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Retail :

Retail Retailing is all activities involved in selling goods or services directly to final consumers for their personal , non business use via shops, markets, door to door selling, mail orders or over the internet where the buyer intents to consume the products through personal, family or household use.

Indian retail:

Indian retail It is primarily divided into two segments- Organised retailing :Any retail outlet chain which is professionally managed has accounting transparency & organised supply chain management with centralised quality control and sourcing. Unorganised retailing : any retail outlet which is run locally by the owner or the caretaker of the shop , such outlets lack technical and accounting standardisation.

Indian Retail Market:

Indian Retail Market Size Of total Retail Market 2006 $ 310 billion 2011 $ 470 billion 2016 $ 675 Billion The market Is expected to grow at a CAGR of 7.5% in the next five years. Size of Organized Retail Market 2006 $ 10 billion 2011 $ 26 billion 2016 $ 84 billion The modern retail segments is expected at a CAGR of 26 % in next five years. Source: Technopak Advisors ( 22nd jan 2012)

Indian Retail Market:

Indian Retail Market Overall Retail Market –US$ Bn 675 470 310 2006 2011 2016 2016 Source : Technopak Analysis: Emerging Trends in Indian Retail and Consumer: 2011

Indian Retail Market:

Indian Retail Market Organized Retail Market –US$ Bn In $ US bn 84 26 10 2006 2011 2016 Source: Technopak Analysis: Emerging Trends in Indian Retail and Consumer: 2011 CAGR: 21:0% CAGR: 26:0%

India Retail Market (Overall) : By Category:

India Retail Market (Overall) : By Category Category 2006 2011 2016 CAGR (2011-16) Food and Grocery 217 325 425 5.50% Apparel 25 35 50.2 7.50% Jewellery & Watches 16.5 25.6 44.2 11.50% Consumer Electronics & IT 16.5 22.7 42.8 13.50% Pharmacy 8 13.9 23.4 11.00% Furnishings & Furniture 6.5 9.1 17.1 13.50% Restaurants and Food Joints 4.6 8.8 15.8 12.50% Footwear 3.6 4.5 8.3 13.00% Beauty Services 0.6 1.3 3 18.00% Health/Fitness Services 0.4 1 2.5 20.00% Others 11 23 42.5 13.10% Total (US$ Bn) 310 470 675 7.50% The total retail market in India is estimates at US$ 470 Bn in 2011. The Food & grocery segment is the largest retail category and accounts for ~70% of the total retail market. Source: Technopak Analysis: Emerging Trends in Indian Retail and Consumer: 2011

India Retail Market (Organized) : By Category:

India Retail Market (Organized) : By Category Category 2006 2011 2016 CAGR (2011-16) Food and Grocery 2 9 34 30.00% Apparel 3.5 5.5 8 8.50% Jewellery & Watches 1 2.5 7.5 25.00% Consumer Electronics & IT 1.5 4 18 35.00% Pharmacy 0.2 0.8 4.5 41.00% Furnishings & Furniture 0.4 0.7 1.2 12.00% Food and Beverage (Eating Out) 0.5 1.5 6 30.00% Footwear 1 1.7 3.8 17.50% Beauty Services 0.2 0.2 0.5 20.00% Health/Fitness Services 0.1 0.2 0.6 25.00% Total (US$ Bn) 10 26 84 26.00% • At 35%, Food & Grocery has the highest share of organized retail . Food & Grocery along with Apparel, Jewellery & Watches and Consumer Electronics & IT accounts for ~80% of the organized retail market in India in 2011. Source: Technopak Analysis: Emerging Trends in Indian Retail and Consumer: 2011

PowerPoint Presentation:

INDIA RETAIL – KEY GROWTH DRIVER Economic Growth : The per capita Income in 2009-10 more than doubled to US$ 849 from US$ 348 in 2000-01 Expanding Middle Class : By 2030, 91 million households will be middle class up from 21 million today Rapid Urbanization : 570 million people will live in cities, nearly twice the population of United States today Investment in Infrastructure : India expected to invest US$ 500 billion in infrastructure, mainly in power, telecommunication, road, railways and oil pipelines by March 2012 Rising Brand Consciousness : 60% of the population is below the age of 30 have exposure to Western consumption Sources :On .Point : JLLM, McKinsey’s India’s Urban Awakening, 2010

