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Retail Industry
The Indian retail Industry has emerged as one of the
most dynamic & fast paced Industries due to the
entry of several new player.
Retailing Format In India
• Organized Retailing :- Organized retailing refers to trade activities
undertaken by the licensed retailers i.e., those who are registered
for sales tax, income tax etc. These include the corporate backed
hypermarket, retail chains and also the privately owned large retail
business.
• Unorganized Retailing :- Unorganized retail sector it is defined as an
outlet run locally by the owner or caretaker of a shop that lacks
technical and accounting standardization. The supply chain and
sourcing are also done locally to meet the local needs.
• (Rs. 400,000 crore retail markets are unorganized in India.
• Rs. 20,000 crore segment of the market is organized)
By- AT Kearney
Facts & Figures
Retail Sector In India.
Organized retail
Sector 8%
Unorganized
retail Sector
92%
Organized Retailing In India
• Malls : Located mainly in metro cities, in proximity to urban outskirts.
Ranges from 60,000 sq. ft. to 7,00,000 sq. ft. and above. E.g.: Pantaloons,
Specialty Store.
• Discount Stores: As the name suggests, discount stores or factory outlets,
offer discounts on the MRP through selling in bulk reaching economies of
scale.
• Department Stores: Large stores ranging from 20000-50000 sq. ft,
catering to a variety of consumer needs. Further classified into localized
departments such as clothing, toys, home, groceries, etc.
• Hyper marts/Supermarkets: Large self-service outlets, catering to varied
shopper needs are termed as Supermarkets. These are located in or near
residential high streets. These stores today contribute to 30% of all food &
grocery organized retail sales.
• Convenience Stores: These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods during the
day, seven days a week.
• MBO: Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy
market places and Metros.
GDP contribution.
• As per Associated Chamber of Commerce and Industry
(ASSOCHAM) report states that both Organized & Un-organized
retail has contributed 22% of the Indian GDP.
• Indian retail Provide 8% of the employment.
• India is the world 5th Largest global retail space.
8%
92%
Organized retail penitration
Organized sector Unorganised sector
Market Size
• As per Boston Consultancy Group & Retail association of India
1. Indian retail market expected to double to $1 trillion by 2020 from $600
billion in 2015.
2. Overall retail market is expected to grow @ 12% per annum.
3. Retail Spending In top 7 city amt to 3.58 trillion with organized retail
penetration at 19% in 2014.
Online Retail
• India becoming world fastest growing e-commerce market.
1. Robust Investment.
2. Increasing internet user.
• Indian e-commerce sales are expected to reach US$ 55 billion by FY2018
from US$ 14 billion in FY2015.
• India's e-commerce market is expected to reach US$ 220 billion in terms of
Gross Merchandise Value (GMV) and 530 million shoppers by 2025.
• India’s direct selling industry increased by 6.5 per cent in FY2014-15 to Rs
7,958 crore (US$ 1.19 billion) and is expected to reach a size of Rs 23,654
crore (US$ 3.55 billion) by FY2019-20. (IDSA)
Investment Scenario
• According to the Department of Industrial Policies and Promotion (DIPP)
Indian retail industry in single-brand segment has received FDI totality to
344.9 million during April 2000- Sep 2015.
1. Adidas and Reebok sports brands, has become the first foreign sports
company to get government approval to open 100 per cent foreign-owned
stores in India.
2. Aeropostale, an American teen fashion retailer, has chosen to enter India over
China, and expects India to be among its top three markets over the next four
years with revenue target of Rs 500 crore (US$ 75 million).
3. Textile major Arvind Limited has announced a partnership with Sephora,
owned by LVMH Moet Hennessy Louis Vuitton, a French luxury conglomerate,
in order to enter into the beauty and cosmetics segment.
4. Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 375 million)
in a fruit and vegetable processing unit, an integrated meat processing unit,
and a modern shopping mall in Hyderabad, Telangana.
5. Mobile wallet company MobiKwik has partnered with Jabong.com to provide
mobile payment services to Jabong’s customers.
Government Initiatives
• The Ministry of Urban Development has come out with a Smart National Common
Mobility Card (NCMC) model to enable seamless travel by metros and other
transport systems across the country, as well as retail purchases.
• 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.
• The Government has approved a proposal to scrap the distinctions among different
types of overseas investments by shifting to a single composite limit, which means
portfolio investment up to 51 per cent will not require government approval nor will
it have to comply with sectoral conditions as long as it does not result in a transfer
of ownership and/or control of Indian entities to foreigners. As a result, foreign
investments are expected to be increase, especially in the attractive retail sector.
• 100% FDI in single brand retail
1. Sourcing of at least 30% of the value of the product must be from India small
scale industry & cottage industry.
2. Product should be sold under same brand in one or more countries other than
India.
Challenges:-
• Heterogeneous market:- Highly diverse demographic of the Indian
Consumer.
• Poor supply chain Infrastructure:- Lack of storage & transport logistics
often leading to huge wastage.
• Workforce related issues:- Challenges of finding training & retaining talent.
• Concerns with e-tailing:- possibility of incorrect deliveries & higher
instances of return due to COD (cash on delivery) facility.
BY:- Subin Suresh

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Retail industry

  • 1. Retail Industry The Indian retail Industry has emerged as one of the most dynamic & fast paced Industries due to the entry of several new player.
  • 2. Retailing Format In India • Organized Retailing :- Organized retailing refers to trade activities undertaken by the licensed retailers i.e., those who are registered for sales tax, income tax etc. These include the corporate backed hypermarket, retail chains and also the privately owned large retail business. • Unorganized Retailing :- Unorganized retail sector it is defined as an outlet run locally by the owner or caretaker of a shop that lacks technical and accounting standardization. The supply chain and sourcing are also done locally to meet the local needs. • (Rs. 400,000 crore retail markets are unorganized in India. • Rs. 20,000 crore segment of the market is organized) By- AT Kearney Facts & Figures
  • 3. Retail Sector In India. Organized retail Sector 8% Unorganized retail Sector 92%
  • 4. Organized Retailing In India • Malls : Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq. ft. to 7,00,000 sq. ft. and above. E.g.: Pantaloons, Specialty Store. • Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale. • Department Stores: Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc. • Hyper marts/Supermarkets: Large self-service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. • Convenience Stores: These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. • MBO: Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.
  • 5. GDP contribution. • As per Associated Chamber of Commerce and Industry (ASSOCHAM) report states that both Organized & Un-organized retail has contributed 22% of the Indian GDP. • Indian retail Provide 8% of the employment. • India is the world 5th Largest global retail space. 8% 92% Organized retail penitration Organized sector Unorganised sector
  • 6. Market Size • As per Boston Consultancy Group & Retail association of India 1. Indian retail market expected to double to $1 trillion by 2020 from $600 billion in 2015. 2. Overall retail market is expected to grow @ 12% per annum. 3. Retail Spending In top 7 city amt to 3.58 trillion with organized retail penetration at 19% in 2014.
  • 7. Online Retail • India becoming world fastest growing e-commerce market. 1. Robust Investment. 2. Increasing internet user. • Indian e-commerce sales are expected to reach US$ 55 billion by FY2018 from US$ 14 billion in FY2015. • India's e-commerce market is expected to reach US$ 220 billion in terms of Gross Merchandise Value (GMV) and 530 million shoppers by 2025. • India’s direct selling industry increased by 6.5 per cent in FY2014-15 to Rs 7,958 crore (US$ 1.19 billion) and is expected to reach a size of Rs 23,654 crore (US$ 3.55 billion) by FY2019-20. (IDSA)
  • 8. Investment Scenario • According to the Department of Industrial Policies and Promotion (DIPP) Indian retail industry in single-brand segment has received FDI totality to 344.9 million during April 2000- Sep 2015. 1. Adidas and Reebok sports brands, has become the first foreign sports company to get government approval to open 100 per cent foreign-owned stores in India. 2. Aeropostale, an American teen fashion retailer, has chosen to enter India over China, and expects India to be among its top three markets over the next four years with revenue target of Rs 500 crore (US$ 75 million). 3. Textile major Arvind Limited has announced a partnership with Sephora, owned by LVMH Moet Hennessy Louis Vuitton, a French luxury conglomerate, in order to enter into the beauty and cosmetics segment. 4. Abu Dhabi-based Lulu Group plans to invest Rs 2,500 crore (US$ 375 million) in a fruit and vegetable processing unit, an integrated meat processing unit, and a modern shopping mall in Hyderabad, Telangana. 5. Mobile wallet company MobiKwik has partnered with Jabong.com to provide mobile payment services to Jabong’s customers.
  • 9. Government Initiatives • The Ministry of Urban Development has come out with a Smart National Common Mobility Card (NCMC) model to enable seamless travel by metros and other transport systems across the country, as well as retail purchases. • 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. • The Government has approved a proposal to scrap the distinctions among different types of overseas investments by shifting to a single composite limit, which means portfolio investment up to 51 per cent will not require government approval nor will it have to comply with sectoral conditions as long as it does not result in a transfer of ownership and/or control of Indian entities to foreigners. As a result, foreign investments are expected to be increase, especially in the attractive retail sector. • 100% FDI in single brand retail 1. Sourcing of at least 30% of the value of the product must be from India small scale industry & cottage industry. 2. Product should be sold under same brand in one or more countries other than India.
  • 10. Challenges:- • Heterogeneous market:- Highly diverse demographic of the Indian Consumer. • Poor supply chain Infrastructure:- Lack of storage & transport logistics often leading to huge wastage. • Workforce related issues:- Challenges of finding training & retaining talent. • Concerns with e-tailing:- possibility of incorrect deliveries & higher instances of return due to COD (cash on delivery) facility.