Dept of Commerce and Management studies            Andhra University          UGC Seminar On“ new trends in business educa...
Session on Experience sharing with retailFocus             Under the Esteemed                   Guidance of          Prof....
Retail BasicsDefinition: A business or person that sellsgoods to the consumer, as opposed to awholesaler or supplier, who ...
Organized Retailing – trading activitiesundertaken by licensed retailers those who areregistered for sales tax, income ta...
Major global Retailers         Retailer        Home CountryWal-Mart Stores              USACarrefour Group             Fra...
Major Domestic PlayersRetail Group      StoreFuture Group      PantaloonK.Raheja group    Shopper’s stopTata group        ...
Retail Formats
Other classification of retail formatsMom-and-pop Stores – Family owned businessesDepartment stores – KarachiwalaCatego...
Indian Retail Scenario At A Glance• The contribution of retail industry to India’s GDP is  more than 13%.• Spreads over mo...
Indian Retail Scenario At A Glance• India’s per capita retailing space is the lowest in the  world. (2 square feet).• In I...
Indian Retail Scenario At A Glance• India’s first true shopping mall was inaugurated in  1999 in Mumbai. (This mall is cal...
Issues in International Retailing   • Legislation and Regulation -- FDI   • Taxation and Cross Border Shopping   • Variati...
Introduction to fdiFDI refers to the capital inflows from abroad that is invested inor to enhance the production capacity ...
FDI in IndiaName of the sector        Increase in FDiInsurance                 49%Broadcast sector          74%Retail and ...
Scope of FDI in retail sectorAfter agriculture, retail sector is thehighest employer, employing 7% of the totalwork force...
Scope of FDI in retail sectorBetter cold storages prevent loss of fruitsand vegetables Opening up of large retail houses...
FDI in RetailOn September 14th 2012, Government of India allowedFDI in Multi-brand retail up to 51% and in single brandre...
Some Regulations of FDIThe establishment of the retail sales outlets will bein compliance of applicable State laws/regula...
FDI proposed conditions1} Minimum investment of US $100 million2} At least 50% of total FDI brought in shallbe invested in...
FDI proposed conditions3} Expenditure on land cost and rentals, if any, willnot be counted for purposes of backendinfrastr...
Safeguards A three year timeframe has been fixed for settingup the back-end infrastructure     This condition will bind t...
 There is a conditionality requiring at least 30%procurement from Indian small industries     This would enable them to g...
BenefitsGlobal experience indicates that organized andunorganized retail co-exists and growConsumers stand to gain the m...
BenefitsThe young people joining the workforce willbenefit from the creation of employmentopportunitiesThe policy will f...
FDI- Vizagites’ perspective
Age of the individuals           Sample distribution                                                  51 &                ...
Growth of Shopping malls in recent years is beneficiary to the                                customers40       37.5%     ...
Central Government’s recent decision on FDI helps for the                        growth of retailing in India50           ...
Where do you prefer to shop?60                                  52%     48%5040                                    30%    ...
Do you think foreign retailers intervention will effect small                       scale retailers business90            ...
Do you think foreign retailers offer products at cheaper                              rates80             68%706050       ...
ConclusionEntry of foreign investors into the country willimprove the GDP of the nation. It creates efficientstorage facil...
ConclusionThe small scale intermediaries are however given priorityby the foreign players as they need local networking fo...
Thank YouUnder the Esteemed Guidance ofProf. B.Mohan Venkat Ram
Fdi in Retail sector- 2012
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Fdi in Retail sector- 2012

  1. 1. Dept of Commerce and Management studies Andhra University UGC Seminar On“ new trends in business education” 4th Dec, 2012
  2. 2. Session on Experience sharing with retailFocus Under the Esteemed Guidance of Prof. B. Mohan Venkat Ram By: Sobha Rani Peddini
  3. 3. Retail BasicsDefinition: A business or person that sellsgoods to the consumer, as opposed to awholesaler or supplier, who normally sell theirgoods to another business.Retail consists of the sale of goods ormerchandise for final consumption by the userand not for further sale or processing.
