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BY
S.WASEEM AHMED MOHAMMED YASEEN ANNUSHREE KHAREL
SYED FARAAZ
AMRITH
IMAN AHMED
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Retail is a French word which means to cut a pieceoff or break the bulk. In the present context, it
means sale to customer which means first handtransaction with the customer. So it includes all theactivities of selling goods or services directly to thefinal customer for personal or business use
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Barter System was known as the first form ofretail.
As time passed currency was exchanged with goodsand services.
Hawkers carried out the first Retailing in PushCarts
Followed by Kirana Stores .. Mom and PopupStores
Finally Manufacturing era necessitated thesmall stores and Specialty stores
It was a seller market still than this point of timewith the limited number of brands available now itis buyers market.
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Phenomenal success of certainplayers in retail sector
E.g.: Shoppers Stop Hype created by management
consultants and media Phenomenal growth of service
sector and down turn inmanufacturing sector
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Globalization
Success of organized retail sector in developedcountries
Changes in Consumer behavior and increase in theirpurchasing power.
Ever green demand for basic things like food
Negative working capital ; Companies buy on credit
and sell for cash
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2005 -06 :-PictureGDP -$700 bn
2012 -13 :- PictureGDP -$1200 bn
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Largest and fastest growing sector in India.
Modern retailing forms one point stop for allshopping.
Consumer gets a large product variety of brandsto choose from one roof.
First it was a sellers market and now itschanging to buyers market.
By 2013 Indian retail sector would be generating10 million employment opportunities.
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Higher competition would lead to higher quality inproducts and services.
Better lifestyle as better products would beintroduced.
Exports would increase due to greater sourcing ofmajor players.
Technology would be upgraded in terms of
logistics, production, and distribution channels. Employment would increase and skills &
manpower will develop.
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Margins are low
High property cost
Poor Infrastructure Expertise in logistics
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Unorganized Retailing Hawkers (Kirana)
Weekly Markets
Organized retailing
Convenient / Departmental stores
Factory outlets and discounts Market
Supermarkets
Wholesalers market Company and Franchises showroom
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Organized Retail is nothing but a retailplace all the items are segregatedand brought under one roof, unlikethe unorganized retail where there aredifferent things are sold in different
shops. It also aims to bring maximumof different brands making the sametype of product together.
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Unorganized retailing is defined as anoutlet run locally by the owner orcaretaker of a shop that
lacks technical and accountingstandardization. The supply chainand sourcing are also done locally to
meet local needs. Its organizedcounterpart may not obtain its suppliesfrom local sources.
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Increasing demand driven by the countrys youngworking population
Increase in per capita income which in turn
increases the household consumption
Create win-win situation for all links in valuechain ( suppliers, producers, retailers and
customers).
Improvement in the standard of living.
Technology intensive industry
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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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Change in consumer behavior pattern andincrease in disposable income.
It is estimated that 15 million people would beengaged in Retail and Retail support activities by
2010 Indian rural markets offer a sea of an opportunity
for the retail sector.
Upcoming international Players
Healthy prospect for the fashion industry.
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Indian taxation system favors small retailbusiness.
Competition from unorganized Sector to the
organized Sector.
Middle class Psychology.
Increasing Real Estate prices
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I i l il i
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Franchise
International company gives name and technologyto local partner. Gets royalty in return
In case master franchise is appointed for region orcountry, he has right to appoint local franchisees
Nike, Pizza Hut, Tommy Hilfiger, Marks andSpencer, Mango
Manufacturing
Company sets up Indian arm for production
Bata India. It also has right to retail in India
How theyare
present
International retailers inIndia: Strategies
I t ti l t il i
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Distribution
International company sets up local distributionoffice
Supply products to Indian retailers to sell Also set up franchised outlets for brand
Swarovski, Hugo Boss
Wholesale trading
Cash and Carry operations 100% FDI permitted
Metro Cash n Carry
How theyare
present
International retailers inIndia: Strategies
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Improve competition
Develop the market
Greater level of exports due to increased sourcing by
major players Sourcing by Wal-Mart from China improved
multifold after FDI permitted in China
Similar increase in sourcing observed for Metro inIndia
Provides access to global markets for Indianproducers
Benefitsof FDI
WhyFDI?
