Академический Документы
Профессиональный Документы
Культура Документы
Retail in India:
Getting organized to drive growth
A CII – A.T. Kearney report
C MY K
Retail in India:
Getting organized to drive growth
Retail in India:
Getting organized to drive growth
To the extent this report relates to information prepared by A.T. Kearney Limited for the Confederation of Indian
Industry (CII), it is furnished to the recipient for information purposes only. Each recipient should conduct its own
investigation and analysis of any such information contained in this report. No recipient is entitled to rely on the
work of A.T. Kearney Limited contained in this report for any purpose. A.T. Kearney Limited makes no representa-
tions or warranties regarding the accuracy or completeness of such information and expressly disclaims any and
all liabilities based on such information or on omissions thereof.
The recipient must not reproduce, disclose or distribute the information contained herein without the prior writ-
ten consent of CII and A.T. Kearney Limited.
Executive summary ix
3. Key imperatives 19
4. Conclusion 31
Contents v
vi Retail in India: Getting organized to drive growth
Foreword
ndia is currently facing the world's most dynamic continue to drag our economy down.
Foreword vii
A.T. Kearney partners and principals, including Raman and preparing the report.
Mangalorkar, Hemant Kalbag, Vivek R. Gupta, Kaustav
Mukherjee and Saurine Doshi provided overall direc- We would like to extend our appreciation to everyone
tion for this study. Subhendu Roy, Manas Majumdar, who helped us in our effort.
Namit Garg, Saurabh Singh, Jasraj Singh Virdi,
Supratim Banerjee, Munir Suri and Divya Sahay were
involved on a day-to-day basis in conducting the study Confederation of Indian Industry
around USD 320 billion, the Indian retail sector is still There are issues that need to be addressed
relatively small by global standards, with retail giants A retail consumer in India today still does not enjoy the
like Wal-mart alone reporting over USD 315 billion in value that organized retail has brought to the table in
global sales. some international settings. Groceries sold in hyper-
markets are still priced higher in comparison to those
But India is catching up and catching up fast. For two sold by local street vendors, parking and traffic at large
years in a row, A.T. Kearney has ranked India at the top format stores continues to be a challenge, and it is not
of the Global Retail Development IndexTM. Several of easy finding experienced and polished sales floor asso-
the major Indian conglomerates have announced and ciates. These symptoms are caused by some core
are in the process of implementing major retail proj- issues that are preventing the next level of maturation
ects (Reliance, AV Birla Group, Tata, etc.), existing retail- in the Indian retail industry.
ers continue to experiment with new formats and con-
cepts (Pantaloon, Shopper's Stop, etc.), many of the Based on the findings of this study, there are 10 over-
multi-national retailers are pacing the sidelines and arching issues that most retailers view as major imped-
evaluating different ways to participate, and mall iments to growth and the associated escalation in
development continues at a staggering pace. "consumerism". These issues are:
Underdeveloped Supply Chain Capabilities
Executive summary ix
the magnitude of the issue varies by geography and by In South Africa during the mid-1990s, the GEAR initia-
cluster (metro, large city, small city, town or rural). For tive promoting FDI was started, a new Labour
example, supply chain issues such as a logistics infra- Relations Act was adopted and substantial tax reduc-
structure, the availability of a cold chain network and tions were introduced. These changes substantially
the presence of distribution hubs and networks is a grew the retail sales trend line by 50 per cent, touching
much bigger challenge in small towns and rural areas sales of almost 300 billion Rand in 2005 as compared
than in the large metros such as Mumbai, Delhi or to the pre-reform trend of approximately 200 billion
Kolkata. On the other hand, real estate challenges are Rand. Also, post reforms, the retail sector has become
proving to be a bigger impediment in metros than in the largest employment sector (followed by manufac-
smaller cities such as Agra, Nasik or Amritsar. turing, finance and agriculture) in South Africa, with a
workforce of over 3 million individuals. Similarly,
Similarly, if we look at the organized retail challenges China's government has also played a critical role in
across geographies within India, the differences are fostering organized retail, primarily through FDI. The
quite stark. In this study, we specifically examined number of convenience stores grew from 899 in the
seven distinct states and union territories: Andhra year 2000 to 7,371 in 2004. In the same time frame,
Pradesh, Chandigarh, Delhi, Maharashtra, Tamil Nadu supermarkets grew from 1,690 to 4,654 and hypermar-
and West Bengal. As an example, the road network in kets from 104 to 705.