  4. 4. Organized Retailing – trading activitiesundertaken by licensed retailers those who areregistered for sales tax, income tax, etc., theseinclude the corporate-backed hypermarkets and retailchains, and also the privately owned large retailbusinesses.Unorganised retailing – traditional formats of low-cost retailing, for example, the local kiranashops, owner manned general stores, etc
  5. 5. Major global Retailers Retailer Home CountryWal-Mart Stores USACarrefour Group FranceThe Home Depot, Inc USAThe Kroger Co. USARoyal Ahold NetherlandsMetro AG GermanyTarget Corporation USAAlbertson’s,Inc. USASears, Roebuck and Co. USAKmart Corporation USA
  6. 6. Major Domestic PlayersRetail Group StoreFuture Group PantaloonK.Raheja group Shopper’s stopTata group West sideRPG SpencersLandmark Group LifestyleBharati-walmart WalmartReliance group Reliance retailA V Birla Group Louis Phillipe, Van HeusenMetro Metro cash and carryViveks Ltd Viveks
  7. 7. Retail Formats
  8. 8. Other classification of retail formatsMom-and-pop Stores – Family owned businessesDepartment stores – KarachiwalaCategory Killers – best buy, sports authorityMalls – Forum mall, Spencer PlazaDiscount Stores – Brand factorySupermarkets – TrinethraHypermarkets -- Big bazaar
  9. 9. Indian Retail Scenario At A Glance• The contribution of retail industry to India’s GDP is more than 13%.• Spreads over more than 6 million outlets (2.4 million urban and 3.6 million in rural).• There is no supply chain management perspective.• Over 8 per cent of India’s population is engaged in retail
  10. 10. Indian Retail Scenario At A Glance• India’s per capita retailing space is the lowest in the world. (2 square feet).• In India still, more than 60% sales in retail comes from food items only• No role model for Indian suppliers and retails to adapt or expand in the Indian context. Hence Indian retailers have to find a suitable model and adopt it to the Indian context.
  11. 11. Indian Retail Scenario At A Glance• India’s first true shopping mall was inaugurated in 1999 in Mumbai. (This mall is called “Crossroads”).• An FDI Confidence Index survey showed that the retail industry is one of the most attractive sectors for FDI (foreign direct investment) in India.
  12. 12. Issues in International Retailing • Legislation and Regulation -- FDI • Taxation and Cross Border Shopping • Variations in Retailing Practice and Customs
  13. 13. Introduction to fdiFDI refers to the capital inflows from abroad that is invested inor to enhance the production capacity of the economyMethods:The foreign direct investor may acquire voting power of anenterprise in an economy through any of the following methods: •by incorporating •by acquiring shares •through a merger or an acquisition of an unrelated enterprise •joint venture with another investor or enterprise
  14. 14. FDI in IndiaName of the sector Increase in FDiInsurance 49%Broadcast sector 74%Retail and consumer 51%products(Multi brand)Retail and consumer 100%products (single brand)Aviation 49%
  15. 15. Scope of FDI in retail sectorAfter agriculture, retail sector is thehighest employer, employing 7% of the totalwork force in the country.Retailing in India accounts for more than13% of its GDP
  16. 16. Scope of FDI in retail sectorBetter cold storages prevent loss of fruitsand vegetables Opening up of large retail houses willupgrade systems, supply chain, upgradepeople and their abilities and skills. Consumers will be benefited first
  17. 17. FDI in RetailOn September 14th 2012, Government of India allowedFDI in Multi-brand retail up to 51% and in single brandretail up to 100%The choice of allowing FDI has been left to stategovernments.The Chief Ministers ofDelhi, Assam, Maharashtra, AndhraPradesh, Rajasthan, Uttarakhand, Haryana andGovernments of the State of Manipur and the UnionTerritory of Daman & Diu and Dadra and Nagar
  18. 18. Some Regulations of FDIThe establishment of the retail sales outlets will bein compliance of applicable State laws/regulations, such as the Shops and EstablishmentsAct etc.Retail sales outlets may be set up only in cities witha population of more than 10 lakh as per 2011 CensusIn States/ Union Territories not having cities withpopulation of more than 10 lakh as per 2011Census, retail sales outlets may be set up in the cities
