7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

1/12

WHAT LIES IN STORE FOR THE

RETAILING INDUSTRY IN INDIA?

BY

Sunil

Prabhu

Praveen P

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

2/12

Facts

India currently having about 5-12 millionretail outlets all over the country.

Organized retailing constitutes nearly 2% of

the total retail sector whereas unorganizedretailing constitutes the rest 98%.

Indian retailing industry is expected to grow

from the current US$350M to US$427M by2010 and to US$635M by 2015.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

3/12

ECONOMIC 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 toincrease in purchasing power.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

4/12

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.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

5/12

TECHNOLOGICAL ENVIRONMENT

The progression of IT is now aiding the growthof 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 arealso helping in ordering & tracking inventory

items, warehousing, transportation etc.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

6/12

REGULATORY ENVIRONMENT

Foreign investment up to 100% is still not

permitted. Real estate laws at the statelevel not yet clear on the issue of allowing

large commercial stores. Tax structure for

the retailing industry still needs to be

restructured.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

7/12

SUPPLIER ENVIRONMENT

The biggest constraint to the growth ofretail 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.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

8/12

TECHNOLOGICAL ENVIRONMENT

The progression of IT is now aiding thegrowth of retail sector also. IT is now

providing support to quick information

processing, decision making, reduction inprocessing cost, real time monitoring,

security of transactions etc. Implementation

of SCM system & CRM are also helping inordering & tracking inventory items,

warehousing, transportation etc.

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

9/12

Opportunities

OPPORTUNITIES ECONOMIC GROWTH

POSITIVE GROWTH RATE

GROWING SIZE OF CONSUMING CLASS

INTERNATIONAL MARKET AWARENESS

MORE EXPOSURE TO INTERNATIONAL

MARKETS THROUGH TV & INTERNET

GROWING MARKET

INCREASING NUMBER OF YOUTHS &

INCREMENT IN INCOME LEVEL

ADVANCING TECHNOLOGY

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

10/12

THREATS:

ORGANIZED RETAILERS ARE OFTEN RESISTED INORDER TO MAINTAIN SUPPORT FROM

UNORGANIZED VENDORS REGULATORY ISSUES

DIRECT FOREIGN INVESTMENT NOT PERMITTED REAL ESTATE LAWS FOR SETTING UP

INFRASTRUCTURE RESTRUCTURING OF TAX

WEAK SUPPLY SYSTEM

DIFFICULTY IN COVERING SUCH A LARGE AREA #TRADITIONAL, FRAGMENTED DISTRIBUTION &

RETAIL NETWORKS

ERRATIC LOGISTICS BUYERS PSYCHOLOGY

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

11/12

TaxpoliciesInterestrates

&monetary

policies

Demographics,

Population

growthrates,Agedistribution

Industryfocus

ontechnological

effortInternationaltrade

regulationsand

restrictionsGovernment

spendingLabor/social

mobilityNewinventions

and

developmentContract

enforcementlaw

Consumer

protection

Unemploymen

tpolicy&

Taxation

Lifestyle

changesRateof

technology

transfer

Competition

regulation Inflationrates Fashion,hypesInformation

TechnologyHealth

consciousness

7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?

12/12