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A study on retial sector.
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What is Retail?
Retailing consists of the businessactivities involved in selling goodsand services to consumers for theirpersonal, family, or household use. Itincludes every sales of goods andservices to the final consumer.
As such retailing is the last link
that connects the individualconsumer with the manufacturingand distribution chain
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Evolution of Retail
Barter chain
Kirana stores
Chain of large stores
Finally malls
Hypermarkets
Supermarkets
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Retail Sector in India
Retail
Unorganized97%
Organized3%
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Current scenario of Indianretial -:
Unorganized market; Rs. 583,000 crores.
Organized market; Rs. 5,000 crores.
High rate of growths in organized retailingbetween 2000-2005.
Over 4000 new modern outlets in last 3years.
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Classifying Indian retail
Modern Format retailers Traditional Retailers
Supermarkets (Foodworld) Kiranas
Hypermarkets (Big Bazaar) Kiosks
Department Stores Street Markets
Companys exclusive outlets weekly markets
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Modern form of retail
Malls
Specialty Stores
Discount Stores
Department Stores
Hypermarkets/Supermarket
MBOsFood retail
Agriculture retail
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Different products involvedin RetailingFood
Books & Magazines
Fashion & Clothing
Personal Care
Optical Consumer Electronics
Sport & LeisureFootwear & Leather
Toys & Games
Jewellery & Watches
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Drivers of Retail Industry
Demography Dynamics:
Double Incomes:
Plastic Revolution:
Urbanization:
Covering distances has becomeeasier:
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Impact of organised sector ?
Effect on small retailers and vendors in theunorganized sector keeping in
mind the likely growth in the overall
market.Effect on employment.
Impact on consumers.
Impact on farmers and manufacturers. Impact on prices.
Overall impact on economic growth.
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Problems faced by indianretailers.
Margins are low
High property cost
Poor InfrastructureExpertise in logistics
Couple of firms in retail sector have turn
over more than Rs 100 crore.
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Importance
Largest and fastest growing sector in India.
Modern retailing forms one point stop forall shopping.
Consumer gets a large product variety ofbrands to choose from one roof.
First it was a sellers market and now its
changing to buyers market. By 2010 Indian retail sector would be
generating 10 million employmentopportunities.
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Analysis of Growth byASSOCHAMOrganized retail growing at estimated 25%
It is expected that retail in India could beworth US$ 175-200 billion by 2016.
2008-09 Total retails contribution to GDP isbetween 8% which would further jump up tonearly 12% in next few years. By 2010,retails contribution to national GDP in
totality is likely to be 22%.
2008 Retail Growth rate 25-28%,Unorganized and organized retail size 300billion US$
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Government Policies
The retail industry in India is growing at asignificant pace. However, there are severalproblems faced by the industry. The majorchallenges for the organized sector include:
Taxation laws that favor small retailers.
Multi-point octroi collection.
According to analysts, for this industry tothrive, Indian retailers need to emulateworldwide retail practices such as accuracyin financial reporting, increased levels ofcorporate governance and greateraccountability among employees.
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Strength
Increasing demand driven by the countrysyoung working population
Increase in per capita income which in turn
increases the household consumption. Improvement in the standard of living.
technology intensive industry.
Consumer spending increasing at 11%annually.
Pattern of consumption changing along withshopping trends
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Weakness
Lack of expertise in Supply Chain.Management.
Inadequate Infrastructure.
Lack of specialized professionals in Industry.
Government Restrictions on FDI.
Lack of huge investments for expansion.
Lack of industry status.
Need to provide Value for Money-squeezingmargins.
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Opportunities
Change in consumer behavior pattern andincrease in disposable income.
Indian rural markets offer a sea of an
opportunity for the retail sector.Upcoming international Players.
Healthy prospect for the fashion industry.
Social factors like dual household incomehas enhanced spending power
Increase in use of credit cards.
Spends moving towards lifestyle products
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Threats
Competition from unorganized Sector tothe organized Sector.
Rising lease/rental costs affecting project
viability. FDI restrictions in the retail sector.
Poor monsoons and low GDP Growth could
affect consumer spending drastically. Differentiate taxation laws hindering
expansion.
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conclusion
The consumers preferences are changingrapidity and becoming highly diversified. It isdifficult for the retail stores to satisfy all theneeds of the customers. The most of theconsumers want to get some attractiveprices, good schemes and offers on everypurchases and a shopping comfort as well .Those who are able to purchase their needs
and want for a month in a bulk prefers to goto the retail chains.
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