The Retail Scenario in India

• It is the second largest employer after Agriculture

• It is mainly in the unorganized sector in the form of small, family

or independently owned shops usually called as Mom & Pop or
Father & Son shops.

• There are over 1.2 lac retail outlets in India contributing roughly
10-12% of GDP

• Organized or modern retail constitute roughly 3-4% of total retail

segment

• Food Sales constitute 62% in the total retail sales

 The Retail Scenario in India
• The Retail Industry is likely to be worth Rs. 20,000 crore and
proportion of organized sector to be around 6%, by 2010
• Major cities in which Organized Retail is growing are Delhi-
NCR, Mumbai, Bangalore, Hyderabad, Chennai, Kolkata
• It is further expected to grow in Pune, Ahmedabad, Lucknow,
Jaipur, Bhopal, Indore, Chandigarh, Ludhiana, etc.
• NCR accounts for nearly 40% of total Mall space among the six
metro and 7 non metro cities
• Share of Organized Retail in other countries: Malaysia (50%),
Thailand (40%), Philippines (35%), Indonesia (25%), S.Korea
(15%) and China (20%)
 The Retail Scenario in India

Drivers of Growth
• Indian Middle Class
the purchasing power of Indian middle class is growing substantially
with a year-on-year growth rate of 5-per cent in its household income.

According to NCAER, the 9.2 crore strong Indian middle class (whose
annual income ranges between Rs 2 lakh and Rs 10 lakh) is expected to
cross 15.3 crore by 2009.
• Policy Reforms
The Indian government allows 51 per cent Foreign Direct Investment
(FDI) in single brand retailing owing to which foreign multinationals
like Reebok and Louis Vuitton can now operate directly in the Indian
markets instead of going through franchise route of earlier.
 International Retailing : Strategies
 Quantification: of the opportunity
 Market Assessment : Whether to expand

 Cultural differences: how to deal

 Competition:level, quality and positioning
 Price Analysis:defining right pricing for new market
 Gross Margin:cost of goods and identify sourcing alternatives
 Regulatory issues:cost effective solutions
 Logistics planning :efficient flow of goods
 System integration: between new market and head office
 Head office and company structure:structure options
 Proforma development: defining the ROI based on established
benchmarks
 Entry strategy and location analysis: Modelling and cost benefit
analysis
 Implementation services:Staff, media, logistics and warehousing, etc.
 Types of Ownership
 Independent Single Store Establishment

 Corporate Retail Chains

 Franchising

Variety and Assortment

Variety is the number of merchandize categories a
retailer offers. Also referred as Breadth

Assortment is the number of different items in a

merchandize category. Also referred as Depth

Stock Keeping Unit: Each different item of

merchandize