- The document discusses foreign direct investment (FDI) in India, particularly in the retail sector. It provides an overview of India's FDI policy evolution over time, the opportunities and challenges of FDI in retail, and the future outlook for the retail sector.
- Key points include that FDI in retail allows 51% ownership in single-brand stores, organized retail makes up only 5% of the retail sector currently, and FDI can help address issues of supply chain management, employment generation, and development. However, challenges include competition from small retailers, difficulties acquiring real estate, and compliance with various regulations.
Market Research Report : Retail Market in India 2012Netscribes, Inc.
For the complete report, get in touch with us at : info@netscribes.com
Retail market in India was valued at INR 16.94 tr in 2010 and is expected to grow at a CAGR of 11%. It accounts for 22% of the country's GDP and is the second largest employer with 35.06 mn people. Traditional retail formats are fast getting replaced by modern organised retail formats. Due to growing retail space and changing consumer behaviour, retail market in India is poised for strong growth in the near future.
The report begins with the market overview section that gives an insight into the retail market in India, its market size and growth, along with the share of major retail segments. Low organised retail penetration indicates huge growth potential of this market. This is followed by the major segments in the retail market, where food and grocery occupies the largest share. The various market entry strategies available for foreign retailers, franchising, cash and carry wholesale trading, strategic license agreements, joint ventures, manufacturing, distribution, have also been highlighted. A comparison of the traditional retail supply chain with the modern retail supply chain has also been given. The section also includes an overview of the various organised retail formats, hypermarkets, cash-and-carry, department stores, supermarkets, shop-in-shop, specialty stores, category killers, discount stores and convenience stores. Additionally, an analysis of Porter’s Five Forces provides an insight into the competitive intensity and attractiveness of the market.
An analysis of the drivers and challenges explains the factors leading to the growth of the market including low organised retail penetration, rising income levels and consumerism, growing retail space and mall boom, increasing availability of credit and changing demographics and consumer behaviour. Strong opportunity exists in the market due to low organised retail penetration in India. This coupled with the fact that income level and consumerism are rising, will drive the retail market. The key challenges identified are insufficiencies in supply chain, shortage of skilled manpower and real estate issues.
Key trends in the market have also been analysed which includes emergence of innovative retail formats, online and rural retailing and integration of various business strategies. This is followed by a section on the FDI scenario of the retail market in India which includes evolution of retail FDI policy, current FDI scenario in retail, single brand retailing and multi brand retailing in India. A section on the investment scenario of this market is also highlighted, including investment and expansion plans, mergers and acquisitions, and partnership agreements in the retail sector.
The competition section provides an overview of the competitive landscape in the market and includes a detailed profile of the major players. It begins with a matrix showing the various retail formats under which the playe
retail analysis with pestel, condition of indian retail in terms of figures and a brief forecast and Pestle, future of retail in India, relation between India & retail, can retail survive in India, projection of retail in India, future analysis of retail in India, Is retail good in India, Pestle Analysis of retail future in India, Pestle and retail analysis in India, Retail in India and hindrance in it through Pestle analysis
This presentation consists of a discription of the stock price from the supermarket Carrefour. Afterwards you can read my personal forecast and some arguments.
Market Research Report : Retail Market in India 2012Netscribes, Inc.
For the complete report, get in touch with us at : info@netscribes.com
Retail market in India was valued at INR 16.94 tr in 2010 and is expected to grow at a CAGR of 11%. It accounts for 22% of the country's GDP and is the second largest employer with 35.06 mn people. Traditional retail formats are fast getting replaced by modern organised retail formats. Due to growing retail space and changing consumer behaviour, retail market in India is poised for strong growth in the near future.
The report begins with the market overview section that gives an insight into the retail market in India, its market size and growth, along with the share of major retail segments. Low organised retail penetration indicates huge growth potential of this market. This is followed by the major segments in the retail market, where food and grocery occupies the largest share. The various market entry strategies available for foreign retailers, franchising, cash and carry wholesale trading, strategic license agreements, joint ventures, manufacturing, distribution, have also been highlighted. A comparison of the traditional retail supply chain with the modern retail supply chain has also been given. The section also includes an overview of the various organised retail formats, hypermarkets, cash-and-carry, department stores, supermarkets, shop-in-shop, specialty stores, category killers, discount stores and convenience stores. Additionally, an analysis of Porter’s Five Forces provides an insight into the competitive intensity and attractiveness of the market.
