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Business Set up Article - part of eBizWire by StartBizIndia
 

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    Business Set up Article - part of eBizWire by StartBizIndia Business Set up Article - part of eBizWire by StartBizIndia Document Transcript

    •   Industry of the Month       “Retailing in India”           eBizWire            Vol . I  Issue. II, March 2012    Insight Biz India News                                                                           2Biz  Policy Updates                                                                  2Retail Industry in India                                                         3 ‐ 7Business Idea of the Month           7StartBizIndia  Discussion Platform  8Upcoming Business Summit                                                9Contact us                                                                                   10      For more info on Business setup visit www.startbizindia.in        P a g e  | 1                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •    Biz India News  Headlines  India has invited Saudi participation in upcoming investment opportunities in its petroleum India invites Saudi Arabia to upstream and downstream sector including OPaL’s Petrochemical project at Dahej and invest in oil sector OMPL’s Petrochemical project at Mangalore Singapore-based Sembcorp Industries said its Indian joint venture, Thermal Powertech Sembcorp India plant signs 10 Corp, has signed an agreement with Indonesias PT Bayan Resources for supply of about year coal contract one million tonnes of coal per year for 10 years. The contract, which is for an aggregate of 10 million tonnes of coal, is expected to commence in 2014, Sembcorp said in a statement. The increase in diplomatic strength between Indian and Australia has facilitated devotion Australia turns focus to South, of more resources to South India, according to David Holly, Consul General to South keen on more bilateral trade India, Australian Consulate General, Chennai, India. The bilateral trade is poised to reach A$ 40 billion (US$ 42.59 billion) in three years, as per Michael Carter, Consul Commercial and Trade Commissioner, Australia Trade Commission Hero MotoCorp has signed a technology-sharing deal with US motorcycle firm Erik Buell Hero MotoCorp joins hands with Racing (EBR). "Its a very flexible partnership where they will develop cutting-edge Erik Buell Racing technology based on our needs and market demands," according to Pawan Munjal, Managing Director and CEO, Hero MotoCorp German firm Steinbach sets Steinbach & Partner, the Germany-based global executive search and human resource up Indian arm (HR) consultancy firm, has entered India and set up a wholly-owned subsidiary, headquartered in Pune. Ethiopia has sought India’s assistance for promoting tourism in the country  Visiting Ethiopia Seeks Assistance Ethiopian Minister of Culture and Tourism Tadelech Dalcho called on Tourism Secretary from India to Promote R.H. Khwaja and showed keen interest in India’s tourism activities Tourism Tata Consultancy Services Ltd (TCS) has announced a joint venture (JV) with Mitsubishi Corporation to increase penetration in Japan. The JV will be named Nippon TCS Solution TCS in JV with Mitsubishi for Centre and will offer information technology (IT), business process outsourcing (BPO) Japan Market and infrastructure services to Japanese corporations    Biz Policy Updates  Legal Headlines  RBI has revised the procedure for reporting the software exports to Software technology Parks (STPI) on 15th February 2012. This procedure is applicable to those Software RBI revises procedure for exporters whose turnover is excess of Rs. 1000 Crores or who submits at least 600 reporting the software exports to Softex Forms annually. STPI GOI has permitted up to 100% FDI in Single Brand Product Retail Trading under FDI in Single Brand Retailing th approval Route on 10 January 2012     For more info on Business setup visit www.startbizindia.in        P a g e  | 2                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •      Key  Players  in  Indian  Retail Industry In India  Retail Market  “The secret of successful retailing is to give your customers what they want. And really, if you think about it from the point of view of the customer, you want   everything: a wide assortment of good quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience." Sam Walter – Founder Walmart Corporation India is one of the fastest growing retail industries in the world over the last couple of years. It is the fifth largest in the world and third largest in Asia after China and Japan. The retail industry is divided into organized and unorganized sectors. The former refers to trading activities carried on by licensed retailers and the latter refers to traditional formats like kiryana stores. Traditionally the retail market in India was largely unorganized, however, with changing consumer preferences, organized retail is gradually becoming popular. The last few years have seen an immense growth in this sector, the key drivers being changing consumer status and demography. The government policies are becoming more favorable and emerging technologies are facilitating operations. With rising disposable incomes, expansion