ORGANIZED RETAIL

FORMAT
 Introduction

• Retail is the sale of goods to end users, not for resale, but for use and consumption by
the purchaser
• It can also be defined as the timely delivery of goods and services demanded by
consumers at
prices that are competitive and affordable.
• One of the world’s largest industry exceeding US $ 9 trillion.
• Total retail contribution in World GDP is 27%. Organized retail in US accounts for 22% of
GDP. The Share of organized retail in developing markets ranges between 20% to 55%
• Dominated by developed countries. US, EU & Japan constitutes 80% of world retail
sales.
 Introduction : Organized Retail

• Organized retail or modern retail is usually chain stores, all owned or franchised by a
central entity, or a single store that is larger than some cut-off point.
• The relative uniformity and standardization of retailing is the key attribute of modern
retail.
• Organized retailing, in India, refers to trading activities undertaken by licensed
retailers, that is, those who are registered for sales tax, income tax, etc. These include
the publicly traded supermarkets, corporate-backed hypermarkets and retail chains,
and also the privately owned large retail businesses.
 Types

Department Store
Super markets
Category Killers
Kiosks
Hypermarkets
Malls
Difference in Organized and unorganized retail.
 Organized Retail in India
• The organized retail market is growing at 3.5 percent annually. Rapid change with
investments to the tune of US$25 billion is being planned by several Indian and
multinational companies in the next 5 years.

•It is huge industry in terms of size

and according to management
consulting firm
Techno Park Advisors Pvt. Ltd.,
it is valued at above US$ 350
Billion.
 Organized Retail in India
• According to the tenth report of Global retail Report Index (GRID) of
AT Kearney, India is having a very favorable retail environment and it is placed
at 4th spot in the GRDI. The main reasons behind that is the 9% real GDP
growth in 2010, forecasted yearly growth of
8.7% through 2016, high saving
and investment rate and increased
consumer spending.

• According to report, organized

retail accounts for 7% of India’s
roughly
$435 billion retail market and is
expected to reach 20% by 2020.
 Investment Scenario
The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totaling US$
537.61 million during April 2000–March 2016, according to the Department of Industrial Policies
and Promotion (DIPP).
• International Finance Corporation (IFC), the investment arm of The World Bank, plans to invest up to
Rs 134 crore (US$ 19.86 million) in Kishore Biyani's Future Consumer Enterprises Ltd, which is
expected to aid the company in driving its growth plans.
• IKEA, the world’s largest furniture retailer, plans to invest Rs 10,500 crore (US$ 1.56 billion) to set
up 25 stores across India and hire over 15,000 permanent employees and 37,500 temporary employees
to assist in running its stores.
• Walmart India plans to add 50 more cash-and-carry stores in India over the next four to five years.
• Aditya Birla Retail, a part of the US$ 40 billion Aditya Birla Group and the fourth-largest
supermarket retailer in the country, acquired Total hypermarkets owned by Jubilant
Retail.
• US-based Pizza chain Sbarro plans an almost threefold increase in its store count from the current
17 to 50 over the next two years through multiple business models.
 Government Initiatives
The Government of India has taken various initiatives to improve the retail
industry in India.
• Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in
online retail of goods and services through the automatic route, thereby providing
clarity on the existing businesses of e-commerce companies operating in India.
• The Government of India has accepted the changes proposed by Rajya Sabha select
committee to the bill introducing Goods and Services Tax (GST). Implementation of GST
is expected to enable easier movement of goods across the country, thereby improving
retail operations for pan-India retailers.
• IKEA, the world’s largest furniture retailer, bought its first piece of land in India in
Hyderabad, the joint capital of Telangana and Andhra Pradesh, for building a retail
store. IKEA’s retail outlets have a standard design and each location entails an
investment of around Rs 500–600 crore (US$ 74–89 million).
 Benefits
• Organized retail will bring in massive employment in organized sector
with benefits to locals (China experienced employment growth rates of 9
million over 3 years) albeit with changed skill sets.
• Massive Infrastructure up-gradation will come in increasing the overall
efficiency in the economy, which will reduce the current huge amounts of
wastage occurring to the economy.
• Increased tax revenues and profits retained within the country for
local portion. History in other countries negates critics
• Will benefit end consumers in the area of price, convenience & quality of
products & packaging.
 The Road Ahead

• E-commerce is expanding steadily in the country. Customers have the ever

increasing choice of products at the lowest rates.
• Both organized and unorganized retail companies have to work together to
ensure better prospects for the overall retail industry, while generating
new benefits for their customers.
• Nevertheless, the long-term outlook for the industry is positive, supported
by rising incomes, favorable demographics, entry of foreign players, and
increasing urbanization.
THANK