Retail scenario of India

Retailing in India

 India is the fifth largest retail destination

in the World.
 Retailing is the largest employer after
agriculture(employs more than 8% of
the population).
 About 7% of the population of India is
involved in retailing unlike 20% in USA.
Retailing in India

 Trading volume in retail industry is

around 10000 billion INR.
 Organised retail industry is only 3.5% of
the total retail industry.
 Organised retail industry is expected to
grow at 25% to 30% p.a.
Evolution of retail in India

 Historic/rural reach: Weekly markets,

village fairs and melas.

 Traditional reach: Convenience stores,

mom and pop/Kiranas.
Evolution of retail in India

 Government supported: PDS

outlets,khadi stores and co-operatives.

 Modern formats: Exclusive brand

outlets,super/hypermarkets,depar----
tmental stores and shopping malls.
Sectorwise breakup of retail
industry
 Textiles and Fashion = 39%
 Footwear = 9%
 jewellery and watches= 7%
 Mobile handsets and = 3%
 accesories.
 health and beauty = 2%
 Food and groceries = 18%
Sectorwise breakup of retail
industry
 Durables = 13%
 Books, music and gifts = 3%
 Home = 3%
 Pharma = 2%
 Entertainment = 1%
Structure of retailing in India

 Rural retailers.
 Small traditional retailers:
 Organised modern retailers and
 Malls.
Structure of organised apparel
retailing
 Single brand outlets.
 Multibrand clothing stores.
 Departmental stores.
Rural retailers

 Chaupal sagar - owned by ITC India ltd.

 Hariyali bazaar – owned by DCM group.
Small traditional retailers

 Kiranas: Traditional mom and pop

stores.
 Kiosks
 Street markets.
Organised modern retailers

 Corporate houses:
Tatas - trent,
RPG group – food world,
health and glow etc.,
ITC – wills lifestyle,
Rahejas – Shoppers stop,
Future group – bigbazaar,
Hiranandhini – haiko,
DLF – Dt cinemas.
Organised modern retailers

 Dedicated brand outlets:

Nike, reebok, Zodiac etc.

 Multibrand outlets:
Vijay sales, Viveks etc.
 Manufacturers/exporters:
Pantaloons, Bata, Weekender etc.
Organised apparel retailers

 Arvind mills.
 Madura garments.
 Raymonds.
 Royal classic polo – Planet fashion.
 Wills lifestyle.
 Westside.
 S.kumar's.
Foreign retailers

 Single brand outlets:

Nike, Mango, Addidas, Rolex, Louis
vuitton, versace.

 Multi-brand retailers:
Marks and spencer.
Large Indian retailers

 Hypermarkets:
Big bazaar, Giants, star and shoprite.

 Departmental stores:
Lifestyle, Piramals, Trent, Pantaloons
and Shopper's stop.
Factors responsible for the
development of retail sector
 Rising incomes and improvements in
infrastructure are enlarging consumer
markets and converging consumer
tastes.
 Shift in comsumer demands to foreign
brands like Mcdonalds, pansonic etc.
 Growth of E - tailing.
Challenges of retailing in India

 Regulations affecting real estate

purchases.
 Taxation which favours small retailers.
 Lack of trained workforce.
 Instrinsic complexity of retailing – rapid
price changes, constant treat of product
obsolescence and low margins.
FDI in retailing

 GOI allows only single brand outlets to

be set in India, with not more than 51%
foriegn shareholding.
 Multibrand outlets can have franchises in
India.
Foreign retailers in India

 Single brand outlets:

Rolex, Nike, Addidas, Louis vuitton,
Versace, Gucci and Giorgio Armani etc.

 Tie-ups:
Escada – S-kumar's, Bombay dyeing –
Carrefour, Moja-tana – Nike, Dairy farm
– Foodworld, Pantaloons – Lee cooper,
galaxy, gini and jony, liberty.
Challenges faced by foreign
retailers
 Premium brands derive their aspirational
value from their exclusivity and
inaccessibility, they tend to lose their
franchise when they become easily
accessible.
 51%-49% ratio does not give foreign
partners sufficient control over Indian
operations.
 Conclusion
The demanding assertive Indian consumer
is now sowing the seeds for an exciting
retail transformation that has already
started bringing in larger interest from
International Brands / formats.
With the advent of these players, the race is
on to please the Indian consumer and its
time for the Indian Consumer to sit back
and enjoy the hospitality of being treated
like a King.