The document provides an overview of the Indian retail sector including key statistics and trends. Some of the main points summarized are: - Total retail sales in India are USD 550 billion with a GDP per capita income rising from USD 1761 in 2015 to USD 2366 in 2018. - Organized retail makes up 10% of the sector currently but is growing over 20% annually from 2012-2020. - E-commerce is a major growth area for retail in India with online retailers using mobile apps to increase their customer reach. - Key challenges for the retail sector include a heterogeneous market, poor supply chain infrastructure, and competition from unorganized markets.

1. USD 550 Billion
Total Retail Sales
GDP Per Capita Income
From current USD. 1761 in
2015 to USD. 2366 in 2018
10%
Organized Retail Sector
Penetration
> 20% Growth
In Organized Retail
during 2012-2020
14th Rank
Global Retail
Development Index (GRDI)
2020- USD 45 - 50 Billion
CAGR over next five
years – 40%-45%
Number of International
Brands entering into India
Indian Retail Sector- At Glance
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2. 2
Indian Retail Sector
Introduction
The Indian retail industry is one of the most vibrant industries in
the country. It is currently ranked at 20th position among the top
30 developing countries identified by management consulting
firm AT Kearney in its 2014 Global Retail Development Index
(GRDI).
With the growth in the retail industry, the corresponding demand
for real estate is also being created. Further, with the online
medium of retail gaining more and more acceptance, there is a
tremendous growth opportunity for retail companies, both
domestic and international.
Investment Scenario
With the rising need for consumer goods in different sectors
including consumer electronics and home appliances, many
companies have invested in the Indian retail space in the
past few months. Some of them are:
 Japanese firm SoftBank has invested around US$ 627
million in Snapdeal, which has made it the largest
shareholder in the e-commerce company.
 American fast food chain Burger King plans to open 12
outlets in India over the next three months, six each in
Delhi and Mumbai. It is presently looking at a company-
owned and company-operated model for its stores,
which will be located in food courts and high-street
locations.
 Amazon and Future Group has jointly signed a deal to sell
goods online. Both firms will also develop a new line of
products across categories to be exclusively sold at
Amazon and Future Group's retail
 Myntra.com has planned to launch The Wedding Store by November,
2014. The Wedding Store will offer wedding wear and accessories (shoes,
bags, jewellery, bindis, and so on) that a bride and groom will require.
 GoJavas, a logistics service provider in the e-commerce space, has
introduced a ‘try-before-you-buy’ experience in e-retail transactions. In
this, the delivery boys wait at the customer’s house till the customer tries
out the product before accepting or returning it.
V/S