Maharashtra at 93.9 kilometres per 100 square kilome-
tres, offers the best land (non-rail) connections While this kind of growth and results are within reach
amongst all Indian states. But in terms of rail network, in India, the type of support required from the Indian
Maharashtra only has 18 kilometres of rail lines per government is quite different from the role the gov-
1000 square kilometres, and substantially lags behind ernments in China and South Africa have played.
Tamil Nadu which has 51 kilometres for the same area. However, the benefits of state-led initiatives can be
These differences manifest themselves in all areas that substantial.
impact the organized retail environment, from
Internet penetration to real estate costs to rent control Some of the key changes that require the support of
acts to taxes to corruption. the Central and State government are:
Grant industry status to retail
A retailer in India currently must navigate these issues, Expand rail network density and wagon capacity
try to make a profit, deliver value to its shareholders Reform the Urban Land Ceiling and Regulation Act
and continue to add value to the consumer. A daunt- Computerize land records and make information
ing task for the best of companies and doubly so for available online
most companies trying to start their retail venture. A Substantially reduce license requirements and
hypermarket in Mumbai must apply for 29 unique offer a "single window" facility
licenses that could take up to six months, and then Overcome power shortage through privatization
when it opens the second store, it must apply for the and infrastructure investment
same 29 licenses all over again. So, what is the solution Improve management of city planning exercises,
and where will it come from? with due attention to creating adequate commer-
cial space
As in most problems in the business world, there is no Amend labour laws to be more supportive of retail
simple solution and no single accountability. There are requirements (24x7x365)
however, two entities that can address the specific Eliminate any remaining Octroi taxes
issues identified: the Government and the Retail
Industry. These and other policy changes are discussed in
greater detail in this document.
The government can play a meaningful role
Two specific case studies were developed - South The retail industry must take some of the
Africa and China, to highlight the important role gov- responsibility
ernment plays for the development of the retail sector. While the government must step up and play a sub-
Executive summary xi
xii Retail in India: Getting organized to drive growth
1. Retail landscape in India
2 Retail in India: Getting organized to drive growth
1. Retail landscape in India
etailing in India is emerging as one of the largest (GRDI) for 2006 (Fig. 1.2). The GRDI is conducted annu-
Fig. 1.1
1998 2000 2002 2004 2006E 2008E 2010E 1951 1961 1981 1991 2001
1. The GRDI study ranks countries on four parameters - country risk, market attractiveness, retail market saturation and retail entry timing.
Retail market attractiveness matrix based upon A.T. Kearney GRDI 2006
80 Lower priority
Chile
Hungary Size of the bubble indicates
South Korea
Slovakia
0 = High Risk, 100 = Low Risk
Tunisia Latvia
Mexico
India
60 Saudi Croatia
Arabia Thailand
Bulgaria
Romania
Brazil Morocco
Egypt Russia
Turkey
50
Vietnam
Ukraine
Philippines
Pakistan
40 Indonesia
Bosnia &
Herzegovina
Macedonia
30
30 40 50
Market Potential(1)
0 = Low Potential, 100 = High Potential
sumerism. A look at India's demographics further more income available for spending rather than for
lends credibility to the retail story. India's consumer savings and investment. Can any retailer now afford to
market today encompasses over 400 million people miss this story?
with rising disposable incomes. Population shifts
towards urban areas and income shifts towards higher Another important factor announcing India's signifi-
income classes are key factors driving consumerism. cance for retailers is the current optimal stage of readi-
Also higher incomes are now in the hands of a younger ness within India for retail and for the entry of
population with lesser dependencies. This implies retailers.
