 INDIAN RETAIL ENVIRONMENT

WITH
RESPECT TO DISTRIBUTION.
 Retail industry

 The word "Retail" originates from a

French-Italian word.
 Retailing is the set of business activities
that adds value to the products and
services sold to consumers for their
personal or family use.
 It does this by organizing their
availability on a relatively large scale
and supplying them to customers on
a relatively small scale.
 Retail is India's largest industry. It accounts
for over 10 per cent of the India's GDP
and around eight per cent of the
employment. Retail sector is one of
India's fastest growing sectors with a 5
per cent compounded annual growth rate.
India's huge middle class base and its
untapped retail industry are key
attractions for global retail giants
planning to enter newer markets. Driven
by changing lifestyles, strong income
growth and favorable demographic
patterns, Indian retail is expected to grow
25 per cent annually. It is expected that
retail in India could be worth US$ 175-200
 The Indian retail industry in valued at
about $300 billion and is expected to
grow to $427 billion in 2010 and $637
billion in 2015. Only three percent of
Indian retail is organized. Retailers of
multiple brands can operate through
a franchise or a cash-and-carry
wholesale model.
 The Indian retail environment has
attained $ 210bn quiche, witnessing a
strong development pace of five
percent per year as per latest survey
by Price Waterhouse Coopers.
 Structure of retail industry
 The retail industry continued in India in
the form of Kiranas till 1980. Soon,
following the modernization of the
retail sector in India, many companies
started pouring in the retail industry
in India like Bombay Dyeing, Grasim
etc. As has been mentioned earlier
the retail sector in India can be widely
split into the organized and the
unorganized sector.
 Organized retail sector
 After 50 years of unorganized retailing and
fragmented Kiranas stores, the Indian retail
industry has finally begun to move towards
modernization, Systematization and
consolidation.
 There has been a boom in retail trade in India
owing to a gradual increase in the
disposable incomes of the middle class
households, as a result of good
performance of IT, Service and
Infrastructure sectors. More and more
players are entering the retail business in
India to introduce new formats like malls,
supermarkets, discount stores, department
stores and even changing the traditional
looks of bookstores, chemist shops, and
furnishing stores.

 Unorganized retail sector

 Theunorganized retail sector basically

includes the local Kiranas, hand cart,
the vendors on the pavement etc.
This sector constitutes about 98% of
the total retail trade.
 Retailers role in
distribution channel
 Final businesses in distribution channels that link
manufacturers with consumers.
 When manufacturers sell directly to consumers,
they are performing both the production and
retailing business activities.
 Wholesalers and retailers may perform many of
the same functions.
 Wholesalers satisfy retailers' needs
 Retailers satisfy needs of ultimate consumers.

 Theproducer and final customers are
part of every distribution channel.
Depending on product nature, type of
customers and degree of intensity of
distribution networks, there could be
various numbers of intermediaries
between manufacturer and customers