JCE, MBA BELGAUM

IntroductionIntroduction

Indian retail Industry is Fifth largest in the world.

One of the sunrise sectors with huge growth potential and accounts for 14-15% of the country’s GDP.

The Indian retail industry is estimated to be worth around US$ 500 billion currently.

The Indian retail industry has expanded by 10.6 per cent between 2010 and 2012 and is expected to increase to US$ 750-850 billion by 2015

Cont….Cont….

The recent announcement by the Indian government with Foreign Direct Investment (FDI) in retail, especially allowing 100% FDI in single brand and 51% FDI in multi-brand has created positive sentiments in the retail sector.

The next wave of the retail boom is upon us.

Retail formats in IndiaRetail formats in IndiaHyper marts/supermarketsMom-and-pop storesDepartmental storesShopping mallsE-tailersVendingCategory killers

ClassificationClassificationRetail industry can be classified into two broad categories – organized retail and unorganized retail.

Organized retail  Those traders/retailers who are licensed for trading

activities and registered to pay taxes to the government.

Constitutes 3-5% segment of the market Eg: Big Bazaar, More, Reliance Fresh, etc.

Unorganized retail  It consists of unauthorized small shops – Constitutes more than 97-95% segment of the market But remain to be the radiating force of Indian retail

industry Eg: conventional Kirana shops, general stores, corner

shops among various other small retail outlets

Emerging AreasEmerging Areas

Some sectors that occupy a prominent position with the retail industry are:◦ Apparel and fashion – Everybody

understands the impact of fashion and textiles on the environment. Almost $19.5 billion were spent on online apparel shopping in the year 2009 and increasing since then.

◦ Fashion & Lifestyle - In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the retail to grow faster.

Cont…Cont…• Pharmaceutical Retail – Driven by therapies like

anti-diabetic, vitamin, anti-infectives and dermatology, it accounted for a robust 15% growth in 2011, in India.

• Food & Beverage retail - Backed by huge potential and changing lifestyles, the food and beverage retail market is growing at a robust 30-35% per year.

• E-commerce – The next big revolution, with the advent of e-commerce in the retail industry, retail stores are facing stiff competition from e-stores. The rising demand for e-shopping has lead to a new debate cropping up in the world.

Factors driving growthFactors driving growthEmergence of nuclear familiesGrowing trend of double-income households Increase in disposable income and customer

aspiration Increase in expenditure for luxury itemsLarge working populationLow share of organized retailingGrowing liberalization of the FDI policy in the

past decade

BottlenecksBottlenecksA long way to meet international standards

Lack of efficient supply-chain management

Lack of required retail space

No fixed consumption pattern

Shortage of trained manpower

Lack of proper infrastructure and distribution channels

Skill sets requiredSkill sets required

Conceptual understandingAnalytical skillsDetail-orientationFair understanding of customer’s

psychologyObservations skillsProject ManagementOperational Skills In-depth product knowledge

ConclusionConclusionThe Indian retail industry is witnessing far

reaching changes. The change is riding on an overall growth in

income and consumption across the country, including the rural areas

The Indian retail industry will, however, take a long time and would require a sustained effort before the benefits reach the target due to its own characteristics

The trade practices and policies change with every state and even within the state. But these have not deterred the TNC retailers in entering India due to the huge potential it offers

THANK YOU!!!