The document discusses globalization and its impact on the retail sector in India. It outlines the benefits and disadvantages of globalization. It then provides details on the organized and unorganized retail sectors in India, including the different types of retail stores. It also examines government policies around foreign direct investment and a SWOT analysis of the Indian retail industry.

1. Globalization & Retail Sector
By-P1103
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P1146
P1152
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2. Globalisation
– An economic phenomenon
– A social phenomenon
– A cultural phenomenon

3. Globalisation

4. Benefits of Globalisation
 Increased choice
 Greater potential for growth
 Increase international
economies of scale
 Greater employment
opportunities
 Massive increases in wealth
for many countries

5. Disadvantages of Globalisation
 Increase in gap between the
rich and the poor
 Dominance of global trade
by the rich, northern
hemisphere countries
 Lack of opportunities for the
poor to be able to have
access to markets
 Exploitation of workers and
growers

6. Retail Sector
• Goods and Services(Marketing Intermediary)
• 14% GDP
• 2nd Sector
• 5th in World
• 2nd in Asia

7. Different products involved in Retailing
Food
Books & Magazines
Fashion & Clothing
Personal Care
Electronics
Sport & Leisure
Home Ware
Footwear & Leather
Toys & Games
Jewellery & Watches
Furniture
Petrol

8. Division of Retail Sectors
• Organized
• Unorganized

9. Manufacturers
Whole seller
Organized Sector
Distributor
Retailer

10. Organized Sector
Super markets
(Low Price and Low margin basis)

11. Organized Sector
Hypermarkets
(Food and Non-food things)

12. Organized Sector
Departmental stores
(Retail outlets)

13. Organized Sector
Specialty stores
(Books and Sales of Music Cassettes)

14. Unorganized Sector

15. Customers
Bargain Hunters Casual Shoppers
Devoted Customers

16. Share of Organized Retail

19. International Retail: At a Glance
3% 2% 9%
8% 38%
13%
27%
USA EU Japan China
India Russia Others

20. Government Policies
 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:
 Taxation laws that favor small retailers.
 Multi-point octroi collection.
 Indian retailers need to emulate worldwide retail practices such as
accuracy in financial reporting, increased levels of corporate governance
and greater accountability among employees.
 Foreign Equity does not go beyond 51 percent.
 Additions to the product categories to be sold under ‘single brand’ require
fresh govt. approval.

21. Why FDI?
 Improve competition
 Develop the market
 Greater level of exports due to increased
Benefits of sourcing by major players
FDI
 Sourcing by Wal-Mart from China improved
multifold after FDI permitted in China
 Similar increase in sourcing observed for
Metro in India
 Provides access to global markets for
Indian producers

22. Why FDI?
 Investment in technology
 Cold storage chains solve the perennial problem
of wastage
 Greater investment in the food processing sector
Benefits of technology
FDI  Better operations in production cycle and
distribution
 Better lifestyle
 Greater level of wages paid by international
players usually
 More product variety
 Newer product categories
 Economies of scale to help lower consumer price
 Increased purchasing capacity of consumers

23. How FDI ?
 FDI should be allowed in stages
2 yrs
 Initial stages: 26% FDI
 Establishment Phase: 49% FDI 2 yrs
How FDI ?
 Mature Phase: 100% FDI 2 yrs
 FDI policy
 No incentives needed to attract FDI
 Market size and potential are sufficient
inducers
 No need for costly tax breaks, import duty
exemptions, land and power subsidies, and
other enticements

24. SWOT Analysis

25. Strength
 Increasing demand
 Because of increase in per capita income
household consumption also well increase
 WIN-WIN situation for all
( suppliers, producers, retailers and customers).
 Improvement in the standard of living.
 Technology intensive industry

26. Weakness
 Lack of expertise in Supply Chain Management
 Inadequate Infrastructure
 Labor Laws
 Lack of specialized professionals in Industry
 Lack of industry status.
 Government Restrictions on FDI
 Non-Availability of Government Land

27. Opportunities
 Change in consumer behavior pattern and increase
in disposable income
 More than 15 million people would be engaged in
Retail Industry by 2015
 Indian rural markets offer a sea of an opportunity
for the retail sector
 Upcoming international Players
 Healthy prospect for the fashion industry

28. Threats
 Indian taxation system favors small retail
business.
 Competition from unorganized Sector to the
organized Sector.
 Middle class Psychology.
 Increasing Real Estate prices