An analysis of the drivers and challenges explains the factors leading to the growth of the market including low organised retail penetration, rising income levels and consumerism, growing retail space and mall boom, increasing availability of credit and changing demographics and consumer behaviour. Strong opportunity exists in the market due to low organised retail penetration in India. This coupled with the fact that income level and consumerism are rising, will drive the retail market. The key challenges identified are insufficiencies in supply chain, shortage of skilled manpower and real estate issues.
Key trends in the market have also been analysed which includes emergence of innovative retail formats, online and rural retailing and integration of various business strategies. This is followed by a section on the FDI scenario of the retail market in India which includes evolution of retail FDI policy, current FDI scenario in retail, single brand retailing and multi brand retailing in India. A section on the investment scenario of this market is also highlighted, including investment and expansion plans, mergers and acquisitions, and partnership agreements in the retail sector.
The competition section provides an overview of the competitive landscape in the market and includes a detailed profile of the major players. It begins with a matrix showing the various retail formats under which the playe
retail analysis with pestel, condition of indian retail in terms of figures and a brief forecast and Pestle, future of retail in India, relation between India & retail, can retail survive in India, projection of retail in India, future analysis of retail in India, Is retail good in India, Pestle Analysis of retail future in India, Pestle and retail analysis in India, Retail in India and hindrance in it through Pestle analysis
This presentation consists of a discription of the stock price from the supermarket Carrefour. Afterwards you can read my personal forecast and some arguments.
This presentation talks about the Retail industry inside out and focusses on the IT strategy being followed in the industry. A business case for Carrefour is built up for various candidate projects analysed using a 10 lens method.
I appreciate you leave a comment on the slideshow. You are free to use to use the information as long as you mention the source although I would not be able to share the originals with you since it is not under my ownership alone.
This is a guide to using social media for retail brands. It explores 3 key questions for any retailers looking to harness the power of social media:
1) What exactly are Social Media?
2) Why are they relevant to Retail Marketing
3) How can Retailers get started using Social Media?
It shares key figures that provide a rationale for using social media as part of retail marketing, offers some inspiring case studies of retail social media from around the world, explroes some trends that will shape the future of social in retailing, and sets out a simple framework to help retailers get started in Social Media.
FDI or Foreign Direct Investment is a self explanatory term well sort of. In a layman’s language it refers to any monetary investment that is made by an entity in business if any kind on foreign shores.I'am sure this presentation will help you to understand FDI better .
India is the country having the most unorganized retail market.
The contribution of retail industry to India’s GDP is more than 13%.
More than 99% retailer’s function in less than 500 square feet of shopping space.
India's retail sector is on its way of modernization. Traditional markets are making way for new formats such as departmental stores, supermarkets and specialty stores.
With the growth in income levels, Indians have started spending more on health and beauty products.
India's retail sector is estimated to touch US$ 833 billion by 2013 and US$ 1.3 trillion by 2018.
Flaring Retail Sector: Facets and Challengesdeshwal852
The Indian retail industry flaring day by day. The concept of retail which includes the shopkeeper to customer interaction, has taken many forms and dimensions, from the traditional retail outlet and street
local market shops to upscale multi brand outlets, especially stores or departmental stores. This paper makes an attempt to study features and challenges for retail sector
Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. Ex. Quasi-mall, sub-urban discount stores, Cash and carry etc
2. •FDI in Retail – Policy Perspectives.
•Retail Sector – An Overview.
•FDI Policy in Retail - Opportunities & Challenges.
•Emerging Human Resource Challenges.
•What lies ahead ?
Issues for Discussion
3.
4. The commitment of money or
capital to purchase financial
instruments or assets in order to
gain profitable returns.
5. Investment done by citizens and
government of one country (home
country) invest in industries of
another country (host country).