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Investment in technology Cold storage chains solve the perennial problem of
wastage
Greater investment in the food processing sector
technology Better operations in production cycle and distribution
Better lifestyle
Greater level of wages paid by international playersusually
More product variety
Newer product categories
Economies of scale to help lower consumer price
Increased purchasing capacity of consumers
Benefitsof FDI
Why FDI?
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FDI should be allowed in stages
Initial stages: 26% FDI
Establishment Phase: 49% FDI
Mature Phase: 100% FDI
FDI policy
No incentives needed to attract FDI
Market size and potential are sufficient inducers
No need for costly tax breaks, import dutyexemptions, land and power subsidies, and otherenticements
How FDI ?
How FDI ?
2 yrs
2 yrs
2 yrs
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Low domestic competition
Because of fragmented nature of industry
Lack of exposure to global best practices
Low entry barriers for unorganized retailing
Moderate entry barriers for organized retailing
Wholesale system under-invested leading to 20-40%wastage
Non level playing field issues
Wide differences in treatment of small and largeretailers
IndustryChallenges
Challenges in the Industry
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Starts with his family business in textile.
1987 he launched first ready-made trousers brand-Pantaloon.
1992 Pantaloon Fashion went public. Started manufacturing garments under two more
brands John Miller and Bare.
The business seems unviable due to high distribution
cost and margins. 1997 opened his first store at Kolkata.
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Store did a business worth Rs 100 million.
2001 he introduced the hypermarket concept adaptedto Indian conditions in the form of BigBazaar(Mumbai).
For further expansion Biyani went for a loan of Rs 1.2billion.
Was able to pull out over1,00,000 people within 1st
week of its operation.
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Gave the Indian customers the feel of local marketplace narrow lanes, crowded market place andcustomers bumping into each other and intocommodities.
He understood that Indian like the hustle-bustle ofthe market place, which gives them a feeling that thegoods are sold at a lower price.
Exploited the Economics of scale. Tie up with manufactures to bring down the selling
price of products.
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2002 Biyani started Food Bazaar within Big Bazaar.
Focused on Farm To Plate concept in Food Bazaar(Farm next to the store).
Sold In House products. Used traditional supply chain management.
His principle was KIS Keep It Simple; ie not makingthe operations complex.
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Leveraging Future Groups presence across 70% ofcustomers wallet.
Objective is to create the experience of 26thJanuary onthe net.Futurebazaar.com to focus on deals, giftingand trust.
Beta testing underway
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FUTURE GROUP THE TATA GROUP
SANJIV GOENKAS RPG GROUP
DUBAI BASED MICKY JAGTIANIS LANDMARKGROUP
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This industry is expected to grow at a pace of about 25-30 per cent annually,
and is considered to be a great investment market. Whether it is real estate or
FMCG, the growth rates are escalating and marketers are looking at this space
more seriously than ever. According to a research conducted by Annual Global
Retail Development Index (GRDI), the retail business in the country has had a
share of about 10 per cent in the total GDP and rose to 12 per cent in 2009.
From Rs. 35,000 crore in 2004, the retail industry was expected to grow to
109,000 crore by the end of last year. This year has begun with a lot of new
initiatives and new marketing skills to understand the consumer psyche. It is
expected to go up to US$ 833 billion by the year 2013. It is further expected to
reach US$ 1.3 trillion by the year 2018 at a CAGR of 10%.
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Huge Scope for Development
Competitive Market
Organized retail is fast growing at a rate of 30% YOY
Greater opportunity for employment
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