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*Compiled By: Saurabh, Jai, Kumar, HarshrajRETAIL
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Industry Structure
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Categorisation Within Retail *
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Verticals In Retail and ORP*
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Retail Growth Drivers and How Demand Has Grown Over The
Years*Rising income levels to drive consumptionDesire for better
standard of living to drive non-food consumption growthFavourable
working age population to influence consumer spendingIncrease in
literacy levels
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Evolution of Retail in India and supply addition - 1/21990 -
2005 The start of 1990's heralded a new beginning in the retailing
business. However,it was not manufacturers looking for an
alternative sales channel,, but pure-play retailers like Pantaloon,
Shoppers Stop, Life etc who entered the retail market during this
phase. Liberalisation of the Indian economy further widened avenues
for foreign brands and retailers. Internationalbrands like
McDonald's, Adidas, Reebok, Nike, Benetton, Levi Strauss etc
entered the Indian retail market.Retail outlets like PlanetM, Music
World and Crossword entered the market before 1995. In 1997
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2005 PresentFrom 2005, the Indian retail industry witnessed high
growth, entry of many large players and evolution of new formats. A
growing middle class, increasing disposable incomes as well a large
and young consumer population acted as key growth drivers.
Recognising the large untapped potential, large industrial houses
like Reliance, Aditya Birla, Bhartietc. entered the market. Global
retailers like Carrefour, Zara etc also made a foray.Several
premium bands like Armani, Versace, Gucci etc. entering the Indian
market, mostly through joint ventures. In 2008-09. The government
furtherliberalised FDInorms in single-brand retail by allowing 100
per cent FDI in January 2012. In September 2012, government allowed
51 per cent FDI in multi-brand retail, which will help multi
national chains such as Carrefour, Tesco, Walmart etcto set up shop
in India in multi brand retail.Lately we have the online retail
marketplaces like snapdeal, Flipkart, Myntra etc
*Evolution of Retail in India and supply addition - 2/2
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Cost Factors & Economies of ScaleLease rentals is one of the
key input factor in the organised retailoperating margins in the
industry ranges from 4 to 10%Rather than economies of scale its the
right strategy like cluster approach of location stores lead to
decline in logistic cost
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Price Behavior*
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Nature and Behaviour of DemandNature of demand depend upon
consumer taste and preferences for the productsDemand is also
influenced by retailers in the sale season by giving heft
discountsFor premium brands like Versache demand is inelastic
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Factors of Production In This Sector*
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Criticality of the industry in overall economyOrganised retail
is very small in India and has used opportunity of growthSuccess of
this industry will lead to decline in food inflationIt will
generate employment in the country which will further lead to
consumption driven demand in the economy and in the end will lead
to increase in the productivity in the economyIt will eliminate
middle men in the system and will benefit both producers and
consumers and thus will bring efficiency in the economy
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Future OutlookGrowth picks up gradually in 2014-15; to
accelerate in 2015-16 driven increase consumption by Indian
household and urbanisationORP to improve to 10 per cent by
2018-19Physical format retailers to face stiff competition from
online players
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*Saurabh*Saurabh
*Saurabh*HarshrajOver the years, disposable incomes of Indian
consumers and share of households falling in higher income
brackets, have both risen significantly and thus, driven up the
overall spending power of consumers. These trends havein turn
alteredconsumption patterns, thereby driving growth of the retail
industry.As income levels of Indian consumers increase, demandfor
products beyond food and clothing also sees a rise. This has led to
an increase innon-food expenses, which comprises expenditure on
footwear, clothing, home furnishing, fuel and light, consumer
durables, etc.Population in the working age group of 15-54 years
are the largest consumers/spenders as far as the retailing industry
is concerned.As perCensus 2011, more than 50 per centof India's
total population falls under this group, indicating the significant
influence wielded by this segment on consumer spending. Moreover,
literacy levels in the country have also increased significantly,
to 74 per cent in 2011, from 64 per cent in 2001
*Jai*Jai*Jai*Jai*Harshraj*Harshraj*Saurabh*Harshraj*
