India's Retailing Future

7/31/2019 India's Retailing Future

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Unlimited Opportunity

Retail Scenario in

India

Prepared by : Raj Kumar Mishra

Guide : Dr. Susheel Pande


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CONTENTS


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Retail has played a major role world over in increasing

productivity across a wide range of consumer goods

and services. The impact can be seen in countries like

USA, UK, Mexico, Thailand and more recently China.

Economies of countries like Singapore, Malaysia,

Hongkong, Srilanka and Dubai are also heavily assisted

by the retail sector.

Retail is the second largest industry in the US both in

number of establishments and number of employees.

The Global Retail Industry


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Highest shop density in the world Around 12 million shops in the country

Just 0.9 million in the US catering to more

than 13 times of the Indian retail market size

Around 11 shop for every 1000 people

Market

Urban

Rural

% Split

45

55


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Sales through super markets and departmental stores are small

compared with overall retail sales.

Indian Retail - dominated by unorganized

sector

Approximately 2 million Mom and Pop Shops

Share of organized retail sector is only 4.6%

FDI in the retail sector not permitted to protect local retailers

(excepting for single brand & cash and carry formats. In this FDI

is 51%.)

Indian retail sector is one of the least concentrated in the world.

The top five companies hold a combined market share of less

than 2%

India is third largest market in Asia and Oceania, behind Japan

and China.


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retailing refers to the individuals standalone retail units in traditional formats, which receive

their supplies through multiple intermediaries.

retail on the other hand refer to the

systematically structure retail trading activities

undertaken by comparatively larger business entities,

which more often operate a chain of stores in multiple

geographic locations, under a brand name appropriate

for the merchandise handle


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Percentage of Organized Retail

85 81

5540 36

3020 20

4.6

0

20

40

60

80

100

US

A

Taiwa

n

Malaysia

Thailan

d

Braz

il

Indonesia

Polan

d

Chin

a

India


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Future Group Big Bazaar, Pantaloon, e-zone

Reliance Reliance Fresh

Tata Croma Electronic Retail

Videocon Next Electronic Retail

Mobile Phone Retail

Restaurants McDonalds

RPG Group Foot world, Health and Glow

Rahejas Shoppers Stop Cinema Chains PVR, DT by DLF, Cine Max, Reliance Big

Entertainment.


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India is fast becoming the retaildestination of the world. The retail

market in India is anticipated to grow

427 billion USD by the year 2012.

Reasons

Indias booming Economy Growing Middle Class

Increasing disposable income


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Inspite of global slowdown, there are several

reasons for expecting growth of the organized

retail sector in future in India. Among these the

following reasons stand out quite strongly.

Paradigm shift in consumer life style. Enormous potential for rural retail.

Scope for increased FDI in retail.

Entry of big players

Increased service orientation, quality & convenience

Technology trend (RFID, Tunnel scanning, ERP & GRM

system, Advt. planning & scheduling system (APS)

modern payment methods.


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Increased Female Workforce

The no. of female heads of household grew by 16% from

2000 to 2003.

In type A cities 72% of teenaged girls want to work after

marriage working women from 15% of the total urban female

population & this is expected to rise to over 20% by 2010. Increase in ratio of working women

Apparel : Rs. 2209 Cr., Stationary : Rs. 621 Cr.

Toys : Rs. 389 Cr., Products : Rs. 1978 Cr. Health & Beauty

(not including cosmetic or services) Rs. 415 Cr.

Indian Kid spend nearly Rs. 291 Cr. As pocket money as per

estimate account to an international survey, brand loyalty

starts by 04 yrs. of age.


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Retailing as an industry has still long way to go, to become

truly flourishing industry, retailing needs to cross the

following hurdles:

Automatic approval is not allowed for foreign investment in retail

Regulations restricting real estate purchases and cumbersome locallaws.

Taxation, which favours small retail businesses

Absence of developed supply chain and integrated IT management.

Lack of trained workforce

Low skill level for retailing management

Intrinsic complexity of retailing viz : low price changes, constant

threat of product, obsolescence and low margins


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In India the retail sector is the second largest employer after agriculture,although it is highly fragmented and predominantly consists of small

independent, owner managed shops.

The country is witnessing a period of boom in retail trade, mainly on account

of a gradual increase in the disposable incomes of the middle and upper-middle class household.

More and more corporate houses including form of mall and shopping center

builders and managers. New formats like super market and large discount

and department store have started influencing traditional looks. For retail sector to achieve further growth, the spread of organized retailing

has to become a national phenomenon.


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India's Retailing Future

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