Upload
agarwalsagar88
View
232
Download
2
Embed Size (px)
Citation preview
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 1/64
RETAILING IN INDIA
RETAILING
IN INDIA
Presentation byShahnas ASyama K S
Sobymol Devasia
Sabitha Z.B
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 2/64
Retailing
According to Philip Kotler “retailing includes allthe activities involved in selling goods or
Services directly to final consumers for personal ,
Non business use”.
“Every sale of Goods and Services to final
consumer” – Food products, apparel, movie
tickets; services from hair cutting to e-ticketing.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 3/64
A retailer or retail store is any business enterprise
whose sale volume comes primarily fromretailing”.
A retailer may be defined, as a „ dealer or traderwho sells goods in small quantities‟.
Any Organization Selling to final consumer
is retailing , whether they are
A Manufacturer
A Wholesaler
A Retailer
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 4/64
It does not matter how they sell or serve ( By)
• Person• Mail
• Telephone
• Vending Machine or• Internet
Or
Where these are sold• A store
• A street
• Consumer‟s House
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 5/64
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 6/64
Characteristics of retailing
It offers direct interaction
Sale volume is comparatively large in quantities
Customer service
Sales promotions are offered at this point only
Different forms
Location and layout are critical factors
More employment opportunities
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 7/64
Retailers Types
• Department stores
• Specialty stores
• Convenience store
• Discount store
• Off-price retailer
• Super store
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 8/64
Functions of Retailing
• Sorting
• Breaking Bulk
• Holding stock
• Communications
• Assist small suppliers
• Customer service
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 9/64
INDIAN RETAIL-BRIEFOVERVIEW The Indian retail sector is highly
fragmented with more than 90 per centof its business being carried out bytraditional family run small stores.
This provides immense opportunity forlarge scale retailers to set-up theiroperations – a slew of organized retail
formats like departmental stores,hypermarkets, supermarkets andspecialty stores are swiftly replacing thetraditional formats dramatically altering
the retailing landscape in India.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 10/64
India is the third-most attractive retailmarket for global retailers among the 30largest emerging markets, according to
US consulting group AT Kearney‟s reportpublished in June 2010
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 11/64
RETAIL-MARKET SIZE
The total retail sales in India will growfrom US$ 395.96 billion in 2011 toUS$ 785.12 billion by 2015
Indian retail sector accounts for 22 percent of the country's gross domesticproduct (GDP) and contributes to 8
per cent of the total employment.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 12/64
Weekly MarketsVillage Fairs
Melas
Convenience StoresMom and Pop/Kiranas
PDS OutletsKhadi Stores
Cooperatives
Exclusive Brand OutletsHyper/Super MarketsDepartment Stores
Shopping Malls
Traditional/PervasiveReach
GovernmentSupported
Historic/RuralReach
Modern Formats/International
Evolution of Indian retail
Source ofEntertainment
NeighborhoodStores/Convenience
Availability/ LowCosts /
Distribution
ShoppingExperience/Efficiency
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 13/64
REASONS FOR THEGROWTH Robust economic growth High disposable income with the end-
consumer Rapid construction of organized retail
infrastructure are key factors behind theforecast growth. Expansion in middle and upper class
consumer base Growth potential in India‟s tier -II and tier-III
cities as well. The greater availability of personal credit and
a growing vehicle population providingimproved mobility also contribute to a trend
towards annual retail sales growth of 12.2 percent.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 14/64
Indian Retail – Buoyed by highGDP growth
8.90%9.0%
6.8%6.0%
6.0%5.6%
5.2%
6.4%
6.6%
5.4%
9.2%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Projections of 8% sustainable real GDP growth rate till 2020promise high growth potential for Indian Retail…
R e a l G r o w t h R a t e
Source :Central Statistical Organization (CS0)
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 15/64
India Experiencing RapidEconomic Growth
2,630
916 979 1,068
2,374
4,367
13,245
10.7%
9.4%
6.7%
3.7%
2.0%2.8%
2.3%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
China India Russia Brazil UK Japan US
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
9.4% growth rate makes India the second fastest growingeconomy in the world
G D P
( U S
$ b n )
R e a l G r o w t
h R a t e
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 16/64
Led by Growth in ServicesSector
13% 14%
55%
21%
7%6%
21%
37% 41%
107%
0%
20%
40%
60%
80%
100%
120%
Tourist Arrivals Passenger Cars
Sales
Commercial
Vehicle Sales
Domestic Air
Passengers
New Cell Phone
Connections
2005-06
2006-07
% Increase in growth over the previous year
Services sector adding to GDP in a significant manner
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 17/64
Driven from Consumption Throughout the 1.1 BillionPopulation
5-7 million
Super Rich
70 – 80 million
Afford Cars, Private Healthcare &
Foreign travel
250 - 300 million
Afford goods like Refrigerators , Scooters& Colour TVs
600-700 million (Generally Rural)
Afford simple industrial productse.g. bicycles , radios , textiles
Poverty Line = income less than $ 1/day
Source: McKinsey,
60 % of India’s population are under 24 years
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 18/64
With High PrivateConsumption GDP
US$ 935 billion
Private Consumption
US$ 580 Billion(62%)
Public Spending and CapitalFormation
US$ 355 Billion (38%)
RetailUS$ 342 Billion
(59%)
Non RetailUS$ 238 Billion
(41%)
Urban (5,100 towns)
US$ 154 Billion(45%)
Rural (6,27,000 villages)US$ 188 Billion
(55%)
Modern retail – US$ 12 billion8% of urban retail spends
Modern retailNegligible
Food
Apparel
Beverages
Footwear
Consumer
durables
Appliances
Stationery
Kitchen utensils
Furniture
Furnishings
Sports goods
Health & Beauty
Personal Care
Jewellery
Timing
Transport
Communication
Recreation
CulturalServices
Education
Rent
UtilitiesOther Services
Source: Central Statistical Organization (CS0) and Technopak AnalysisConversion rate: 1 US$ = 40.86 Rs.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 19/64
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 20/64
28 March 2014
Which Makes Indian Retail an Attractive Market
India tops the Global Retail Development Index
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 21/64
ORGANISED v/sUNORGANISED The Indian retail market, over the last
decade, has been increasingly leaningtowards organized retailing formats.
The pattern in domestic retailing is
altering in the favor of organized modernretailing, a big change from thetraditional plethora of unorganizedfamily-owned businesses.
Rapid urbanization, changes in shoppingpattern, demographic dividend and pro-active measures by the Government areabetting the growth of the retail sector inIndia.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 22/64
Organised retail in India is expected to increase from 5per cent of the total market in 2008 to 14 - 18 per cent
of the total retail market and reach US$ 450 billion by2015
According to a report titled 'India Organised RetailMarket 2010', published by Knight Frank India, during2010-12 around 55 million square feet (sq ft) of retailspace will be ready in Mumbai, national capital region(NCR), Bengaluru, Kolkata, Chennai, Hyderabad andPune. Besides, between 2010 and 2012, the
organised retail real estate stock will grow from theexisting 41 million sq ft to 95 million sq ft.
Driven by the growth of organised retail coupled withchanging consumer habits, food retail sector in India isset to be more than double to US$ 150 billion by 2025.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 23/64
Organized Retailing in India (2006)
Organized retail INR 28,000 crore
Clothing, Textiles &Fashionaccessories
39%
Footwear 9%
Jewellery & Watches 7%
Mobile handsets & accessories 3%
Health & Beauty (including services) 2%
Food & Grocery 18%
Durables 13%
Books, Music & Gifts 3%
Home 3%
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 24/64
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 25/64
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 26/64
28 March 2014
Modern Retail – Organized Channels
• The share of organized retail is less than 3% of the total retail market
• The size of modern retail is about US$ 8 Billion and has grown by 35% CAGR in lastfive years
85% 81%
55%40% 36% 30% 20% 20% 3%
0%
20%
40%
60%
80%
100%
US Taiwan Malaysia Thailand Brazil Indonesia Poland China India
Traditional Channel Modern Channel
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 27/64
28 March 2014
.. but Rapid Transformation is Anticipated
Current Size & Future Projections for Indian Retail Market
342 373 408
445 486
530
800
12 18 26 39 59 87
200
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012 2017
U S $
B i l l i o n
Total Retail Organized Retail
And may reach a share of 25% by 2017
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 28/64
28 March 2014
RECENT TRENDS
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 29/64
28 March 2014
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 30/64
28 March 2014
Recent Trends
Experimentation with formats: Retailing inIndia is still evolving and the sector is witnessinga series of experiments across the country withnew formats being tested out. Ex. Quasi-mall,sub-urban discount stores, Cash and carry etc.
Store design : Biggest challenge for organizedretailing to create a “customer -pull” environment
that increases the amount of impulse shopping.Research shows that the chances of sensesdictating sales are upto 10-15%. Retail chainslike MusicWorld, Baristas, Piramyd and Globusare laying major emphasis & investing heavily instore design.
Emergence of discount stores: They areexpected to spearhead the organized retailingrevolution. Stores trying to emulate the model ofWal-Mart. Ex. Big Bazaar, Bombay Bazaar,RPGs.
Unorganized retailing is getting organized: Tomeet the challenges of organized retailing suchas large Cineplex's, and malls, which are backedby the corporate house such as 'Ansals' and'PVR„ the unorganized sector is gettingorganized. 25 stores in Delhi under the banner ofProvision mart are joining hands to combinemonthly buying. Bombay Bazaar and Efoodmartformed which are aggregations of Kiranas.
Recent changes:
Unorganized : Vast majority of the twelve million
stores are small "father and son" outlets
Fragmented : Mostly small individually owned
businesses, average size of outlet equals 50 s.q.
ft. Though India has the highest number of retailoutlets per capita in the world, the retail space
per capita at 2 s.q. ft per person is amongst the
lowest.
Rural bias: Nearly two thirds of the stores are
located in rural areas. Rural retail industry has
typically two forms: "Haats" and “Melas". Haats
are the weekly markets : serve groups of 10-50villages and sell day-to-day necessities. Melas
are larger in size and more sophisticated in terms
of the goods sold (like TVs)
Traditionally three factors have plaguedthe retail industry:
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 31/64
28 March 2014
Retail Market not limited to metros but widely across India
• The classic ”skimming” strategy in the
metros is not longer sufficient – 100 cities strategy
• Over 250 large size shopping mallsare currently under construction
• Leading cities 2030 areforecasted to be
– Mumbai
– New Delhi
– Chandigarh
New Delhi
Bangalore
Mumbai
Chennai
Kolkata
Ahamabad
HyderabadPune
Above 10 Mn inhabitants
Above 4 Mn inhabitants
Above 2 Mn inhabitants
Above 1 Mn inhabitants
Kanpur
Lucknow
Jaipur
Nagpur
Coimbatore
Bhopal
Madurai
Kochin
Varanasi
Visakhapatnam
Patna
Indore
Surat
Vadodara
Ludhiana
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 32/64
AADHAR Future Group and Godrej Agrovet's joint
venture (JV) in rural retailing, 'Aadhar', is allset for a revamp. The alliance operatesstores in Gujarat, Maharashtra, Haryana andPunjab and mainly sells wheat and paddyapart from daily need products. The company
also provides farmers with solutions toproblems regarding their agricultural output,which includes what kind of crop can theyplant and when, along with techno-
commercial suggestions to help them give a
RURAL RETAILING
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 33/64
Champion Agro Ltd
Rajkot based Champion Agro Ltd isplanning to come up with single windowshopping facility for farmers.
The company already has 35 agri-retailing outlets in the Saurashtra region,and is expected to open around 400outlets at a taluka level across Gujaratby 2016.
It will open 50 new outlets by the end of2011with an investment of US$ 3.3million. The overall investment planned is
between US$ 66.7 – US$ 88.94 million.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 34/64
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 35/64
OTHER VENTURES
Marico is using mobile technologyinnovatively to arm its fieldrepresentatives in their procurement
process. The IT team at Maricodeveloped a mobile-based applicationfor Nokia 5235 series handsets. The
company gave these GPS-enabledphones to 120 of its fieldrepresentatives, with mapped routes.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 36/64
Hindustan Unilever Ltd (HUL) isexperimenting with tablet PCs in its
attempt to increase its rural reach. It hasbeen able to reach to 500,000 outlets in ayear‟s time. According to Nitin Paranjape,managing director, HUL, “We put all the
villages on an IT map. The name of thevillage, its total strength, nearestdistributors available, whether it has a
school, a hospital, a primary health centre,all of this was mapped. We used thisinformation to determine the opportunitythe village presented to us.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 37/64
Global Heavyweights in Indian RetailingJoint Ventures Product Range Retail Formats
Bharti-Walmart (with $2.5
Billion investment byBharti)
Food & grocery, electronics & appliances, clothing &
footwear, furniture & furnishing, household articles.
Hypermarkets, Supermarkets and
Convenience
Carrefour-Landmark Food and groceries, FMCG, apparel and electronics Hypermarkets
Home Retail Group plc -Shopper's Stop Ltd andHypercity Retail India
Private Ltd
Franchising the Argos concept under the terms of thearrangement, Argos will be providing its brand,catalogue and multi-channel expertise and IT support
Multi Channel propositions
Tata-Woolworths Sourcing agreement for Consumer durables andFoods under brand name CROMA
Multi brand retail chain
Staples Inc – PantaloonRetail
Global Sourcing of Office equipments across variousbusinesses
Cash and carry
Reliance Food & grocery, electronics & appliances, clothing &footwear, furniture & furnishing, household articles.
Multi format and Multi Category
Birla Food & grocery, electronics & appliances, clothing &footwear, furniture & furnishing, household articles.
Convenience and Supermarket
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 38/64
FDI in Retail
At present, the government allows 51%foreign direct investment in a single-brand retail venture while 100% ispermitted in wholesale cash-and-carry.
Under single-brand retailing a store canstock goods that have the same brand.In the wholesale cash-and-carry route,which most foreign retailers use, there isrestriction on sale to individuals. Thesestores are only permitted to sell to outfitssuch as restaurants and kirana stores
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 39/64
FDI in Retail
Foreign direct investment (FDI) inflowsbetween April 2000 and December2010, in single-brand retail trading,
stood at US$ 66.69 million, accordingto the Department of Industrial Policyand Promotion (DIPP).
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 40/64
FDI in Multi Brand Retailing
India's multi-brand retail sector, isestimated to be worth $28 billion (Rs125,000 crore) according to a Boston
Consulting Group (BCG) study. The government is likely to permit
foreign direct investment (FDI) in the
multi-brand retail sector from April2012.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 41/64
The government prepared a draft in July2011, which says 49 per cent FDI inmulti-brand retail will be allowed in aphased manner which will be effective
from the next financial year i.e. April2012.
The Committee of Secretaries (CoS)headed by Cabinet secretary Ajit KumarSeth met on July 22 to finalise theblueprint of the proposal for politicalclearance. One of the major outcome of
the discussion is raising 49% to 51%.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 42/64
According to the the economic advisor to thePrime Minister, Kaushik Basu , thegovernment will allow FDI in three phases. Inthe first phase, foreign multi-brand retailchains will be allowed in the metros Delhi,
Mumbai, Kolkata and Chennai. In the secondphase other metros like Bangalore,Hyderabad and Pune will be included.
The draft has laid out strict norms such as
earmarking 40 per cent investment forbackend infrastructure, such as cold storage,soil testing labs and seed farming, forprospective entrants.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 43/64
The move has paved the much-requiredway for international retailer likeBentonville, Arkansas-based Wal-Mart
Stores Inc. and Paris-based CarrefourSA to open their retail stores throughstrategic partnerships.
According to Business Monitor
International, retail sales in India may jump from $396 billion in 2011 to $785billion in 2015, representing a growth of
around 100 per cent.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 44/64
to harm self-employment opportunities adversely affect the manufacturing
sector
harm small traders across the country.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 45/64
consumers will soon more options tochoose products
more and more investment in the
backend Improve the standard of efficiency of
supply chain management.
f
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 46/64
Latest Information on IndianRetail Scenario Singapore-based CapitaMalls Asia,
which develops, owns and managesmalls across Asia, has pledged US$
400 million to its growth in India up till2014. Mr Kevin Chee, CEO andCountry Head of CapitaMalls Asia, hassaid that apart from funding the twomalls that are operational now, thismoney would be used to developseven more malls in India.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 47/64
Reliance Retail will enter the cash andcarry market with "Reliance Market" in
Ahmedabad; the first one to be
opened by August 2011.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 48/64
Ujala fabric whitener maker JyothyLaboratories has bought Henkel AG's50. 97 per cent stake in its Indiansubsidiary for US$ 137.02 million,including debt and preference shares,the two companies revealed. The dealincludes Henkel's entire portfolio that
includes Henko and Chek detergents,Pril dish cleaners and Fa deodorant,and rights to the multinational's futurelaunches.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 49/64
With the launch of its first 'ArvindExperience Store' in Gujarat atVadodara, denim major Arvind Ltd. is
looking at 100 stores by the end of thefinancial year 2011-12. The store inVadodara is the company's eighth inthe country after seven stores in
Andhra Pradesh.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 50/64
Quick food service restaurant chainSubway will set up 45 outlets acrossthe country by 2011-12 entailing an
investment of around US$ 9 million.The company has now 205 outlets inIndia and plans to take its count to 250by the end of 2011-12.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 51/64
Max Hypermarkets, the food retailingchain of the Dubai-based LandmarkGroup is investing US$ 122.14 million
for its store expansion businessacross 30 cities in India.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 52/64
Retail - Government Initiatives
India will announce new rules for foreigninvestment in retail by April 2012, paving theway for companies such as Wal-Mart Storesand Carrefour to open stores, according to
Junior Trade Minister Jyotiraditya Scindia. Agovernment panel has issued a report thatrecommends easing a law that prohibits non-Indian companies from operating multi-brandoutlets. Allowing foreign investment in multi-
brand retail may help moderate food prices,said Kaushik Basu, chief economic adviser inthe finance ministry, who sits on the panel.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 53/64
India currently allows 51 per cent FDI in single-brandretail and 100 per cent in wholesale cash-and-carryoperations.
In a landmark decision, the government has easednorms for investments by foreign companies that arepresent in India through a joint venture (JV) or a
technical collaboration. Now, the foreign company willnot have to seek a no-objection certificate (NOC) fromthe Indian partner for investing in the sector where the joint venture operates.
The government has also relaxed norms fordownstream investments and convertible instruments,giving foreign companies more powers. The changesare part of the third revision of the Consolidated FDIPolicy.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 54/64
KEY CHALLENGES
THE KIRANA
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 55/64
THE KIRANA
CRM practice Known about the customer‟s families Credit and home delivery Consumer familiarity runs from
generation to generation Open longer hours and stock most of thegoods
Consequently, a large number ofcustomers are not willing to pay apremium for the shopping experiencepromised by large format retailers.
HIGH COSTS FOR THE
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 56/64
HIGH COSTS FOR THEORGANIZED SECTOR
High expenses to organized sector .
The lease cost up to 6-10 percent of
sales Manpower cost is lower at 5-6 percent
of sales
Capital costs are more in retailbusiness due to major renovationsneeded every 5-7 years.
Organizing Retail in India-Challenges
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 57/64
Retail Challenges
g g g
Heterogeneous market
◦ Product offerings in different stores across the country will be
very different
◦ No standard mode of operation across formats
◦ Market not mature (has to be validated)
Infrastructure will bring about logistical challenges
◦ Though, improvements in road networks, power supply are
underway
Trained employees with understanding of retail business are
inadequate compared to the needs of organized retail
Barriers to Entry
◦ High taxes, bureaucratic clearance process and labour laws
High cost of real estate
◦ though over 600 malls are to come up all over the country by
the next 4 years
Indian retailers are deeply entrenched, are expanding and
building on logistics and technology initiatives
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 58/64
Processes
• Complex Processes - Multiple MRP, Deals & Promotions, Forecasting &Replenishment, Lean supply chain – JIT inventory, flow through warehouse
• Evolving processes in Supply chain & merchandising
• Global Best Practices not adopted
Consumer
Infrastructure
• High disposable income
• Changing consumer preferences
• 28 states, 100+ religion, 250+ festivals
• Supply chain not reliable. Cold storage infrastructure evolving• Outsourced transportation
• Low level automation in warehouses
Supplier/Vendor
Current IT
• Little or no collaboration between vendor & retailer
• Low fill rates from vendors
• Highly localized assortments leading to relationship with multiple vendors• Complex trading contracts and off invoice discounts
• Multiplicity of disparate Systems & Data Formats
• No architecture roadmap
• Base ERP and home grown POS solutions. Low investments in store systems
• No investments in planning & optimization technologies
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 59/64
Challenges contd..Weakness of Player
Retail not being recognized as an industry in india.
The lack of recognition as an industry hampers the availability offinance to the existing and new players. This affects growth andexpansion plans
The high cost of real estate:
Real estate price in some cities in India are amongst the highest inthe
world.
The lease or rent of the property is one of the major areas of
expenditure, high lease rentals eat into the profitability of aproject.
Lack of adequate infrastructure Poor roads , lack of a cold chain infrastructure, etc , hamper the
development of food and fresh grocery retail in india.
The existing supermarkets and food retailers have to invest asubstantial amout of money and time in building a cold chainnetwork.
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 60/64
Multiple and complex taxation system
The sales tax rates very from state to state while organisedplayers have to face a multiple point control and tax
system,there is considerable expense to transfer good fromone store to another.Foreign direct investment:- The fact that foreign direct investment(FDI)is not permitted in
pure retailing is seen as one of the prime reasons for theslow growth of
retail in India. A global retailer can enter India only by way of a franchise
with an Indian partner or through technological alliances.Purchasing power of money
As the Indian population mostly consist of middle classfamilies and
low wages worker they don't want to go in the super marketor retail market
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 61/64
Key Challenges
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 62/64
Key Challenges
Key Challenges
to overcome
• Attracting & retaining qualified manpower• Implementing SOP’s & best practices
• Focus on improving operational efficiency• Cost control• CRM & Service levels
Internal
• High real estate cost• Anarchic laws
• Shortage of qualified manpower• Poor infrastructure• Unorganized & poor supply chain
External
Key Opportunities
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 63/64
y pp
Supply Chain Investments
• Setting up logistics and supply chain infrastructure
• Import of know how and logistics techniques from developed retail countries
IT Infrastructure
• IT is the enabler behind communication, collaboration with suppliers, andan efficient supply chain
Manpower
• Potential tie-ups with universities and setting up dedicated retail institutes
• Utilize experience of international retailers to train local talent
Large Rural market
RETAIL ROAD AHEAD
8/12/2019 RETAILING IN INDIA ppt
http://slidepdf.com/reader/full/retailing-in-india-ppt 64/64
RETAIL – ROAD AHEAD
There is a huge untapped opportunity inthe retail sector, thus having immensescope for new entrants, driving largeinvestments into the country.
A good talent pool, huge markets andavailability of raw materials atcomparatively cheaper costs areexpected to make India lead one of theworld‟s best retail economies by 2042.
The industry is also slated to be a majoremployment generator in future.