Varied window displat : now a days retailers know that if your product is dosplayed properly acc. to the culture of the state you are operating in , will definaltey help you
Count the country and then speak on the 4 things showed here
This is not all there is still more
In 2881, India had the highest shop density in the world, with 11 outlets for every 1,888people.. The high density restricts their scope of expansion, and thereby ofupgrading. This also means that, except in the case of severely segmented markets, thissector stands little chance of competing against large retailing corporations operatingwith economies of scale.
It will bring out many positive changes i.e. improvement in supply chain management. It is noticed that 35-40% of the agriculture produce perishes every year due to poor infrastructure in India and there are only 6522 cold storages in India mainly used for potatoes.Investment in technologies and infrastructure by the retail corporations will act as a boon for our economy.These org will come in with technical know how and expertise and will train indian manpower and hone their skills as suitable for the industry.Moreover small players who have already been working with Internationalchains like Wal-Mart/Carrefour in India have benefitted a lot by manufacturing their private label products & also showcasing ourproducts in their stores by reaching end consumer directly at competitiveprices which would otherwise launching and building a new brand is a task in itself.It is understood that MNC that invest in retail in india would also source indian goods to their international outlets in a big way, thus provide a boost to indian exports. Indian retail chains would get integrated with global supply chain since Fdi will bring in technology, quality standards and marketing.
technological know how, soil quality improvement, pesticide and fertilizer usage,grading, sorting, capabilities and increasing availability of low interest credit forfarmers.
After observing the opportunities and challenges, the views of different org. and the benefits that are likely to take place in indian economy..the panel recommends that fdi in multi brand retail should be allowed but a cap of 49% should be imposed to protect the interest of small and medium size retailers and give them a breathing space to adjust themselves to the new environment and also work to bring in their competitive advantage. China opened the fdi 49% in 1992 and has been immensely benefitted due transfer of technical know how and increased exports there are currently appx 40 foreign players contributing to org retail sector. Now, its time for india to open the borders and be benefitted by the retail growth.A major proportion of initial FDI should be invested in developing back endinfrastructure. For e.g. the foreign partners need to tell the total amount thatthey will be investing in next five years. Out of these atleast 80% of the FDIhas to be made in initial three years.We talked of large percentage of agriculture produce getting wasted annually. Well investment in technology and supply chain will surely prevent such wastages consequently curb the supply caused inflation which is currently hovering around 15.46%.
It is well noted that urban migration has created a significant excess of labour in India's largeand medium-sized cities. Retail jobs can offer a viable career opportunity for the urbanunemployed who may lack in formal education and training, just as they can for those inrural areas. Rather than stipulating employment conditionalities that may obstructemployment generation in urban areas, alternative incentive structures may be used toencourage companies to train and employ youth in the areas in which retail outlets arelocated - both rural and urban.Additionally, if incentive structures or conditionalities are imposed, they should be mandatedupon both domestic and foreign funded retail chains equally.Furthermore, it is being discussed that retailers should be restricted to larger citiesof 10 lakh or more. This point is in direct conflict with a stipulation requiring the hiring ofrural youth, who will likely be unable to travel to their place of employment in a consistent,cost-effective manner.
And u can well see difference in the share of spending in these 3 categories by rural and urban households.
Retail investments and operations are typically executed with local and regionalconsiderations in mind, so a national legal framework cannot truly be effective. State andlocal licensing requirements are sufficient to protect small retailers, and otherwise regulatethe industry.Implementing new regulations will likely hold back growth in this sector, as well as weaken itsAttendant benefits on SME suppliers, consumers and supply chain investment. Rather thanimpose such regualtion, the government may consider policies and incentives that directlybenefit small retailers. These incentives can include, for example, access to low-cost capital,training on quality and technical standards, and infrastructure investment in their ownbusinesses.
•FDI in Retail – Policy Perspectives.
•Retail Sector – An Overview.
•FDI Policy in Retail - Opportunities & Challenges.
•Emerging Human Resource Challenges.
•What lies ahead ?
Issues for Discussion
The commitment of money or
capital to purchase financial
instruments or assets in order to
gain profitable returns.
Investment done by citizens and
government of one country (home
country) invest in industries of
another country (host country).
Automatic Route Government
No permission required Approval /License required.
