Retail industry in india trends and issues -a.m.narahari

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Retail industry in india trends and issues -a.m.narahari

  1. 1. Retail Industry in India: Trends, Key Driving Factors and Socio-Economic Impact-A.M.Narahari, Registrar.St . Aloysius College (Autonomous), Mangaloreamnarahari@gmail.com<br />National Seminar on<br />“Marketing Revolution: Emerging Trends in Retail Marketing”<br />Vidyodaya Arts & Commerce First Grade College, T.Narasipura.<br />September 17, 2011<br />
  2. 2. Traditional Vs Modern Retail Industry<br />Family Owned Vs Corporate-MNCs<br />Sellers’ Market- Buyers’ Market<br />Un Organised Vs Organised<br />Limited Competition<br />Limited Choices<br />Less Brand Loyalty<br />Retailer Domination<br />Mom and Pop Stores<br />Cost Driven<br />Less Innovation<br />Single Location Operation<br />
  3. 3. Value-for Money-Buy<br />More shopping time<br />Less customer service<br />Retailers’ Reputation<br />‘Lifestyle’ was rare<br /> Hawkers and local markets<br />Indian Consumer<br />
  4. 4. TRENDS<br />Projected as Prominent service industry- substantial contribution to GDP- about 10-14% of GDP<br />Corporate entry- small to large - Internationalisation – entry of MNCs- international brands<br />Phenomenal growth- Traditional on the decline -96% to 80% & Organised on the rise-4% to 20%<br />4<br />
  5. 5. TRENDS cont…<br />Electronic Mode- Technology driven-information explosion<br />Urbanisation- Almost 33% of the population<br />Facilitating Consumerism -Changing life style<br />Impetus to food & groceries<br />New value added services-non-store outlets, entertainemt, restaurants, games, etc.<br /> <br />5<br />
  6. 6. ENTRY OF LUXURY PRODUCTS<br />Jewellery Graded Watches and Pens<br />Branded Jewellery<br />Crystalware by the likes of Swarovsky<br />Designerware Clothes, Shoes, Ties & Suits<br />Luxury Automobiles<br /> (Cars, Buses, Two- Wheelers and Others)<br />Healthcare & Fitness Products<br />6<br />
  7. 7. RETAIL MARKET PLAYERS<br />Large Retail Formats<br />Automatic Vending Machines<br />Direct Mail & Catalogue<br />TV Home Shopping<br />Online Retailing<br />Telemarketing<br />Direct Selling<br />7<br />
  8. 8. CONSPICUOUSNESS OF RETAIL MARKET <br />Chinese Products<br />Bottom of the Pyramid Approach of C.K.Prahlad<br />Mass Marketing(civil aviation, Railways)<br />Rural Marketing<br />Products Tailor-made for the customers(Seasonal Insurance Premium Products, Micro-finance and Biometric Transactions, ITC Choupal) <br />8<br />
  9. 9. KEY DRIVING FACTORS<br />Demographic Changes- Youthful-enhanced life expectancy-larger labourfoce- urbanization<br />Value Shift- Joint Family to Nuclear Family, Material Culture Vs Thrift & Simplicity, Luxury Vs Necessities-Conservatism to consumerism- Changing life styles<br />9<br />
  10. 10. KEY DRIVING FACTORS<br />Liberal Policy perspectives in retail markets for speedier economic growth<br />Rising Income<br />Consumer Finance<br />Aggressive Marketing<br />10<br />
  11. 11. KEY DRIVING FACTORS<br />Western Lifestyles<br />TV Channels<br />Organised Retailing<br />Corporate Entry<br />Franchisee for Foreign Brands<br />Urbanisation<br />Credit Card Marketing<br />11<br />
  12. 12. TECHNOLOGY-THE ENABLER<br />Reaching Customers<br />Promotion<br />Buying<br />Delivery <br />Payment<br />Servicing<br />Interactive Maintenance<br />Information<br />Getting the Response<br />Getting the Feedback<br />12<br />
  13. 13. SOCIO- ECONOMIC IMPACT<br />Customer is the king- Still limited choice<br />Facilitating economic growth- issue of uneven growth, regional disparities- wide gap in income distribution<br />Convenient life style<br />New Paradigm in price mechanisms- economies of large scale-discount stores<br />13<br />