Fig. 1.3
Window of opportunity for Retail entry in markets (based on GRDI rankings from 1995 2006)
Stage of the
market Opening Peaking Declining Closing
High Priority
Ukraine (2004)
Vietnam (2003)
Bulgaria (2003)
Russia (2006)
Russia (2004)
India (2006)
Hungary (2006)
China (2006)
China (2003)
Vietnam (2006)
Slovakia (2005)
China (1995)
Kazakhstan (2006)
India (2003)
Hungary (1995)
India (1995)
Bulgaria (2006)
Slovakia (2006)
GRDI
Ranking
Low Priority
Strategy • Monitor market; • Open sourcing office or step up retail stores; • Scale up opening to • Determine market position;
consider sending test the market capture market reevaluate strategy as needed
research team share
Formats • Not applicable • Consider supermarkets and hypermarkets, • Consider discounter • No pattern identified
cash and carry, and convenience stores over models
other formats as they have higher success
rates
Labor • Identify skilled labor • Hire and train local talent; create balance with • Switch balance from • No pattern identified
pool for market expatriate employees expatriate to local
staff
Fig. 1.4
Although retail
The retail is a significant
sector contributor
has been steadily …and
… organized retailing
is helped by everis growing
still at a urban
very
togrowing
India’s economy
in India …… population,nascent stage
with higher in India incomes
disposable
Retail % Contribution
India Total toSize,
Retail Market GDP(USD
(Yr 2005)
Bn) Organized Retail Penetration
Urban Population as % of Total(%)
Population
55
85
75
39
32
22 23
32
17
22 20
USA Brazil South Vietnam China India USA Brazil South Vietnam China India
Africa Africa
80% 25%
75.0%
70% 20.0%
20%
60%
50% 15%
40.0%
40%
10.0%
30% 8.0% 10%
19.0% 6.0%
20%
13.0% 3.0% 5%
10% 7.0% 7.0% 7.0%
1.0% 4.1% 4.1% 2.9% 2.1% 2.0%
0% 0%
Food and Groceries Clothing & Textile Consumers Durables Jewellery & Watches Home Decor & Beauty Care
Furnishings
Market Share Total Retail Market Share Organized Sector Penetration Organized Retail
Source: CRISINFAC
depending on the type of products serviced. For India, explains why so many retailers have plans for this cat-
food and groceries form the biggest category in the egory in the pipeline. In comparison, footwear and
retail pie (Fig. 1.5), accounting for close to 70%. clothing segments boast the highest penetration of
However this category has the lowest organized retail organized retail, as international brands like Nike,
penetration of 1%, which is indicative of the greater Reebok and Levis had started setting up shop almost a
opportunity available for organized retail and also decade ago. This segment may see further activity,
Fig. 1.6
Durables
13%
Food and Grocery Food Bazaar, Food World, Subhiksha, Nilgiris, Trinethra, Big Bazaar, Spencer’s RPG Retail Supermarket (Foodworld) Hypermarket (Spencer’s)
Specialty Store (Health & Glow)
Food and Beverage Barista, Café Coffee Day, Mc Donald's, Pizza Hut, Haldirams
Piramal’s Department Store (Piramyd Megastore) Discount Store (TruMart)
Mall (Crossroads)
Department Stores Shoppers Stop, Lifestyle, Westside, Globus, Piramyd
Pharmacy Health and Glow, CRS, 98.4, Apollo Pharmacy Pantaloon Department Store (Pantaloon) Supermarket (Food Bazaar)
Hypermarket (Big Bazaar)
Books, Music & Gifts Landmark, Crossword, Archies, Music World, Planet M Seamless Mall (Central)
given the recent government guideline allowing FDI Now if we look at the split of the organized retail mar-
up to 51 per cent for single brand retailing. ket of USD 15 billion for 2005 (Fig. 1.6), clothing and
textiles has the largest share at 40%. This is apparent
Fig. 1.8
Domestic retailers are expanding and International retailers have significant presence in India
Fig. 2.1
Favourable Metros
Mumbai
Large Cities Delhi
Small Cities Kolkata
Market Potential Value
Ahmedabad
Chennai
Agra Jaipur
Nagpur
Amritsar
Pune
Asansol Nasik
Towns
Rural
Ujjain
Sidhpura Rohtak
Nellore
Jamna Hisar
Unfavourable
Low Population High
2. Other indicators could have been used, but population has been shown to be the most critical demographic indicator for the retail sector and has therefore been used in the
study
ferent stakeholders. Therefore, these issues were also lacks quality logistics infrastructure which hinders
rated based on the extent to which government and scaling up of retailing operations.
