Retail Management, Types of Retail shops, Retail Marketing, Distribution Channels

1. Session Name
Retail Management
Delivered By :
Prof. Shantilal Hajeri
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Prof.Shantilal Hajeri

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Prof.Shantilal Hajeri

3. Brief Introduction
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4. Lectures Planned
S.N Date Unit
1 18-Nov-23 1
2 19-Nov-23 2
3 25-Nov-23 3
4 26-Nov-23 4
5 2-Dec-23 5
6 3-Dec-23 6
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5. Syllabus
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6. Syllabus
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7. Table of Contents
Unit No Title of the Unit
1 Retailing
2 Retail Theories
3 Retail Location Strategy
4 Retailing in India
5 Challenges to Retailing in India
6 Challenges to Global Retailing
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8. Unit 4 Retailing in India
Title of the topic
4.1 Retail in India
4.2 Evaluation and Size of retail in India
4.3 Drivers of retail change in India
4.4 Foreign Direct Investment in retail
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9. By the end of this session, you will be able
to:
1. Know about Evaluation and Size of retail in
India
2. Understand Drivers of retail change in India
3. Know about Foreign Direct Investment in retail
Learning Objectives
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10. Introduction
• Retail in India has undergone a remarkable transformation over the years,
driven by
• economic growth, urbanisation, changing consumer preferences, and
technological
• advancements. The retail sector in India plays a crucial role in the country's
economy,
• contributing significantly to employment, GDP, and trade. This write-up offers
an overviewof
• the retail industry in India, including its evolution, challenges, trends, and
future prospects.
• It is a dynamic and integral sector of the country's economy, connecting
producers and
• consumers through the exchange of goods and services.
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11. 4.1 Retail in India
• Retail in India has undergone a remarkable
transformation over the years, driven by economic
growth, urbanisation, changing consumer
preferences, and technological advancements.
• The retail sector in India plays a crucial role in the
country's economy, contributing significantly to
employment, GDP, and trade.
• It is a dynamic and integral sector of the country's
economy, connecting producers and consumers
through the exchange of goods and services.

12. 4.1 Retail in India
• The industry covers a wide range of activities, from
small local shops to large modern shopping malls
and e-commerce platforms. India presents a unique
and complex retail landscape.
• This sector holds immense significance, contributing
significantly to employment, economic growth, and
overall development.
• The sizable middle class and unexplored retail
market in India are the main factors for international
retail chains seeking to move into India.

13. 4.1 Retail in India
• The urban Indian consumer’s purchasing power is increasing, and
branded goods in categories like apparel, cosmetics, footwear,
watches, beverages, food, and even jewellery are gradually evolving
into business and leisure that are well-liked by the urban Indian
consumer.
• To improve the business climate and make it simpler now for a
foreign company setting up fully owned subsidiaries in India, the
Indian government has implemented a number of policies and put in
place regulations.
• Nearly 60 shopping malls covering a total retail space of 23.25 million
sq. ft are expected to be functional during 2023-25.

14. 4.1 Retail in India
• India ranks among the best countries to invest in Retail space.
• Factors that make India so attractive include the second largest
population in the world, a middle-income class of mn158 households,
increasing urbanisation, rising household incomes, connected rural
consumers, and increasing consumer spending.
• As of 2021, there were 1.2 million daily e-commerce transactions.
Online shoppers in India are expected to reach 500 million in 2030
from +150 million in 2020.
• The E- Commerce market is expected to touch US$ 350 billion in
GMV by 2030.

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17. Evolution of Retail in India
• The evolution of retail in India reflects the broader socio-
economic changes that the country has undergone.
• From traditional marketplaces to modern malls and online
platforms, the retail industry has continually adapted to meet
the needs and aspirations of Indian consumers.
• As India continues to urbanise and modernise, the retail
sector will likely experience further transformation, forced by
technological advancements, evolving consumer behaviour,
and the pursuit of convenience and quality.

18. Evolution of Retail in India
The evolution of the retail industry in India has been
marked by distinct phases, reflecting changes in
economic policies, consumer behaviour, and
technological advancements:
1. Pre-Liberalization Era (Before 1990s):
2. Economic Liberalisation (1990s - Early 2000s):
3. Organized Retail Growth (Mid-2000s - 2010s):
4. Rise of E-commerce (2010s - Present):
5. Omnichannel Retailing and Tech Integration
(Present and Beyond):

19. Pre-Liberalization Era (Before 1990s)
• Prior to the economic reforms of the early
1990s, India had a predominantly unorganised
and traditional retail structure.
• Local markets, Kirana stores (small mom-and-
pop shops), and street vendors were the
primary sources of goods for consumers.
• The retail landscape was highly fragmented
and unorganised with limited exposure to
modern retail formats.