Foreign
Investment
through
Foreign
Direct
Investments
Foreign
Institutional
Investors
7. • 1991- FDI allowed selectively up to 51% in priority
sectors.
• 1997-FDI allowed up to 100% in sectors like mining,
manufacturing.
8. • 2000-06 FDI allowed up to 100% in specified sectors.
FDI limits increased.
Procedures further simplified
• The top 3 Indian Regions attracting the highest FDI.
Mumbai, Delhi and Karnataka.
Account for nearly 62% of the total FDI.
9. • Mergers and Acquisitions
• Horizontal FDI
• Vertical FDI.
*Backward Vertical FDI
*Forward Vertical FDI
By
Target
• Resource-Seeking
• Market-Seeking
• Efficiency-Seeking
• Strategic-Asset-Seeking
By
Motive
10. Barter
system
Weekly
market
Village
melas
Kirana
Stores
Conveni
ence
store
Government
Stores
Super
markets
Hyper
markets
Malls
Brand
outlets
11. • 51% Single Brand
Retailing
• 100% Cash and
Carry Model
12. Incentives attract FDI.
Market size and potential are sufficient inducers.
Tax breaks, import duty exemptions, land and power
subsidies, and other enticements.
13. FDI inflows from
August 1991 to
April2010 were
$134.6 billion.
FDI inflows from
2000-10 crossed
$300 billion
14.
15.
16. GRDI Position : 3rd
Size : $ 400 billion
Growth Rate : 13%
GDP contribution : 12%
Major sector : Food and Grocery
Employment : 2nd largest industry
(35.06 million)
Types: Organized ( 5%)
Unorganized ( 95%)
17. • Corporates are increasingly coming into this sector.
• Demand of branded goods on a large scale.
• Demand of new and varied products.
• High quality product is preferred .
• Varied window display.
• E-tailers increase the presence.
18. Format Description Retailers
Hypermarkets Offering basket of product Spencers, Big bazaar
Cash and Carry Bulk-buying requirement Bharti-wal-mart
Departmental stores Large layout, Wide merchandise
mix
Lifestyle , Globus
Supermarkets Household product as well as food
as integral part of the service
Apna bazaar , food
bazaar
Shop-in-shop Shops located in shopping malls Navras ( big bazaar)
Specialty stores Focus on individual product type Brand Factory
Category killers Particular segment The LOFT
Discount stores Branded product at discounted
prices
Subhiksha, levi’s
outlet
Convenience stores Small Retail stores In and out
19. Retail Segment Percentage holding
in sector
Major retailers
Food and grocery 63% Reliance fresh, Café
brio, food bazaar
Clothing, textile and
fashion
9% Westside, shoppers
stop, globus
jewellery 5% Tanishq
Catering services 5% IRCTC
Consumer durable 4% Viveks, vijay sales,
Croma
pharmaceuticals 4% Piramal group
Entertainment 3% Bowling co.,
Furnishing, utensils 3% Hometown, Tangent
Concept
Mobile handsets 2% The mobile store,
20. • One of the world's largest industries exceeding US$ 9
trillion.
• Dominated by developed countries.
• 47 global fortune companies & 25 of Asia's top 200
companies are retailers.
• US, EU & Japan constitute 80% of world retail sales.
21. • Retail trade in Europe employs 15% of the European
workforce (3 million firms and 13 million workers).
• The world’s population is poised to expand 50% by 2050.
The world currently comprises of 78% poor, 11% middle
income and 11% rich.
22. 20%
8%
14%
6%
12%
India
Brazil
Japan
China
USA
Contribution Respective
to GDP
24. 0 20 40 60 80 100
US
Taiwan
Malaysia
Thailand
Indonesia
China
India
Organised
Unorganised
US Taiwan Malaysia Thailand Indonesia China India
Unorganised 15% 19% 45% 60% 70% 80% 95%
Organised 85% 81% 55% 40% 30% 20% 5%
25.
26.
27. India China
Focus on Services Focus on Industry
High labor cost Low Labor Cost
Home grown Capital FDI
Old technology Adaptability to Latest
technology
Democratic Government Communist Government
28.
29.
30. INDIA
•A large emerging market .