industry could control them. A 2 x 2 matrix was subse- Inadequate Utilities - Lack of basic infrastructure
quently created which used the two dimensions to like power, transport and communication creates
segment the issues. The issues were then classified difficulty in sustaining retail operations across the
into four categories: large geographical spread of country.
Generic infrastructure issues - These are environ- IT Infrastructure Hurdles - Reliable IT infrastruc-
mental challenges faced by the Indian industry as ture is important for managing modern supply
a whole and some of the issues like underdevel- chains which are the backbone of any retailing
oped supply chain are critical for retail sector. business and India faces a clear problem in this
Fig. 2.2
Underdeveloped
Supply Chain Taxation
Hurdles
Inadequate
Utilities Real Estate
Hurdles
IT Infrastructure
Hurdles
Supply Base
Hurdles Insufficient
Inadequate Government
Human Incentives
Resources
Limited Policy Related
Consumer Hurdles
Retail Sector Insights
Specific
Infrastructure/Market Issue Policy Issue
knowledge about the consumer behavior due to India also lacks national level distribution networks
limited market research conducted on the huge and hubs. Fragmented supplier network in rural areas
population in towns and rural areas. lead to multiple levels of product handling. Also con-
Insufficient Government Incentives - sumer product companies are more focused on front
Government is yet to create any major sector spe- end distribution and hence the distribution model is
cific policies to boost the retail sector. more robust in urban areas with high consumer con-
Policy Related Hurdles - The policy environment centration.
in India is complex, creating challenges for growth
and establishment of new business. While studying Indian states, we found there are no
standard best practices in India - Maharashtra and
Generic infrastructure issues Tamil Nadu have the best road and rail network in
Supply chain, utilities and IT infrastructure hurdles are India respectively, while West Bengal has the maxi-
generic infrastructure issues that will be addressed by mum cold storage capacity in India. Globally, a better
the natural evolution of the industry. logistics infrastructure is sustained through road main-
tenance and capacity utilization of the rail network
Supply chain is a key bottleneck for retail sector and this is particularly true in developed countries like
growth. India lacks efficient and reliable logistics infra- the US. There are also several specialized refrigerated
warehousing and
Lack of adequate and reliable power, water and gas cold state trans-
sources portation compa-
Inadequate nies in the US and
Utilities Inadequate public transport facilities
UK that provide
professional serv-
Inadequate telecommunications and internet facilities
ices to the retail-
structure in roads, rail and ports. We also have a highly ing industry - Indian companies would do well to intro-
fragmented trucking industry and absence of reliable, duce such practices.
national service providers. Accordingly supply chain
management (SCM) systems have very low penetra- We believe that, while the supply chain will evolve
are at the mercy of government officials for clearances. Along with the long drawn process, there is also no
Within this, different states have different licensing standardization across states. Retailer associations
requirements. Even in the US, licenses for opening need to consistently engage with governments to
retail operations are governed by individual states - bring standardization across policies.
however the US (and China) follows single window
clearance models which makes it ideal for retailers, and Key issues prioritization
minimizes time lost in bureaucratic paperwork. We see that ten key issues hinder development of
retailing in India. However not all issues are of equal
Also, as noted earlier, food and grocery is the largest importance across clusters. Fig. 2.3 shows that while
category within retailing. The APMC Act has proved a supply chain, utilities, taxation and human resource
deterrent in developing efficient practices, both for hurdles are the most critical issues across all clusters,
the retailer as well as for the farmer. The Act provides a real estate and consumer insights are critical cluster
monopoly status to the state-owned Agricultural specific issues.
