Retail sector by Anup Sukumaran


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This Presentation is based on Inidan Retail Se cto aftr 1991 also includes SWOT Analysis ...Special Thank for KP 2 do such a gr8 work

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Retail sector by Anup Sukumaran

  1. 1. Globalization & Retail SectorBy-P1103 P1125 P1146 P1152 P1157
  2. 2. Globalisation– An economic phenomenon– A social phenomenon– A cultural phenomenon
  3. 3. Globalisation
  4. 4. Benefits of Globalisation Increased choice Greater potential for growth Increase international economies of scale Greater employment opportunities Massive increases in wealth for many countries
  5. 5. Disadvantages of Globalisation Increase in gap between the rich and the poor Dominance of global trade by the rich, northern hemisphere countries Lack of opportunities for the poor to be able to have access to markets Exploitation of workers and growers
  6. 6. Retail Sector• Goods and Services(Marketing Intermediary)• 14% GDP• 2nd Sector• 5th in World• 2nd in Asia
  7. 7. Different products involved in RetailingFoodBooks & MagazinesFashion & ClothingPersonal CareElectronicsSport & LeisureHome WareFootwear & LeatherToys & GamesJewellery & WatchesFurniturePetrol
  8. 8. Division of Retail Sectors• Organized• Unorganized
  9. 9. ManufacturersWhole seller Organized Sector Distributor Retailer
  10. 10. Organized SectorSuper markets(Low Price and Low margin basis)
  11. 11. Organized SectorHypermarkets(Food and Non-food things)
  12. 12. Organized SectorDepartmental stores(Retail outlets)
  13. 13. Organized SectorSpecialty stores(Books and Sales of Music Cassettes)
  14. 14. Unorganized Sector
  15. 15. CustomersBargain Hunters Casual Shoppers Devoted Customers
  16. 16. Share of Organized Retail
  17. 17. International Retail: At a Glance 3% 2% 9% 8% 38% 13% 27% USA EU Japan China India Russia Others
  18. 18. Government Policies The retail industry in India is growing at a significant pace. However, there are several problems faced by the industry. The major challenges for the organized sector include:  Taxation laws that favor small retailers.  Multi-point octroi collection.  Indian retailers need to emulate worldwide retail practices such as accuracy in financial reporting, increased levels of corporate governance and greater accountability among employees.  Foreign Equity does not go beyond 51 percent.  Additions to the product categories to be sold under ‘single brand’ require fresh govt. approval.
  19. 19. Why FDI?  Improve competition  Develop the market  Greater level of exports due to increasedBenefits of sourcing by major players FDI  Sourcing by Wal-Mart from China improved multifold after FDI permitted in China  Similar increase in sourcing observed for Metro in India  Provides access to global markets for Indian producers
  20. 20. Why FDI?  Investment in technology  Cold storage chains solve the perennial problem of wastage  Greater investment in the food processing sectorBenefits of technology FDI  Better operations in production cycle and distribution  Better lifestyle  Greater level of wages paid by international players usually  More product variety  Newer product categories  Economies of scale to help lower consumer price  Increased purchasing capacity of consumers
  21. 21. How FDI ?  FDI should be allowed in stages 2 yrs  Initial stages: 26% FDI  Establishment Phase: 49% FDI 2 yrsHow FDI ?  Mature Phase: 100% FDI 2 yrs  FDI policy  No incentives needed to attract FDI  Market size and potential are sufficient inducers  No need for costly tax breaks, import duty exemptions, land and power subsidies, and other enticements
  22. 22. SWOT Analysis
  23. 23. Strength Increasing demand Because of increase in per capita income household consumption also well increase WIN-WIN situation for all ( suppliers, producers, retailers and customers). Improvement in the standard of living. Technology intensive industry
  24. 24. Weakness Lack of expertise in Supply Chain Management Inadequate Infrastructure Labor Laws Lack of specialized professionals in Industry Lack of industry status. Government Restrictions on FDI Non-Availability of Government Land
  25. 25. Opportunities Change in consumer behavior pattern and increase in disposable income More than 15 million people would be engaged in Retail Industry by 2015 Indian rural markets offer a sea of an opportunity for the retail sector Upcoming international Players Healthy prospect for the fashion industry
  26. 26. Threats Indian taxation system favors small retail business. Competition from unorganized Sector to the organized Sector. Middle class Psychology. Increasing Real Estate prices