Increase in disposable income of a family.
70 mn Indians – salary of $18,000.
Rise to 140 mn by 2011.
Consumer spending power increased by 75% in
last 3 years.
The per capita income in 2009–2010 has more
than doubled to US$ 849 from US$ 348 in 2000–01.
32. •Increase in consumer class.
Consumer class will grow
from 50 million at present to
583 million by 2025.
With more than 23 million
people taking their place
among the world’s
wealthiest citizens.
Upper class
Middle class
Lower class
33. •Wide demographics -- average age of 25 yrs.
•Brand consciousness.
60 % of population below age of 30.
Awareness through World Wide Web.
•Changing consumer mindset.
Focus shifting from low price to convenience, value
and a superior shopping experience.
•Small Basket Size Shaping of Consumption
36. •Easy consumer credit.
EMI & loan via credit cards --
easy for Indian consumers to
afford expensive products.
For instance, Casas Bahia’s-
Brazil.
Upper class
Middle class
Lower class
Note: BOP C.K.Prahalad.
37. •Employment generation.
Second-largest employer after
agriculture.
Retail trade employing 35.06 million.
Wholesale trade generating an
additional employment of 5.48 million.
Additional
1.6 mn
jobs .
38. •Technology Better use of resources and
goods.
Wastage and Storage problems will be
resolved.
Efficient logistics, production, and
distribution channels.
Digital records.
39.
40. •Rural market.
Robust Consumption.
70% Indian households.
2/5 of the country’s total consumption pie.
Accounts to 45% of GDP.
41. •FDI in Retail sector will resolve problems
regarding foreign exchange in India.
•The life-long basic needs will keep on
driving the Retail Industry.
44. SKILLED
WORKERS
COMPETITION
REAL
ESTATE
PROBLEM
MARKET
POWER
SUPPLY CHAIN
MANAGEMENT
INFLATION
TAXATION
POLICIES
PROBLEM IN
RAISING
FUNDS
45. • Major challenge faced by Organized retail sector:
In Retail, over 70 per cent of the labor force in
both sectors combined (organized and unorganized)
is either illiterate or educated below the primary
level.
• Labor Laws
46. • A strong competition from mom and pop shops:-
Easily accessible & approachable.
Provide services like Free home delivery and goods on
credit.
They change consumer focus.
47. INDIAN
• Pantaloons
• Reliance
• Bharti retail
• RPG
• Lifestyle
• K raheja
• Subhiksha
• Piramyd
• Trent
• Vishal group
GLOBAL
• Tesco
• Walmart
• Metro
• Carrefour
• B&Q
• Target
49. FORMAT AVERAGE SIZE
Convenience Stores 800 sq. feet
Discount Stores 1000 sq. feet
Category Killers 8000 sq. feet
Specialty Stores Single-category
Shop-in-Shop Within Large malls
50. FORMAT AVERAGE SIZE
Supermarket Large in Size
Typical in layout
Department Stores 10,000 – 60,000 sq. feet
Cash and Carry 75,000 Sq. feet
Hypermarkets 50,000 – 1,00,000 sq. feet
51. • Market power is in hands of unorganized retail.
Unorganized •95%
Organized •5%
• Potential of Indian Market is US$ 200 billion whereas India
is just earning its 3%.
53. In India every year there is pilferage of US$ 65 billion
whereas in USA it is just 1-2%.
Due to lack of proper storage infrastructure post-harvest
losses of farm produce is Rs. 1 trillion cr.
annually.
54. In terms of corruption India stands at 85th position.
Because of paper work, corruption is present along the
entire supply chain.
In India, there are additional 2-3 intermediaries as
compared to USA.
i. They dominate the value chain.
ii. They flout mandi norms & their pricing lacks
transparency.
55. India is still in developing stage in installing and
managing an effective IT system especially in rural areas
which hampers the overall growth of organized retail
sector.
56. Banks are reluctant to finance retailers because of falling
demand of organized retailers in India as it has witnessed
failure of many stores like Spencer's, Subhiksha, etc.
57. • Taxation laws in India favors only small retail businesses.