20. Economic Liberalisation (1990s - Early
2000s)
• Liberalisation, Privatisation and Globalisation (LPG) era stgarted in 1991
with the setting up of Wortld Trade Orgainsiation (WTO).
• The world was treated like a global village i.e. one big market.
• The introduction of economic liberalisation policies in the early 1990s
marked a significant turning point for India's retail sector.
• The opening up of the economy led to increased foreign direct investment
(FDI) and the entry of multinational retail giants.
• Modern formats of retailing such as supermarkets, hypermarkets, and
department stores gained ground in urban areas.
• This period saw the establishment of early organised retail players like
Big Bazaar, Subhiksha, Pantaloons and Shoppers Stop.

21. Organized Retail Growth (Mid-2000s - 2010s):
• The mid-2000s witnessed a rapid expansion of
organised retail chains, especially in urban and
semi-urban regions.
• Shopping malls became destinations for
shopping, entertainment, and dining, creating a
shift in consumer behaviour.
• This period also saw the emergence of
specialised retail formats focusing on specific
product categories such as electronics,
fashion, and home goods.

22. Rise of E-commerce (2010s - Present):
• The proliferation of the internet and the advent
of smartphones brought about a new era in
Indian retail - the rise of e_x0002_commerce.
• Online shopping platforms like Flipkart,
Amazon, and Snapdeal gained traction,
offering consumers a convenient way to shop
from the comfort of their homes.
• The e-commerce boom led to increased
competition and innovation, forcing traditional
retailers to adapt their strategies.

23. Omnichannel Retailing and Tech Integration
(Present and Beyond):
• In recent years, the lines between online and
offline retail have blurred, giving rise to the
concept of omnichannel retailing.
• Retailers are leveraging technology to create
seamless shopping experiences, allowing
customers to interact with brands through
various delivery channels.
• Data analytics, AI, and ML are being employed
to understand consumer preferences and offer
personalised recommendations.

24. 4.2 Evaluation and Size of retail in India
• The retail sector in India is a vital component of the
country's economy, contributing significantly to GDP,
employment, and overall economic growth.
• Evaluating the size of the retail industry involves
considering various factors such as market value,
employment, organised vs. unorganised segments,
and the contribution of different retail formats.
• As of September 2021, an overview of the evaluation
and size of retail in India is covered in the next slides

25. Market Size and Value
• The Indian retail market is vast and diverse, catering to a population of over
1.3 billion people.
• The market value of the retail industry includes the sales generated by
various retail formats, both traditional and modern
• In 2020, the Indian retail market was estimated to be around $854 billion.
• However, due to the COVID-19 pandemic, there was a significant disruption in
the retail landscape, impacting sales and consumer behaviour.
• The pandemic accelerated the adoption of e-commerce, due to safety
concerns and lockdowns.

26. Employment:
• The retail sector is a substantial source of employment in India,
providing jobs across a wide range of roles from sales associates
to supply chain managers.
• The retail industry offers employment opportunities through
traditional retail setups.
• As of 2021, the retail sector was estimated to employ around 46
million people, making it one of the largest employers in the
country.
• This number encompasses both organised and unorganised retail,
highlighting the sector's significance in providing livelihoods.

27. Organised vs. Unorganised Retail
• India's retail landscape is characterised by a mix of organised and
unorganised retail.
• The organised retail segment includes modern formats such as
supermarkets, hypermarkets, malls, and chain stores.
• The unorganised retail segment consists of small Kirana stores, street
vendors, and local shops.
• The organised retail segment has been growing steadily, but it still
constitutes a smaller portion of the overall retail market.
• In 2020, organised retail accounted for approximately 11-12% of the total
retail market.
• However, this share has been increasing gradually as more consumers
embrace modern retail formats.

28. Retail Formats and Trends
• Several retail formats coexist in India, catering to diverse consumer
preferences. Traditional Kirana stores remain a cornerstone of the retail
landscape, particularly in residential areas.
• However, the rise of supermarkets, hypermarkets, malls, and e-commerce
platforms has transformed the way consumers shop.
• E-commerce has witnessed remarkable growth, with a substantial number of
consumers opting for online shopping.
• The e-commerce market in India has seen annual growth rates of over 25%,
driven by factors like increased internet penetration, smartphone adoption,
and changing shopping habits.

29. Future Outlook:
• The retail industry in India is poised for further
growth, driven by ongoing urbanisation, rising
incomes, and the integration of technology.
• E- commerce is expected to continue playing a
significant role, especially in reaching
consumers in remote areas.
• The omnichannel approach, blending online
and offlineexperiences, is likely to become
more prevalent as retailers strive to meet
evolving consumer expectations.

