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Evolution of Retailing :

Evolution of Retailing The emergence of retailing in India now has more to do with the increasing purchasing power of buyers, especially post-liberalization, increase in product variety, and the increasing economies of scale, with the aid of modern supply and distribution management solutions. Activity: Name a few existing retailers in India who you feel, are quite successful.

Evolution of Retailing :
Evolution of Retailing Important Stores opened in the Q4 FY 06

Indian Retail Scenario At A Glance :

Indian Retail Scenario At A Glance The contribution of retail industry to Indias GDP is more than 13%. Indian retail industry (organized as well as unorganized) spreads over more than 6 million outlets (2.4 million urban and 3.6 million in rural). Even though India has well over 6 million retail outlets of all sizes and styles, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents organized retailing with a great opportunity. It was only in the year 2000 that the global management consultancy AT Kearney put a figure to Indian retail Industry Rs. 400,000. Retailing in India is still thoroughly unorganized. There is no supply chain management perspective.

Indian Retail Scenario At A Glance :

Indian Retail Scenario At A Glance As much as 96 per cent of the 6 million-plus outlets are smaller than 500 square feet in area. This means that India per capita retailing space is about 2 square feet (compared to 16 square feet in the United States). Indias per capita retailing space is thus the lowest in the world. Just over 8 per cent of Indias population is engaged in retail (compared to 20 per cent in the United States). Indias per capita retailing space is thus the lowest in the world. Given the size, and the geographical, cultural and socio-economic diversity of India, there is no role model for Indian suppliers and retails to adapt or expand in the Indian context. Hence Indian retailers have to find a suitable model and adopt it to the Indian context.

Indian Retail Scenario At A Glance :

Indian Retail Scenario At A Glance Indias first true shopping mall complete with food courts, recreation facilities and large car parking space was inaugurated as lately as in 1999 in Mumbai. (This mall is called Crossroads). An FDI Confidence Index survey done by AT Kearney, showed that the retail industry is one of the most attractive sectors for FDI (foreign direct investment) in India and if allowed, foreign retail chains would make a great impact on Indian retailing. In India still, more than 60% sales in retail comes from food items only.

A Few Indian Retailers: :

A Few Indian Retailers: Pantaloons The different formats of Pantaloons are Big Bazaar The Discount Hypermarket Pantaloons - The Family Store Central Mall One point shopping Food Bazaar Food & Grocery Super Market God Bazaar specialty store RPG The different retail formats of RPG group are: Spencers (earlier known as Food World) Super Market Spencers Hypermarket Health and Glow Music World

Share of Organized Retailing in Countries :

Share of Organized Retailing in Countries

Organized Retailing in India (2006) :

Organized Retailing in India (2006)

Forces Governing Indian Retailing :

Forces Governing Indian Retailing Consumer Pull: Rising income and greater purchasing power of the Indian customer and the tremendous growth of the middle class in the post-liberalization era. Growing urbanization leading to a variety of customer needs. Significant increase in the number of brands in the Indian market leading to a larger option set for the Indian customer. Media boom leading to an increased level of awareness levels and exposure to the international trends and concepts. Changing demographics propelling the growth of retail industry. Psychographic changes in the Indian consumer behaviour Shopping is becoming an outing or a way of family entertainment that means that families now spend greater time in shops.

Retailing : The Road Ahead :

Retailing : The Road Ahead India is a nation of shopkeepers and it has more outlets than any other country in the world. But retail outlets still exist in all shapes and sizes Panwalla to Shoppers Stop. However most of these retail outlets are kirana shops that are smaller than 500 sq.ft. in area, provide very basic offerings and hardly use any technology. According to Mr. Nedungadi, President, Madura Coats, Retailing is becoming all about great ambience, more choice and convenient location. An emerging trend is also that of the value consciousness of the consumer. So Indian retail industry has a long way to go. With corporate investments coming to organized retailing, the scope and growth of organized retailing is looking bright for Indian retail Industry.

Opening the door partly 51% FDI permitted to Single Brand Retail :
Opening the door partly 51% FDI permitted to Single Brand Retail The most significant development in regulatory aspects influencing the Indian retail industry is the governments decision to allow foreign direct investment (FDI) up to 51% in retail outlets meant exclusively for single brands. Previously single brands had to enter India only through joint ventures or the franchisee route. Now brands can enter with a majority stake of 51% along with a local partner. This definitely gives the international brands more space to play ground.

Some of the other regulatory aspects in India presently are: :

Some of the other regulatory aspects in India presently are: Foreign-owned Indian companies cannot own and operate retail outlets except some specific areas Variable stamp duties on transfer of property from state to state. City urban planning prohibiting bigger commercial plots, rigid building and zoning laws for procurement of retail space. Strong pro-tenancy laws Urban Land Ceiling Act and Rent Control Acts.

Foreign Direct Investment in Retail :

Foreign Direct Investment in Retail Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.