Organized retail is growing rapidly in India and accounts for 7% of the country's $435 billion retail market, expected to reach 20% by 2020. It involves chain stores owned by central entities or large single stores, providing standardized retail experiences. The organized retail market in India is growing at 3.5% annually and attracting major foreign investments of $25 billion over 5 years from companies like IKEA and Walmart. The government is also supporting growth through policies like allowing 100% FDI in online retail and implementing GST to ease movement of goods nationwide. Organized retail is expected to generate employment, infrastructure growth, and increased tax revenues for India.

1. ORGANIZED RETAIL
Presented by:
Suvransu Chakraborty
Syed Shamsuddin
Trinanjan Datta

2. Introduction
• Retail is the sale of goods to end users, not for resale, but for use and consumption by the
purchaser
• It can also be defined as the timely delivery of goods and services demanded by consumers at
prices that are competitive and affordable.
• One of the world’s largest industry exceeding US $ 9 trillion.
• Total retail contribution in World GDP is 27%. Organized retail in US accounts for 22% of
GDP. The Share of organized retail in developing markets ranges between 20% to 55%
• Dominated by developed countries. US, EU & Japan constitutes 80% of world retail sales.

3. Introduction : Organized Retail
• Organized retail or modern retail is usually chain stores, all owned or franchised by a
central entity, or a single store that is larger than some cut-off point.
• The relative uniformity and standardization of retailing is the key attribute of modern
retail.
• Organized retailing, in India, refers to trading activities undertaken by licensed
retailers, that is, those who are registered for sales tax, income tax, etc. These include
the publicly traded supermarkets, corporate-backed hypermarkets and retail chains,
and also the privately owned large retail businesses.

4. Difference in Organized and unorganized retail.

5. Organized Retail in India
• The organized retail market is growing at 3.5 percent annually. Rapid change with
investments to the tune of US$25 billion is being planned by several Indian and
multinational companies in the next 5 years.
• It is huge industry in terms of size
and according to management
consulting firm
Techno Park Advisors Pvt. Ltd.,
it is valued at above US$ 350 Billion.

6. • According to the tenth report of Global retail Report Index (GRID) of
AT Kearney, India is having a very favorable retail environment and it is placed
at 4th spot in the GRDI. The main reasons behind that is the 9% real GDP growth
in 2010, forecasted yearly growth of
8.7% through 2016, high saving
and investment rate and increased
consumer spending.
• According to report, organized retail
accounts for 7% of India’s roughly
$435 billion retail market and is expected
to reach 20% by 2020.
Organized Retail in India

10. Investment Scenario
The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totaling US$
537.61 million during April 2000–March 2016, according to the Department of Industrial Policies and
Promotion (DIPP).
• International Finance Corporation (IFC), the investment arm of The World Bank, plans to invest up to
Rs 134 crore (US$ 19.86 million) in Kishore Biyani's Future Consumer Enterprises Ltd, which is
expected to aid the company in driving its growth plans.
• IKEA, the world’s largest furniture retailer, plans to invest Rs 10,500 crore (US$ 1.56 billion) to set
up 25 stores across India and hire over 15,000 permanent employees and 37,500 temporary employees
to assist in running its stores.
• Walmart India plans to add 50 more cash-and-carry stores in India over the next four to five years.
• Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and the fourth-largest
supermarket retailer in the country, acquired Total hypermarkets owned by Jubilant Retail.
• US-based Pizza chain Sbarro plans an almost threefold increase in its store count from the current 17
to 50 over the next two years through multiple business models.

11. Government Initiatives
The Government of India has taken various initiatives to improve the retail
industry in India.
• Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in online
retail of goods and services through the automatic route, thereby providing clarity on the
existing businesses of e-commerce companies operating in India.
• The Government of India has accepted the changes proposed by Rajya Sabha select
committee to the bill introducing Goods and Services Tax (GST). Implementation of GST is
expected to enable easier movement of goods across the country, thereby improving retail
operations for pan-India retailers.
• IKEA, the world’s largest furniture retailer, bought its first piece of land in India in
Hyderabad, the joint capital of Telangana and Andhra Pradesh, for building a retail store.
IKEA’s retail outlets have a standard design and each location entails an investment of
around Rs 500–600 crore (US$ 74–89 million).

12. Benefits
• Organized retail will bring in massive employment in organized sector with
benefits to locals (China experienced employment growth rates of 9 million
over 3 years) albeit with changed skill sets.
• Massive Infrastructure up-gradation will come in increasing the overall
efficiency in the economy, which will reduce the current huge amounts of
wastage occurring to the economy.
• Increased tax revenues and profits retained within the country for local
portion. History in other countries negates critics
• Will benefit end consumers in the area of price, convenience & quality of
products & packaging.

13. The Road Ahead
• E-commerce is expanding steadily in the country. Customers have the ever
increasing choice of products at the lowest rates.
• Both organized and unorganized retail companies have to work together to
ensure better prospects for the overall retail industry, while generating new
benefits for their customers.
• Nevertheless, the long-term outlook for the industry is positive, supported
by rising incomes, favorable demographics, entry of foreign players, and
increasing urbanization.

14. THANK YOU