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Foreign Direct Investment in Indian Retailing

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  • 1. RETAILING IN INDIA FOREIGN DIRECT INVESTMENT Prof. Sameer Mathur, Ph.D.
  • 2. Sameer Mathur BuddingMarkets.com Marketing Professor 2009 – 2013 Ph.D. and M.S. (Marketing) 2003 – 2009 Marketing Professor 2013 – Indian Institute of Management, Lucknow
  • 3. Agenda • Overview of FDI in Indian Retailing • Organized Retailing in India – Current Status • Regulations on FDI in Indian Retailing • Opposition to FDI in India
  • 4. The Indian market is becoming more accessible to global firms. Many well known multinationals are interested in expanding their operations into the Indian market, (e.g. Wal-Mart, Metro & Carrefour). FDI Retailing: Niche & Increasing
  • 5. FDI Retailing: Niche & Increasing
  • 6. FDI Retailing in India Indian government wants to fully open up its markets to foreign direct investment Many opposition parties are hindering the growth of this open market initiative. A growing debate exists on whether or not “international retailers” should be allowed to engage in multi-branding retailing At present, global firms are only allowed to engage in Cash & Carry (wholesaling) operations in India.
  • 7. Cash & Carry
  • 8. Agenda • Overview of FDI in Indian Retailing • Organized Retailing in India – Current Status • Regulations on FDI in Indian Retailing • Opposition to FDI in India
  • 9. Source: “Euromonitor - Retailing in India 2011” Titan Industries Ltd 15% Reliance Retail Ltd 15% Amway India Enterprises PVT Ltd 7%LG Electronics India PVT Ltd 8% Aditya Birla Retail Ltd 8% Infiniti Retail Ltd 8% Vishal Retail Ltd 8% Spencer's Retail Ltd 8% Pantaloon Retail India Ltd 23% Organized Retailing Brand Shares % 2009
  • 10. Source: “Euromonitor - Retailing in India 2011” Future Value Retail Ltd 26% Titan Industries Ltd 20% Reliance Retail Ltd 13% Amway India Enterprises PVT Ltd 6% LG Electronics India PVT Ltd 7% Aditya Birla Retail Ltd 7% Infiniti Retail Ltd 7% Vishal Retail Ltd 7% Spencer's Retail Ltd 7% Organized Retailing Brand Shares % 2010
  • 11. Top Organized Retailing Brand Shares
  • 12. Source: “Euromonitor - Retailing in India 2011” Titan Industries Ltd 17% Reliance Retail Ltd 11% Pantaloon Retail India Ltd 28% LG Electronics India PVT Ltd 11% Shopper's Stop 5% Aditya Birla Retail Ltd 5% Next Retail India Ltd 5% Infiniti Retail Ltd 6% Vishal Retail Ltd 6% Spencer's Retail Ltd 6% Organized Store-Based Retailing Brand Shares % 2009
  • 13. Source: “Euromonitor - Retailing in India 2011” Future Value Retail Ltd 19% Titan Industries Ltd 19% Reliance Retail Ltd 14% Pantaloon Retail India Ltd 9% LG Electronics India PVT Ltd 9% Shopper's Stop 5% Aditya Birla Retail Ltd 5% Next Retail India Ltd 5% Infiniti Retail Ltd 5% Vishal Retail Ltd 5% Spencer's Retail Ltd 5% Organized Store-Based Retailing Brand Shares % 2010
  • 14. Foreign retailers are thinking of new ways and approaches in order to successfully reach the end- consumer by developing and employing various different marketing techniques, such as the provision of additional services, fashion consulting, home delivery, special discount periods, but not limited to rebranding of retail chains. Improved Targeting
  • 15. Source: “Euromonitor - Retailing in India 2011” Improved Targeting
  • 16. 15% 9% 4% 6% 4% 6% 4%4% 4% 4% 2% 4% 4% 4% 4% 4% 4% 4% 4% 2% Titan Industries Ltd LG Electronics India Pvt. Ltd Infiniti Retail Ltd Godrej & Boyce Manufacturing Co Ltd Next India Retail Ltd Vishal Retail Ltd Shopper's Stop Ltd Reebok India Pvt Ltd Pantaloon Retail India Ltd Lifestyle International Pvt Ltd Vijay Sales Ltd Apollo Hospitals Enterprises Ltd Tribhovandas Bhimji Zaveri Delhi Pvt Ltd adidas India Marketing Pvt Ltd Samsung India Electronics Ltd Bata India Ltd Raymond Ltd Bombay Dyeing & Manufacturing Co Ltd Pantaloon Retail India Ltd Reliance Retail Ltd Organized Non-Grocery Retailing Brand Shares % 2009
  • 17. Infiniti Retail Ltd. Top Organized Non-Grocery Retailing Brand Shares
  • 18. 15% 8% 6% 6% 6% 6% 6%6% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 2% Titan Industries Ltd LG Electronics India Pvt. Ltd Infiniti Retail Ltd Godrej & Boyce Manufacturing Co Ltd Next India Retail Ltd Vishal Retail Ltd Shopper's Stop Ltd Reebok India Pvt Ltd Pantaloon Retail India Ltd Lifestyle International Pvt Ltd Vijay Sales Ltd Apollo Hospitals Enterprises Ltd Tribhovandas Bhimji Zaveri Delhi Pvt Ltd adidas India Marketing Pvt Ltd Samsung India Electronics Ltd Bata India Ltd Raymond Ltd Bombay Dyeing & Manufacturing Co Ltd Pantaloon Retail India Ltd Reliance Retail Ltd Organized Non-Grocery Retailing Brand Shares % 2010
  • 19. Agenda • Overview of FDI in Indian Retailing • Organized Retailing in India – Current Status • Regulations on FDI in Indian Retailing • Opposition to FDI in India
  • 20. Regulations
  • 21. The government only permits 51% FDI in single-brand retailing. At present, FDI in Multi-branding retailing is illegal, i.e. prohibited. • However, the latter has a promising future, since, if permitted, it would enormously help India’s economy. Regulations
  • 22. Franchising: Cash & Carry Permitted
  • 23. Agenda • Overview of FDI in Indian Retailing • Organized Retailing in India – Current Status • Regulations on FDI in Indian Retailing • Opposition to FDI in India
  • 24. Opposition: Professionals
  • 25. Opposition: Common Folk
  • 26. Opposition: Intellectuals
  • 27. Opposition: Concerned Citizens
  • 28. Fierce Opposition Exists • The concern is that FDI in Retail will destroy the traditional way of retailing in India, sending mom & pop shops out of business. • Some are just protecting their own personal or business retailing interests.