  14. 14. SOCIO- ECONOMIC IMPACT<br />Cultural impact- India is like EU- 29 states equal 10-12 countries in terms of language, culture & economic development<br />Unorganized retail market in an agrarian economy<br />Mind game –consumer obsession- Food Stores- KFC- McDonald- Junk foods<br />Real Estate Issues <br />14<br />
  15. 15. SOCIO- ECONOMIC IMPACT<br />Deceptive pricing strategies- Discount offerings- Buyer beware concept still relevant-predatory pricing – Monospony market<br />Unethical practices-Corruption<br />Genetically modified – Artificially blended-makeshift strategies for taking the consumer for a ride<br />15<br />
  16. 16. Foreign Direct Investment: Is it wise to allow a free entry?<br />WTO- GATS obligations<br />Industry strongly advocating supported by the Planning Commission & concerned ministries<br />FDI already existing –JV, franchising, cash & carry operation, direct marketing, 51% in single brand retail- issue of direct investment<br /> Focus on two issues- Employment & Consumer Welfare- study shows decline in employment elasticity with liberalization<br />16<br />
  17. 17. KEY ISSUES<br />I: Uniqueness of Indian retail market- <br />a. end consumers reached through<br />i. Vertical separation- through retailers<br />ii. Vertical integration- direct<br />But India -small-highly fragmented- unorganized<br />Customer relation established by small retailers<br />No barrier for entry or exit<br />Socio-political stability in terms of employment<br />Under employment- disguised employment highest<br />Organised market in nascent stage<br />17<br />
  18. 18. II: Benefits of FDI : Pull-Push Factors<br />Pull<br />Organized players collaborate to expand<br />Expertise available with world leaders<br />Meeting foreign currency crisis<br /> can satisfy customers<br />Push<br />They are interested in India<br />Emerging mkt- even for procurement-handicraft & semi-finished<br />Share of FDI declining in developed countries<br />Internationalization-great opportunity for maxmising return on investment<br />18<br />
  19. 19. KEY ISSUES<br />III: Impact on marginal producers & Workforce- experience of other countries<br />IV: Impact on existing Labour Laws<br />V: Safeguard options available to Government to protect small producers/suppliers- MFN, National Treatment concepts<br />19<br />
  20. 20. Challenges Ahead <br />Empowering small retailers for an inclusive growth- effective co-existence with organized market- corporate social responsibility-bottom of the pyramid approach<br />Retail cooperatives for small retailers- this may facilitate QR (quick response & ECR (efficient consumer response)<br />More effective Consumer education- protection- <br />Regulations for protecting cultural identity<br />Promoting ethical practices<br />20<br />
  21. 21. Challenges Ahead <br />Merger & Acquisitions of weak outlets<br />Change of mindset of retailers with the support of manufacturers to satisfy the target customers<br />Use of technology for business excellence by setting up a network of independent firms<br />Setting up of franchisee organization- & non-store retailing channels<br />Liberalisation with a human face<br />21<br />
  22. 22. REFERENCES<br />Narayana, K.G. S & P.K. Sudarsan ( 2008): Globalisation of Retailing: An Indian Perspective, The associated Publishers, NewDelhi<br />Vedamani, Gibson G ( 2010) : Retail Management: Functional Principles and Practices , JAICO , Mumbai<br />Soni, Ajaya N ( 2010) : Retail Management , Oxford Book Company <br />Shewan, M.A. ( 2008): Retail Management , Sonali Publications, New Delhi<br />Rosemary, Varky & Rafiq Mohammed ( 2007) : Principles of Retail management, Palgrave Mcmillan, Newyork<br />www:google.com, accessed on September 06, 07,08 and 13, 2011<br />Inputs from various Scholars <br />22<br />

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