the indian retail scenario
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8/14/2019 The Indian Retail Scenario
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The Indian RetailScenario
Presented By:Presented By:
Ajay BhuraAjay Bhura
Amit JainAmit Jain
Anirban BhattacharyaAnirban Bhattacharya
Anjan RoyAnjan Roy
Anupam KejriwalAnupam Kejriwal
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overviewoverview The sector contributes 10% of the GDP
Largest employer after agriculture - 8%* of population
Estimated to show 25%+ annual growth rate by the end of the
decade as against the current growth rate of 8.5%. Most fragmented in the world and only 3% of the entire
retailing business is in the organized sector. (CRISIL report ) Highest outlet density in world Around 12 million outlets
Long way to go
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The share of organized retail in India is around 3% of the totalretail market
The size of modern retail is about US$ 8 Billion and has grownby 35% CAGR in last five years
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marketmarket
Pantaloon Retail IndiaLtd.,
Shoppers Stop,
Style SPA Furniture Ltd, Subhiksha,
Titan Industries,
Lifestyle,
Walmart Spencers
Westside
Archies,
Big Bazaar,
Crossword,
Ebony Retail HoldingsLtd.,
Fabmall,
Food Bazaar,
Globus Stores Pvt. Ltd.,
Health and Glow,
Music WorldEntertainment Ltd.,
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Recent Trends ..
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M.N.C. REGIMEM.N.C. REGIME
CONTRACT FARMING
COLLECTION OFAGRICALTURE PRODUCTS
TO OWN FACTORY
TO OWN DEPT. STORE
TO CUSTOMER
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ConfrontingConfronting
Retail FirmsRetail FirmsBehavior
ofConsumers
SocioeconomicEnvironment
Behaviorof the
Supply Chain
Stateof
Technology
Behaviorof
Competition
Legal andEthical System
Retail
Firm
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Swot analysisSwot analysis
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..Demographic favor
Rising disposable income
Increase in number of people in earner category.
Urbanization
Shopping convenience
Low labor cost of skilled ones.
Changing consumer habits and lifestyles.
Plastic card revolution.Greater availability of quality retail space.
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....Policy related issues
- lack of industry status for retail.
- numerous licence,permits and registrationrequirement.
-farmer and retailer unfriendly APMC act.Limited consumer insight
-lack of detailed region specific customer data.
-less data on spending pattern. inadequate human resources
-lack of trained personnel at all level.-stringent employment and industry laws.
-fragment approach to human resources.
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cont..cont..
Taxation hurdle-inconsistent octroi and entry tax structure.-vat and multiple taxation issues.-large grey market presence.
Underdeveloped supply chain
-underdeveloped logistics infrastructure.-absence of national cold chain networks.-lack of national distribution networks and hubs
Lack of adequate utilities
- lack of basic infrastructure like power, transport andcommunication creates difficulty in sustaining retailoperations across the large geographical spread ofcountry.
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OpportunitiesOpportunities Exposure to global trend
Shift of expense basket from basics to
lifestyle products
Increased spend on Apparel, personal care,
entertainment
Easy Bank credit boosts retail
Easing out on Import barriers, Government
sponsorship taking shape (FDI Policy, Tax
and Duty structure, Subsidies)
M-Commerce & e-Commerce boosts retail Potential for investment.
Locational advantage.
Increase in income
Changes in lifestyle demand for
global trends & Luxury goods
Service Sector: creating new jobs.
Working Population in 2010 will70%
From Save to Spend
High disposable income family
structures on a rise
Nuclear Families
DINKS (Double Income No Kids) &
Multi income families
Rural Retail
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....Political issues.Inflation.NostalgiaLack of differentiation among the malls that are coming.Poor inventory turns and stock availability measures.
