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Finalfdiinretailppt 101011161658 Phpapp01
Finalfdiinretailppt 101011161658 Phpapp01
Investment done by citizens and government of one country (home country) invest in industries of another country (host country).
Automatic Route
Government
No permission required
2000-06 FDI allowed up to 100% in specified sectors. FDI limits increased. Procedures further simplified The top 3 Indian Regions attracting the highest FDI. Mumbai, Delhi and Karnataka. Account for nearly 62% of the total FDI.
By Target By Motive
Mergers and Acquisitions Horizontal FDI Vertical FDI. *Backward Vertical FDI *Forward Vertical FDI
Barter system
Government Stores
51% 100%
Incentives attract FDI. Market size and potential are sufficient inducers.
GRDI Position : 3rd Size : $ 400 billion Growth Rate : 13% GDP contribution : 12% Major sector : Food and Grocery Employment : 2nd largest industry (35.06 million) Types: Organized ( 5%) Unorganized ( 95%)
Format
Description
Retailers
Hypermarkets
Cash and Carry Departmental stores Supermarkets Shop-in-shop Specialty stores Category killers
Discount stores
Convenience stores
Retail Segment
Major retailers
63%
9% 5% 5% 4% 4% 3% 3% 2%
Retail trade in Europe employs 15% of the European workforce (3 million firms and 13 million workers). The worlds population is poised to expand 50% by 2050.
14% 8% 20%
China USA
US Sales: $374.5 bn
US Sales: $77.3 bn
Stores: 2,258
China
India 0 20 40 60 80 100
US
Unorganised 15% Organised 85%
India Focus on Services High labor cost Home grown Capital Old technology Democratic Government
China Focus on Industry Low Labor Cost FDI Adaptability to Latest technology Communist Government
Source: McKinsey&Company
Lower class
Brand consciousness.
60 % of population below age of 30. Awareness through World Wide Web.
Source: McKinsey&Company
Lower class
Employment generation.
Second-largest employer after agriculture.
Technology Better use of resources and goods. Wastage and Storage problems will be
resolved.
Efficient logistics, production, and distribution channels.
Digital records.
Rural market.
Robust Consumption. 70% Indian households. 2/5 of the countrys total consumption pie. Accounts to 45% of GDP.
FDI in Retail sector will resolve problems regarding foreign exchange in India.
The life-long basic needs will keep on driving the Retail Industry.
SKILLED WORKERS
INFLATION COMPETITION
TAXATION POLICIES
MARKET POWER
Pantaloons Reliance Bharti retail RPG Lifestyle K raheja Subhiksha Piramyd Trent Vishal group
GLOBAL
INDIAN
Clustering of outlets.
AVERAGE SIZE 800 sq. feet 1000 sq. feet 8000 sq. feet
Specialty Stores
Shop-in-Shop
Single-category
Within Large malls
FORMAT
Supermarket Department Stores Cash and Carry Hypermarkets
AVERAGE SIZE
Large in Size Typical in layout 10,000 60,000 sq. feet 75,000 Sq. feet 50,000 1,00,000 sq. feet
Unorganized Organized
95%
5%
Potential of Indian Market is US$ 200 billion whereas India is just earning its 3%.
Shrinkage
Additional Intermediaries
Technology Hurdles
In India every year there is pilferage of US$ 65 billion whereas in USA it is just 1-2%.
Due to lack of proper storage infrastructure postharvest losses of farm produce is Rs. 1 trillion cr.
annually.
In terms of corruption India stands at 85th position. Because of paper work, corruption is present along the entire supply chain.
India is still in developing stage in installing and managing an effective IT system especially in rural areas which hampers the overall growth of organized retail sector.
Taxation laws in India favors only small retail businesses. Implementation of non-uniform VAT across states. Octroi and entry tax in some states.
No Automatic Approval for FDI- Only 51% FDI is allowed to one brand shops in Indian retail sector.
Liquidity pressure
Indian retail sector : Employs 8% (35 million)of the working population. Could yield 12 to 15 million retail jobs in the coming five years.
Store Operations
Merchandising
Marketing
Level
Skills Required
Skill Gaps
Customize
Purchase executive
Communication
Level
Store Manager/ Department Manager
Skills Required
Management Proficient Tools Sales Promotion Programms
Skill Gaps
Cross Functional Activities Man Management Skills knowledge.
Skills Required Availability of merchandise. Maintenance Design/modify the logistic schemes. Negotiation with warehouse owners.
Knowledge of data analysis. Understand customer behavior. Coordinate with media agencies.
Store Characteristics
Demand
Communication Skills
Multi Tasking
Supply
Limited Retail Training
Opportunities
Higher Level Skills
The Retailers Association of India (RAI) - Diploma and Degree Programs in Retailing - Bharti Retail and Vishal Retail - 5,000 trained persons
4-5%
30-33%
10-15%
50-53%
Employment.
Unfair competition. Under-developed organized retail sector.
FDI can be a powerful catalyst to spur competition in the retail industry. It can bring about: Supply Chain Improvement Investment in Technology Manpower and Skill development Efficient Small and Medium Scale Industries Increase in exports
Shoppers Stop has plans to invest Rs250 Crore to open 15 new supermarkets in the coming three years.
Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million to add up to existing 2.4 million sq ft retail space. .
Timex India will open another 52 stores by March 2011 taking its total store count to 120
Investment into warehouse and cold storage chain will result in significant efficiency on supply chain.
Farmers benefited through direct marketing and contract farming programme. Improves farm production through modern techniques.
Expected Growth
1.4
CAGR 10%
1.3
1.2
1 0.8 0.6 0.4 0.2 0 2008 2011 2013 2018 0.35 0.59 0.83
In the last four year, the consumer spending in India climbed up to 75%. By the year 2013, the organized sector is also expected to grow at a CAGR of 40%. The total number of shopping malls is expected to expand at a CAGR of over 18.9 per cent by 2015.
?????
To develop our rural sector ,should conditionalitys be put on the FDI funded chains relating to employment? For example, should we stipulate that at least 35% of the jobs in the retail outlets should be reserved for the rural youth?
Urban migration Opportunity to urban and rural unemployed Alternative incentive schemes
Industry experts predict that the next phase of growth in the retail sector will emerge from the rural markets. By 2012 the rural retail market is projected to have a total of more than 50 per cent market share.
Apparel, along with food and grocery, will lead organised retailing in India.(RNCOS)
?????
What additional steps should be taken to protect small retailers? Should an exclusive legal and regulatory framework be established to protect their interests?
National legal framework cannot be effective. Hamper growth in retail sector. Incentives directly to benefit small retailers.
Allow access to the small retailers to the stores through special windows.
Thank You