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- Anam Patel- Batul Kagalwala- Beverlee D’Mello- Nisheeta Patankar- Srushti Gangan
Pre-1947 1947 1970s 1980s 1991 1991-95
Haats, Melas and typical
Indian markets were formed
India becomes an independent
nation
First emergence of
organised retail through textile sector
Emergence of brands and brand
retail outlets
India opens doors
through economic reforms
Multiple formats and
product categories introduces
TIMELINE OF RETAILING INDIA
1995--99 2000-05 2005 2006 2006-10
Modern malls are introduced
Rapid expansion of
multiple format Indian
co’s begin
High Street shopping
centers begin to appear
Government allows up to 51% FDI in a single brand
retail firm
Rapid modern mall and
single brand stores
expansion
TIMELINE OF RETAILING INDIA
4
IVIIIIIInitiation
Manufacturers opening their own outlets
Pure play Retailers, realizing the potential start to test waters,
Conceptualization Entry of large Indian corporates and Global Retailers
Large Investment Commitments by large Indian corporate
Expansion by leading Product Brands
Increasing Competition
Large Scale Consolidation
More than 25-30 retail businesses with Revenues in excess of US $ 1 Billion
More Aggression from International Players
Specialty Formats based on finer segmentation of the market
Private brands getting established
Movement to Smaller Cities and Rural Areas
I
Siz
e o
f In
du
str
y
Pre 1995 1995 to 2005
2005 to 2010
2010 Onwards
Entry of large global retailers
Consolidation and Expansion
STRATEGIC LICENSE
AGREEMENTSForeign
company enter into a
licensing agreement
with a partnering with Indianpromoter
owned companies
CASH & CARRY WHOLESALE RETAILING
100 % FDI allowed inwholesale trading which
involves building a
large distribution
network
DISTRIBUTIONAn
international company
can set up a distribution
office in India and
supply products to
local retailers
FRANCHISEE ROUTEThis is
widely used with a
number to international brands in order to set
shop in India
MANUFACTUR-ING
A company can setup
manufacturing units in India along with stand alone retail
outlets
JOINT VENTURES
International firms can enter into
agreements with
domestic players and set up base
in India. Share of MNC is
restricted to 49% over
here
RETAIL ENTRY OPTIONS
DEPARTMENT STORES HYPERMARTS SUPERMARKETS AND CONVENIENCE STORES
Well established, limited competition Relatively new concept, but already as big as department stores Main challenge to mom and pop stores
Entrenched in Indian Mindset Growing fast, but competition to intensify How to compensate for facilities that mom and
pop stores provide namely Home Delivery and Monthly Credit?
Score on shopping experience Price Discount and Wide Varieties act as key attractions
Immense Competitions, building scale to achieve cost efficiencies will be critical
Stress on branding Key to success will be efficient Supply Chains and Store locations
Price not critical as they cater to upper income class
EMERGENCE OF ORGANISED RETAILING
PRESENT SCENARIO
CURRENT FDI POLICY
FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route
FDI up to 51 % with prior Government approval (i.e. FIPB) for retail trade of ‘Single Brand’ products(2006 Series)
FDI is not permitted in Multi Brand Retailing in India.
MAJOR RETAILING PLAYERS IN INDIA
PROPOSED GOVERNMENT POLICY
• FDI up to 100% in ‘single brand’ retail
• FDI up to 51% in ‘multi brand’ retail
GOVERNMENT AND FDI
INDIA AND FDI
OUR TAKE ON FDIRedistribution of jobs.
Fears of small shopkeepers getting displaced are vastly exaggerated.
Stimulation of existing competition.
it's very unlikely that global retail will ever become monopolies.
TO BE.……..OR NOT TO BE???