RETAIL INDUSTRY IN INDIA

Hitesh N Bhiogade

Index Flow

Definition of Retailing Revolution of Indian Retail Industry Present scenario of Indian Retail industry Types of Retail market Tax System FDI in Retail Challenges Opportunities Conclusion Reference

First form of retail was Barter system - exchange of goods

Followed by Kirana store and Mom & Pop store and then PDS outlet controlled by government.

Finally Manufacturing era necessitated the small stores and specialty stores

1990’s saw a fresh wave of entrants with a shift from Manufactures to pure Retailers

Post 1995 onwards saw an emergence of shopping centers, hyper and super markets trying to provide customer with 3 Vs - Value, Variety and Volume

Evolution of Indian Retail Industry

“Retailing- includes all the activities involved selling goods or Services directly to final consumers for personal use, not for business use”.

Indian Retail Industry

• Indian retail Industry is Fifth largest in the world.• Retailing in India is one of the pillars of its

economy and accounts for 14 to 15 percent of its GDP.

• Indian retail industry contributes 8% to of the total employment.

• Food segment contributes largest part of total value of retail market.

• The Indian retail sector is fragmented with more than 90% of its business being carried out by traditional family run small stores.

Types of Retail Market in India

Unorganized Retail Market Market size - 92% It includes owner managed general store, convenience

store, kirana store Location – Residential area, Main roads Lacks technical and accounting standard Space limitation

Shift from Unorganized to Organized self service outlets

Changing Scenario

BEFORE AFTER

Organized Retail Market Market size - 8%(rapidly growing) It includes Larger malls, Retail chain, Supermarket Professionally managed with accounting standard Customer are mostly brand conscious and use lifestyle

products Customer are shifting from buying to shopping

experience No space limitation

Organized Market

E-commerce

E-commerce and organized retail has their own separate presence in the market

Trading in products or services using Internet Effective and efficient way of conducting business It has market entry strategy where the company may or

may not have a physical presence India has close to 10 million online shoppers and is growing

at an estimated of 30% Main categories –Electronics and cloths and future category

furniture Some disadvantage of e-commerce is that consumer can’t

feel & touch product , so they came out with 30 days return policy

Major players- Flipkart,Amazon,Snapdeal,Homeshop18

Key Players of Retail Industry in India

Future group Shopper stop Trent Brand house Retail Reliance Sahara Group Videocon Next

Tax Impacts

There were multiple indirect tax:- Custom Duty Central value added tax (VAT) Service tax Central Sales tax (CST) State value added tax Entry tax

GST :- In order to integrate all these tax into a single unified tax system and bring about broad-based reforms in the indirect regime, the Government of India has introduced Uniform Goods and Service Tax (GST) across the country.

FDI in Retail

FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route.

FDI up to 100% for retail trade of ‘Single Brand’ products.

Single brand retailers like Apple, IKEA can own 100% of their Indian store, up from previous cap of 51%.

Indian government allowed FDI up to 51% for multi brand sector.

Both multi brand and single brand stores in India will have to source nearly a third of their goods from small and medium sized indian suppliers.

Challenges for Retail in India

Lack of Finance- Due to lack of finance to a existing and new players. This affects growth and expansion plans.

Requirement of numerous license, permits and registration

Underdeveloped supply chain High cost of Real estate Lack of basic infrastructure like power,

transport, communication

Opportunities

Retail Education and Design to fulfill increasing demand of skilled people

To develop supply chain and logistic infrastructure investment.

To attract Large Rural Market have to develop some project like ‘Aadhar’ a joint venture between Future group and Godrej agrovet which sells paddy, wheat and help farmers for agricultural problem

Conclusion

Indian Retail industry has a huge room for development and very bright future prospect.

Proper government measure can assure healthy growth.

Indian Retail Industry helps to grow Indian economy in terms of income and employment generation.

Reference

Wikipedia, the free encyclopedia http://www.google.com http://www.economywatch.com http://www.nielsen.com http://www.indianretailing.com

Thank you