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Retail Scenario India and Global


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Retail Scenario India and Global

  1. 1. RETAIL SECTORS Prof:- Prema B.
  3. 4. Evolution of Retail <ul><li>Barter System was known as the first form of retail. </li></ul><ul><li>As time passed currency was exchanged with goods and services. </li></ul><ul><li>Hawkers carried out the first Retailing in Push Carts </li></ul><ul><li>Followed by Kirana Stores …….. Mom and Popup Stores </li></ul><ul><li>Finally Manufacturing era necessitated the small stores and Specialty stores </li></ul><ul><li>It was a seller market still than this point of time with the limited no of brands available </li></ul><ul><li>Barter chain  Single brand franchise chain  Standalone large store <_ Chain of large stores And Finally Malls </li></ul>
  4. 5. <ul><li>Economist says that Boom Has Started of Retail due to more spending Capacity of Indians </li></ul><ul><li>Emerging of retail started in brief in patterns like changing face of the Indian retail sector </li></ul><ul><li>Provide customers with 3 V’s i.e. Value, Variety and Volume. </li></ul>
  5. 6. <ul><li>“ A retail is one who stocks the producers goods and is involved in the act of it to the individual consumer, at the Margin of Profit “. </li></ul><ul><li>As such retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. </li></ul><ul><li>Selling Directly to consumer selling in smaller units / quantities the bulk. </li></ul><ul><li>Very high numbers near to neighborhood </li></ul><ul><li>Reorganized by the service levels </li></ul><ul><li>Retail Sector today is worth of 394 Billion Us $ </li></ul>What is Retail?
  6. 7. Contd…
  7. 8. Food        Books & Magazines Fashion & Clothing   Personal Care Optical Consumer Electronics   Sport & Leisure Home Ware Footwear & Leather  Toys & Games Jewellery & Watches Furniture  Petrol          
  8. 9. Manufacturers Whole seller Distributor Retailer Organized Sector
  9. 10. Types of Retail Sectors <ul><li>Unorganized Retailing </li></ul><ul><li>Hawkers (Kirana) </li></ul><ul><li>Weekly Markets </li></ul><ul><li>Organized retailing </li></ul><ul><li>Convenient / Departmental stores </li></ul><ul><li>Factory outlets and discounts Market </li></ul><ul><li>Supermarkets </li></ul><ul><li>Wholesalers market </li></ul><ul><li>Company and Franchises showroom </li></ul>
  10. 11. Importance <ul><li>Largest and fastest growing sector in India. </li></ul><ul><li>Modern retailing forms one point stop for all shopping. </li></ul><ul><li>Consumer gets a large product variety of brands to choose from one roof. </li></ul><ul><li>First it was a sellers market and now its changing to buyers market. </li></ul><ul><li>By 2010 Indian retail sector would be generating 10 million employment opportunities. </li></ul>
  11. 12. Retail Sector in India
  12. 15. Some of the Key Players in Organised Retail
  13. 18. Analysis of Growth by ASSOCHAM <ul><li>Organized retail growing at estimated 25% </li></ul><ul><li>It is expected that retail in India could be worth US$ 175-200 billion by 2016. </li></ul><ul><li>2007-08 Total retails contribution to GDP is between 8% which would further jump up to nearly 12% in next few years. By 2010, retails contribution to national GDP in totality is likely to be 22%. </li></ul><ul><li>2007 – Retail Growth rate – 25-28%, Unorganized and organized retail size – 300 billion US$ </li></ul><ul><li>Opening 10 to 15 outlets by 2015, it plans to employ about 5,000 people selling groceries, consumer goods, fruits and vegetables. India's retail industry is worth $300bn (£148bn) </li></ul><ul><li>Eg: Bharti is expected to invest 60 Billion with the largest retail Walmart </li></ul>
  14. 19. Growth of Indian Retail Sector Retail Sector contribution to GDP sector is 8%-10%.
