The retail sector in India contributes 15% to GDP and is one of the fastest growing sectors. It is largely unorganized, with 94-95% of retail being conducted by small shops and vendors. However, organized retail through large corporate chains is growing and contributes 4-5% currently. Major challenges to growth include lack of infrastructure and difficulties acquiring real estate. The government is proposing increased foreign direct investment in retail, such as allowing 100% ownership of single-brand stores and 51% of multi-brand stores, to modernize the sector.

2. RETAIL SECTOR IN INDIA
 RETAILER: A retailer is one who stocks the
producer’s goods and is involved in selling it to
the individual consumer, at a margin of profit.
 As one of the fastest growing sectors in
India, retail contributes to 15% of GDP.
 Indian retail is estimated to be Rs.12,781 billion
and one of the top five retail markets.
 It is the largest source of employment, next only
to agriculture (7%)

3. TWO MAJOR SECTORS OF
RETAIL
ORGANISED UNORGANISED
• Undertaken by licensed • Traditional forms of low
retailers cost retails
• Include corporate based • Local kirana
hyper markets , retail stores, manned general
chains and private owned shops
large retail businesses • Paan/beedi stalls, hand
• Contributes 4-5% of total cart and pavement vendor
retail • Contributes 94- 95% of
• Major players are total retail
Reliance, future group etc

4. VARIOUS RETAILS
•Food and grocery •Apparel retail •Gems and jewellery
•Pharmaceutical retail •Book and music retail •Consumer durable retail

5. TOTAL RETAIL MARKET

6. RETAIL FORMATS IN INDIA

7.  Good talent pool, huge markets and availability of
quality raw materials at cheaper costs
 Major employment generator
 Sector is expected to grow upto Rs.19000 billion
by 2016 in India
 Major Indian corporate groups are already big
players in this sector. To name a few, Reliance
Group, Future Group, Aditya Birla Group and The
Tata Sons.

8.  Lack of adequate infrastructure with respect to
roads, electricity, cold chains and ports
 Multiple clearances required by same company
for opening new outlets
 Non-availability of land makes it difficult to find
good real estate location and appropriate size of
land to set up these huge showrooms.
 The Indian Corporates who have a major
presence in the retail sector are yet to break-even

10.  Currently Indian market is mostly closed for outsiders
 51% equity participation by the Foreign Investor for single brand
retailing
 Louis Vuitton
 Nike
 Adidas
 26% equity participation by the foreign investor for multi brand
retailing
 Business model
 Franchise models – Most preferred
 E.g Dominos and Pizza Hut, Benetton, Marks and Spencers
 Cash and carry whole sale retailing
 100% allowed
 E.g Metro AG of Germany
 Strategic licensing agreement

11. Proposed FDI Bill by the Government
 Foreign groups can own up to 51% in multi-brand
retailers.
 Single brand retailers, like Apple, can own 100% of
their Indian stores, up from the previous cap of 51%.
 Retailers will have to source nearly a third of their
goods from small and medium-sized Indian suppliers.
 Retailers must confine their operations to 50 odd
cities with a population over one million.
 Multi-brand retailers must have a minimum investment
of US$100 million with at least half of the amount
invested in back end infrastructure, including cold
chains, refrigeration, transportation, packing etc.
 The proposed location of the stores must be atleast
25kms away from the standard urban area.