Analyzing the factors that have contributed to the

growth of the organized retailing industry and

challenges to its development in India
12 million outlets in India
Contributes 18% to GDP
Expected to grow to $950 billion by 2018
The retail industry is divided into :-
1. Unorganized sector It consists of street carts, pavement shops,
Kirana stores and kiosks
2. Organized sector It includes hypermarkets, supermarkets,
convenience stores, department stores and specialty chains
The organized sector constitutes 7.5% of the total retailing industry. It
is projected to grow to $95 billion by 2018
Key retail segments apparel, food, mobile and telecom, jewellery and
pharmacy
Opportunities
Economic growth has led to a rise in the disposable income
Globalization has created more awareness of the international
developments among Indians
Increasing urbanization
Large rural market to be tapped
Affluent young population and growing number of working women
Changing consumer preferences
The urban consumers place more emphasis on the quality of products and
retail service, store ambience and convenience of shopping
Shopping is becoming more social as consumers are increasingly sharing
their shopping experiences on social networks

Threats
Misconception among the price-conscious middle-class consumers that
the modern retail formats being air conditioned, sophisticated places are
bound to be more expensive
Opportunities
Improvement in supply chain management (SCM) and customer
relationship management (CRM)
Easier to order and track inventory items
Better warehousing facilities
Enhancements in transportation and logistics
Hyper-personalization and consumer adaptability through improved
customer analytics Provide personalized products and efficient services
by analyzing customer behaviour and their past purchase pattern
Omnichannel retailing Provides customer with a seamless shopping
experience whether he is shopping online from a desktop or mobile device,
by telephone or in a bricks and mortar store

Threats
Shortage of skilled manpower
Automation of systems will result in a loss of jobs, especially the
unskilled labour class
Evolution in the sales team being on par with the evolution in technology
Opportunities
Favourable real estate and infrastructural developments
Easy availability of credit and bank loans
Innovative physical and online channels
Increasing service-orientation in company culture

Threats
Fragmented distribution and retailing networks due to large
geographical size
Erratic logistics
Lack of proper storage facilities
Huge costs involved in the initial setup of the supply chain management
system
Evolution in the back-end since the cost to serve in one-piece is greater
than the sum total of the costs of dispatching carton-by-carton
Opportunities
Liberalization of FDI policies
100% FDI allowed under single-brand retailing
51% FDI permitted under multi-brand retailing
100% FDI in online retailing which has led to the growth of
E-commerce companies
Expected adoption of GST which will enable easier movement of
goods across the country, thereby improving retail operations
Limiting the role of regulation and lesser requirement of government
approvals

Threats
States like West Bengal and Tamil Nadu have opposed FDI in retail
and favour the unorganized sector
Provision requiring single-brand retailer with greater than 51%
ownership to source at least 30% of their goods from local small and
medium-sized companies. This has been a major source of delay for
many firms to open their stores in India. Ex. IKEA
 FDI in retail is permitted to 100% under single brand retailing.
Whereas FDI up to 51% is permitted under multi brand retailing.

100% FDI through automatic route under single brand retailing to be

allowed soon.

Among the Indian player D-Mart has emerged as the top retailer and
states the following as their success factor:-
High Inventory turnover ratio.
Owning most of the properties where store exist.
High volume and low margins.

Most of the retailers are targeting Tier II and Tier III as the land is
cheaper and the market is untapped.
 IKEA, the worlds largest furniture retailer, plans to invest Rs 10,500
crore (US$ 1.56 billion) to set up 25 stores across India and hire over
15,000 permanent employees and 37,500 temporary employees to assist in
running its stores
New York-based designer brand Kate Spade will be launched in India
later this year and will set up a network of stand-alone stores across major
cities
Aeropostale, an American teen fashion retailer, has chosen to enter
India over China, and expects India to be among its top three markets over
the next four years with revenue target of Rs 500 crore (US$ 74.12
million).
The Government of Andhra Pradesh signed pacts worth Rs 1,500 crore
(US$ 222.36 million) in a wide range of sectors including retail and steel
and gas with Walmart India, Future Group, Arvind Lifestyle Brands Ltd and
Spencers Retail, during the Partnership Summit in Visakhapatnam.
Thank you

Ankit Kumar 161107

Prashant Purohit 161140
Purva Kakkar 161141
Rahul Dawar 161142
Rajat Soni 161143