The retail industry continued in India in the form of Kiranas till 1980.

Soon,
following the modernisation of the retail sector in India, many companies started
pouring in the retail industry in India like Bombay Dyeing, Grasim etc. As has been
mentioned earlier the retail sector in India can be widely split into the organised and
the unorganized sector. The unorganized sector is predominant. We may discuss in
detail the different divisions of the retail sector in India.




Retail Investment Opportunities in India
India has witnessed a fast paced growth in the retail sector in the last 15 years, and thousands of job
opportunities were created. According to the 2012, GRDI report (Global Report Development
Index) India ranked 5
th
among the top thirty countries in retail marketing sector.

Food Retail India
Indian Government has recently announced 100% Foreign Direct Investment (FDI) in cash & carry formats or
51% FDI in single-brand, which has created optimistic reactions from top retail sector investors from across the
world.
Indias retail structure
Being among the top populated nations, Indian retail market draws a mammoth $450 billion, both as organised
and non-organised sectors. The organised retail fraction currently amounts to 10 % total market, but is
predicted to rise to 20%
Overview of Indian retail segment 2012
Food and grocery 60%
Apparel 11%
Consumer electronics 8%
Mobile and telecom 6%
Food service 5%
Jewellery 4%
Pharmacy 3%
Others 3%

Overview of Channels or formats
Indian retail sector is diversified into various setups based on factors like the outlet size, pricing strategy, kind
of commodities sold, and location.
1. Channels and outlets or organized retail has improved. Hypermarkets (40,000 to 200,000 sq. feet),
supermarkets (10,000 to 30,000 sq. feet), convenience stores (500 to 3,000 sq. feet) are major retail formats.
2. Cash & carry outlet is not completely a retail format, but the consumers or small retailers purchase products in
bulk. The size of such stores range from 100,000 to 300,000 Sq. Feet. Wal-Mart in coalition with Bharti is the
major player of this format.
3. Discount stores (Big bazaar, Subhiksha), speciality stores (Vijay sales), departmental stores (Globus, west-
side) and category killers (Ezone, Staples).
Laws and Regulations
There are certain laws that retailers have to follow, which are related to establishing stores and conducting
everyday activities.
General laws are:
Shop & Establishment Act
Income Tax Act
Standards of Weights & Measures Act
Contract labour Act
The Companies Act
Customs Act
In addition to the above acts, retailers have to follow some regional rules & regulation on the store location.
FDI Setup in India
Many foreign brands have entered into India after the 1991 Government policy, which had appealed to the
foreign participants in the retail sectors. The cash & carry business was the easiest mode for foreign retailers to
gain foothold into the promising Indian market. Carrefour launched their first cash & carry store in Indias capital
city, New Delhi. Last year, due to global economic slowdown, investments had dropped in almost all sectors.
For this reason, Government has changed the foreign investment guidelines to elevate investments in this
current year. Organized retailing is on the rise at a forceful rate with the increase in the numbers of shopping
malls and organized retail formats.

Clothing Retail India
Key Factors That Have Given Rise To Organized Retail In India Are:
1. Increase in disposal incomes of middle-class Indian middle-class families are seen as pursuers and
strugglers. It is this consuming class that is the prime target section for retailers.
In 2005, about 6.4% middle class accounted for 20% disposal income.
By 2015, there will be 25% increase in middle class contributing for 44% total disposal income.
By 2025, these predicted respective figures might even elevate up to 46% -57%.
Indian middle class population along with their developing level of disposal income will increase the prospective
development of organized retail sector in India.
2. Revolution in consumer trends and styles The main reason for the paradigm shift in shopping behaviour
of Indian consumer is acceptance of trends and styles. The advanced technological changes have made
Indians aware of changes in lifestyle. Today, they shop for brands as per needs and occasions.
Consumers are attracted into organized retail stores, because they offer various brands and selections. The
change in lifestyle has given a massive boost to the retail sectors like telecom, beauty, healthcare, and
entertainment. Additionally, media coverage has increased consumer awareness regarding products, prices,
and uses.
3. Changing demographics India is the youngest and largest consumer market of the world with median age
around 25 years. It is lowest in comparison to other countries. As per the forecast calculation, Indias median
age will be 28 years in 2020. More than 53% Indian population is expected to be of age below 30 by 2020.
This clearly indicates that the potentials of enormous Indian retail sector. The population is regarded to be more
vibrant than former generations, because their expenditure is driven by wants instead of needs. The retail
products related to lifestyle are expected to get a huge boost by the young population.
4. Increase in working people - Being the 2
nd
largest in population rate, India is undoubtedly a huge consumer
market. In 2008, working population in India within age group 15 to 49 years was 53% in comparison to 48.6%
in UK, 53% in Russia and 49% in US. Furthermore, in the last decade, there has been 20% rise in working
women.
5. Increase in urbanisation Currently, more than 335 million Indians dwell in towns and cities amounting to
30% of total population. Speedy migration to metros and cities for high income opportunities have allowed for
development of retail sales in the country. Moreover, the rapid infrastructure development has attracted many
rural inhabitants to the cities.
6. Internet brought awareness and online shopping facility Internet users in India are increasing. Internet is
not only used for getting information and entertainment, but is also used extensively for shopping as well.
Consumers are able to order products comfortably from their homes, and have them delivered at their
doorsteps.
7. Easy credit availability Credit cards have also led to the elevation of organized retail segment in India.
Actually, it has fuelled the purchasing powers of young Indians.
8. Foreign retail investment expansion plans Foreign investors like Wal-Mart plan to establish more retail
outlets in 12 18 months. Technopak estimates that organised retail will tap US $35 billion in coming 5 years.
Consolidation benefits:
Indian economy is predicted to add extra trillion dollars to its Gross Domestic Product (GDP) in next 5 to 6
years, allowing Compound Annual Growth Rate (CAGR) of 12%. In this early development phase, Indian retail
is expected to rejuvenate and distinguish itself fully. Main Gains:
1. Consumer sentiments are improving with financial conditions, employment opportunities, regular incomes, price
rises, quality of life, personal financial health, and stock performance.
2. Same store sales concept has bounced back.
3. New store expansions have accelerated sales growth.
4. Government totally backs organized retail, because it can enhance farm practices and ensure better price,
which can be a win-win for both farmers and consumers. Therefore, Government has articulated APMC Act
(2003), where farmers and private players can openly trade their product.
5. Organized retail can benefit up to 0.5% sales tax on the application of GST (Goods & Service Tax) of running
business in India.
6. In coming 20 years, along with change in spending power, India will observe rapid development in its
middleclass The households with Rs.200000 disposable incomes annually will raise to Rs.1000000.
India has emerged the fifth largest consumer market. Development will draw millions of people above the
poverty line, and into the world of middle-class. Rising incomes will give every Indian an opportunity to enjoy
comfort and pleasures enjoyed by middle-class families world-wide. Moreover, increasing domestic
consumption will generate more financial and employment developments as businesses work diligently to fulfil
new consumer demands. For retail players from across the world, India provides an opportunity to invest. In
fact, it is predicted to represents the largest consumer market for next two decades.