all fashion shows in
India

Nagpur Distribution:
• Direct supply from suppliers
to the retail outlets
• Tie-up with 3PL service
Manufacturing hubs providers as the brand
expands
Store Location
Tirupur