organized retail sector in india ppt for college
TRANSCRIPT
ORGANIZED RETAIL SECTOR IN INDIA
Prepared By:Arun Goel
MBA (4th Sem.)05015603909
Meaning of Retail:
Derived from from the French word retaillier meaning 'to cut a piece off' or 'to break bulk
Means to sell product or services to final consumers in small quantities
Also adds value to products & services sold for final consumption
International Retail: At a Glance One of the world’s largest industry exceeding US $ 9 trillion
47 Global Fortune 500 companies & 25 Asia's Top 200 companies are retailers
Dominated by developed countries
US, EU & Japan constitutes 80% of world retail sales
38%
27%
13%
8%3% 2% 9%
USA EU Japan China
India Russia Others
Share of Organized Retail
Percentage of Organized Retail
85 81
5540 36 30
20 204.6
0
20
40
60
80
100
US
A
Taiw
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Mala
ysia
Thaila
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Bra
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Indonesia
Pola
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Chin
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India
International Learning Total retail contribution in World GDP is 27% Organized retail in US accounts for 22% of GDP Share of organized retail in developing markets ranges between 20% to 55% Retail markets are organizing faster In developed markets, dominant player (Wal-Mart in US, Tesco in UK) has a significantly higher share; enjoying up to 8-13% market share Departmental stores growth is declining while ‘All-under-one-roof` & ‘neighborhood’ convenience is gaining strength
Retail Landscape in India
Indian Retail - dominated by unorganized sector Approximately 2 million Mom and Pop Shops Share of organized retail sector is only 4.6% FDI in the retail sector not permitted to protect local retailers (excepting for single brand & cash and carry formats. In this FDI is 51%.) Indian retail sector is one of the least concentrated in the world. The top five companies hold a combined market share of less than 2% India is third largest market in Asia behind Japan and China.
Retail consumption by
Indian retail is dominated by food & grocery which contributes > 65% of Rs 9.3t retail market, almost 99% of this is dominated by kirana stores.
Organized Retail in India
The share of organized retail in total retail pie is set to increase from 3% to about 10 - 12 % by 2015.
Key Trends Existing players expanding to smaller towns
Number of existing players like Big Bazaar, Shopper’s Stop, Piramyd are planning expansion in smaller cities
Indian business houses in retail Many business houses are planning retail entry
/ expansion either on their own or through partnerships
Global Players planning entry in India Some of world’s largest retailers - evaluating
entry in India including Wal-Mart, Carrefour,Tesco, IKEA, Best Buy, Lowe's, Kingfisher Group, Auchan, Woolworth, NTUC etc.
Shop Rite, Metro, Marks & Spencers, & Spar are already here
Some have setup Sourcing / Back-office centers e.g. Tesco, Wal-Mart, etc.
Rural opportunity - becoming interesting for organized retailers
Current Retail Growth
Indian retail industry ~ Rs 990,037 Cr (USD 300 bn), growing at 5-6% p.a.
Organised retail industry ~ Rs 35,000 Cr (USD 7.7 bn), growing at 25-30% p.a.
943990
10401092
11461203
1264
28
35
44
55
68
85
107
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200
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1400
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Rs '000 C
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Rs '000 C
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Total Retailing Market ( Rs '000 Cr) Organized Retailing (Rs '000 Cr)
SWOT ANALYSIS…………… Strengths
Increasing demand driven by the country’s young working population Increase in per capita income Technology intensive industry
Weaknesses Inadequate Infrastructure Government Restrictions on FDI
Opportunities Upcoming international Players Indian rural markets offer a sea of an opportunity for the retail sector Healthy prospect for the fashion industry
Threats Competition from unorganized Sector Increasing Real Estate prices
Gaps in Current Organized Retail Lack of right formats catering to needs especially “All Under One Roof” formats
Absence of single trusted player with pan-India presence
No investment in supply-chain infrastructure.
Sole focus on front-end with minimal back-end linkages (DC, logistics, cold chain, vendor & farmer development, etc.)
Inconsistent availability, quality & pricing
Transactional approach, minimal focus on customer service over the life-cycle
CONCLUSION…… The future for organized retail in India is a bright one The retail industry needs to get organized and drive its own destiny
The government needs to relax norms on foreign direct investment
Keep in mind buying habits of Indian consumer