Produce Marketing Committee in the purchase of agri-
cultural produce from farmers. As a result, the supply Our analysis shows that while there are issues that
chain is lengthened, farmers are not able to realize need government intervention across state and cen-
favourable prices due to the monopoly and consumers tral levels, retailers need to proactively develop their
have to pay higher prices since the APMC's are typical- own solutions as well. We believe Indian retailers are
ly cartelized. For retailers, it becomes difficult to source currently fragmented - they need to cohesively gener-
items directly from farmers. They are forced to rely on ate solutions to retail issues and present their case to
intermediaries thus causing systemic inefficiencies. the government, as and when needed.
A look at Indian states suggests there is no best prac- In the next section, we shall highlight specific impera-
tice in license, permit and registration requirements, tives for retailers and the government to accelerate
and the procedure is cumbersome across the country. growth in the retail sector.
Key imperatives 21
Table 3.1
Source: World Bank “Doing Business”, 2005 World Economic Forum, “Global Competitiveness Report 2005-06”, International Labor
Organization’s LABORSTA Database, A.T. Kearney
serve as a common starting point for customer needs ence and induce further spend by better presentation,
analysis (Fig. 3.1). Further, specific customer insights good product assortment and availability. Adopting
should be gleaned from PoS data analysis, CRM tools category management techniques in handling specif-
and analytics by retailers, so as to be the basis for pro- ic product categories in terms of packaging, pricing,
viding customers with an ideal shopping experience. demand fulfilment and replenishment will also serve
Based on customer data and analysis, retailers should to present a positive shopping outlook to consumers,
segment customers and target products/ service offer- resulting in greater sales.
ings to satisfy their specific needs. This will ensure opti-
mal utilization of investments and resources in meet- Improve on supply chain infrastructure
ing actual customer needs leading to enhanced pro- The current transport infrastructure in terms of road
ductivity and cost savings and improved RoIs, as and rail network is being improved but an accelerated
opposed to adopting a generic and broad-based track should be taken to realize the benefits of having
approach that attempts to meet all customer require- streamlined supply chain - fresher products and
ments and satisfies none. reduced logistics costs leading to increased sales and
better margins. For example, in the US, 75 per cent of
Indian retailers should also take the lead in setting up the national road budget is spent in upkeep and main-
a Consumer Confidence Index similar to the ones in tenance of roads as travel-worthy, as opposed to 50
the US, China and Brazil, to track consumer behaviour per cent for India. Similarly, rail capacity utilization is
and spending patterns. The index should then be ana- better in the US with 3.3 kilo tons per wagon per year
lyzed using scientific techniques and the results can be as versus 2.3 kilo tons per wagon per year for India. The
used to guide pricing and promotions-related deci- retail industry should take it upon itself to develop the
sions and other category management issues. stakeholders in the logistics process - transport com-
panies, warehouse providers and build long-term rela-
Retailers should also explore appropriate store man- tions with them to leverage the benefits of a supply
agement practices to enhance the customer experi- chain running like clockwork.
Fig. 3.1
Key imperatives 23
Before laying-out the action plan for Indian State and reforms enabled retail sector to become the largest
Central Governments, we analysed strategies adopted employment sector in South Africa, with a workforce
by other governments - South Africa and China. For of over three million individuals - shown in Figure 3.3.
