Growing Indian Retail Industry: Current Scenario and Future Outlook
1.
2. • Indian retail is one of the fastest growing markets in the world and the world’s
fifth largest global destination in the retail space.
• Retailing in India accounts for over 10% of the country’s Gross Domestic
Product (GDP) and around 8% of the employment.
• Indian retail market is divided into “Organized Retail Market” and “Unorganized
Retail Market” constituting 9% and 91% of total Retail Sector respectively.
• The overall retail market in India is expected to grow at 12% growth rate per
annum Modern trade is going to expand as twice as fast at 20% per annum and
traditional trade is expected to grow at 10% .
• Retail industry reached to Rs 66.39 lakh crore (US$ 950 billion) in 2018 at CAGR
of 13 per cent and expected to reach Rs 76.87 lakh crore (US$ 1.1 trillion) by
2020.
INDIAN RETAIL INDUSTRY
3. Current Scenario for Retail Industry
• Absence of discounts influenced
online purchasing.
• Mobile and Fashion are most
impacted.
• (FDI) norms for online retail affected
the working of large ecommerce
marketplaces barred online
marketplaces and their group
companies from owning vendors and
prohibited them from controlling the
inventory sold on their platforms.
4. TECHNOLOGY
• Digital retail channels (e-commerce)
• Barcoding and computerized billing systems
• Point-of-sale systems
• Digital Payments
• Supply Chain
• Automated checkout/Cashier less stores
5. MONETARY POLICY
INTEREST RATE:
• Lower interest rate helps the organised retailers to expand.
• Also helps the unorganised retailers to borrow money from micro-
finance.
INFLATION:
• Increase in inflation leads to decrease in the demand of the goods
leading to the decrease in the business of the retailers.
6. DEMOGRAPHICS
• Growth in the middle class.
• Growth in the young urban consumers because of rise in the
urban income.
• Growth in aspiration
• Digital influence- Search for product online
GLOBALISATION
• The demand for the trending goods produced outside India
increases leading to import of these goods that sells in the
retail stores.
7. LEGAL FACTORS
• Consumer protection
• Relaxation on rules on e-pharmacy.
• Privacy and data protection for online purchases.
MONSOON
• A good monsoon increases the demand for goods in India, leading to
increase in the business of the retailers.
EMPLOYMENT
• Entry of super-marts, malls generates employments.
• Nearly 8% of the employment comes from retail sector i.e. 4-16
crores of people are employed in the retail related activities.
8. FDI in Retail
means that
foreign companies
in certain
categories can sell
products through
their own retail
shop in the
country.
Increase in
Employment
Benefits local
Manufacturers
Technological
Advancement
Brings
Infrastructure
Investment
Removes
middleman
Advantages of
FDI in retail
100 per cent FDI in retail trading of food
products manufactured or produced in
India.
Minimum investment cap is US$
100 million
9. Regulatory & Fiscal POLICIES of the
Government
Regulatory Fiscal
• Consumer Demand
• Cost of Doing Business
Tax-related fiscal policy affects retail
businesses by changing the amount of
disposable income people have to
spend.
• Retailers have to pay more for line
of credit due to high interest rates.
• Increase in Social Security and
Medicare add to the cost of doing
business.
Example
• Support for the automobile sector
• Reduction in capital gains tax, and
• Additional liquidity support for NBFC
• Reduction in Corporate Tax
Increase in the minimum wages
Improving transportation
infrastructure as it is the backbone
of retail