Product offerings in different stores across the country is very different
Market not mature (has to be validated)
Skilled Labour a significant challenge
High taxes, bureaucratic clearance process and labour laws
Infrastructure
Supply Chain & Logistics
Competitive activity reduction in margins
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Challenges withChallenges with
Infrastructure andInfrastructure and
Logistics:Logistics:The lack of proper infrastructure and distribution channels inthe country results in inefficient processes. This is a majorhindrance for retailers as a non-efficient distribution channel is
very difficult to handle and can result in huge losses.Infrastructure does not have a strong base in India.Urbanization and globalization are compelling companies todevelop infrastructure
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SUPPLY CHAIN AND LOGISTIC ISSUES IN INDIAN RETAIL
INDUSTRY
The biggest operational challenge for Indian retailers is managing the supply
chain properlyExperts from the supply chain management companies and existing players in the
retail sector agree to the fact that the back-end operations in retail need a solid
boosting in terms of investmentThe need to outsource the back-end operations to experts in the industry and its
feasibility is also being exploredThe infrastructure in India in terms of road, rail, and air-links are not sufficient.
So, warehousing plays a major role as an aspect of supply chain operationsTo overcome these problems, the Indian retailer is trying to reduce
transportation costs and investing in logistics through partnership or directly.
The growth of the Indian retail industry, to a large extent depends on supplychain, so efforts must be made by Indian retailers to maintain it properly
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ROLE OF FOREIGN DIRECT INVESTMENT IN INDIAN RETAIL INDUSTRY
According to a report by CB Richard Ellis, India is one of the top 50
destinations by global retailers. The report explores globalization of retailindustry and scrutinizes retailer presence in relation to market sectors, country
of origin and other influences.Indias retail market, currently valued at $511 billion, is poised to grow to
$833 billion in the next 5 years.The organized retail sector, currently accounting for less than 5 % of the total
pie, is expected to register a compounded annual growth rate of 40% and swell
to $107 billion within the same period.The consumers spending in India has increased by an impressive 75% in the
last 4 years and will quadruple in the next 20 years.Domestic retailers and mall developers plan to move into smaller towns and
cities with alacrity in order to respond to growing consumer markets there andcapture rising demand for brandsHowever to enable this sector to realize , restriction son FDI in retail will have
to be relaxed further and retail rentals will need to undergo some degree of
rationalization
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Driven from Consumption Throughout the 1.1Billion Population
5-7 million
Super Rich
70 80 million
Afford Cars, Private Healthcare &Foreign travel
250 - 300 million
Afford goods like Refrigerators , Scooters& Colour TVs
600-700 million (Generally Rural)
Afford simple industrial productse.g. bicycles , radios , textiles
erty Line = income less than $ 1/day
urce: McKinse ,
60 % of Indias population are under 24 years
http://images.google.com/imgres?imgurl=http://upload.wikimedia.org/wikipedia/en/thumb/2/23/Indian_Couple_on_Bicycle.jpg/180px-Indian_Couple_on_Bicycle.jpg&imgrefurl=http://en.wikipedia.org/wiki/Bicycle&h=250&w=180&sz=15&hl=en&start=1&tbnid=Vj2HXGk35I5f2M:&tbnh=111&tbnw=80&prev=/images?q=lower+class+indians&ndsp=20&svnum=10&hl=en&lr=&sa=N -
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AheadAhead India is amongst the least saturated of all major global markets in terms of
penetration of modern retailing formatsMany strong regional and national players emerging across formats and product
categories
Most of these players are now gearing up to expand rapidly after having gonethrough their respective learning curves
Real Estate Developers are also moving fast through the learning curve to providequalitative environment for the consumers
The Shopping Mall formats are fast evolving
Partnering among Brands, retailers, franchisees, investors and malls Improved Infrastructure
Many companies like Lee Cooper, Starbucks and Walmart have put forward their
FDI proposals to the government.
Walmart-Bharti combination, Tesco, AV Birla group and Future group are all
gearing up for huge investments and aggressive business strategies.
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THANKYOU
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