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AN OVERVIEW of RETAIL SECTOR
Retailing Worlds largest private industry
US$ 6.6 trillion sales annually Indian retailing
Largest employer after agriculture - 8% ofpopulation
Highest outlet density in world Around 12 mn outlets
Still evolving as an industry Long way to go
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Organized Retailing as a % of totalRetailing
CountryCurrent share of org.
retailing (%)USA 80
Argentina 40Brazil 40
Thailand 40
Korea 35
Taiwan 35
China 20
Malaysia 20
Poland 20
India 2
*DATA OF 2008
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Retailing & India Largest private industry in India
2nd Largest Employer after agriculture
Contributes 10% of GDP
Highest Retail outlet density in the World
Growth @ 2% (1995-2005)
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Segment-wise recent trends anddevelopment in retailing
Food and grocery Textile and apparel Consumer durables
Music and books Jewellery Wooden furniture Leather footwear
Handicrafts Fast food chains Real estate Fuel retailing
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Traditional/Pervasive
Reach
GovernmentSupported
Modern Formats/International
Historic/
RuralReach
EVOLUTION OF INDIAN RETAIL
Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls
PDS Outlets Khadi Stores Cooperatives
Convenience Stores Mom and Pop/Kiranas
Weekly Markets Village Fairs Melas
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Classifying Indian retail
Modern Format retailers (organized) Supermarkets Hypermarket (3000-5000 sq ft) Department Stores (1000-2000sq ft)
Convenience Stores (750-1000 sq ft) Company Owned Company Operated
Traditional Format Retailers (unorganized)
Kiranas: Traditional Mom and Pop Stores Kiosks Street Markets Exclusive /Multiple Brand Outlets
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Categories of Indian retail
Corporate Houses Tatas: Tata Trent RPG group: Food World, Health and Glow, etc ITC: Wills Life Style
Rahejas (ShoppersStop), Hiranandani(Haiko),DLF(DT cinemas) etc.
Dedicated brand outletsNike, Reebok, Zodiac etc
Multi-brand outletsVijay Sales, Viveks etc
Manufacturers/ Exporters Pantaloons, Bata, Weekender
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Large Indian retailersHypermarket
Big BazaarGiantsShopriteStar
Department storeLifestylePantaloonsPyramidsShoppers StopTrent
EntertainmentFame AdlabsFun RepublicInox
PVR
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Entry Routes of Foreign Retailers Franchise
International company gives name andtechnology to local partner. Gets royalty inreturn
In case master franchise is appointed for regionor country, he has right to appoint localfranchisees
Nike, Pizza Hut, Tommy Hilfiger, Marks andSpencer, Mango
Manufacturing Company sets up Indian arm for production
Bata India,has right to retail in India
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Entry Routes of Foreign Retailers Distribution
International company sets up localdistribution office
Supply products to Indian retailers to sell Also set up franchised outlets for brand
Swarovski, Hugo Boss Wholesale trading
Cash and Carry operations 100% FDI permitted
Metro Cash n Carry
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COMPANIES WHO WANT TO ENTER INDIANRETAIL MARKET
WALMART (worlds largest turnover company) withBHARTI
Italian designer GIOGRGIO ARMANI with DLF
ltd.(51% share of armani) 2nd biggest retailer Frances
CARREFOUR by 2009.
Britains MARKS & SPENCERwants to expand in India.
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WHY FDI SHOULD BE PERMITTED? Improve competition Develop the market Greater level of exports due to increased sourcing by
major players
Investment in technology Better lifestyle
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WHY FDI SHOULD BE PERMITTED?
Manpower and skill developmentTourism DevelopmentInvestment in whole supply chainLong term benefits
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Politics nd FDI in retailing
BJP hints at scrapping FDI in retail if voted to power
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RECOMMENDATIONS
Allow FDI in Retailing First bring foreign companies in less sensitive
sector. FDI regime should be gradual Invest in supply chain infrastructure
Provide retailers with easy access to finance
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CONCLUSION
FDI in retailing would surely an advantage to Indiaand it would also help India in becoming 'developedcountry'. As the people also accept the retailing itwill be an advantage to them also. So the
government should also open the retail sector to theforeign investment, as it also serves as anemployment generator.
So, 'FDI in retailing is the need of the hour'
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TH NKYOU