RETAILING

INDUSTRY IN INDIA
 RETAILING

 According to Kotler: “Retailing includes all the

activities involved in selling goods or services to
the final consumers for personal, non business
use”.

 The Indian retail is dotted by traditionally

market place called bazaars or haats comprises
of numerous small and large shops, selling
different or similar merchandise .
 INDUSTRY HISTORY
 Traditionally retailing in India can be traced to
 The emergence of the neighborhood ‘Kirana’ stores
catering to the convenience of the consumers
 Era of government support for rural retail:
Indigenous franchise model of store chains run by
Khadi & Village Industries Commission
 1980s experienced slow change as India began to
open up economy.
 Textiles sector with companies like Bombay Dyeing,
Raymond's, S Kumar's and Grasim first saw the
emergence of retail chains
 Later Titan successfully created an organized retailing
concept and established a series of showrooms for its
premium watches
 The latter half of the 1990s saw a
fresh wave of entrants with a shift
from Manufactures to Pure Retailers.

 For e.g. Food World, Subhiksha and

Nilgiris in food and FMCG; Planet M and
Music World in music; Crossword and
Fountainhead in books.

 Post 1995 onwards saw an emergence

of shopping centers,
 mainly in urban areas, with facilities
like car parking
 targeted to provide a complete
destination experience for all
segments of society
 INDUSTRY IN PRESENT
 The India Retail Industry is the largest among all
the industries, accounting for over 12 per cent of
the country’s GDP and around 8 per cent of the
employment. The Retail Industry in India has come
forth as one of the most dynamic and fast paced
industries with several players entering the market.
But all of them have not yet tasted success
because of the heavy initial investments that are
required to break even with other companies and
compete with them. The India Retail Industry is
gradually inching its way towards becoming the
next boom industry.
 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
 sectors in Indian retail
 Food         Footwear & Leather 
Books & Magazines
Toys & Games
Fashion & Clothing  
Jewellery & Watches
Personal Care
Furniture 
Optical Consumer Electronics  

Sport & Leisure Petrol   

     
Home Ware
 Drivers of Retail change in India

1. Changing Income Profiles: Steady economic growth

fuelled the increase in income in India. The average
middle class family's income rose by more than
20% between 1999-2003.
2. Diminishing difference between Rural and urban
India: Rural India accounts for over 75% of India
population and this in itself offers a tremendous
opportunity for generating volume driven growth.
Tax benefit. In year 2002-03 LIC sold 50% of its
policies in rural India. Same BSNL also sold its
50% connection in small towns .
3. Changes in Consumption patterns:
Occupational changes and expansion of media have
caused a significant change in the way the consumer
lives and spends his money.
o The changes in income brought about changes in
the aspirations and the spending patterns of the
consumers. the buying basket of the consumer
changed
4. The emergence of a young Earning India :
Nearly 70% of the Indian population is below the
age of 34. taking advantages of employment
opportunity in the booming service sector these
young Indians are redefining service and
consumption patterns
Some of the Key Players in
Organized Retail
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.
Challenges to retail Development in
India

 Retail not being recognized as an industry in India.

 The high costs of real estate.

 Lack of Adequate infrastructure.

 Multiple and complex taxation system.

Size of the organized retail market
(Rs Cr)

2001-02 2007 CAGR (%)

(compound Annual growth
rate)

TOTAL 16,000 37,216 18

Food 1,800 7,473 33
Clothing 4,950 10,423 16
Cons.Durables 1,650 3,787 18

Books & Music 450 1,426 26

Share of organized & unorganized retail
with comparison

PAKISTAN 1 99

INDIA 3 97

CHINA 20 80

INDONESIA 30 70

BRAZIL 36 64 ORGANISED

40 60 UNORGANISED
THAILAND

MALASIA 55 45

TAIWAN 81 19

USA 85 15

0% 20% 40% 60% 80% 100%

Retail Trade- India, US and China

Organized
Trade Employment Shops Sector
  ($ bn) (%) (million) share (%)
India 180-394 7 12 2-3
China 360 12 2.7 20
US 3800 12.6-16 15.3 80
 Analysis of Growth
 Organized retail growing at estimated 25% .
 The Indian retail market, which is the fifth largest
retail destination globally, has been ranked as the
most attractive emerging market for investment in
the retail sector by AT Kearney's eighth annual
Global Retail Development Index (GRDI), in 2009.
The share of retail trade in the country's gross
domestic product (GDP) was between 8–10 per cent
in 2007. It is currently around 12 per cent, and is
likely to reach 22 per cent by 2010.
 E.g.: Bharti has invested 60 Billion with the largest
retail Wal-Mart (last year).