The document provides an overview of the retail industry in India. It discusses the evolution of retail in India from traditional haats and mandis to modern organized retail chains. Some of the key drivers of retail change in India include rising incomes, growth of the young population, increasing credit availability, and changing consumer preferences. However, the retail industry in India also faces challenges such as lack of adequate infrastructure, cultural diversity across the country, shortage of trained human resources, and a complex taxation system.

1. PRESENTED BY:
BABITA KHANDWAL
M.COM 3RD SEM
TRINITY COLLEGE

2. OUTLINE
 INTRODUCTION
 OVERVIEW
 RETAIL & RETAILING
 EVOLUTION OF RETAIL IN INDIA
 DRIVERS OF RETAIL CHANGE IN INDIA
 CHALLENGES OF RETAIL CHANGE IN INDIA
 CONCLUSION

3. INTRODUCTION
 India retail industry is the largest industry in India, with an
employment of around 8% and contributing to over 10% of the
country's GDP.
 Retail industry in India is expected to rise 25% yearly being
driven by strong income growth, changing lifestyles, and
favourable demographic patterns.
 A further increase of 7-8% is expected in the industry of retail
in India by growth in consumerism in urban areas, rising
incomes, and a steep rise in rural consumption

4. OVERVIEW
 It is the second fastest growing economy of the world
 Potential to be the third largest economy in terms of GDP in next few years
 It ranks high amongst the top 10 FDI destinations of the world
 Fastest growing tourist market in Asia
 World bank states, India to be worlds second largest economy after China by the year
2050
 Stable and investor friendly Central Government at the helm of affairs
 Introduction of Value Added Tax or VAT and tax reforms
 High degree of professionalism and corporate ethics
 Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and
high returns on investments .

5. RETAIL & RETAILING
 RETAIL is the final stage of any economic activity. It was
first recorded as a noun with the meaning of a , “SALE IN SMALL
QUANTITIES’’. These are the final business entities in a distribution
channel that links manufacturers to customers.
 RETAILING can be defined as the distribution channel
function, where an organisation, buying the products from
supplying firms or manufacturing the products themselves, sells
these directly to consumers.

6. EVOLUTION OF RETAIL IN INDIA
 While barter is considered to be the oldest form of retail trade.
 Haats, Mandis and Melas have always been a part of the Indian
landscape. They still continue to be present in most parts of the
country. E.g.: Suraj Kund Craft Mela (1st to 15th February)
 The origin of retailing in India can be traced back to the
emergence of kirana stores and mom & pop stores.
 Eventually the govt. Supported the rural retail and many
indigenous franchise stores came up with the help of Khadi &
Village Industries Commission

7. SURAJ KUND
CRAFT MELA

8. CONTI...
 The economy began to open up in the 1980’s resulting in
the change of retailing. The first few companies to come up
with retail chains where in TEXTILE SECTOR.
 Examples: Bombay Dyeing, S Kumar's, Raymond's etc.
Later TITAN launched retail show rooms in the organised
retail sector.

9. THE EVOLUTION OF RETAILING IN INDIA
CAN BE BETTER UNDERSTOOD AS:
Nineties (90’s)
Before 1990
EARLY 80’s

10. EARLY 80’s
 Retailing in India was synonymous with peddlers, vegetable
vendors, neighbourhood Kirana stores and consumer durable stores
in a nearby town. The retailers operated in highly unstructured
and fragmented market.

11. BEFORE 1990
 Organised retailing in India was led by few manufacturer owned
retail outlets, mainly from the textile industry.
Example: Bombay Dyeing, S Kumar's, Raymond's, Grasim etc.
 Later TITAN successfully created an organised retailing concept &
established a series of show rooms for its Premium Watches.
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12. NINETIES (90’s)
 Liberalization of the Indian economy led to the dilution of stringent restrictions.
 Entry of few multi-national players like Nanz into the Indian market.
 Setting up of retail chains by domestic retailers like cotton world (Mumbai),
Nirula’s (Delhi) and the Viveks and Nilgiris in the south.
 The latter half of the 1990’s saw a fresh wave of entrants with a shift from
manufacturers to pure retailer.
Example: Food World, Subhiksha and Nilgiris in food and FMCG, Planet M and
Music World in music, Crossword and Fountainhead in books.
 1995 onwards saw an emergence of shopping centres, mainly in urban areas,
with facilities like car parking targeted to provide a complete destination
experience for all segments of society.

13. 18/11/2017

14. DRIVERS OF RETAIL CHANGE IN INDIA
SUPPLY
SIDE
FACTOR
INCREASING
CREDIT
FRIENDLINESS
REAL ESTATE
DEVELOPMENT
Diminishing
diff b/W Rural
and urban
India
GOVERNMENT
REGULETIONS
DEMAND
SIDE
FACTOR
CHANGING
INCOME
PROFILES
GROWING
YOUNG
POPULATION
THE
CHANGING
ROLE OF
WOMEN
CHANGING
CONSUMER
PREFERENCES

16.  CHANGING INCOME PROFILE: According to the NCAER
data, the upper and middle class are likely to increase their
share in the population from 19.6% in 1995-96 to 42.6%
in 2009-10. The proportion of disposable income of the
major consuming class has risen from 20% in 1995-96 to
28% in 2001-02; 35% by 2005-06 and to 48% by 2009-
2010.
GROWING YOUNG POPULATION: The median age of the
Indian population is around 25 yrs, making it one of the
youngest countries in the world compared with the US, China
& Japan with median age of 35, 30, & 44 yrs.

17.  CHANGING ROLE OF WOMEN: According to the 2001 census
report, the population of working women has increased from
22% in 1991 to 26% in 2001. In 2008 India's working
population constituted around 53% of the population as
compared with 48.6% in U.K, 49% in US and 53% in Russia.
 CHANGING CONSUMER PREFERENCES: Over the years, consumer
awareness about quality and price of products/services has
increased due to increasing level of literacy in the country and
growing exposure to the developed nations via media. The Indian
population is today characterized by youth, who also have the
spending power.

19.  INCREASED CREDIT FRIENDLINESS: Many capital
expenditure, i.e. money spend on buying a house, vehicle,
jewelers or consumer durables has transformed into consumer
revenue expenditure because the easy availability of finance. In
1995, just 2.6million urban households in India afford
mortgage. But, now number had rocketed to 20.5 million.
 REAL ESTATE DEVELOPMENT: Real Estate availability is a
key factor influencing the choice of the right location. Real
estate costs for the Indian organized retailers are 8-20% of
sales compared with 3-4% for retailers in other countries.
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20.  DIMINISHING DIFFERENCE BETWEEN RURAL AND URBAN
INDIA : Rural India accounts for over 75% of India population
and this in itself offers a tremendous opportunity for generating
volume driven growth. In year 2002-03 LIC sold 50% of its
policies in rural India. Same BSNL also sold its 50% connection in
small towns.
 GOVERNMENT REGULATIONS: There are certain laws that the
retailers need to follow, these laws are as follows:
 Shop and Establishment act, 1948
 Standards of weight & measures act, 1976
 The Income Tax act, 1961
 Customs Act, 1962
 The Companies act, 1956

21. Major Indian Retail players in market
 RELIANCE
 TATA GROUP
 BIRLA GROUP
 K RAHEJA GROUP
 PHANTALOON
 SUBHIKSHA
 DLF
 BHARTI WALL MART

23. CHALLENGES TO RETAIL DEVELOPMENT
IN INDIA
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INTERNATIONAL STANDARDS
INEFFICIENT SUPPLY CHAIN MANAGEMENT
LACK OF RETAIL SPACE
CULTURAL DIVERSITY
REAL ESTATE ISSUES
HUMAN RESOURCE PROBLEM
LACK OF ADEQUATE INFRASTRUCTURE
COMPLEX TAXATION SYSTEM
FRAUD IN RETAIL

24. INTERNATIONAL STANDARDS
Even through India has well over 5 million retail outlets of
different sizes and styles, it still has a long way to go before it
can truly have a retail industry at par with international
standards.

25. INEFFICIENT SUPPLY CHAIN MANAGEMENT
Indian retail is still dominated by unorganised
sector and there is still a lack of efficient supply
chain management.

26. LACK OF RETAIL SPACE
Most of the retail outlets in India are less than 500 square feet in area. This is very
small by international standards

27. CULTURAL DIVERSITY
India's huge size & socio economic & cultural diversity means
there is no established model or consumption pattern
throughout the country.

28. REAL ESTATE ISSUES
With over 1,000 hypermarkets & 3,000 supermarkets
projected to come up by 2011, India will need additional
retail space of 7,00,000,000 sq ft as compare to today.

29. HUMAN RESOURCE PROBLEM
Trained manpower shortage is a challenge facing the organised retail
sector in India. The Indian retailers have difficulty in finding trained
person & also have to pay more in order to retain them.

30. LACK OF ADEQUATE INFRASTRUCTURE
Poor roads and the lack of a cold chain infrastructure hampers the development of
food and fresh grocery retail in India. The existing supermarkets and food retailers
have to invest a substantial amount of money and time in building a cold chain
network.

31. COMPLEX TAXATION SYSTEM
Experts says that CGST(Central GST), SGST(State GST) are nothing but new
names for Central Excise/Service Tax, VAT and CST. Hence, there is no major
reduction in the number of tax layers. Some retail products currently have only
four percent tax on them. After GST, garments and clothes could become more
expensive.

32. FRAUD IN RETAIL
It is one of the primary challenges the companies would have to face. Frauds,
including vendor frauds, thefts, shoplifting and inaccuracy in supervision &
administration are the challenges that are difficult to handle. As size of sector
increase, this would increase the number of frauds.