FoodWorld: Pioneering Organized Food Retailing in India

 
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Case Details:

Case Code : BSTR051
Case Length : 14 Pages
Period : 1990 - 2003
Organization : RPG Group
Pub Date : 2003
Teaching Note :Not Available
Countries : India
Industry : Food Retailing

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Background Note

The emergence of the RPG group of companies dates back to the 1820s, when an entrepreneur, Ram Dutt Goenka traveled from Rajasthan to Kolkata (West Bengal), looking for a good business opportunity.

His efforts paid off and very soon, he started doing business with the East India Company. As the business flourished, more people from the Goenka clan joined in and became involved in the company's other ventures such as banking, textiles, jute and tea. Over the decades, the Goenkas became names worth reckoning in the Indian business scene.

However, the credit for laying the foundation of the RPG group (in its present form) goes to Rama Prasad Goenka (Goenka). Over the decades, the group diversified into a number of businesses (refer Table I for information about the RPG group of companies). Many RPG brands formed a part of almost every Indian's life.

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With businesses ranging from tyres (Ceat) to cellular telephony (Sprint) and from music records (HMV/Saregama) to retailing (FW, MusicWorld, Health & Glow), the RPG group touched the lives of all classes of Indians. During 1990-2000, the group's compound annual growth rate (CAGR) was 25%.

Since the time it was established, RPG entered into partnerships with many international companies, which included 16 Fortune 500 companies. By 2001, the group had 58,573 employees, a turnover of Rs 66 billion and an asset base of Rs 68 billion. The estimates given by the Confederation of Indian Industry (CII)2 in May 2001 put the Indian retail industry's size at $ 180 billion. According to a CII-McKinsey report, the retail industry had the potential to develop into a $ 300 billion industry by the year 2010. Having realized this potential, RPG had already begun working hard towards establishing itself as the owner of the country's most successful chain of retail outlets. RPG's foray into the retail business had begun way back in 1989, when it took over the retail store chain, Spencers3...

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2] CII is a non-government, non-profit, industry-led and industry-managed organization partnering with industry and government alike by providing advisory and consultative services.

3] Spencers was set up in 1865, in Chennai, Tamil Nadu and catered to the British and military population through its imported specialty items.

 

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