PowerPoint Presentation:

FDI IN RETAIL - PRESENT SCENARIO FDI in Single Brand Retail was permitted in 2006, to the extent of 51% and now opened to 100% . FDI in Multi Brand Retail is now opened up to 51%, with the following conditions : Minimum investment of US$ 100 million 50% of US$ 100 million to be invested in the back-end infrastructure 30% of sourcing to be done from small scale industries Stores can be opened only in cities with a minimum population of 1 million States will have the freedom to decide entry of international retailer with 51% FDI Sources :Discussion Paper on FDI in retail by DIPP

Why do we need it: :

Why do we need it: We are the second highest producer of fruits and vegetables in the world but still we are not able to utilise is properly because of inadequate infrastructure facilities. It will reduce pre-harvest wastage/losses and thus help control food inflation. It will create 1.5 million more jobs in 5 years. Apart from the huge number of indirect employment. It will increase competition which is always beneficial for the customer. It will reduce the middleman from the equation. It will reduce costs which in turn will reduce prices

Pros of FDI in Retail:

Pros of FDI in Retail A . Competition : Catalysts to spur competition & innovation in retail industry. Ensure highly efficient-low margin business model. B. Consumers : Improved product availability, quality & reduce wastages. Consumers to get best products and services at reasonable price . Consumer will get variety of products at low prices compared to market rates, and will have more choice to get international brands at one place .


CONTD… C. Back End & Supply Chain Improvement : Inadequate storage facilities cause heavy losses to farmers. 25 %-30% of F&V and 5%-7% of food grain in India are wasted . An 11 th plan working group has estimated a total investment of Rs 64312 crores in agriculture infrastructures. FDI in retail to bring investment, technology, management know how etc. Food inflation and fluctuation in food prices can be controlled.


CONTD… D. Better Realization for Farmers : Today, Intermediaries dominate the value chain. Indian farmers realize only 1/3 rd of the total price paid by the final consumer against 2/3 rd by farmers in nations with a higher share of organized retail. FDI to ensure better realization for farmers & producers. In most cases, in the retailing business, the intermediaries have dominated the interface between the manufacturers or producers and the consumers. Hence the farmers and manufacturers lose their actual share of profit margin as the lion’s share is eaten up by the middle men


CONTD… This issue can be resolved by FDI, as farmers might get contract farming where they will supply to a retailer based upon demand and will get good cash for that, they need not to search for buyers.


CONTD … E. Economic Growth : Sourcing from India will increase. Exports to get significant boost. India can also become a shopping destination for the world. Sectors like Textile and handicraft will get a significant boost. Due to coming of foreign companies’ new infrastructure will be build, thus real estate sector will grow consequently banking sector, as money need to be required to build infrastructure would be provided by banks.


CONTD… . F. Job opportunities: Estimates shows that this will create about 80Lakh jobs. These career opportunities will be created mostly in retail, real estate. But it will create positive impact on others sectors as well.

Cons of FDI in Retail:

Cons of FDI in Retail Retail industry in India is the second largest employer after agriculture. Any game changing situation can lead to heavy job losses particularly in rural areas and small cities. Unfair competition and abilities of big retailers to sustain losses can lead to large scale exit of domestic retailers, especially the small family managed outlets. Indian retail sector including organized sector is still under-developed and in a nascent stage. It is critical that the retail sector is allowed to grow and consolidate first, before opening to foreign investors.

PowerPoint Presentation:

FDI IN RETAIL – CONCLUSION Most of the consumers in India, particularly in urban areas, are exposed to benefits and experience of organized retail. It will be difficult to deny the same benefits and experience to balance consumers for a very long period. India is a big and growing market. Both unorganized and organized sectors can sustain together. Policy makers to ensure a level playing field for small retailers. Better credit availability to unorganized retailers from banks and micro-finance institution through innovative banking.

PowerPoint Presentation:

Gradual opening of retail sector to give domestic industry enough time to adjust to the changes. Clear guidelines on investment in Infrastructure and Export commitments for International Retailers would help all stakeholders to benefit.

PowerPoint Presentation:


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