of stores and supporting economic factors, Indias retail sector is expected to grow to about $ 600 billion by 2014, according to a report by global consultancy and research firm. TRADITIONAL AND MODERN RETAILING: THE INDIA STORY   Traditional retailing continues to be backbone of the Indian retail Industry, with traditional/ unorganized retailing contributing to over 95% of total revenues. The classic mum & pa   family retailing outlets forms the major part of retail market. More than 12 million retail outlets exists in India as against China with 2.7 millions. Retail Sector in India is primarily   categorized by the type of products retailed, as opposed to the different retail formats in operation. The food and beverages accounts for largest share of revenues. The Indian consumer behavior of preferring proximity to food and grocery retail outlets is highly evident. Retail  Formats  In  Apparels, mobile, consumer durables are also equally growing in the retail market in India. Apparel is one of the fastest growing verticals, with the highest number of domestic India  and foreign brands mushrooming in the market, and increasing consumer willingness to pay for brand and quality of products.  Exclusive Branded Retail Shops ORGANISED RETAIL IN INDIA  Multi Branded Retail Organised retailing, in India, refers to trading activities undertaken by licensed retailers, Shops that is, those who are registered for sales tax, income tax, etc. These include the publicly- traded supermarkets, corporate-backed hypermarkets and retail chains, and also the  Convergence Retail privately owned large retail businesses. These are exciting times for Indian Retail. Outlets   For more info on Business setup visit www.startbizindia.in        P a g e  | 3                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •   Retail Industry In India  Competitive  Scenario  in LICENSES REQUIRED TO START A RETAIL STORE IN INDIA  Indian Retail Sector   Shops & Establishments Trade Licenses    Labour License/7 days working permission    ESIC Sub Code  Hypermarkets  Contract Labour Registration  Prevention of Food & Adulteration Act  Departmental Stores  Food handlers certificate  Grampanchayat N.O.C  Supermarkets  Police Clearance  Licence for frozen Non veg food  Specialty Stores  Milk and Milk Products Order  Drug License for OTC Products  Cash & Carry Stores  Civil Supply License  Food license to store food products from the Medical Officer of Health of Municipal Corporation  Permission from state electricity board/ municipal authorities/ Government for use of generators/ D.G. sets  Food and Drug Licenses i.e. PFA licence  Licence for sale of Cosmetics under Drugs and Cosmetics Act  Valet Parking  Restaurant Grade License  Any other License/ Permission as may be required FUTURE OUTLOOKBefore 2011, India had prevented innovation and organized competition in itsconsumer retail industry. It has been claimed that the lack of infrastructure andcompetitive retail industry is a key cause of Indias persistently high inflation.Furthermore, because of unorganized retail, in a nation where malnutrition remains aserious problem, food waste is rife. Well over 30% of food staples and perishablegoods produced in India spoils because poor infrastructure and small retail outletsprevent hygienic storage and movement of the goods from the farmer to theconsumer. Strategies by Retailers  It has been estimated that Indian retail market is generating sales of about $470billion a year, of which a miniscule $27 billion comes from organized retail such as  Lowering pricessupermarkets, chain stores with centralized operations and shops in malls. Theopening of retail industry to free market competition, some claim will enable rapidgrowth in retail sector of Indian economy. Others believe the growth of Indian retail  Offering Discountsindustry will take time, with organized retail possibly needing a decade to grow to a25% share. A 25% market share, given the expected growth of Indian retail industry  Value Added servicesthrough 2021, is estimated to be over $250 billion a year: a revenue equal to the2009 revenue share from Japan for the worlds 250 largest retailers.  Leveraging partnershipsThe Indian retail sector, particularly organized retail, is still under-developed and in anascent stage and therefore it is important that the domestic retail sector is allowedto grow and consolidate first, before opening this sector to foreign investors.   For more info on Business setup visit www.startbizindia.in        P a g e  | 4                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •    Retail Industry In India  Policy Support: Demand Potential: Govt is planning to India’s growing remove old tax system population and to simplify the tax urbanization offers huge calculation and avoid market for organized double taxation in retail Indian Retail Advantage  India in Retail   Gateway to India  While there are restrictions in FDI in Indian retail, the most common channels for entry of foreign retailers are through;  Strategic License Increasing Investments: Agreements i.e. 100% FDI allowed in Partnering with Indian Single Brand Product promoter owned Retail Trading under approval route companies in the Middle East (UAE) or South   East Asian countries (Singapore, Malaysia,  Indian market has high complexities