• Implementation of non-uniform VAT across states.
• Octroi and entry tax in some states.
58. • No Automatic Approval for FDI- Only 51% FDI is
allowed to one brand shops in Indian retail sector.
• Complications in issuance of licenses like a hypermarket
in Mumbai must apply for 29 unique licenses & then when
it has to come up with second store it has to apply for same
29 licenses all over again.
61. • Indian retail sector :
Employs 8% (35 million)of the working population.
Could yield 12 to 15 million retail jobs in the coming
five years.
• Out of which organized segment is about 0.3 million.
• Retail sector grew at 9.4% on real terms & 15.4% on
nominal terms.
62. Front End
Operations
Back End Operations
Store
Operations
Merchandising
Logistics &
Distributions
Marketing
Procurement
/ Purchase
Corporate
Services
63.
64.
65. MBA Graduates with 5-
10years of Experience
Graduates with 2-5years of
Experience
Graduates/ 12th Pass/ 10th
Pass
Graduates/ 12th Pass/ 10th
Pass
70. Level Skills Required Skills Gap
Senior Manager/
Manager
•Availability
of merchandise.
•Maintenance
•Design/modify the
logistic schemes.
• Negotiation with
warehouse owners.
•Availability of
experienced Logistics
personnel is a key
challenge
Marketing
Manager/Sr.
Marketing
Manger/
Marketing
Officer
• Knowledge of data
analysis.
•Understand customer
behavior.
•Coordinate with media
agencies.
• Ability to understand
•Communication
71. Complexity/Technical Nature of Product
Nature of Supply Chain
Changes in the Product Nature/ Type
Level of
Customer
Involvement
Store
Characteristics
Price Segment(Luxury, Mass market etc.
Intensity of Skill Requirement
72. Demand
• Communication Skills
• Multi Tasking
Supply
• Limited Retail Training
Opportunities
• Higher Level Skills
73. • The Retailers Association of India (RAI)
- Diploma and Degree Programs in Retailing
- Bharti Retail and Vishal Retail
- 5,000 trained persons
78. FDI can be a powerful catalyst to spur competition in the
retail industry.
It can bring about:
Supply Chain Improvement
Investment in Technology
Manpower and Skill development
Efficient Small and Medium Scale Industries
Increase in exports
79. Lifestyle plans
to have more
than 50 stores
across India by
2012–13.
Shoppers Stop
has plans to
invest Rs250
Crore to open
15 new
supermarkets
in the coming
three years.
Pantaloon
Retail India
(PRIL) plans to
invest US$
77.88 million
to add up to
existing 2.4
million sq ft
retail space. .
Timex India will
open another
52 stores by
March 2011
taking its total
store count to
120
80.
81. • Investment into warehouse and cold storage chain will
result in significant efficiency on supply chain.
• Farmers benefited through direct marketing and contract
farming programme.
• Improves farm production through modern techniques.
• Increasing availability of low interest credit for farmers.
82. 1.4
1.2
1
0.8
0.6
0.4
0.2
0
Expected Growth
CAGR
10%
0.35
0.59
0.83
1.3
2008 2011 2013 2018
• In the last four year, the
consumer spending in India
climbed up to 75%.
• By the year 2013, the
organized sector is also
expected to grow at a CAGR of
40%.
• The total number of shopping
malls is expected to expand at
a CAGR of over 18.9 per cent
by 2015.
83. The initial cap on investment could be pegged at 49%.
FDI should be leveraged to create back-end infrastructure.
FDI will be a powerful driver to curb inflation.
84. ?????
To develop our rural sector ,should
conditionality’s be put on the FDI funded chains
relating to employment?
For example, should we stipulate that at least 35%
of the jobs in the retail outlets should be reserved
for the rural youth?
85. Urban migration
Opportunity to urban and rural unemployed
Alternative incentive schemes
86. Industry experts predict that the
next phase of growth in the
retail sector will emerge from
the rural markets.
By 2012 the rural retail market
is projected to have a total of
more than 50 per cent market
share.
Apparel, along with food and
grocery, will lead organised
retailing in India.(RNCOS)
87. ?????
What additional steps should be taken to protect
small retailers?