30. 4.2 Evaluation and Size of retail in India

31. 4.3 Drivers of retail change in India
• Several key drivers have brought about changes in consumer
behaviour, market dynamics, and the overall retail ecosystem.
• Some of the key drivers of change in the retail industry in India
include healthy economic growth, changing demographic profile,
increasing disposable income, urbanisation, and changing consumer
tastes and preferences.
• A large young working population with an average age of 24 years,
nuclear families, along with increase in working women population
and emerging opportunities in the service sector are also going to be
key growth drivers of the organised retail sector in India.

32. 4.3 Drivers of retail change in India
• Don’t worry about next generation. Let them
stand on their own.
• Die empty.
• Undue importance for social status.
• Craze for branded goods
• According to a report by BCG and the Retailers
Association of India (RAI), India's retail industry
is on a robust path to recovery expected to
continue growing at 10% CAGR to reach
approx. $2 trillion in the next decade.

33. 4.3 Drivers of retail change in India

34. Economic Growth and Rising Incomes
• India's steady economic growth has led to an
increase in disposable incomes and higher
purchasing power among consumers.
• As people have more money to spend, their
consumption patterns have evolved, driving
demand for a wider variety of products and
shopping experiences.
• Earn more spend more (Oppositte of Live
within your means)
• Fear Of Missing Out (Black Friday. Discount
only today)

35. Urbanisation and Changing Demographics
• Rapid urbanisation has created larger
consumer markets in cities and towns.
• Urban dwellers tend to have different shopping
preferences and demands compared to rural
consumers, leading to the growth of modern
retail formats that cater to urban lifestyles.
• Villages are also having all the facilities of
cities such as internet, road and
communication facilities.

36. Digital Revolution and E-commerce
• The proliferation of the internet and
smartphones has opened up new avenues for
retail.
• E-commerce platforms have penetrated due to
their convenience, extensive product range,
and competitive pricing.
• This has driven a shift in consumer behaviour,
with more people opting for online shopping.
• “Kar Lo Duniya Mutthi Me” Tag line of Reliance
Communication in lagte 1990s has be come
true.

37. Technology Adoption
• Retailers in India are increasingly adopting
technology to enhance customer experiences,
optimise operations, and streamline supply
chains.
• Technologies like artificial intelligence, data
analytics, and mobile apps are being used to
personalise offers, improve inventory
management, and optimise pricing strategies.
• Big data analysis studies the behaviour of
individual consumer and aims for target
marketing.

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40. Changing Consumer Preferences
• Consumers are looking beyond basic
necessities and seeking quality, variety, and
convenience in their shopping experiences.
• This shift in preferences has led to the growth
of organised retail formats.
• There are working women who have more than
1000 sarees/dresses.
• There are people who order one or the other
thing online every day.

41. Rise of Middle Class
• The expanding middle-class population has
created a significant market for branded
products, lifestyle items, and luxury goods.
• This has encouraged the establishment of
international and domestic brands, leading to
the growth of modern retail

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43. Government Policy and Regulations
• Changes in government policies, such as
liberalising FDI (foreign direct investment)
norms in retail, have had a significantimpact.
• These policy changes have facilitated the entry
of multinational retail giants and encouraged
investments in organised retail.
• LPG era since 1991.
• Export of one country is the import of another
country.

44. Infrastructure Development
• Improved transportation networks, better
logistics, and the expansion of road and rail
connectivity have facilitated the movement of
goods across the country.
• This has led to the growth of supply chains and
enabled retailersto reach remote areas more
efficiently.

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47. Globalization and Cultural Influences
• Exposure to global trends and culturesthrough
media and the internet has influenced
consumer preferences and aspirations.
• Consumers in India are now more aware of
international brands and products, leading to a
demand for similar experiences locally.

48. Omnichannel Retailing
• With the integration of online and offline
shopping experiences through omnichannel
strategies has become a driving force in retail.
• Retailers are focusing on providing seamless
interactions across various touchpoints,
enabling customers to research, buy, and
receive products through multiple channels.

49. Sustainability and Ethical Consumption:
• Increasing awareness of environmental issues
has driven a growing demand for sustainable
and ethically produced products.
• Retailers are responding by incorporating eco-
friendly and socially responsible practices into
their business models.