South Africa it was observed that significant positive
changes in retail sales and in overall economy were China's government played a vital role in promoting
propelled by substantial tax reductions and a new development of organized retail, primarily through
Labour Relations Act - shown in Figure 3.2. These FDI. The number of convenience stores grew from 899
Fig. 3.2
Changes in policy led to retail growth and growth in related sectors in South Africa
Policy changes throughout the 1990s catalyzed growth in the retail sector which in turn had its
impact on agriculture and the construction sector amongst others
• Repeal of the agro-marketing policies allowed retailers to source products directly from producers and both sectors benefited
greatly; as 55% of supermarkets sales come in food and grocery
• Demand for retail real estate boomed as a result of the growth in the retail sector and favourable economic conditions
• A look at the pattern of movement in retail sales and GDP shows that while the impact is greater on retail sales, it is a leading
variable and shows the impact that an increase in sales has on the economy in the future
Sources: Statistics South Africa, Food and Agriculture Organization of the UN, A.T. Kearney Research
Fig. 3.3
3,500
2,000
1,500
1,000
500
0
1994 1995 1996 1997 2001 2002 2003 2004 2005
Agriculture Manufacturing Retailing Finance
Employment in the retail sector grew at a CAGR of 7.5% just lower than employment in Finance and Construction
In 1994 retailing accounted for 17.2% of all employment; however by 2005 the
retail sector accounted for with 24.6% of all employment in South Africa
Retail Sales grew at a CAGR of 19.8% for the next five years after the introduction of FDI in 1992
in the year 2000 to 7,371 in 2004. And, in parallel, medium priority. As much has been written and said
supermarkets grew from 1,690 to 4,654 and hypermar- about FDI in the retail sector, this report has not delved
kets from 104 to 705. It is shown in Fig. 3.4. into its implications. FDI in retail has become a political
issue and will require political strength to pass it
The strategy in the Indian context has been articulated through.
in a set of key initiatives that need to be driven by the
central and state governments in order to facilitate the Grant industry status to the retail sector
growth of the retail sector in India. The initiatives have Granting industry status to the retail sector should be
been separated, based on whether they fall under the the first initiative on the part of the Central
ambit of the central or the state government. Government to ensure growth of the retail sector in
the country. A regulatory body, on the lines of TRAI -
Central Government the telecom regulator, should be set up to legislate on
The Central Government is a key stakeholder in the industry norms, tax enforcement and consumer pro-
development of the retail sector in India. It has to tection.
review some of its existing policies to ensure that all
bottlenecks in the path of growth of the retail sector A related step would be to ease up bank financing for
are removed and an appropriate environment is pro- the sector, including insurance norms that do not exist
vided to facilitate the growth of the Indian retail sector. currently.
The Central Government needs to take up the follow-
ing initiatives to achieve this goal: This action would facilitate financing options that
would enable the retail industry to expand and grow
Grant industry status to the retail sector rapidly. It would also result in a much-needed nodal
Establish minimum quality assurance standards agency for business aspirants in the retail space that will
Reformulate the Small Scale Industries policy help in simplifying the processes and procedures. Going
forward, this step is extremely critical in strengthening
The first two initiatives have been accorded the high- the sector's competitiveness and building a platform for
est priority while the third initiative has been given the growth the retail industry promises.
Key imperatives 25
Establish minimum quality assurance policy formulation decisions fall in their domain. These
standards policy decisions will play a vital role in significantly eas-
Another key step towards ensuring the development ing the constraints under which the retail sector is cur-
of retail sector in India would be to mandate compul- rently operating in various Indian states. The state gov-
sory assurance for product and service quality. This ernments need to take up the following initiatives to
would help in establishing minimum quality assurance facilitate the development of the Indian retail sector:
standards for the entire industry. Amend labour laws
The Central Government should also facilitate setting Undertake taxation reforms
up a system to provide certification on quality assur- Amend state level policies to simplify retail opera-
ance, skills standards, customer service, etc., to ensure tions set-up and supply chain practices
minimum best practices across the industry. Improve logistics and utilities infrastructure
Develop IT infrastructure
Reformulate Small Scale Industries policy It is an area that directly controls industry's ability to
The Central Government should periodically review its respond to growth opportunities, and hence, it
small-scale industry policy and gradually remove requires a transformation that recognizes the growth
reservations on SSI manufacturing of 506 items to pro- opportunity and its impact on the country's economy.
