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FDI in single brand and
   multi brand retail : By C4
               :




FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




             FDI in single brand and multi brand retail

 Content


            1 Government policies


            2 Causes and Effects


            3 Typical cases


            4 References




                FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




                                   Government policies
    Details




1. Single-brand with 100% ownership
         • Requirement that the single brand retailer source 30 percent of its goods
         from India.
2. Multi-brand retail 51% FDI
    • Requirement brand retailer source 30 percent of its goods from India.
    • Needs approval from respective state govt.
    • Allowed only in cities where population is more than 10 lac.




                         FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




Causes and Effects
    Details

Causes


1.     Retailing in India accounts for 14 to 15 percent of its GDP.

2.     The Indian retail market is estimated to be US$ 450 billion

3.     One of the top five retail markets in the world by economic value

4.     Supermarkets accounted for about 4 percent of the industry




                            FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




                                        causes and effects

 Effects


    Benefit to government : organized retail
1. Organized retailing, refers to trading activities undertaken by licensed retailers, that is,
     those who are registered for sales tax, income tax, etc.
2.   These include
                        1 the publicly traded supermarkets,
                        2 corporate-backed hypermarkets
                        3 retail chains,
                        4 and also the privately owned large retail businesses
3 It increases revenue of Government


                               FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




                                    causes and effects

 Effects




4 Better logistics, competitive shops, foreign expertise and technology.

5 Help to bring down food prices

6 Higher prices for farmers, and lower prices for consumers.

7 Can be adverse for small retailers , mom and pop shop owners .

8 70% material can be sourced from outside so it can cause the competition for
  Indian companies .




                   FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




                                          Typical cases
 IKEA
Offer wide range of product s at cheaper price

Product includes but not limited to

1.         furniture

2.         Children's items: mammals, birds, adjectives

3.      Curtain accessories:

4.         Kitchen utensils:

5.      wall decoration, pictures and frames, clocks

6.         food products



plans to invest 1.5 billion euro (Rs 10,500 crore) in India to set up 25 stores.


                        FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




                                         Typical cases

Problems faced by IKEA

1.   30% sourcing from India

2.   Allowed Product range



     Diluted sourcing norms

     From sourcing of 30 per cent of requirements “mandatorily” from micro, small
     and medium enterprises (MSMEs) in India, to “preferable sourcing from
     MSMEs”.




                       FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune




                                            Typical cases
Bharti Walmart
     Cashing on FDI loop holes
1.   Bharti Walmart, earned more than half its revenues in 2011 by selling
     merchandise to Bharti Retail.
2.   Bharti Retail, purchased goods worth Rs 1,095 crore from Bharti Walmart.
3.   This amounts to 58% of the joint venture company's total revenue of Rs 1,876
     crore for the year.
4.   Department of Industrial Policy & Promotion had in 2010 barred these
     companies from selling more than 25% of their products to 'group companies'.
Deface from BhartiWalmart
No clear definition of group companies by Indian Government.
Other issues , Lobbying money and sacking of Indian CEO




                     FDI in single brand and multi brand retail : C4 group BNA PPT
Indira Institute Of Management Pune



References

 http://www.economist.com/blogs/banyan/2012/09/indian-economic-reforms


 Business standard


 Wikipedia


 Economic Times




                      FDI in single brand and multi brand retail : C4 group BNA PPT

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Fdi c4

  • 1. FDI in single brand and multi brand retail : By C4 : FDI in single brand and multi brand retail : C4 group BNA PPT
  • 2. Indira Institute Of Management Pune FDI in single brand and multi brand retail  Content 1 Government policies 2 Causes and Effects 3 Typical cases 4 References FDI in single brand and multi brand retail : C4 group BNA PPT
  • 3. Indira Institute Of Management Pune Government policies  Details 1. Single-brand with 100% ownership • Requirement that the single brand retailer source 30 percent of its goods from India. 2. Multi-brand retail 51% FDI • Requirement brand retailer source 30 percent of its goods from India. • Needs approval from respective state govt. • Allowed only in cities where population is more than 10 lac. FDI in single brand and multi brand retail : C4 group BNA PPT
  • 4. Indira Institute Of Management Pune Causes and Effects  Details Causes 1. Retailing in India accounts for 14 to 15 percent of its GDP. 2. The Indian retail market is estimated to be US$ 450 billion 3. One of the top five retail markets in the world by economic value 4. Supermarkets accounted for about 4 percent of the industry FDI in single brand and multi brand retail : C4 group BNA PPT
  • 5. Indira Institute Of Management Pune causes and effects  Effects  Benefit to government : organized retail 1. Organized retailing, refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. 2. These include 1 the publicly traded supermarkets, 2 corporate-backed hypermarkets 3 retail chains, 4 and also the privately owned large retail businesses 3 It increases revenue of Government FDI in single brand and multi brand retail : C4 group BNA PPT
  • 6. Indira Institute Of Management Pune causes and effects  Effects 4 Better logistics, competitive shops, foreign expertise and technology. 5 Help to bring down food prices 6 Higher prices for farmers, and lower prices for consumers. 7 Can be adverse for small retailers , mom and pop shop owners . 8 70% material can be sourced from outside so it can cause the competition for Indian companies . FDI in single brand and multi brand retail : C4 group BNA PPT
  • 7. Indira Institute Of Management Pune Typical cases  IKEA Offer wide range of product s at cheaper price Product includes but not limited to 1. furniture 2. Children's items: mammals, birds, adjectives 3. Curtain accessories: 4. Kitchen utensils: 5. wall decoration, pictures and frames, clocks 6. food products plans to invest 1.5 billion euro (Rs 10,500 crore) in India to set up 25 stores. FDI in single brand and multi brand retail : C4 group BNA PPT
  • 8. Indira Institute Of Management Pune Typical cases Problems faced by IKEA 1. 30% sourcing from India 2. Allowed Product range Diluted sourcing norms From sourcing of 30 per cent of requirements “mandatorily” from micro, small and medium enterprises (MSMEs) in India, to “preferable sourcing from MSMEs”. FDI in single brand and multi brand retail : C4 group BNA PPT
  • 9. Indira Institute Of Management Pune Typical cases Bharti Walmart Cashing on FDI loop holes 1. Bharti Walmart, earned more than half its revenues in 2011 by selling merchandise to Bharti Retail. 2. Bharti Retail, purchased goods worth Rs 1,095 crore from Bharti Walmart. 3. This amounts to 58% of the joint venture company's total revenue of Rs 1,876 crore for the year. 4. Department of Industrial Policy & Promotion had in 2010 barred these companies from selling more than 25% of their products to 'group companies'. Deface from BhartiWalmart No clear definition of group companies by Indian Government. Other issues , Lobbying money and sacking of Indian CEO FDI in single brand and multi brand retail : C4 group BNA PPT
  • 10. Indira Institute Of Management Pune References  http://www.economist.com/blogs/banyan/2012/09/indian-economic-reforms  Business standard  Wikipedia  Economic Times FDI in single brand and multi brand retail : C4 group BNA PPT