  • 29. SUMMARY • Overview of FDI in Indian Retailing • Organized Retailing in India – Current Status • Regulations on FDI in Indian Retailing • Opposition to FDI in India
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  • 31. http://www.daybreakingnews.com/post/Atos-which-is-one-of-the-famous-information-technology-companies- will-ban-e-mail.aspx http://2.bp.blogspot.com/- 3O1hfgHAx0M/TaP72drb_rI/AAAAAAAAlnE/uNW3Gg4eVUY/s1600/bangalore_traffic.jpg http://www.visualphotos.com/image/2x4719736/stack_of_indian_fifty_rupee_banknotes http://www.inboundlogistics.com/cms/article/the-bright-side-of-logistics-in-india/ http://ismashphone.com/images/iphone-productivity-apps.jpg http://budgetsimple.files.wordpress.com/2011/12/piggy-bank.jpg http://www.littleabout.com/cim/10-rupee-coin-symbol.jpg http://iifmglobal.com/images/scroll-img/large/management-college-class-room-environment.jpg http://office.microsoft.com/en-us/templates/business-store-hours-TC030006405.aspx http://www.southasiamail.com/ http://indianprofessionals.org/wpimages/wpf5036d24.jpg http://www.ehow.com/how_2240128_identify-fake-watch.html http://www.notofakes.com/Resources/Sectors/LuxuryandFashionGoods/tabid/198/Default.aspx http://www.ecab.it/info-24h.html http://www.goingwithmygut.com/.a/6a00e55404668688330120a9689a74970b-pi http://images.zaazu.com/img/male09-male-happy-smiley-smiley-emoticon-000048-facebook.gif http://www.bizindia.net/uploads/tphome/images/2010/India%20shopping%20mall.jpg http://img.scoop.it/4ie3yc50uHXBwUXhmrtLozl72eJkfbmt4t8yenImKBVaiQDB_Rd1H6kmuBWtceBJ http://images.idiva.com/media/photogallery/2011/Jun/bnaires_wedding_600x450.jpg http://farm5.static.flickr.com/4057/4498830387_e37e542b6b.jpg http://carimg.sulekha.com/automotive-albums/default/original/india_retail.jpg http://www.travelvantage.com/vwphotos/india-cox-25.jpg http://www.prabhupada.org/rama/wp-content/uploads/high1769788.jpg http://www.opinion-maker.org/wp-content/uploads/2011/03/Indian-rich-and-poor-just-accross-the-wall.jpg http://www.newdelhiairport.in/images/India-rich-cultural.jpg http://blogs.voanews.com/pho http://i.dailymail.co.uk/i/pix/2011/10/27/article-0-0E8B33FF00000578- 821_634x422.jpgtos/files/2011/11/AP_India_Workers_Protest_23nov11-878x591.jpg http://i.dailymail.co.uk/i/pix/2009/03/06/article-0-03C5CF44000005DC-959_468x345.jpg http://www.youthkiawaaz.com/wp-content/uploads/2011/01/indian-NGO.jpg http://4.bp.blogspot.com/-jLccAfTzz0c/TeXdaCe7JoI/AAAAAAAACeE/qDeBoUViUV8/s1600/paanshop1.jpg http://www.travelindia-guide.com/travel_india_images/festivals/Diwali-dhanteras.jpg http://www.theoriginof.com/images/food-stuff/paan/paan.jpg http://upload.wikimedia.org/wikipedia/commons/thumb/f/f1/Paan60.jpg/250px-Paan60.jpg http://www.clipartpal.com/_thumbs/pd/education/award_ribbon_red.png http://www.indiaretailing.com/upload/newsimage/pantaloon-ad(1).gif http://imageshack.us/photo/my-images/401/titan170px3es.gif/ http://upload.wikimedia.org/wikipedia/commons/c/c8/RIL_retail.jpg http://www.retailangle.com/images/future_value_retail.JPG http://www.tsin.co.in/images/lg.jpg http://topnews.in/files/Tata-logo.png References and Image Credits
  • 32. Recommended Reading
  • 33. Over 600,000 views from more than 100 countries http://www.BuddingMarkets.com/ Sameer Mathur BuddingMarkets .com http://www.facebook.com/BuddingMarkets/

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