in terms of a wide geographic spread and Thailand, Indonesia) distinct consumer preferences varying by each region necessitating a need for localization even within the geographic zones  Franchising  India has highest number of outlets per person (7 per thousand)  Cash & Carry wholesale  2 Indian retail space per capita at 2 sq ft (0.19 m )/ person is lowest in the world trading  Indian retail density of 6 percent is highest in the world.1.8 million households in India have an annual income of over 45 lakh     For more info on Business setup visit www.startbizindia.in        P a g e  | 5                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •     Retail Industry In India  Market Size over the  INDIAN RETAIL REFORMS Past Years (USD Billion)  Until 2011, Indian central government denied foreign direct investment (FDI) in multi- brand Indian retail, forbidding foreign groups from any ownership in supermarkets, 450 convenience stores or any retail outlets, to sell multiple products from different brands directly to Indian consumers. 400 350 CAGR 6.4% The government announced the following: 300 250  India will allow foreign groups to own up to 51 per cent in "multi-brand retailers", 200 as supermarkets are known in India, in the most radical pro-liberalisation reform 150 passed by an Indian cabinet in years; 100  single brand retailers, such as Apple and Ikea, can own 100 percent of their 50 Indian stores, up from the previous cap of 51 percent; 0 1998 2002 2006 2010  Both multi-brand and single brand stores in India will have to source nearly a third of their goods from small and medium-sized Indian suppliers; Source: EIU, Euro monitor, Aranca Research  all multi-brand and single brand stores in India must confine their operations to 53-odd cities with a population over one million, out of some 7935 towns and cities in India. It is expected that these stores will now have full access to over  The Retail sector in India 200 million urban consumers in India; is emerging as largest  multi-brand retailers must have a minimum investment of US$100 million with at sector having Total Market least half of the amount invested in back end infrastructure, including cold Size of USD425 Billion in chains, refrigeration, transportation, packing, sorting and processing to 2010 considerably reduce the post harvest losses and bring remunerative prices to farmers;  The Indian retail Industry is  The opening of retail competition will be within Indias federal structure of increasing at annual growth government. In other words, the policy is an enabling legal framework for India. rate of 6.4 percent. The states of India have the prerogative to accept it and implement it, or they can decide to not implement it if they so choose. Actual implementation of policy will be within the parameters of state laws and regulations.   2010- Market Size USD 425Billion The opening of retail industry to global competition is expected to spur a retail rush to   Expected in 2014- India. It has the potential to transform not only the retailing landscape but also the Market Size USD nations ailing infrastructure.   600Billion      For more info on Business setup visit www.startbizindia.in        P a g e  | 6                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •    Retail Industry In India  GREEN LIGHT FOR SINGLE-BRAND RETAIL REFORMS On January 10, 2012, India approved increased competition and innovation in single- brand retail. The reform seeks to attract investments in production and marketing, improve the availability of goods for the consumer, encourage increased sourcing of goods from India, and enhance competitiveness of Indian enterprises through access to global designs, technologies and management practices. In this announcement, India requires single-brand retailer, with greater than 51% foreign ownership, to source at least 30% of the value of products from Indian small industries, village and cottage industries, artisans and craftsmen.   Globally, Single Brand Retail follows a Business Model of 100% ownership and global   majors have been reluctanct to establish their presence in a restrictive policy   environment. The current cap of 51% confers a right to pass all ordinary resolutions, while enhancing the cap to 100% will confer full ownership and control, “DIPP had earlier said in a statement. Business IDEA OF THE Month      Online Entertainment Shop: We would probably be bored off all the time if we had nothing for entertainment. Don’t you think? Sanity mainly, people would go crazy in boredom. Entertainment can be anything like a movie show, a concert, dance show, comedy show etc. And, people when gets this entertainment means through a mouse click, they get excited. Online Entertainment Shop is a great business opportunity that unites the entertainment industry with the internet. Let’s consider starting an online entertainment coupon service. The business concept is very straightforward. First, you need to design a website that is indexed into various entertainment services and products such as musical concerts, plays, movies, etc. in different parts of India. The next step is to approach companies and businesses within the entertainment industry to advertise discounts that apply to their specific products and services on the website. Visitors to the entertainment coupon website would be   only a few clicks away from locating and printing a discount coupon for the entertainment event or product they were seeking. The business would gain revenue by charging the entertainment companies a monthly fee to advertise on the site and post their discount coupons.   