EVOLUTION OF

RETAIL IN INDIA
S U B M I T T E D BY
GROUP 2

ALEKH GUPTA

DIVYYA GARG

MILIND AGARWAL

ROBIN GUPTA

SIDDHARTHA KULKARNI

DEFINITION OF RETAIL
According to Philip Kotler retailing includes all the
activities involved in selling goods or services directly to
final consumers for personal, non- business use
Goods can include- food products, movie tickets, apparel
etc.

Services can range from hair cutting to e-

ticketing.

PHASES IN RETAILING
Phase 1

Barter
Syste

A system of transaction where people

exchanged valuable they possessed for the
goods held by another person.

Phase 2:

Adoption of
common
form of
currency

Transactions
became easier

Retailing was
limited to
commodities
that fulfilled
basic needs

Phase 3

Retailers
respond to the
changing
shopping needs
and
expectations of
consumers

Small
stores
transform
into
bigger
sized
stores

Retailers try to
take advantage
of economies of
scale and bring
value-pricing to
consumers.

EVOLUTION OF RETAIL IN INDIA

Consolidatio
n
Expansion
2010 onwards

Conceptualizatio
n
1900-1905

Initiation
PRE1900s
Manufacturers
open their own
stores

Retailers realise
potential of the
Indian market
Most decide to
venture into an tap
the potential of the
apparel segment

Early 2000s
Substantial
investments and
expansion by large
Indian corporates
Entry into food
and general
merchandise
category
Pan India
expansion into
major cities
Repositioning by
existing players

Large scale
consolidation
Increase in
competition due
to emergence of
large number of
retailers
Movement from
large cities to
smaller cities,
towns, rural
areas etc.
Entry of
international
players into the
Indian markets
Major rise in eretailing poses

WHAT IS RETAILING?
Retail comes from the old French word tailer which means to cutoff, clip,
divide in terms of tailoring( 1365). It was recorded as a noun with the
meaning to sell in small quantities in 1433
Retailing may be understood as the final step in distribution of
merchandise, for consumption by the end consumer
Retail in the final step in a distribution channel that links a manufacturer to
the end consumer.
Retailers attempt to satisfy consumers by having the right merchandise, at
the right price, at the right place, at the right time

PRE
1947

RETAIL IN INDIA
1995-99

Haats,
melas and
typical
Indian
markets
were
formed

1970s

2006
Modern
malls are
introduced

Rapid
expansion of
multiple
format
Indian cos
begins

2005

1990-95

First
emergence
of organized
retail through
textile sector

Multiple
formats and
product
categories
introduced

1980s

Rapid growth
of online
retailing is
observed

High street
shopping
centers
appear

2000-05
1991

Emergence
of brands
and branded
retail outlets
in India

India
opens
doors
through
economic
reforms

Today

Government
allows 51%
FDI in singlebrand retail
firms

2005-10
Rapid
modern
malls and
single brand
store
expansion

ADVANTAGES OF RETAIL IN INDIA

Healthy economic
growth, changing
demographic profile,
increasing disposable
incomes, changing
consumer tastes and
preferences are driving
growth in the organised
retail market in India
Introduction of Goods
and Service Tax (GST) as
a single unified tax
system from next fiscal
year

Rapid urbanisation with

increasing purchasing
power

Collective efforts of
financial houses and
banks with retailers
enabling consumers to
go for durable products
with easy credit.

Foreign retailers are

continuously entering
the Indian market

Cumulative FDI inflow in

retail for September
2015 was USD344.93
million; expected to
increase to USD400
million in 2016

ANALYTICS IN RETAIL
Richer Customer Experience
Analytics can help improve product recommendations, provide consistency
across channels, etc.

Enhanced Store Ops

Use shrink analysis, demand sensing, etc., to manage inventory. Better

coupon design and targeting can improve sales and profitability

Improved Financials
Accurate risk and profitability analysis can help boost margins

Better Merchandize Planning

Intuition based decisions can give way to analytics-led category assessment,
product pricing, etc.

Optimized Spending

Analytics in Retail Data driven forecasting reduces promotional spends and

increases revenues

Fine-tuned Supply Chain

Network optimization, vendor analytics, shipping strategies, etc., can improve

supply chain visibility

E-RETAIL AND BRICK AND MORTAR

Online Retail:

Brick and mortar

Short of time
Discounts for branded products
Used where online retail services
Ready to wait for the product to get
are not available e.g. small
cities.
delivered
Quick decision of buying compare the People are not in touch with
technology
prices, quality of variety of products
When products are of lesser
amount and consumer does not
want to pay delivery charges.
Needs the product on urgent
basis
Customer wants to check the
product before buying and does
not trust online retailers.

PROS AND CONS OF ONLINE/OFFLINE STORES

PROS AND CONS OF TRADITIONAL
STORES

PROS AND CONS OF ONLINE

STORE

Pros
Numerous options
Face to face communication Touch
and feel product Direct and less
confusion Easy to get or return the
product

Pros
Convenience.
Better prices.
Variety of products.
Discounts and Fewer expenses
Comparison of prices
Cons
Physical feel of items missing
Out of stock problem.
Delivery risk and Mishandling
while shipping.
Online fraud due to Spyware on
your PCs or Online connectivity
issues.