• 1991- FDI allowed selectively up to 51% in priority
• 1997-FDI allowed up to 100% in sectors like
• 2000-06 FDI allowed up to 100% in specified sectors.
FDI limits increased.
Procedures further simplified
• The top 3 Indian Regions attracting the highest FDI.
Mumbai, Delhi and Karnataka.
Account for nearly 62% of the total FDI.
• Mergers and Acquisitions
• Horizontal FDI
• Vertical FDI.
*Backward Vertical FDI
*Forward Vertical FDI
• 51%Single Brand
• 100%Cash and
Incentives attract FDI.
Market size and potential are sufficient inducers.
Tax breaks, import duty exemptions, land and power
subsidies, and other enticements.
FDI inflows from
August 1991 to
FDI inflows from
GRDI Position : 3rd
Size : $ 400 billion
Growth Rate : 13%
GDP contribution : 12%
Major sector : Food and Grocery
Employment : 2nd largest industry
Types: Organized ( 5%)
Unorganized ( 95%)
• Corporates are increasingly coming into this sector.
• Demand of branded goods on a large scale.
• Demand of new and varied products.
• High quality product is preferred .
• Varied window display.
• E-tailers increase the presence.
Format Description Retailers
Hypermarkets Offering basket of product Spencers, Big bazaar
Cash and Carry Bulk-buying requirement Bharti-wal-mart
Departmental stores Large layout, Wide merchandise
Lifestyle , Globus
Supermarkets Household product as well as food
as integral part of the service
Apna bazaar , food
Shop-in-shop Shops located in shopping malls Navras ( big bazaar)
Specialty stores Focus on individual product type Brand Factory
Category killers Particular segment The LOFT
Discount stores Branded product at discounted
Convenience stores Small Retail stores In and out
Retail Segment Percentage holding
Food and grocery 63% Reliance fresh, Café
brio, food bazaar
Clothing, textile and
9% Westside, shoppers
jewellery 5% Tanishq
Catering services 5% IRCTC
Consumer durable 4% Viveks, vijay sales,
pharmaceuticals 4% Piramal group
Entertainment 3% Bowling co.,
Furnishing, utensils 3% Hometown, Tangent
Mobile handsets 2% The mobile store,
• One of the world's largest industries exceeding US$ 9
• Dominated by developed countries.
• 47 global fortune companies & 25 of Asia's top 200
companies are retailers.
• US, EU & Japan constitute 80% of world retail sales.
• Retail trade in Europe employs 15% of the European
workforce (3 million firms and 13 million workers).
• The world’s population is poised to expand 50% by 2050.
The world currently comprises of 78% poor, 11% middle
income and 11% rich.
0 20 40 60 80 100
US Taiwan Malaysia Thailand Indonesia China India
Unorganised 15% 19% 45% 60% 70% 80% 95%
Organised 85% 81% 55% 40% 30% 20% 5%
Focus on Services Focus on Industry
High labor cost Low Labor Cost
Home grown Capital FDI
Old technology Adaptability to Latest
Democratic Government Communist Government
•A large emerging market .
Increase in disposable income of a family.
70 mn Indians – salary of $18,000.
Rise to 140 mn by 2011.
Consumer spending power increased by 75% in
last 3 years.
The per capita income in 2009–2010 has more
than doubled to US$ 849 from US$ 348 in 2000–01.
Characteristics of Indian Market
•Increase in consumer class.
Consumer class will grow
from 50 million at present to
583 million by 2025.
With more than 23 million
people taking their place
among the world’s
•Wide demographics -- average age of 25 yrs.
60 % of population below age of 30.
Awareness through World Wide Web.
•Changing consumer mindset.
Focus shifting from low price to convenience, value
and a superior shopping experience.
•Small Basket Size Shaping of Consumption
•Easy consumer credit.
EMI & loan via credit cards --
easy for Indian consumers to
afford expensive products.
For instance, Casas Bahia’s-
Note: BOP C.K.Prahalad.
Second-largest employer after
Retail trade employing 35.06 million.
Wholesale trade generating an
additional employment of 5.48 million.
•Technology Better use of resources and
Wastage and Storage problems will be
Efficient logistics, production, and
70% Indian households.
2/5 of the country’s total consumption pie.
Accounts to 45% of GDP.
