Jubin.P.George, T3 MBA,SS.III, SJCET SoM

RETAIL INDUSTRY

What is retailing?Means “sales in small quantities.”

The Retail Industry is the sector of economy which is consisted of individuals, stores, commercial complexes, agencies, companies, and organizations, involved in the business of selling or merchandizing diverse finished products or goods to the end-user consumers directly and indirectly.

Retail IndustryWorld’s largest private industryAbove US $ 8 trillion sales worldwide annually

Accounts for almost 10% of GDP in most countries

Major employer in most economiesMajor driver for real estate and urban development

Generates competition which results in:Reduction of pricesProduct and service innovationEnhanced customer experience

Types of RetailingOrganised Retailers:

SupermarketsHypermarketsDepartmental stores

Unorganised retailers:Kirana storesStreet markets

Evolution of Retailing

Global Retail Development Index™The Global Retail Development

Index™ is an annual study that ranks the top 30 developing countries for retail expansion worldwide. The Index analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies and to identify developing market investment opportunities. The GRDI is unique because it identifies today's most successful markets and those that offer the most potential for the future.

2016 Global Retail Development Index Ranking

Country 2016 RankChina 1India 2

Malaysia 3Kazakhstan 4Indonesia 5

Turkey 6United Arab

Emirates 7Saudi Arabia 8

Peru 9Azerbaijan 10

Major players in International retailing

Company Name Net Sales (Billion $) Country

Wal-Mart $4,21,849 USACarrefour $1,20,297 French 

Tesco $94,185  UKMetro AG $89,081 German 

The Kroger Company $82,189 USASchwarz $77,220 German 

Costco Wholesale $77,946 USAHome Depot $67,997 USA

Target $67,390 USAAldi GmbH &

Company $58,000 German 

Major players in International retailing

In Indian scenarioThe retail sector in India is emerging as one of the largest sectors in the economy

By 2015, the total market size is estimated to be around USD600 billion, thereby registering a CAGR (Compound Annual Growth rate) of 7.45 per cent since 2000.

Retail industry is expected to grow to USD$ 1.3 trillion by 2020, registering a CAGR of 9.7 per cent between 2000-2020

In Indian scenario (cont.)

Indian retail industry is 5th largest in the worldAccounts for 24% of country’s GDP and 8% of the total employment.

Retail IndiaThe Indian retail market is currently estimated at USD 450 billion.

Food segment contributes largest part of total value of retail market, followed by fashion, leisure & entertainment and fashion accessories.

India's organized retail space is evolving fast and achieve penetration level of 7%, which signifies huge potential growth.

Indian luxury market currently stands at USD 3.5 billion and expected to grow to make India the twelfth-largest luxury retail market in the world by 2017.

Govt. policy in retailing1995– World Trade Organization’s general agreement on trade in services, which include both wholesale and retailing services, came into effect.

1997– FDI in cash and carry (wholesale) with 100% rights allowed under the government approval route.

2006– FDI in cash and carry (wholesale) brought under the automatic route.

Up-to 51% investment in a single- brand retail outlet permitted.

2011– 100% FDI in single –brand retail permitted.2012– 51% FDI in multi- brand retail permitted.2016- 100% FDI in multi-brand food processing.

Govt. policy in retailingThe governments of some states, particularly Congress-ruled states have said they will allow foreign supermarkets to open in their state:Andhra Pradesh, Assam, Delhi, Haryana, Kashmir, 

Maharashtra, Manipur, Uttarakhand, Daman & Diu and Dadra-Nagar Haveli.

Other states, have said they will not allow foreign supermarkets to open in their state, these are:West Bengal, Gujarat, Bihar, Kerala, 

Madhya Pradesh, Tripura, and Orissa, Rajasthan.

Retail formats in India:Retail formats in India:

Hyper marts/supermarketsMom-and-pop storesDepartmental storesConvenience storesShopping mallsE-retailers Discount storesVendingSpecialty stores

Top players in Indian market

43%

18%8%

7%12%

6% 6%Market Share

Pantaloon RetShoppers StopBrandhouseTrentOthersProvogueKoutons Retail

Hot destinationsTIER 1 Cities Delhi, Mumbai, Kolkata, Chennai

TIER 2 CitiesHyderabad, Bangalore, Ahmadabad,

Gurgaon, Pune, Baroda, Noida

TIER 3 CitiesChandigarh, Coimbatore, Trivandrum,

Faridabad, Ludhiana, Cochin, Shimla, Mysore, Amritsar

In Kerala ScenarioRetailing in Kerala is a subject too subtle and

relevant; as Kerala is known as a consumer state rather than a producer state. The introduction of Margin Free Markets have turned out to be grand success resulting in it becoming one of the largest retail chains in the country.

Top Kerala retailersMargin Free MarketsReliance RetailGrand Fresh HypermarketsCo-operative storesSupply CoMaveli SupermarketsLabham marketsFestival markets (e.g. Onachantha)

Thank you…