Cons
Not all stores accept all modes of
payment.
Parking issues.
Price issues.
Wait in queue at the cash counter

KEY PLAYERS
Pantaloo
ns

Pantaloon Retail India Limited is flagship of Future Group of Companies, based

at Kolkata. The group is incorporated by Mr. Kishore Biyani. PRIL is the first
retail store in hypermarket format. The group is recognized as multi format
retailers.
PRIL Model : One stops shopping model

Under one roof you can get vast range of merchandise with over 2, 50,000
SKUs.
Product Mix : Branded and Private label apparel, Personal care products,
leather products, Books, Music, Toys, Consumer durables, Home Furnishing,
Food and Grocery.
Pricing Strategy : Maximising on Gross margin

Challenged Faced : MRP Laws, Rising Real estate Price, Unavailability of

Land.

KEY PLAYERS
Reliance
Fresh

Reliance Fresh is the venture of Reliance Industry Limited in foods and

vegetables. It is first modern retail enterprise in food sector which has
potential of approx $500bilion market. It is one of the best examples of
agribusiness industries which boost economic integration in rural areas and
villages.
Reliance Fresh Model : Farms to forks model is adopted to operate
business. Small and medium size stores vary from 1500 sqft. to 3000 sqft.
Product Mix : Fresh fruit and vegetables, staples, FMCG and Dairy products.

Pricing Strategy : Disintegrates intermediary and reduce cost of fresh

produce.
Reliance fresh is focusing on value to customer.

Challenged Faced : Political Interface and people movements against the

retail giant at various places.

KEY PLAYERS
Vishal
Mega
Mart

Vishal Mega mart is established in 1986 in Kolkata. The group is conglomerate

today having 180 showrooms across the country. Vishal is one of the fastest retail
groups in India. The outlets cater to almost all price range.
Vishal Mega Mart Model : Small format models at the time of initial phase in
tier I and tier II cities and later on converted into hypermarket model. Focusing on
lower middle income group.
Product Mix : House Hold merchandise, groceries, Footwear, toys, home
furnishing, mobile phones, watches, toiletries items.

Pricing Strategy : Price suit to every targeted customer.

Challenges : Managing the expansion plans with supervising demands of

consumers and keeping economic of scale high.

KEY PLAYERS
Mother
Dairy

Mother Dairy was established in 1974 with a view of making liquid milk
available to city consumers. It is set up by National Dairy Development
Board under first phase of operation flood programme. Mother Dairy also
markets dairy products such as ice cream, dahi, lassi, butter cheese dairy
whitener, Dhara range of edible oils and Safal of fresh fruit and
vegetables
frozen
vegetables
and
fruitfollows
juices.cooperative models. This
Mother Dairy
Model
: Mother
Dairy
model directs the formation of federation, by the help of village level
societies and district level unions, whose prime responsibilities is the
marketing of milk and milk products.

Pricing Strategy : Mother dairy ensures that farmers get market price
by offering quality produce and also provide the produce to the
consumers at reasonable prices through minimizing costs.

Challenges Faced : Company is facing competition from other

organized retailers and increased imports. The quality of milk, low yields,
falling cattle health are some major challenges faced by company.

SUGGESTIONS FOR RETAIL REFORMS

There is a need for setting up of Retailers Cooperatives which functions as distribution
centers and warehouses. It will help the retailers to buy the products they want directly from
original manufacturers in bulk quantity.
Mergers of weak retailers and buy out weak retailers by a stronger one are other important
steps. This will give new retailers the desired leverages to be world class.
Networking of Independent firms believing the use of technology for business excellence and
pressurizing suppliers and others channel members to use compatible technology.
Amend the existing cumbersome labor laws: The existing labor laws needs to be amended
on an urgent basis in order to support the growth the growth of organized retailing and to
develop India as a sourcing hub.
Announce a national policy for retail: The Government should announce a National Retail
Policy that allows the coexistence of both organized and unorganized retail and address
issues such as sourcing, contract farming, movement of goods across India and also defines
clear cut guidelines for the functioning of retail sector in India.

CONTINUED.
Incentives for
Investments

Tax holidays norms for cold storage

chains, infrastructure and investments
in supply chain should be enacted.

Comprehensiv
e Legislation

Comprehensive legislation should

be drafted and enacted with
futuristic approach.

Eliminating
Archaic Laws

Laws, Essential Commodities Act, APMC Acts, Licensing

restriction, differential taxes, stamp duties, should be
simplified and put in proper place so that it would not
hinder growth of retail sector. This will help in creating
"Commodities Futures Markets".
Allow Foreign
Direct
Investment
(FDI) in
phased
manner

Allow foreign direct investment

in the company according to
financial planning.

Rationalize
the tax
structure

The current multipoint taxation

should be rationalized. Government
should introduce a uniform taxation
system across the country to relax
the law that hinder inter state flows
of goods.