Retail_industry_introduction

8/7/2019 Retail_industry_introduction

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Retail Industry in India

Submitted by :

Deepak kumar relhan

Isha Arora

Vineet sachdeva


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Contents

Introduction

Factors governing Indian Retailing

Food sector

Mobile revolution

Kids retailing Clothing & textiles

Consumer durables

Footwear

jewellery

Books, music & gift retail

Drivers of retail change Size of total retail

Size of organised retail

Challenges of retail in India


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Introduction

Retailing includes all the activities involved inselling goods or services consumer for personal,non business use.

The Indian retailing industry is becomingintensely competitive, as more and more playersare striking for the same set of customers. Themajor retail players are Pantaloons, ShoppersStop, Reliance, Big Bazaar etc.

Retail is India's largest industry, accounting forover 10 per cent of the country's GDP and around8 per cent of the employment.


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Forces Governing Indian Retailing1. Consumer Pull: Rising income and greater purchasing

power of the Indian customer and the tremendousgrowth of the middle class in the post-liberalizationera.

2. Growing urbanization leading to a variety ofcustomer needs.

3. Significant increase in the number of brands in theIndian market leading to a larger option set for theIndian customer.

4. Media boom leading to an increased level ofawareness levels and exposure to the internationaltrends and concepts.

5. Psychographic changes in the Indian consumerbehavior.6. Shopping is becoming an outing or a way of family

entertainment that means that families now spendgreater time in shops.


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Indian retail sector is highly fragmented as

compared to the developed as well as the

other developing countries.

The various segments of retail include food,

mobile revolution, kids retailing, clothing &

textiles, consumer durables ,footwear ,

jewellery , books, music & gift, fuel/petrol.


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Food sector

Food dominates the shopping basket in India. TheUS$ 6.1 billion Indian foods industry, which forms44 per cent of the entire FMCG sales, is growingat 9 per cent. Since nearly 60 per cent of theaverage Indian grocery basket comprises non-branded items, the branded food industry ishoming in on converting Indian consumers tobranded food.

1. Food and Grocery2. Food-catering services


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Mobile revolution

The retail market for mobile phones - handset,

is already a US$ 16.7 billion business, growing

at over 20 per cent per year. In comparison,

the consumer electronics and appliance

market looks paltry, at just US$ 5.6 billion,

with growth rate just half of the mobile

market, and that too in a good year.


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Kids retailing

Kids retailing is growing by leaps and bounds in Indiaand those in the industry say it is likely to see 30-35 percent growth per annum. From clothes to stationary,sportswear, outerwear, tailored clothing, eyewear,watches, fragrance, footwear and accessories, the list isendless. Apparel, however, remains the key revenuedriver accounting for almost 80 per cent of total sales.According to industry insiders, The total apparel

market in India for kids is around US$ 2.9 billion, out ofwhich about US$ 780.5 million is branded apparel.


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Footwear

It primarily comprise of footwear for men,women and children.

India is 2nd largest footwear manufacturer inthe world next only to China. Indian footwearmarket is estimated at Rs. 13,750crore out ofwhich organised retail is 37%( Rs.5,200 crore).

Mens footwear is 52%, childrens segment is29%, womens segment 13%

Key players include Bata India, Metro Shoes


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Consumer durables

It comprises of televisions, refrigerators,

washing machines, air conditioners &

microwaves.

It is estimated at Rs. 41,500 crores, and the

organised market is estimated to stand at Rs.

4,300 crores.

Key players include Videocon Plaza, BPL

Gallery.


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Jewellery Retail

2 major segments include gold jewellery &

diamonds. Gold jewellery forms around 80%

of Indian jewellery market.

The gem industry is growing at 20% annually

& currently stands at US$ 3.6 billion.

The segment is dominated by small family

owned retailers.

Tata Group started Tanishq in year 1995


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Books, Music & Gift Retail

The segment is estimated at Rs. 11,500 crores

of which organized retail stands at Rs.1,450

crores.

Key players include Landmark, Crossword.

Landmark is now a part of Trent


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Drivers of retail change

Socio economic factors

Changing income profiles

Age factor Changing role of women & the evolving family

structure

Changing consumption basket

Increased credit friendliness

Geographical dispersion of market potential


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Size of total retail in India

0

100

200

300

400

500

600

700

2008 2009 2010 2011 2012 2013

Series 1


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Size of Organized retail in India

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013 2018

Column1


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Challenges of retail development in

India

Shortage of retail study options (Low retailmanagement skill)

Shortage of trained manpower

Retail not being recognized as an industry in India

High costs of real estate

Lack of adequate infrastructure

Multiple & complex taxation system

Dissimilarity in consumer groups

Restrictions in Foreign Direct Investment


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Future of Retail in India

The retail industry in India is currently growing ata great pace and is expected to go up to US$ 833billion by the year 2013. It is further expected toreach US$ 1.3 trillion by the year 2018 at a CAGRof 10%. As the country has got a high growthrates, the consumer spending has also gone upand is also expected to go up further in thefuture. In the last four year, the consumer

spending in India climbed up to 75%. As aresult, the India retail industry is expected togrow further in the future days

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