  19. 19. FDI proposed conditions1} Minimum investment of US $100 million2} At least 50% of total FDI brought in shallbe invested in backend infrastructure •within three years of the induction of FDI •back-end infrastructure will include investment made towards processing, manufacturing, distribution, desi gn improvement, quality control, packaging, logistics, storage, ware- house, agriculture market produce
  20. 20. FDI proposed conditions3} Expenditure on land cost and rentals, if any, willnot be counted for purposes of backendinfrastructure4} There is a conditionality requiring at least 30%procurement from Indian small industries5} State Governments are also responsible foraspects ancillary to MBRT, such as zoningregulations, warehousingrequirements, access, traffic, parking and other
  21. 21. Safeguards A three year timeframe has been fixed for settingup the back-end infrastructure This condition will bind the foreign investors toinvest in critical back-end infrastructure, which is afelt need across the country It would also make the foreign investorsaccountable for proper implementation of thecondition. Farmers stand to benefit from the significantreduction in post-harvest losses
  22. 22.  There is a conditionality requiring at least 30%procurement from Indian small industries This would enable them to get integrated withglobal retail chains. This, in turn, will enhance theircapacity to export products from IndiaThe final decision will be taken by the stategovernments This gives a control on approvals fornumber, size, format and type of retailer, based onthe favorable conditions of that concerned state
  23. 23. BenefitsGlobal experience indicates that organized andunorganized retail co-exists and growConsumers stand to gain the most.. •firstly, from the lowering of prices that would result from supply chain efficiencies •secondly, through improvement in product quality
  24. 24. BenefitsThe young people joining the workforce willbenefit from the creation of employmentopportunitiesThe policy will facilitate greater FDI inflows,additional and quality employment, global bestpractices and benefit consumers and farmers inthe long run
  25. 25. FDI- Vizagites’ perspective
  26. 26. Age of the individuals Sample distribution 51 & above 2% 41-50 Upto 20 Male 8% 8% 44% 31-40 22% Female 56% 21-30 60% Occupation of individuals 43.5% 37% 6% 9% 4.5%business employes Student H.W Others
  27. 27. Growth of Shopping malls in recent years is beneficiary to the customers40 37.5% 37%3530 21.5% 21.7% Female25 22% Male20 12%1510 16% 15.3% 3.5%5 10% 0.5% 3%0 Strongly agree Agree Disagree Strongly disagree
  28. 28. Central Government’s recent decision on FDI helps for the growth of retailing in India50 45.5%454035 30%30 28.3%25 21% Female 14.7%20 Male15 13%10 17.2% 15.3%5 8% 3.5%0 Strongly agree Agree Disagree Strongly Disagree
  29. 29. Where do you prefer to shop?60 52% 48%5040 30% 25.7%30 Female Male2010 22.3% 22%0 Kirana Shops Shopping mall
  30. 30. Do you think foreign retailers intervention will effect small scale retailers business90 82%807060 49%50 Female40 Male30 18%20 33% 6.6%10 11.4%0 Yes No
  31. 31. Do you think foreign retailers offer products at cheaper rates80 68%706050 38.4%40 32% Female Male30 17.7%20 29.6%10 14.3%0 Yes No
  32. 32. ConclusionEntry of foreign investors into the country willimprove the GDP of the nation. It creates efficientstorage facilities, infrastructures, improve supplychain matrix, upgrades the existing technology, creates millions of jobs and consumers arebenefited more The studies shows that FDI approvalis more beneficial to the nation in the long run, butwith some conditions in order to safeguard theinterests of small and middle intermediaries.
  33. 33. ConclusionThe small scale intermediaries are however given priorityby the foreign players as they need local networking fortheir business activities. But still few will be endangeredbecause of their low supply capabilities.Majority of Vizagites opined that they will get qualityproducts at a cheaper rates. They also opined that thesmall scale retailers will be effected by the intervention ofbig players. Majority of the sample agreed with theCentral Government’s recent decision.
  34. 34. Thank YouUnder the Esteemed Guidance ofProf. B.Mohan Venkat Ram

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