50. Meaning of Sustainable Development
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Triple Bottom line:
Profit, People and
Planet
Profit: Economical
People: Social
Planet: Environmental

51. 4.4 Foreign Direct Investment in retail
• Foreign Direct Investment (FDI) in retail refers to the investment
made by foreign companies or individuals in the retail sector of a
country.
• FDI involves the ownership and control of assets, such as physical
stores, e-commerce platforms, supply chains, and distribution
networks, in the host country's retail industry.
• FDI in retail can have significant economic, social, and political
implications, and its impact depends on the policies and regulations
of the host country
• Foreign Direct Investment (FDI) in India has been on the rise in the
past few years, specially in the retail, e-commerce, hospitality, and
travel space.

52. 4.4 Foreign Direct Investment in retail
• The Indian government has progressively liberalised the retail
sector in India for FDI.
• As per the latest policy issued in 2012 by the DIPP, 100% FDI is
allowed in case of single-brand retail vide automatic route.
• Only those products that are branded and sold under the same
brand in other countries too will be covered under this.
• However, there is no proposal under consideration of the
Government to increase FDI in the multi-brand retail sector in the
country.

53. 4.4 Foreign Direct Investment in retail
• India's approach to FDI in the retail sector has
evolved over the years, with policy changes
reflecting the government's efforts to balance
economic growth, consumer interests, and the
interests of domestic retailers.

54. Multi-Brand Retail
• FDI in multi-brand retail refers to foreign
companies investing in retail outlets that sell
multiple brands and products.
• Historically, India has been cautious about
allowing FDI in this segment due to concerns
about its potential impact on small traders and
local businesses.

55. Single-Brand Retail
• FDI in single-brand retail allows foreign
companies to own 100% equity in retail
ventures that sell only one brand.
• This policy has been more liberal, with the
Indian government allowing higher FDI limits
and fewer restrictions compared to multi-brand
retail.

56. Policy Changes
• The Indian government has introduced various
policy changes related to FDI in retail.
• In 2011, it permitted 51% FDI in multi-brand
retail, subject to conditions like a minimum
investment amount and sourcing requirements.
• However, due to political and opposition
pressures, the policy implementation was left
to individual states, leading to limited actual
investment.

57. E-commerce:
• FDI regulations in e-commerce have also been
a subject of scrutiny and revision.
• There have been discussions about regulating
online marketplaces and their relationships
with sellers.
• The government introduced guidelines to
restrict FDI funded e-commerce platforms from
selling products of companies in which they
have an equity stake

58. Recent Developments
• As of my last update in September 2021, FDI
in multi-brand retail was not a prominent
feature of the Indian retail landscape due to the
cautious approach and certain regulatory
challenges.
• Single-brand retail and e-commerce have been
the main segments where FDI has been more
actively allowed.

59. Impact:
• Advocates of increased FDI in retail argue that
it can bring in foreign investment, enhance
supply chain efficiency, create jobs, and
introduce modern retail practices.
• Critics, on the other hand, express concerns
about the potential displacement of small
traders, loss of local businesses, and adverse
effects on traditional markets.

60. Summary
• Retail in India has transformed due to economic growth, urbanisation,
changing consumer preferences, and technology.
• From traditional markets, the sector embraced modern formats like
malls and e-commerce.
• Drivers include economic growth, urbanisation, tech adoption, and
evolving consumer behaviour.
• Challenges include infrastructure and regulations. Traditional and
modern retail coexist, with e_x0002_commerce growing.
• Trends encompass omnichannel strategies and sustainability.
• The future is promising, with e-commerce and omnichannel
approaches shaping the industry

61. Summary
• The Indian retail sector contributes substantially to the economy via
GDP, employment, and growth.
• The market value, incorporating diverse formats, has grown due to
urbanisation and rising incomes.
• Employment in the sector is significant, especially across traditional
and modern setups.
• Organised retail is expanding, though unorganised retail still holds a
considerable share.
• E-commercehas surged, reshaping consumer behaviour.
• The future outlook is positive, driven by urbanisation, technology, and
changing preferences.

62. Summary
• India's retail evolution stems from economic growth, urbanisation,
technology, and shifting consumer preferences. Rising incomes have
changed consumption patterns.
• Urbanisation created bigger markets.
• Technology, including e-commerce, altered shopping habits.
• The middle-class growth boosted branded and luxury goods demand.
• Government policies influenced FDI and retail regulations.
• Globalisation and sustainability awareness shaped choices.
• Retailers adapted through omnichannel strategies.
• Balancing tradition and modernity, India's retail reflects dynamic societal
changes.

63. Summary
• Foreign Direct Investment (FDI) in Indian retail
involves foreign investment in the sector.
• Policy evolution impacted multi-brand and
single-brand retail.
• Multi-brand FDI faced restrictions due to
concerns about local businesses.
• Single-brand and e-commerce segments
witnessed more FDI participation.
• FDI's impact varies—supporters emphasise
investment benefits and modernization, while