Retail Marketing in

India

RETAIL
Definition : Retail is the sale of goods to
end users, not for resale, but for use and
consumption by the purchaser .The retail
transaction is at the end of the supply
chain.

IMPORTANCE OF RETAIL
MARKET
Economic

Growth
Employment Opportunities
Moves the economy into motion
Provides the consumer a basic
platform to encounter with goods and
a shop keeper

SOME STATISTICS OF
INDIAN RETAIL MARKET
The

total retail sales in India will grow

from US$ 395.96 billion in 2011 to US$
785.12 billion in 2015.

Contributes

to

8%

of

the

total

employment.
Fastest

Economy

growing

sector

in

Indian

CLASSIFICATION OF
RETAIL SECTOR IN INDIA

Traditional Stores


SUPERMARKET

- A self-service
store offering a wide variety of food
and
household
merchandise,
organized into departments

HYPERMARKET

- A hypermarket
(from the French hypermarch) is a
store which combines a supermarket
and a department store

RETAILING SECTORS IN
INDIA
Food

and Grocery
Clothing
Footwear
Gems and Jewellery
Pharmaceuticals
Music
Book
Consumer Durables

FORMATS OF RETAIL
MARKET IN INDIA

Mono/Exclusive
Multi-Branded
Franchised/Owned
Same
Complete
More
Product
choices
Retail
Branded
range
Category
for
Exclusive
Shop
of
customers
product
Retail
of Different
Showroom
Shops
Brand

MAJOR INDIAN RETAIL

PLAYERS IN MARKET

Future

Group
K Raheja Group
Tata Group
RPG Group
Landmark Group
Piramal Group
Subhiksha
Reliance
AV Birla Group

RETAILING IN RURAL INDIA

Haats
Melas
Village

retailer
Mobile retailers
Village market

ORGANISED RETAILING IN
VILLAGES
Godrej

Aadhar

Hariyali

WHY RURAL MARKET?

Large

population
Increasing disposable income
Western influences
Demand for better quality
Desire for luxury

PROBLEMS
Dispersed

population and trade

Low density of shops
Inadequate bank and credit and
investment
Poor storage system

FOREIGN DIRECT
INVESTMENT (FDI)
IN INDIAN RETAIL SECTOR
FDI refers to the net inflows of
investment
to
acquire
a
lasting
management interest (10 percent or
more of voting stock) in an enterprise
operating in an economy other than that
of the investor.

INDIAN PERSPECTIVE
Indian retail sector is largely closed to
outsiders to safeguard the livelihood of
nearly 15 million small store owners
96%
of
the
business
run
by
unorganized retailers
Only 51% foreign investment is
allowed in single brand retail with prior
government permission.
FDI is also allowed in wholesale
business.

HOW TO ENTER INDIAN

MARKET?
CURRENT
PLAYERS

ENTRY

OPTIONS

FOR

FOREIGN

Franchise Agreements

Most widely used entity route by

multinational retailers.
Fast food retailers, Dominos, entered
through master franchise while Pizza Hut
entered through regional franchise.

Cash and Carry

Wholesale Trading

100% FDI is allowed in wholesale trading

which involves building of a large
distribution infrastructure to assist local
manufacturers.
Wholesaler deals only with smaller
retailers and not consumers.

Strategic Licensing
Agreements

Foreign company enters into a licensing

agreement with the domestic retailer.
Mango, the Spanish apparel brand has
entered India through this route with an
agreement with Pyramid, India.

WHY INDIAN MARKET IS SO

ATTRACTIVE
AT

Kearneys study on global retail trends

found that India is least competitive as well
as least saturated of all major global markets.
Good talent pool, unlimited opportunities,
huge markets, availability of quality raw
materials at cheaper costs, is expected to
make India overtake the worlds best retail
economy by 2042.
Market share of organized modern retail is
just over 5% of the total retail industry,
thereby leaving a huge untapped opportunity.

Myths of FDI

Myth 1
Farmers would get higher share of retail
income
with the entry of global organized retail
chains.

FACT
In

US the farm value share of consumer

expenditure for domestically produced
farm foods has steadily declined from
33% to 21% from 1970 to 1994.
According to a European study, the real
farm producer price index of total farm
production fell by 27% over the period
1990-2002 .
- From The Economic
Times

Myth 2
Increase in share of global organized
retail would lower prices in food articles.

FACT
Trends

in the BLS (Bureau of Labour

studies) food price index in US from
1950 to 2007 tend to somewhat mirror
the general Consumer Price Index,
with no steady decrease or increase.

- From The Economic

Times

Myth 3
Global retail chains would procure
directly from farmers.

FACT
Currently

Wal-Mart procures only 20%

(mainly non-food category) of goods
directly from manufacturers.
Most of the organized retailers procure
from large wholesalers and other
intermediaries.

- From The Economic

Times

WHY THE BLAME

CHANGE THE GAME!
GAME?

SAMRIDDHI
Kaushlendra Kumar
IIM-A

Introduced
the
farm
fresh
produce(FFP) retail chain supply
model.
Economic status of 3000 poor
farmers and 500 street vendors in
Bihar has gone up.

CONCLUSION
Indian

Retail Market has a huge room

for development
Development and progress should not
come at others cost
Proper government measures can
assure healthy growth

Presented By Balaji
Rakesh
Unni
Manju
Blesson