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Swapna Pradhan 3ed.

Retailing Management

Learning Objectives

The evolution of retail in India Key sectors in Indian retail Factors affecting the growth of retail in India The aspect of FDI in retail Challenges faced by Indian retail


Swapna Pradhan

Retailing Management 3ed.

Retail In India: Some Facts & Figures


India has emerged as the fourth largest economy in the world in terms of Purchasing Power Parity It is the twelfth largest consumer market in the world Almost 21 million people are believed to be employed in the retail sector, which is 7% of the total national workforce

But, retail has not yet been accorded the status TMH Swapna Pradhan Retailing Management 3ed. of an industry

The Concept Of Organised Retail


Unorganised sector- units whose activity is not regulated by any statute or legal provision, and/or those which do not maintain regular accounts Unorganised form of retail - those forms of trade which sell an assortment of products and services ranging from fruits and vegetables to shoe repair Organised form of retail- typically a multi-outlet chain of stores or distribution centres run by TMH Swapna Pradhan Retailing Management 3ed. professional management

The Evolution Of Retail In India



Swapna Pradhan

Retailing Management 3ed.

Drivers Of Retail Change In India


Socio-economic factors Changing income profiles The age factor The changing role of women and the evolving family structure The changing consumption basket Increased credit friendliness Geographical dispersion of market potential
TMH Swapna Pradhan Retailing Management 3ed.

The Size Of Retail In India

Food and Grocery

Fresh groceries, branded packaged foods, personal hygiene products and toiletries and dry unprocessed groceries Fast Food, cafes, restaurants, locations offering catering services Fabric manufacturers and readymade garments Televisions, refrigerators, washing machines, air conditioners and microwaves Footwear for men, women and children Mainly, Gold Jewellery & diamonds Various Books, Music and Gifts

Size (Rs.)
Total-1200,000 crore Organised- 5000 crore

Key players
Food Bazaar, Subhiksha, Reliance Fresh

Food Services

Total-57,000 crore Organised- 3,940 crore Total-113,500 crore Organised- 21,400 crores Total-41,500 crore Organised- 4,300 crore Total-13,750 crore Organised- 5200 crore Total-52,000 crore Organised- 1,450 crore Total-11,500 crore Organised- 1,450 crore

McDonalds, KFC, Jumbo King, Barista, Caf Coffee Day Arvind Brands, Madura Garments, Raymonds, Park Avenue Strong regional playersVideocon Plaza, BPL Gallery, Vijay Sales Bata, Metro Shoes, Lakhani, Adidas , Reebok Tanishq, Gili Land Mark, Crossword, Higginbothams, Oxford Bookstore

Clothing & Textiles

Consumer Durables

Footwear Jewellery Books, Music and Gifts


Swapna Pradhan

Retailing Management 3ed.

Rural Realities: Beyond Urban Boundaries


What is rural?

Any habitation where the population density is less than 400 per Where at least 75 per cent of the male working population is engaged in agriculture Where there isnt any municipality on board

Rural Retail opportunities - Spurt in the purchasing capacity of farmers

- Marketable surplus of farm produce

- High incomes combined with low cost of living - Consists of approximately 128 million households Current Hariyali Kisan Retailing Bazaars TMH key players- ITC- e-choupal, Swapna Pradhan Management 3ed.

Foreign Direct Investment In Retail


IMF-OECD Glossary of FDI terms and definitions

Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated."
Swapna Pradhan Retailing Management 3ed.


In short, FDI is a method of allowing external

Foreign Direct Investment In Retail


In India, FDI in retail is not allowed An international retailer can enter the Indian retail market through Hi-Tech items/ items requiring specialized after sales service Social sector items Medical and diagnostic items Items sourced from the Indian small sector Two-year test marketing
TMH Swapna Pradhan Retailing Management 3ed.

Challenges To Retail Development In India


Lack of recognition as an industry High costs of real estate Very high stamp duties on transfer of property Lack of adequate infrastructure Multiple and complex taxation system


Swapna Pradhan

Retailing Management 3ed.

Five Forces Of Competition


Bargaining power of suppliers

Potential Entrants

Threat of new entrants


Industry Competitors Rivalry among existing firms


Threat of substitute products or services

Bargaining power of buyers Substitutes

Source: Competitive Strategy, Michael Porter, pg 4


Swapna Pradhan

Retailing Management 3ed.