And, the start up costs is also not so high. You can start the Online   entertainment business by investing Rs. 50,000 to Rs. 1, 00,000   For more info on Business setup visit www.startbizindia.in        P a g e  | 7                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •           StartBizIndia Discussion Platform     Can the branch office of a foreign company purchase immovable   property in India?     A foreign company which has established a Branch Office or other place of business in India, in accordance with the Foreign Exchange Management   (Establishment in India of Branch or Office or other Place of Business)   Regulations, 2000, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for   acquiring such a property should be made by way of foreign inward remittance through the proper banking channels. A declaration in form IPI should be filed   with the Reserve Bank within ninety days from the date of acquiring the   property. Such a property can also be mortgaged with an Authorised Dealer as a security for the purpose of borrowings. On winding up of the business, the   sale proceeds of such property can be repatriated only with the prior approval of the Reserve Bank. Further, acquisition of immovable property by entities   incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran,   Nepal and Bhutan and who have set up Branch Offices in India and would require prior approval of the Reserve Bank.      Can NRI/ PIO rent out the residential/ commercial property   purchased out of foreign exchange/ rupee funds?   Yes, NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted   abroad. Powers have been delegated to the Authorised Dealers to allow   repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an   appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have   been paid/provided for.                 For more info on Business setup visit www.startbizindia.in        P a g e  | 8                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •       Upcoming Business Summit    GIC CONCLAVE 2012  NASSCOM brings to you the second edition of GIC Conclave 2012, scheduled to be held in March 2012 in India. The event is themed around Co-creating Value, the two day conclave would be the ideal platform to share the global best practices, address the challenges faced by the segment, highlight the success stories and discuss new business models and strategies. GIC Conclave is a unique platform, which facilitates focus on segment specific issues. Given the non-compete nature of the industry, the   event would conduct a lot of interactive discussions, which would help share the best practices.   th st Date: 20 – 21 March 2012 Venue: Hotel Le Méridien, New Delhi National       GIC Conclave 2012   Doing Business with India Conference – Opportunities in Investing, Trade,  and Outsourcing with India  India Business Conference offers opportunities in investing and doing business with   India in various sectors including Opportunities in Real Estate, Investment, Trade, Outsourcing, IPO, KPO, IT, Software, Call Centers, Infrastructure, Inter National  Telecommunication, Power Sector & other sectors. It covers Legal, Financial and Tax aspects of Doing Business with India. Great Opportunity to Network with  Doing Business with corporate and governmental leaders India Conference 2012 th Date: 29 May 2012  Global Entrepreneur Venue: Chicago, Illinois, USA Congress   Global Entrepreneur Congress  March 9th -15th the Global Entrepreneur Congress 2012 will come to Liverpool, England providing festival for business people. Entrepreneurs will experience an   inspiring journey through sessions of speeches. And, Speakers included in this credible line up are Sir Richard Branson, Martha Lane Fox, Sir Terry Leahy, Lord Heseltine, and many more….           For more info on Business setup visit www.startbizindia.in        P a g e  | 9                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239 
    •                                                                Contact Us    Visit us at  Neha Seth    neha@indiacp.com      D: +91.11.40622239          A Venture of              D‐ 28, South Extn. Part I New Delhi – 110049  Shipra Paul  T: 40622200 F: 91.40622201    shipra@indiacp.com  E: info@startbizindia.com    D: +91.11.40622246         Disclaimer:   This  paper  is  a  copyright  of  Corporate  Professionals  (India)  Private  Limited.  The  entire  content  of  this  paper  have  been developed for the new startups. The author and the Company expressly disclaim all and any liability to any person who has read this  paper,  or  otherwise,  in  respect  of  anything,  and  of  consequences  of  anything  done,  or  omitted  to  be  done  by  any  such person in reliance upon the contents of this paper.   For more info on Business setup visit www.startbizindia.in        P a g e  | 10                                                                                             For Business setup queries email at  neha@indiacp.com   or call at 011 40622239