CASE STUDY:

RETAILING INDUSTRY IN INDIA

By- Charuta Jagtap (Feb 2013)

OVERVIEW
Retail industry, being the fifth largest in the world, is one of the sunrise sectors with huge growth potential. It accounts for 14-15% of the countrys GDP. Comprising of organized and unorganized sectors. According to the Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. The recent announcement by the Indian government allowing 100% FDI in single brands and future scope of multi-brand FDI have created positive sentiments.

KEY MARKET SEGMENTS

Food &Grocery Clothing & Fashion Beauty & Wellness Electronics Furniture & Furnishings Others

RETAIL MIX
TRADITIONAL & MODERN

Traditional (unorganized)
Street carts

Modern (organized)
Supercenter

Pavement shops
Kirana dukaan Public distribution system

Hypermarket
Supermarket Convenience store

Kiosk/Stalls
Weekly markets

Cash & carry

Discount store Department store

Specialty store
Category killer

KEY INDIAN PLAYERS

BRANDS STORES

Future GroupsFormats
Fabindia RP- Sanjiv Goenka Grp Retail- Formats Tata Group Formats Reliance Retail Formats

Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, aLL, E-Zone etc.
Textiles, Home Furnishings, handloom apparels, jewelry Spencers Hyper, Spencers Daily, Music World, Au Bon Pain(International Bakery Cafeteria), Beverly Hills Polo Club Westside, Star India Bazaar, Steeljunction, Landmark, World of Titan showrooms, Tanishq outlets, Croma Reliance Mart, Reliance Super, Reliance Fresh, Reliance Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance Autozone, iStore

KEY INDIAN PLAYERS CONTD.

BRANDS
K Raheja Corp Group Formats Lifestyle Aditya Birla Group Gitanjali

STORES
Shoppers Stop, Crossword, Hyper City, Inorbit Mall International Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores More outlets Nakshatra, Gili, Asmi, Damas, Gitanjali Jewels, Giantti, Gitanjali Gifts,etc.

KEY FOREIGN PLAYERS

Carrefour Tata Tesco Bharti Wal-Mart IKEA Starbucks etc.

IDENTIFY THE OPPORTUNITIES & THREATS THAT THE RETAILING INDUSTRY IN INDIA OFFERS TO LOCAL & FOREIGN COMPANIES.
QUESTION 1)

OPPORTUNITIES

THREATS
supply-chain

Rising disposable income of Indian Lack of efficient middle-class management Changing demographics

Lack of required retail space

Changing consumer preferences and Shortage of trained manpower shopping habits Increase in working population Lack of proper infrastructure and distribution channels A long way to meet international standards No fixed consumption pattern Inefficient Tax structure Competition retailers from unorganized

Spurt in urbanisation

Rise in MPCE level in urban areas Retail investment Low Share of Organized Retailing

PREPARE AN ETOP FOR A COMPANY INTERESTED IN ENTERING THE RETAIL INDUSTRY IN INDIA.
QUESTION 2)

ENVIRONMENTAL THREAT & OPPORTUNITY PROFILE (ETOP)

Environmental Opportunities Nominal market share of organized retail business indicating scope for tremendous growth. Favorable FDI policies. The next generation Indian Consumer (younger, higher pay, double income households, disposable income, open to western influences etc.) Comparatively favorable political climate. Untapped market. Mending tax policies.

Environmental Threats Competition from unorganized & organized sectors. Indian consumers are still price sensitive & rural misconception about retail outlets being expensive. Raising estate prices and lengthy establishing procedures. Need for improved infrastructure and supply chain. Widely heterogeneous market. Need for better workforce management. Threat from online shopping stores. Inconsistent tax rates.

WAY TO INDIAN MARKETS

Understanding consumers needs, preferences and wants Operating stores efficiently and profitably Serving value-aware consumers Evolving with the market Localising products to delight and excite Indian consumers

BENEFITS OF ROBUST RETAIL ECOSYSTEM

Reduce wastage Employment Sourcing Benefit the farmers Decrease in intermediaries Increased govt. revenues Kiranas can become franchise partners and exist cordially with retail outlets Better price regulation