Should an exclusive legal and regulatory framework
be established to protect their interests?
88. National legal framework cannot be effective.
Hamper growth in retail sector.
Incentives directly to benefit small retailers.
89. Restrict the number of stores that can be operated in a city.
Allow access to the small retailers to the stores through
special windows.
Varied window displat : now a days retailers know that if your product is dosplayed properly acc. to the culture of the state you are operating in , will definaltey help you
Count the country and then speak on the 4 things showed here
This is not all there is still more
In 2881, India had the highest shop density in the world, with 11 outlets for every 1,888
people.. The high density restricts their scope of expansion, and thereby of
upgrading. This also means that, except in the case of severely segmented markets, this
sector stands little chance of competing against large retailing corporations operating
with economies of scale.
It will bring out many positive changes i.e. improvement in supply chain management. It is noticed that 35-40% of the agriculture produce perishes every year due to poor infrastructure in India and there are only 6522 cold storages in India mainly used for potatoes.
Investment in technologies and infrastructure by the retail corporations will act as a boon for our economy.
These org will come in with technical know how and expertise and will train indian manpower and hone their skills as suitable for the industry.
Moreover small players who have already been working with International
chains like Wal-Mart/Carrefour in India have benefitted a lot by manufacturing their private label products & also showcasing our
products in their stores by reaching end consumer directly at competitive
prices which would otherwise launching and building a new brand is a task in itself.
It is understood that MNC that invest in retail in india would also source indian goods to their international outlets in a big way, thus provide a boost to indian exports. Indian retail chains would get integrated with global supply chain since Fdi will bring in technology, quality standards and marketing.
technological know how, soil quality improvement, pesticide and fertilizer usage,
grading, sorting, capabilities and increasing availability of low interest credit for
farmers.
After observing the opportunities and challenges, the views of different org. and the benefits that are likely to take place in indian economy..the panel recommends that fdi in multi brand retail should be allowed but a cap of 49% should be imposed to protect the interest of small and medium size retailers and give them a breathing space to adjust themselves to the new environment and also work to bring in their competitive advantage. China opened the fdi 49% in 1992 and has been immensely benefitted due transfer of technical know how and increased exports there are currently appx 40 foreign players contributing to org retail sector. Now, its time for india to open the borders and be benefitted by the retail growth.
A major proportion of initial FDI should be invested in developing back end
infrastructure. For e.g. the foreign partners need to tell the total amount that
they will be investing in next five years. Out of these atleast 80% of the FDI
has to be made in initial three years.
We talked of large percentage of agriculture produce getting wasted annually. Well investment in technology and supply chain will surely prevent such wastages consequently curb the supply caused inflation which is currently hovering around 15.46%.
It is well noted that urban migration has created a significant excess of labour in India's large
and medium-sized cities. Retail jobs can offer a viable career opportunity for the urban
unemployed who may lack in formal education and training, just as they can for those in
rural areas. Rather than stipulating employment conditionalities that may obstruct
employment generation in urban areas, alternative incentive structures may be used to
encourage companies to train and employ youth in the areas in which retail outlets are
located - both rural and urban.
Additionally, if incentive structures or conditionalities are imposed, they should be mandated
upon both domestic and foreign funded retail chains equally.
Furthermore, it is being discussed that retailers should be restricted to larger cities
of 10 lakh or more. This point is in direct conflict with a stipulation requiring the hiring of
rural youth, who will likely be unable to travel to their place of employment in a consistent,
cost-effective manner.
And u can well see difference in the share of spending in these 3 categories by rural and urban households.
Retail investments and operations are typically executed with local and regional
considerations in mind, so a national legal framework cannot truly be effective. State and
local licensing requirements are sufficient to protect small retailers, and otherwise regulate
the industry.
Implementing new regulations will likely hold back growth in this sector, as well as weaken its
Attendant benefits on SME suppliers, consumers and supply chain investment. Rather than
impose such regualtion, the government may consider policies and incentives that directly
benefit small retailers. These incentives can include, for example, access to low-cost capital,
training on quality and technical standards, and infrastructure investment in their own
businesses.