3. Opportunity Snapshot
Opportunity size
and key retail
segments
833 Million
1. Personal Care , Hair Care, Teeth Care
2. Selected Electronics
3. Food & Beverages
600 Million
1. Packaged Foods and Beverages
2. Luxury Products
3. Indentation
4. Consumer Electronics
5. Personal Care, Beauty and Wellness
500 Million
1. Packaged Food Products
2. Mobile
3. Apparels and Accessories
4. Home Care
5. Affordable Luxury
156,000 (USD Millionaires)
1. Home Furnishing
2. Luxury Consumer Electronics
3. Luxury Products
Rural Consumers
Rural market constitutes 70 per cent of the total population base, but
currently accounts only 40 per cent of the total consumption in India.
Several National and International Retail and FMCG Players have been
planning to explore these untapped markets and are forming various
strategies to take maximum advantage.
Working Population
The population in the working age group of 15 to 54 years is the largest
spender on retail. More than 50 per cent of India’s total population falls
under this group, indicating the significant influence wielded by this
segment on consumer spending
Middle Income Household
India has an aspirational middle class of 75 Million Households. Over the
years, disposable income of Indian Consumer has increased significantly ,
which is leading to substantial change in their spending habits.
Youth
As per the census of 2011 , India has also about 500 million Indians under
the age of 25 . Young Indians are driving purchases in categories such as
mobile phones, fashion , quick service restaurant etc. and are willing to
experiment and change habits. Young Indians have access to more money
than before ,driving independence , aspiration and demand for products.
Growing number of Millionaires
The growth in millionaires in India is driving indulgence in luxury
products such as fine wines, expensive handbags and branded jewellery .
According to Wealth Report 2014, the total number of millionaires in
India grew by 51 per cent , second fastest in the Asia Pacific region
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4. Regulatory Framework
51% FDI in Multi
Brand Retail
• Minimum Investment cap is USD 100 million . 30% of the procurement value of manufactured processes products must be from
SMEs.
• Minimum 50% of total FDI must be invested in back – end infrastructure within three years of first tranche of FDI.
• To ensure Public Distribution System and Food Security System , government reserves right to procure a certain amount of Food
grains.
• Retail Trading , in any form through e-commerce would not be permissible for companies with FDI engaged in multi- brand retailing.
100 % FDI in
single- brand
retail
• Products to be sold should not be of a single brand only.
• Single brand retail trading would cover only products branded during manufacturing
• The foreign investor should be the brand owner
• Sourcing atleast 30% of the value products sold must be from Indian small industries and cottage industries
Goods and
Service Tax
• The retail sector is subject to multilpity of Indirect Taxes, The Government of India is looking to introduce Good and Service Tax
(GST), which would combine service tax and other state –level taxes into a single taxation system. GST would be introduced in
early 2016.
• Retail Industry currently does not earn any set off credit service tax / local body taxes paid . Implementation of GST would help
sett off these taxes and would improve margin significantly.
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5. Trends in Retail Sector
5
Trends
in Retail
Sector
Retail Infrastructure
1. India has emerged as one of the most attractive retail
destination in world. The expected CAGR for retail is 13 per cent
(2013-2019).
2. Number of super market are expected to increase from 500 in
2006 to about 8500 by 2016.
3. The Number of modern stores are expected to increase from
11,192 in 2006 to 67,100 by 2016
4. India is poised to image as a sourcing hub for several
international chain, giving the abundant supply of raw materials
and cost competitiveness.
Luxury Market
1. The CAGR was around 20 per cent over the period 2012-2015.
2. High growth categories are jewellery, watches and accessories
have attracted many PE Players.
E-Commerce
1. E-commerce as retail channel, has seen phenomenal growth
over last couple of years.
2. India has about one million online traders that sell their product
through various e-commerce portals.
3. Online retailers have also started to use the medium of online
mobile apps to increase their reach to the customers.
Food
54%
Ticket
17%
Jewelry
17%
Perfume
12%
Emerging categories for online purchase
State Share of Organized
Retail
Tax Revenue (USD
Billion)
Maharashtra 12% 0.4
Andhra Pradesh 8% 0.27
Uttar Pradesh 8% 0.27
Tamil Nadu 7.8% 0.25
Gujarat 7.8% 0.25
Share of Top states in Organized Retail

6. 6
Challenges
in Retail
Sector
Heterogeneous Market- Highly diverse demographic
of Indian Consumer
Poor Supply chain Infrastructure- lack of storage
and transport logistic often leading to huge
wastage.
Real Estate Concern- Escalating real estate prices
and rentals in large cities due to increase demand.
Competition from unorganized market- inherent
advantages , such as low cost base, ,more proximity
to the customers , negligible real estate challenges
Work force related issue- challenge of finding ,
training and retaining talent
Challenges in Retail Sector Key Players in Market
Company Key Stores
Future Group Big Bazaar, Food Bazaar, Pantaloons, Central Fashion, E-Zone
FabIndia Textiles, Home Furnishing, Handloom
TATA Group Westside, Landmark, Titan, Croma, Tanishq, Starbucks
Reliance
Retail
Super Market, Jewellery, Digital
Gitanjali Nakshatra, Gitanjali Jewels, Giantti, D’damas
RP-Snjiv
Goenka
Group
Spencer Hyper, Beverely Hills Polo Club, Music World
Company Key Segments
Amazon,
Flipkart,
Snapdeal
Books to Electronics
Magic Bricks Real Estate
Zomato Food rating
Blue Stone Jewlery
Local Banaya, Grocery
Fabfurnish.
Pepperfry
Furniture