Retail Marketing in India

RETAIL
Definition : Retail is the sale of goods to end users, not for resale, but for use and consumption by the purchaser .The retail transaction is at the end of the supply chain.

IMPORTANCE OF RETAIL MARKET

Economic Growth Employment Opportunities Moves the economy into motion Provides the consumer a basic platform to encounter with goods and a shop keeper

SOME STATISTICS OF INDIAN RETAIL MARKET

The

total retail sales in India will grow from US$ 395.96 billion in 2011 to US$ 785.12 billion in 2015.
to 8% of the total employment.

Contributes

Fastest growing sector in Indian Economy

CLASSIFICATION OF RETAIL SECTOR IN INDIA

Retail Sector

Organized

Unorganized

Wholesale

Specialist

Traditional Stores

Handcart Vendors

SUPERMARKET - A self-service store offering a wide variety of food and household merchandise, organized into departments HYPERMARKET - A hypermarket (from the French hypermarch) is a store which combines a supermarket and a department store

RETAILING SECTORS IN INDIA

Food and Grocery Clothing Footwear Gems and Jewellery Pharmaceuticals Music Book Consumer Durables

Pharma Jewellery Entertainment 2% 2% Catering 3% 4% Furnitures 6%

Watches 27%

Consumer Durables 6%

Health & Beauty 7%

Books & Music 8% Footwear 23%

Clothing 12%

FORMATS OF RETAIL MARKET IN INDIA

Mono/Exclusive Branded Retail Shops

Multi-Branded Retail Shop

Franchised/Owned Exclusive Showroom

Same Product Category of Different Brand

Complete range of product

More choices for customers

MAJOR INDIAN RETAIL PLAYERS IN MARKET

Future Group K Raheja Group Tata Group RPG Group Landmark Group Piramal Group Subhiksha Reliance AV Birla Group

RETAILING IN RURAL INDIA

Haats

Melas
Village retailer Mobile retailers

Village market

ORGANISED RETAILING IN VILLAGES

Godrej Aadhar Hariyali

WHY RURAL MARKET?

Large population
Increasing disposable income Western influences

Demand for better quality

Desire for luxury

PROBLEMS
Dispersed population and trade
Low density of shops Inadequate bank and credit and investment

Poor storage system

FOREIGN DIRECT INVESTMENT (FDI) IN INDIAN RETAIL SECTOR

FDI refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.

INDIAN PERSPECTIVE
Indian retail sector is largely closed to outsiders to safeguard the livelihood of nearly 15 million small store owners 96% of the business run by unorganized retailers Only 51% foreign investment is allowed in single brand retail with prior government permission. FDI is also allowed in wholesale business.

HOW TO ENTER INDIAN MARKET?

CURRENT ENTRY OPTIONS FOR FOREIGN PLAYERS
Franchise Agreements Most widely used entity route by multinational retailers. Fast food retailers, Dominos, entered through master franchise while Pizza Hut entered through regional franchise. 100% FDI is allowed in wholesale trading which involves building of a large distribution infrastructure to assist local manufacturers. Wholesaler deals only with smaller retailers and not consumers.

Cash and Carry Wholesale Trading

Strategic Licensing Agreements Foreign company enters into a licensing agreement with the domestic retailer. Mango, the Spanish apparel brand has entered India through this route with an agreement with Pyramid, India.

WHY INDIAN MARKET IS SO ATTRACTIVE

AT Kearneys study on global retail trends found that India is least competitive as well as least saturated of all major global markets. Good talent pool, unlimited opportunities, huge markets, availability of quality raw materials at cheaper costs, is expected to make India overtake the worlds best retail economy by 2042. Market share of organized modern retail is just over 5% of the total retail industry, thereby leaving a huge untapped opportunity.

Myths of FDI

Myth 1
Farmers would get higher share of retail income with the entry of global organized retail chains.

FACT
In

US the farm value share of consumer expenditure for domestically produced farm foods has steadily declined from 33% to 21% from 1970 to 1994. According to a European study, the real farm producer price index of total farm production fell by 27% over the period 1990-2002 .
- From The Economic Times

Myth 2
Increase in share of global organized retail would lower prices in food articles.

FACT

Trends in the BLS (Bureau of Labour studies) food price index in US from 1950 to 2007 tend to somewhat mirror the general Consumer Price Index, with no steady decrease or increase.

- From The Economic Times

Myth 3
Global retail chains would procure directly from farmers.

FACT
Currently Wal-Mart procures only 20% (mainly non-food category) of goods directly from manufacturers. Most of the organized retailers procure from large wholesalers and other intermediaries.

- From The Economic Times

WHY THE BLAME GAME? CHANGE THE GAME!

SAMRIDDHI
Kaushlendra Kumar
IIM-A

Introduced the farm fresh produce(FFP) retail chain supply model. Economic status of 3000 poor farmers and 500 street vendors in Bihar has gone up.

CONCLUSION
Indian

Retail Market has a huge room for development Development and progress should not come at others cost Proper government measures can assure healthy growth

Presented By Balaji Rakesh Unni Manju Blesson