Retail Scenario in India

Topics: Retailing, Shopping mall, Department store Pages: 21 (6004 words) Published: August 14, 2013
Praxis Business School

Phase 1

A Report
submitted to

Prof. K. Dasaratharaman

In partial fulfilment of the requirements of the course

Retail Management

04/08/13

By

Asmita Datta
Harshit Parekh
Prabina Chettri
Sanget Balgi

INDEX

Serial No.| Contents| Page No| 1| Retail Scenario in India| 3|
2| Key Drivers an Challenges for the Retail Sector| 5|
3| Choice of Retail Business and Reasons for the choice| 7| 4| Other Evaluated Choices| 8|
5| Global and Indian Scenario of the Apparel Industry| 9| 6| Current Players in the Apparel Industry| 13|
7| Market Size of the Apparel Industry| 14|
8| Key Drivers and Challenges for the Apparel Industry| 17|

Retail Scenario in India

The Indian retail sector can be divided into two broad categories: Unorganised Retail and Organised Retail. Organised retail is made up of those retailers who are licensed for trading activities and are registered to pay taxes to the government. The unorganised retail on the other hand consist of unauthorised small shops, general stores, corner shops among other small retail outlets. Over the last few years, the retail sector has been the fastest growing sector in the country and India has been ranked fifth among the top 30 emerging markets for retail. In the past decade the Indian retail sector has undergone a sea of change. The market which was once dominated by small neighbourhood stores that serviced the needs of millions of customers in country, has now a fair share of hypermarkets, supermarkets and departmental stores, especially in large cities.

According to the India Retail Report, 2013 the total Indian retail market is dominated by the unorganised sector with an approximate share of 92%. The retail sector grew by almost 10.6% between 2010 and 2012 and is expected to increase to USD 750-850 billion in 2015. Food and Grocery is the largest category within the retail sector followed by the Apparels and Mobile segment. Among the organised retail, Apparel is the largest segment followed by Mobile and the Telecom segment.

The Government of India had been considering opening up the Multi brand Retail Trade (MBRT) to FDI for a long time. They had released a discussion paper in 2010 which had gathered extensive public and industry views but it was in September, 2012 when the Government decided to pass the FDI policy in MBRT. The FDI policy may have a low impact on one segment but may be a stumbling block for another segment. Some of the key points of the policy have been highlighted below:

* Multi brand retailers must make a minimum investment of USD 100 million with atleast 50% of the investment in backend infrastructure.

* Retailers can set up in cities with a minimum population of 1 million provided the state government has given an approval. Currently there are 18 cities with population of more than 1 million where the state government has approved the implementation of the policy.

* Multi-brand retailers should have 30% sales from private label brands or unbranded products sourced from small industries

* Multi brand retailers with FDI will not be able to use e-commerce, whereas Indian retailers could use e-commerce as an alternate channel for sales

High inflation and borrowing costs followed by job insecurity in the face of economic uncertainty have hurt consumer confidence. This could be felt in the automobiles and electronics sectors, which have seen a decline in sales for eight months in a row. Weakening of rupee has made imports expensive forcing many consumer products companies to increase the prices in their products. But the Indian consumption story is an attractive one even though it has lost some of its shine recently. According to a study done by Boston Consultancy Group in October 2012, close to 20% of the Indian consumers are going to increase their discretionary spending in the next 12 months...
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