•FDI in Retail sector will resolve problems
regarding foreign exchange in India.
•The life-long basic needs will keep on
driving the Retail Industry.
Let the liberalisation be in
steps rather than being a leap.
• Major challenge faced by Organized retail sector:
In Retail, over 70 per cent of the labor force in
both sectors combined (organized and unorganized)
is either illiterate or educated below the primary
• Labor Laws
• A strong competition from mom and pop shops:-
Easily accessible & approachable.
Provide services like Free home delivery and goods on
They change consumer focus.
• Bharti retail
• K raheja
• Vishal group GLOBAL
In India every year there is pilferage of US$ 65 billion
whereas in USA it is just 1-2%.
Due to lack of proper storage infrastructure post-
harvest losses of farm produce is Rs. 1 trillion cr.
In terms of corruption India stands at 85th position.
Because of paper work, corruption is present along the
entire supply chain.
In India, there are additional 2-3 intermediaries as
compared to USA.
i. They dominate the value chain.
ii. They flout mandi norms & their pricing lacks
India is still in developing stage in installing and
managing an effective IT system especially in rural areas
which hampers the overall growth of organized retail
Banks are reluctant to finance retailers because of falling
demand of organized retailers in India as it has witnessed
failure of many stores like Spencer's, Subhiksha, etc.
• Taxation laws in India favors only small retail businesses.
• Implementation of non-uniform VAT across states.
• Octroi and entry tax in some states.
• 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.
Challenge to get
more customers at
• Indian retail sector :
Employs 8% (35 million)of the working population.
Could yield 12 to 15 million retail jobs in the coming
• Out of which organized segment is about 0.3 million.
• Retail sector grew at 9.4% on real terms & 15.4% on
Back End Operations
MBA Graduates with 5-
10years of Experience
Graduates with 2-5years of
Graduates/ 12th Pass/ 10th
Graduates/ 12th Pass/ 10th
Level Skills Required Skills Gap
• Negotiation with
personnel is a key
• Knowledge of data
•Coordinate with media
• Ability to understand
Complexity/Technical Nature of Product
Nature of Supply Chain
Changes in the Product Nature/ Type
Price Segment(Luxury, Mass market etc.
Intensity of Skill Requirement
• Communication Skills
• Multi Tasking
• Limited Retail Training
• Higher Level Skills
• The Retailers Association of India (RAI)
- Diploma and Degree Programs in Retailing
- Bharti Retail and Vishal Retail
- 5,000 trained persons
FDI can be a powerful catalyst to spur competition in the
It can bring about:
Supply Chain Improvement
Investment in Technology
Manpower and Skill development
Efficient Small and Medium Scale Industries
Increase in exports
to have more
than 50 stores
across India by
has plans to
Crore to open
in the coming
(PRIL) plans to
to add up to
million sq ft
retail space. .
Timex India will
52 stores by
taking its total
store count to
• Investment into warehouse and cold storage chain will
result in significant efficiency on supply chain.
• Farmers benefited through direct marketing and contract
• Improves farm production through modern techniques.
• Increasing availability of low interest credit for farmers.
2008 2011 2013 2018
• In the last four year, the
consumer spending in India
climbed up to 75%.
• By the year 2013, the
organized sector is also
expected to grow at a CAGR of
• The total number of shopping
malls is expected to expand at
a CAGR of over 18.9 per cent
The initial cap on investment could be pegged at 49%.
FDI should be leveraged to create back-end infrastructure.
FDI will be a powerful driver to curb inflation.
To develop our rural sector ,should
conditionality’s be put on the FDI funded chains
relating to employment?
For example, should we stipulate that at least 35%
of the jobs in the retail outlets should be reserved
for the rural youth?
Opportunity to urban and rural unemployed
Alternative incentive schemes
Industry experts predict that the
next phase of growth in the
retail sector will emerge from
the rural markets.
By 2012 the rural retail market
is projected to have a total of
more than 50 per cent market
Apparel, along with food and
grocery, will lead organised
retailing in India.(RNCOS)
What additional steps should be taken to protect
Should an exclusive legal and regulatory framework
be established to protect their interests?
National legal framework cannot be effective.
Hamper growth in retail sector.
Incentives directly to benefit small retailers.
Restrict the number of stores that can be operated in a city.
Allow access to the small retailers to the stores through