  15. 21. Elasticity of Demand for Luxury and Necessities Price Demand
  16. 22. Government Policies <ul><li>The retail industry in India is growing at a significant pace. However, there are several problems faced by the industry. The major challenges for the organized sector include: </li></ul><ul><ul><li>Taxation laws that favor small retailers. </li></ul></ul><ul><ul><li>Multi-point octroi collection. </li></ul></ul><ul><ul><li>According to analysts, for this industry to thrive, Indian retailers need to emulate worldwide retail practices such as accuracy in financial reporting, increased levels of corporate governance and greater accountability among employees. </li></ul></ul><ul><ul><li>Foreign Equity does not go beyond 51 percent. </li></ul></ul><ul><ul><li>Additions to the product categories to be sold under ‘single brand’ require fresh govt. approval. </li></ul></ul>
  17. 23. International Retail: At a Glance
  18. 24. Share of Organized Retail
  19. 25. Key Players <ul><li>Highly evolved US market has WalMart taking only 8% market share </li></ul><ul><li>UK market has Tesco with only 13.4% market share </li></ul><ul><li>China market still does not have a clear leader </li></ul>USA = US$ 2,350 Bn UK = US$ 406 Bn China = US$ 313 Bn
  20. 26. SWOT Analysis
  21. 27. Strength <ul><li>Increasing demand driven by the country’s young working population </li></ul><ul><li>Increase in per capita income which in turn increases the household consumption </li></ul><ul><li>Create win-win situation for all links in value chain ( suppliers, producers, retailers and customers). </li></ul><ul><li>Improvement in the standard of living. </li></ul><ul><li>Technology intensive industry </li></ul>
  22. 28. Weakness <ul><li>Lack of expertise in Supply Chain Management </li></ul><ul><li>Inadequate Infrastructure </li></ul><ul><li>Stringent Labour Laws </li></ul><ul><li>Lack of specialized professionals in Industry </li></ul><ul><li>Lack of industry status. </li></ul><ul><li>Government Restrictions on FDI </li></ul><ul><li>Non-Availability of Government Land. </li></ul>
  23. 29. Opportunities <ul><ul><li>Change in consumer behavior pattern and increase in disposable income. </li></ul></ul><ul><ul><li>It is estimated that 15 million people would be engaged in Retail and Retail support activities by 2010 </li></ul></ul><ul><ul><li>Indian rural markets offer a sea of an opportunity for the retail sector. </li></ul></ul><ul><ul><li>Upcoming international Players </li></ul></ul><ul><ul><li>Healthy prospect for the fashion industry. </li></ul></ul>
  24. 30. Threats <ul><li>Indian taxation system favors small retail business. </li></ul><ul><li>Competition from unorganized Sector to the organized Sector. </li></ul><ul><li>Middle class Psychology. </li></ul><ul><li>Increasing Real Estate prices </li></ul>
  25. 31. Conclusion <ul><li>Huge Scope for Development </li></ul><ul><li>Competitive Market </li></ul><ul><li>Organized retail is fast growing at a rate of 30% YOY </li></ul><ul><li>Greater opportunity for employment </li></ul>
  26. 32. Suggestions <ul><li>Need to explore PPP (Public Private Partnership) </li></ul><ul><li>More exports bring more foreign direct investments </li></ul><ul><li>There would remain future scope for improvements in agriculture, small, and medium scaled with the help of the Indian retail sector </li></ul><ul><li>More investment in supply-chain infrastructure. </li></ul><ul><li>Sole focus on front-end with minimal back-end linkages (Logistics, cold chain, vendor & farmer development, etc.) </li></ul><ul><li>Transactional approach, minimal focus on customer service over the life-cycle </li></ul>
  27. 33. Recession Strategy <ul><li>Offering more & more special discounts. </li></ul><ul><li>The Great Indian Shopping Festival. </li></ul>
  28. 34. Case Study
  29. 35. Entry Point: August 2006 Entry Point: 2002 -2003 Stores : 857 across India Stores: 20 Stores in Maharashtra and Gujarat Products: FMCG, Vegetables Products: FMCG , Medicines and Vegetables Consumer Segmentation: Targeting 2 tire and 3tire Market Consumer Segmentation: Targeting 2 tire and 3 tire market Marketing Strategy: News Papers, TV etc. Marketing Strategy: Believe in mouth publicity Marginal Profitability: The average ticket size is 30 0 RS Marginal Profitability: The average ticket size is 550 Rs. Recession effects and Strategy: Recession effects and Strategy: