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RETAIL SECTORS
Prof:- Prema B.
RETAIL SECTORS
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 V’s 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 “.
As such retailing is the last link that connects the individual consumer with the manufacturing and distribution chain.
Selling Directly to consumer selling in smaller units / quantities the bulk.
Very high numbers near to neighborhood
Reorganized by the service levels
Retail Sector today is worth of 394 Billion Us $
Contd…
Food
Books & Magazines
Fashion & Clothing
Personal Care
Optical Consumer Electronics
Sport & Leisure
Home Ware
Footwear & Leather
Toys & Games
Jewellery & Watches
Furniture
Petrol
Manufacturers
Whole seller
Distributor
Retailer
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
Importance 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.
First it was a sellers market and now its changing to buyers market.
By 2010 Indian retail sector would be generating 10 million employment opportunities.
Retail Sector in India
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 $300bn (£148bn)
Eg: Bharti is expected to invest 60 Billion with the largest retail Walmart
Retail Sector contribution to GDP sector is 8%-10%.
Growth of Indian Retail Sector
Elasticity of Demand for Luxury and Necessities
0
0.5
1
1.5
2
2.5
3
3.5
0 0.5 1 1.5 2 2.5 3 3.5
Pri
ce
Demand
Government Policies
The retail industry in India is growing at a significant pace. However, there are several problems faced by the industry. The major challenges for the organized sector include:
Taxation laws that favor small retailers.
Multi-point octroi collection.
According to analysts, for this industry to thrive, Indian retailers need to emulate worldwide retail practices such as accuracy in financial reporting, increased levels of corporate governance and greater accountability among employees.
Foreign Equity does not go beyond 51 percent.
Additions to the product categories to be sold under ‘single brand’ require fresh govt. approval.
International Retail: At a Glance
38%
27%
13%
8%3% 2% 9%
USA EU Japan China
India Russia Others
Share of Organized Retail
Key Players
Highly evolved US market has WalMart taking only 8% market share UK market has Tesco with only 13.4% market share China market still does not have a clear leader
USA = US$ 2,350 Bn UK = US$ 406 Bn China = US$ 313 Bn
SWOT Analysis
Strength Increasing demand driven by the country’s
young working population
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
Weakness 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.
Opportunities 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.
Threats
Indian taxation system favors small retail business.
Competition from unorganized Sector to the organized Sector.
Middle class Psychology.
Increasing Real Estate prices
Conclusion
Huge Scope for Development
Competitive Market
Organized retail is fast growing at a rate of 30% YOY
Greater opportunity for employment
Suggestions
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
Stores:20 Stores in Maharashtra and Gujarat
Products:FMCG, Vegetables
Products:FMCG , Medicines and Vegetables
Consumer Segmentation:Targeting 2 tire and 3tire Market
Consumer Segmentation:Targeting 2 tire and 3 tire market
Marketing Strategy:News Papers, TV etc.
Marketing Strategy:Believe in mouth publicity
Marginal Profitability:The average ticket size is 30 0 RS
Marginal Profitability:The average ticket size is 550 Rs.
Recession effects and Strategy:
Recession effects and Strategy: