Final Retail Edit

8/3/2019 Final Retail Edit

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INDIAN RETAIL SECTOR Presented By:

Suraj Patil,Shakti Dash,Vidwaita Sachan
http://4.bp.blogspot.com/_hnehR3dwsi0/RrnlCNwYklI/AAAAAAAAAAc/aCi6hLSzGP4/s1600-h/Venu+gopal.bmp


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INTRODUCTION

DefinitionRetail is the sale of goods to end users, not for resale, but for use and

consumption by the purchaser . The retail transaction is at the end of thesupply chain.

Retailing may include subordinated services, such as delivery.

Purchasers may be individuals or businesses.

In commerce, a "retailer" buys goods or products in large quantitiesfrom manufacturers or importers, either directly or through a wholesaler, andthen sells smaller quantities to the end-user.


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SOME KEY FACTS ON INDIA'S RETAIL SECTOR

Indian Retail Sector today is worth of US$ 590 BillionIndian retail sector accounts for 22% of the country's GDP and contributes to 8% of total employment

Retail sector is the fastest growing sector in Indian Economy.

Indian Retail sector is the fifth largest global retail destination.

Indian retail sector is largely closed to outsiders to safeguard the livelihood of nearly 15 million small store owners.

The organized retail market is growing at 35 percent annually while growth of unorganized retail sector is pegged at 6 percent.

Demographic dividend with over 50% of country populace under 25 years of age isa prime driving factor for modern retail sector


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DISTRIBUTION OF RETAIL MARKET


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Retail Sector

OrganizedSector(4%)

UnorganizedSector(96%)


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Manufacturers

Whole seller

Distributor

Retailer

Organized Sector


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SKILLEDWORKERS

COMPETITION

REALESTATE

PROBLEM

MARKETPOWER

SUPPLY CHAIN

MANAGEMENT

PROBLEM INRAISINGFUNDS

TAXATIONPOLICIES

INFLATION


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Taxation laws in India favors only small retail businesses.

Implementation of non-uniform VAT across states.

Octroi and entry tax in some states .


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No Automatic Approval for FDI- Only 51% FDI is allowed

to one brand shops in Indian retail sector.

Complications in issuance of licenses like a hypermarket in

Mumbai must apply for 29 unique licenses & then when it has

to come up with second store it has to apply for same 29

licenses all over again.


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SWOT ANALYSIS


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STRENGTH

Increasing demand driven by the countrys young workingpopulation

Increase in per capita income which in turn increases thehousehold consumption

Create win-win situation for all links in value chain (suppliers, producers, retailers and customers).

Improvement in the standard of living.

Technology intensive industry


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WEAKNESS

Lack of expertise in Supply Chain Management

Inadequate Infrastructure

Stringent Labor Laws

Lack of specialized professionals in Industry

Lack of industry status.

Government Restrictions on FDI

Non-Availability of Government Land.


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OPPORTUNITIES

Change in consumer behavior pattern and increase in

disposable income.It is estimated that 15 million people would be engaged inRetail and Retail support activities by 2011

Indian rural markets offer a sea of an opportunity for the retailsector.

Upcoming international Players

Healthy prospect for the fashion industry.


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THREATS

Indian taxation system favors small retail business.

Competition from unorganized Sector to the organized Sector.

Middle class Psychology.

Increasing Real Estate prices


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ARGUMENTS FOR AND AGAINST REFORMSIN RETAIL

AgainstDisplacement of Unorganised Retailers

Unfair Competition

The small retailers do not have the competency to sustain against bigretailers


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Arguments for reforms in Retail

Creation of jobs in the educated middle classInvestment into warehouse and cold storage chain will result insignificant efficiency on supply chain.Farmers benefited through direct marketing and contract farming

programme.Elimination of layers of middlemenMore investments in retail supply chain and storage


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REFORMS IN RETAIL SECTOR Indias current policy does not allow FDI in retail trade

except for Single Brand Retail

FDI up to 51% is allowed in Single Brand Retail with prior

government approval

100% FDI is allowed in wholesale cash-and-carry formatwhich operate in direct business to business segment


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Recent Measures have been proposed by Committee of Secretaries to open up Multi Brand Retail

Conditions stipulated for Multi Brand Retail include aminimum investment of US$100 million

Would only be allowed to operate in cities with at least 1million people


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LESSONS FROM OTHER COUNTRIES

CHINAFDI was first allowed in 1994 to the extent of 26%Increased to 49% in 2002 and was fully opened up in 2004 byallowing 100% FDI

MALAYSIA

One hypermarket is permitted for a population of 350000 and nonew hypermarket is allowed within 35 km of city centres

THAILAND

Large retail stores have to located 15 km from commercial centresof provincial towns


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IMPACT OF REFORMSAND FUTURE PROSPECTS


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I N D I A N Pantaloons

Reliance Bharti retail RPG Lifestyle K raheja Piramyd Trent

G L O

B A L Tesco

Walmart Metro B&Q Target


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Lifestyle plans tohave more than50 stores acrossIndia by 2012

13 .

Shoppers Stophas plans toinvest Rs250

Crore to open 15newsupermarkets in

the coming threeyears.

PantaloonRetail India

(PRIL) plans toinvest US$ 77.88million to add up

to existing 2.4million sq ft retailspace by 2012

Timex India willopen another 52

stores byDecember2011

taking its totalstore count to120


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0

0.2

0.4

0.6

0.8

1

1.2

1.4

2008 2011 2013 2018

0.35

0.59

0.83

1.3

Expected Growth

CAGR10%

In the last four year, theconsumer spending in Indiaclimbed up to 75%.

By the year 2013, the organizedsector is also expected to grow ata CAGR of 40%.

The total number of shoppingmalls is expected to expand at aCAGR of over 18.9 per cent by2015 .

Source:AT Kearney Report, Indian Retail


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The initial cap on investment could be pegged at 49%.

FDI should be leveraged to create back-end

infrastructure.

Restrict the number of stores that can be operated in acity.

Allow access to the small retailers to the stores throughspecial windows.


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Documents

Final Retail Edit