WHAT LIES IN STORE FOR THE

RETAILING INDUSTRY IN INDIA?

BY
Sunil
Prabhu
Praveen P
Facts

• India currently having about 5-12 million

retail outlets all over the country.
• Organized retailing constitutes nearly 2% of
the total retail sector whereas unorganized
retailing constitutes the rest 98%.
• Indian retailing industry is expected to grow
from the current US$350M to US$427M by
2010 and to US$635M by 2015.
 ECONOMIC ENVIRONMENT
• India’s impressive economic growth rate of
9% Increase in population leading to
growing size of the consuming class.
• Increase in per capita income leading to
increase in purchasing power.
• Since the unorganized retail sector
constitutes about 98% of the total retail
sector, political parties are often quite
offensive towards the growth of the
organized retail business in order to protect
the unorganized vendors.
 TECHNOLOGICAL ENVIRONMENT
• The progression of IT is now aiding the growth
of retail sector also.
• IT is now providing support to quick
information processing, decision making,
reduction in processing cost, real time
monitoring, security of transactions etc.
Implementation of SCM system & CRM are
also helping in ordering & tracking inventory
items, warehousing, transportation etc.
• REGULATORY ENVIRONMENT
• Foreign investment up to 100% is still not
permitted. Real estate laws at the state
level not yet clear on the issue of allowing
large commercial stores. Tax structure for
the retailing industry still needs to be
restructured.
 SUPPLIER ENVIRONMENT
• The biggest constraint to the growth of
retail industry in India. Due to the vast
geographical size of the country, presence
of traditional, fragmented distribution &
retailing networks and erratic logistics
system and poor SCM system, reaching the
customers cost-effectively is a big problem
in India.
• TECHNOLOGICAL ENVIRONMENT
• The progression of IT is now aiding the
growth of retail sector also. IT is now
providing support to quick information
processing, decision making, reduction in
processing cost, real time monitoring,
security of transactions etc. Implementation
of SCM system & CRM are also helping in
ordering & tracking inventory items,
warehousing, transportation etc.
 Opportunities
• OPPORTUNITIES ECONOMIC GROWTH
• POSITIVE GROWTH RATE
• GROWING SIZE OF CONSUMING CLASS
INTERNATIONAL MARKET AWARENESS
• MORE EXPOSURE TO INTERNATIONAL
MARKETS THROUGH TV & INTERNET
GROWING MARKET
• INCREASING NUMBER OF YOUTHS &
INCREMENT IN INCOME LEVEL
ADVANCING TECHNOLOGY
 THREATS:
• ORGANIZED RETAILERS ARE OFTEN RESISTED IN
ORDER TO MAINTAIN SUPPORT FROM
UNORGANIZED VENDORS REGULATORY ISSUES
• DIRECT FOREIGN INVESTMENT NOT PERMITTED
• REAL ESTATE LAWS FOR SETTING UP
INFRASTRUCTURE RESTRUCTURING OF TAX
WEAK SUPPLY SYSTEM
• DIFFICULTY IN COVERING SUCH A LARGE AREA #
TRADITIONAL, FRAGMENTED DISTRIBUTION &
RETAIL NETWORKS
• ERRATIC LOGISTICS BUYERS’ PSYCHOLOGY
 Political Economic Social Technological
Demographics,
Interest rates Industry focus
Population
Tax policies & monetary on technological
growth rates,
policies effort
Age distribution
International trade New inventions
Government Labor / social
regulations and and
spending mobility
restrictions development
Contract
Unemploymen Rate of
enforcement law Lifestyle
t policy & technology
Consumer changes
Taxation transfer
protection
Competition Information
Inflation rates Fashion, hypes
regulation Technology
Health
consciousness
Stage of the
Political Stability & welfare, Internet
 ile
s m
a t
re
it hG
s w
N D
n E
ti o
n ta
s e
p re
a t
e
Gr

THANK U.