mote consolidation of supply base. Currently, the industry is struggling to capitalize on the
growth prospects and is unable to maximize its
The government should also study the applicability of resource potential. In an environment where the sec-
China's TVE structure for India. TVEs or Township and tor is leading the country's economic growth, this sce-
Village Enterprises are a form of rural cooperatives in nario is alarming and should prompt the authorities to
China that are partly subsidized by the government. urgently make the necessary amendments.
Although the SSI policy has been formulated to guard Undertake real estate reforms
the interest of small players in the industry, it's time we A key initiative to be undertaken by the respective
looked at the long list of 506 items for serious revision, state governments is to bring about reforms in the real
urgently. Otherwise this policy would act as an unnec- estate sector. This would entail reforming land use reg-
essary safeguard for categories which would actually ulations, including Urban Land Control Ceiling and
benefit from healthy competition, and thus, would Regulation Act and Rent Control Act to simplify usage
provide customers with more choice, better products and increase transparency for retail operations in rent-
and better price. ing places and utilization of those premises.
Key imperatives 27
ing of the rural population, and secondly, the retail Central government driven initiatives
industry will become even more competitive when it Policy Framework Initiatives - Grant industry status
has a broader market space. to retail. Reduce license requirements for starting
retail operations. Amend APMC Act to allow con-
Initiatives for select states tract farming. The policy framework initiatives
A series of initiatives has been proposed for seven would also require the involvement of the state
Indian states and Union Territories, (Andhra Pradesh, government in some cases.
Chandigarh, Delhi, Maharashtra, Tamil Nadu and West
Bengal) to facilitate the development of retail in these State government driven initiatives
regions. The key stakeholders responsible for each of Supply Chain Development - Expand rail network
these initiatives have also been identified. to increase reach and density, and increase capaci-
ty utilization per wagon. Also expand cold storage
The initiatives have been proposed at the state level facilities with the help of the retail industry to meet
rather than at the cluster level as many of the policies the growing demand.
relevant to retailing are typically formulated at the Real Estate Reform - Urgent reform needed in the
state level. Urban Land Ceiling and Regulation Act. The state
also needs to speed up computerization of land
Initiatives for Maharashtra records and online availability.
The following initiatives have been proposed for Tax Regime Reform - Repeal octroi tax immedi-
Maharashtra to facilitate the growth of retail (See Fig. ately to unite national markets.
3.5). Utility Services Development - Urgent need to
address the power shortage in the state.
Retail industry driven initiatives
Generating Consumer Insights - Urgent need to Similarly, initiatives have been suggested for the other
develop a national Consumer Confidence Index, six states of the sample set. These initiatives have been
similar to that used in the United States, China and attached in Appendix under section 'Initiatives for
Brazil. select states'.
Fig. 3.5
Maharashtra: Initiatives
1 • Expand rail network to increase reach and density, and State government
Supply Chain increase capacity utilization per wagon
Development and Retail industry
• Expand cold storage facilities to meet greater need
5
Tax Regime Reform • Repealoctroitax immediately to unite national markets State government
6 Utility Services
Development • Urgent need to address the power shortage in the state State government
Key imperatives 29
30 Retail in India: Getting organized to drive growth
4. Conclusion – The impact of
recommended changes will be significant
32 Retail in India: Getting organized to drive growth
4. Conclusion – The impact of recommended
changes will be significant
ome of the recommendations coming out of this Additionally and perhaps more importantly, there is an
Fig. 4.1
600
CAGR: 11-12%
$504 bn Revised Trajectory:
A.T. Kearney Projection
500
$421 bn
Current Trajectory
CAGR: 7-8%
400
$321 bn
300 $238 bn
200
100
0
2002 2003 2004 2005 2006E 2007E 2008E 2009E 2010E