Presented by-

Shitish Ahluwalia

 India

currently having about 5-12 million retail outlets all over the country. Organized retailing constitutes barely 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.

 Offer

mainly food items & groceries Occupy an average of 500 sq.ft. of area Often managed by family members & running through generations Little investment of land & assets Little or no taxes paid Standard quality of items sold Moderate pricing Personal and one-to-one customer contact Few items sold on credit and payment is collected at the end of the month.

Identify the opportunities & threats that the retailing industry in India offers to local and foreign companies.

Q1.

ECONOMIC GROWTH
Positive growth rate. Growing size of consuming class.

INTERNATIONAL MARKET AWARENESS GROWING MARKET

More exposure to international markets through TV & internet.

SOCIO-CULTURAL CHANGE
Increasing no. of youth. Increment in income level.

Consumer form larger area are getting reached.

ADVANCE TECHNOLOGY
Software support to operations. Better supply chain management.

POLITICAL AMBIGUITY
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 INFRASTRUCT URE RESTRUCTURI NG OF TAX

WEAK SUPPLY SYSTEM

DIFFICULTY IN COVERING SUCH A LARGE AREA TRADITIONAL, FRAGMENTED DISTRIBUTION & RETAIL NETWORKS ERRATIC LOGISTICS

BUYERS PSYCHOLOG Y
MISCONCEPTI ON AMONG MIDDLE-CLASS CONSUMERS THAT THE MODERN RETAIL FORMATS ARE MORE EXPENSIVE AND NOT AFFORDABLE FOR THEM.

Q2.PREPARE

AN ETOP FOR A COMPANY ENTERING IN RETAILING INDUSTRY IN INDIA.

 The

Economic environment The International environment The Market environment The Political environment The Regulatory environment The Socio-Cultural environment The Supplier environment The Technological environment

 Indias

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.

 Increased

exposure to television and internet resulted in openness and awareness of international developments among Indians. Ease of traveling abroad made people enable to experience the foreign markets.

Reach of organized retailing has been growing to larger geographic area. In addition to the metropolitan cities like Delhi, Mumbai or Kolkata, cities such as Bangalore, Pune etc are also coming under the reach of the organized retail sector. Retailers are now trying to reach the smaller cities like Nagpur, Lucknow or Cochin. In addition to the traditional systems like street carts, pavement shops, weekly markets etc, organized retail sectors are now using the concepts of supermarkets, departmental stores, specialty stores etc. to attract and reach the maximum number of customers.

 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.

 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.

The changing age-profile of the buyers are impressively acting on the growth of organized retail sector. About 70% of the Indians are below 36 years of age, among which almost 50% are below 18 years of age. About 7 million people in their mid-twenties are now earning over US$ 5000 per year. This new-age group of buyers are contributing most to the growth of organized retail sector. Besides, malls are presented in a way to the buyers that is not just a place for shopping, but also a place to hang out and have some entertainment.

 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.

 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.