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Fastest growing sector in Indian Economy. Traditional way making way for new formats such as departmental

Fastest growing sector in Indian Economy.

Traditional way making way for new formats such as departmental store, hypermarkets, supermarkets and specialty store.

Western style malls have begun appearing in metros and cities alike, introducing the Indian consumer to an unparalleled shopping

experience.

The Indian retail sector is highly fragmented with 97% of its business being run by the

The Indian retail sector is highly fragmented

with 97% of its business being run by the

unorganized retailers.

The organized retail however is at a very nascent stage though attempts are being made to increase its proportion to 10-12% by the year 2012 bringing in a huge opportunity for prospective new players.

This sector is the largest source of employment.

 Over the last few years, the retail sales in india are hovering around 33-35% of
  • Over the last few years, the retail sales in

india are hovering around 33-35% of GDP.

  • The last few year witnessed immense growth by this sector, the key drivers being changing consumers profile and demographics, increase in the No. of international brands available in the Indian market.

 Large Indian players are making significant investments in this sector leading to emergence of big
  • Large Indian players are making significant investments in this sector leading to

emergence of big retailers who can bargain

with suppliers to reap economies of scale. Hence discounting is becoming an accepted

practice.

  • Proper infrastructure is a pre-requisite in retailing which would help to modernize India

and facilitate rapid economic growth.

 International retailers see India as the last retailing frontier left as the China’s retail sector
  • International retailers see India as the last retailing frontier left as the China’s retail sector is becoming saturated. However, Govt.

restrictions on the FDI are creating ripple among the international players like Walmart, Tesco and many other retail giants struggling

to enter Indian market.

  • As of now Govt. has allowed only 51% FDI in the sector to 1brand shops like Nike, Reebok,etc.

  • However other international players are taking alternative routes to enter the Indian retail market indirectly via Licensing, cash &

carry wholesale tradiong.

 Major players ◦ Pantaloon Retail ◦ Lifestyle International ◦ RPG Retail ◦ Shopper’s Stop ◦
  • Major players Pantaloon Retail Lifestyle International RPG Retail Shopper’s Stop Trent (TATA) Vivek Ltd.

 India is the least competitive as well as least saturated of all major global markets.
  • India is the least competitive as well as least saturated of all major global markets. This implies that there are significantly low entry barriers for players trying to setup base in India, in terms of the competitive landscape.

  • A good talent pool, unlimited opportunities, huge

market and availability of quality raw material at cheaper cost is expected to make India overtake

the world’s best retail economies by 2040,

according to industry players.

  • A major employment generator

in future.

  • The sector is expected to see an investment of over $30 billion within the next 4-5 years.

 The industry is facing a severe shortage of talented professionals, especially at the middle management

The industry is facing a severe shortage of

talented professionals, especially at the middle management level.

Lack of adequate infrastructure with respect to

roads, electricity, cold chains & ports has further

led to the impediment of a pan-India network of suppliers.

This sector is yet to become a freffered career

option for most of India’s educated class that has

chosen sectors like IT, BPO & financial services.

Govt. restrictions on the FDI are leading to an

absence of foreign players resulting into limited

exposure plans.

 Stringent labor laws govern the no. of hours worked and minimum wages to be paid
  • Stringent labor laws govern the no. of hours

worked and minimum wages to be paid

leading to limited flexibility of operations and employment of part time employees.

  • Multiple clearance are required by the same company for opening new outlets adding to the costs incurred and time taken to expand presence in the country.

 Non availability of Govt. land and zonal restrictions has made it difficult to fing a
  • Non availability of Govt. land and zonal restrictions has made it difficult to fing a

good real estate in terms of location and size.

Also lack od clear ownership titles and high stamp duty has resulted in disorganized

nature of transactions.

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