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Prof:- Prema B.


Retail Sector

Evolution of Retail

Barter System was known as the first form of retail.

As time passed currency was exchanged with goods and services.

Hawkers carried out the first Retailing in Push Carts Followed by Kirana Stores .. Mom and Popup Stores Finally Manufacturing era necessitated the small stores and Specialty stores

It was a seller market still than this point of time with the limited no of brands available
Barter chain Single brand franchise chain Standalone large store Chain of large stores And Finally Malls

Economist says that Boom Has Started of Retail due to more spending Capacity of Indians Emerging of retail started in brief in patterns like changing face of the Indian retail sector Provide customers with 3 Vs i.e. Value, Variety and Volume.

What is Retail?
A retail is one who stocks the producers goods and is

involved in the act of it to the individual consumer, at the Margin of Profit . consumer with the manufacturing and distribution chain. quantities the bulk.

As such retailing is the last link that connects the individual Selling Directly to consumer selling in smaller units / Very high numbers near to neighborhood

Reorganized by the service levels

Retail Sector today is worth of 394 Billion Us $


2005 Established---Amounting 930 crores

Kishore Biyani- Foundation of retail sector

Attractive destination for Global Market Different Products Involved in retail business At the moment we had 300 Malls in India There are different products involved in Retailing

Food Books & Magazines Fashion & Clothing Personal Care Optical Consumer Electronics Sport & Leisure Home Ware Footwear & Leather Toys & Games Jewellery & Watches Furniture Petrol


Whole seller

Organized Sector


Types of Retail Sectors

Unorganized Retailing Hawkers (Kirana) Weekly Markets Organized retailing Convenient / Departmental stores Factory outlets and discounts Market Supermarkets Wholesalers market Company and Franchises showroom

Largest and fastest growing sector in India.

Modern retailing forms one point stop for all shopping.

Consumer gets a large product variety of brands to

choose from one roof. buyers market.

First it was a sellers market and now its changing to

By 2010 Indian retail sector would be generating 10

million employment opportunities.

Retail Sector in India


Unorganized 97 %

Organized 3%

Some of the Key Players in Organised Retail

Analysis of Growth by ASSOCHAM

Organized retail growing at estimated 25%

It is expected that retail in India could be worth US$ 175-200 billion

by 2016.

2007-08 Total retails contribution to GDP is between 8% which

would further jump up to nearly 12% in next few years. By 2010, retails contribution to national GDP in totality is likely to be 22%.

2007 Retail Growth rate 25-28%, Unorganized and organized

retail size 300 billion US$

Opening 10 to 15 outlets by 2015, it plans to employ about 5,000

people selling groceries, consumer goods, fruits and vegetables. India's retail industry is worth $300bn (148bn) Eg: Bharti is expected to invest 60 Billion with the largest retail Walmart

Growth of Indian Retail Sector

Retail Sector contribution to GDP sector is 8%-10%.

Elasticity of Demand for Luxury and Necessities

3.5 3 2.5


1.5 1 0.5 0 0 0.5 1 1.5 2 2.5 3 3.5


Government Policies
The retail industry in India is growing at a significant pace. However,

there are several problems faced by the industry. The major challenges for the organized sector include:
Taxation laws that favor small retailers.

Multi-point octroi collection.

According to analysts, for this industry to thrive, Indian retailers

need to emulate worldwide retail practices such as accuracy in financial reporting, increased levels of corporate governance and greater accountability among employees.

Foreign Equity does not go beyond 51 percent. Additions to the product categories to be sold under single

brand require fresh govt. approval.

International Retail: At a Glance

3% 8%


9% 38%

13% 27%

USA India

EU Russia

Japan Others


Share of Organized Retail

Key Players

USA = US$ 2,350 Bn

UK = US$ 406 Bn

China = US$ 313 Bn

Highly evolved US market has WalMart taking only 8% market share UK market has Tesco with only 13.4% market share China market still does not have a clear leader

SWOT Analysis

Increasing demand driven by the countrys young working


Increase in per capita income which in turn increases the

household consumption

Create win-win situation for all links in value chain (

suppliers, producers, retailers and customers).

Improvement in the standard of living. Technology intensive industry

Lack of expertise in Supply Chain Management

Inadequate Infrastructure
Stringent Labour Laws Lack of specialized professionals in Industry Lack of industry status. Government Restrictions on FDI Non-Availability of Government Land.


Change in consumer behavior pattern and increase in disposable income. It is estimated that 15 million people would be engaged in Retail and Retail support activities by 2010

Indian rural markets offer a sea of an opportunity for the retail sector.
Upcoming international Players Healthy prospect for the fashion industry.

Indian taxation system favors small retail business.
Competition from unorganized Sector to the organized

Middle class Psychology.

Increasing Real Estate prices

Huge Scope for Development
Competitive Market Organized retail is fast growing at a rate of

30% YOY
Greater opportunity for employment

Need to explore PPP (Public Private Partnership) More exports bring more foreign direct investments There would remain future scope for improvements

in agriculture, small, and medium scaled with the help of the Indian retail sector More investment in supply-chain infrastructure. Sole focus on front-end with minimal back-end linkages (Logistics, cold chain, vendor & farmer development, etc.) Transactional approach, minimal focus on customer service over the life-cycle

Recession Strategy
Offering more & more special discounts.
The Great Indian Shopping Festival.

Case Study

Entry Point: August 2006

Entry Point: 2002 -2003

Stores : 857 across India

Products: FMCG, Vegetables Consumer Segmentation: Targeting 2 tire and 3tire Market Marketing Strategy: News Papers, TV etc. Marginal Profitability: The average ticket size is 30 0 RS Recession effects and Strategy:

Stores: 20 Stores in Maharashtra and Gujarat

Products: FMCG , Medicines and Vegetables Consumer Segmentation: Targeting 2 tire and 3 tire market Marketing Strategy: Believe in mouth publicity Marginal Profitability: The average ticket size is 550 Rs. Recession effects and Strategy: