Submitted to: Mrs.

Pooja Chopra

Submitted by: Namrata Malhotra SA-1 PGP/SS/2010-2012/SA1/SEM 4




FLOW OF PRESENTATION Retailing : An overview Classification of Indian Retail sector FDI in Indian retailing Entry routes for Foreign Retailers Foreign Companies who want to enter Indian market Why FDI should be permitted? Recommendations .

6 trillion sales annually Indian retailing  Largest employer after agriculture .AN OVERVIEW of RETAIL SECTOR  Retailing  World’s largest private industry US$ 6.8% of population  Highest outlet density in world Around 12 mn outlets  Still evolving as an industry Long way to go  .

Generation of Employment by Retailing 7% 11% 8% 6% 12% 18% 15% 11.70% INDIA CHINA POLAND BRAZIL USA KOREA UK MALAYSIA *DATA OF 2008 .

retailing (%) 80 70 40 Brazil Thailand Korea Taiwan China Malaysia Poland India 40 40 35 35 20 20 20 2 .Organized Retailing as a % of total Retailing Country USA WUC Argentina Current share of org.

Retailing & India  Largest private industry in India  2nd Largest Employer after agriculture  Contributes 10% of GDP  Highest Retail outlet density in the World  Growth @ 2% (1995-2005) .

Segment-wise recent trends & development in retailing  Food and grocery  Textile and apparel  Consumer durables  Music and books  Jewellery  Wooden furniture  Leather footwear  Handicrafts  Fast food chains  Real estate  Fuel retailing .

EVOLUTION OF INDIAN RETAIL Historic/ Rural Reach Traditional/ Pervasive Reach Government Supported Modern Formats/ International Exclusive Brand Outlets Hyper/Super Markets Department Stores Shopping Malls Weekly Markets Village Fairs Melas Convenience Stores Mom and Pop/Kiranas PDS Outlets Khadi Stores Cooperatives .

Classifying Indian retail  Modern Format retailers (organized)  Supermarkets  Hypermarket (3000-5000 sq ft)  Department Stores (1000-2000sq ft)  Convenience Stores (750-1000 sq ft)  Company Owned Company Operated Traditional Format Retailers (unorganized)  Kiranas: Traditional Mom and Pop Stores  Kiosks  Street Markets  Exclusive /Multiple Brand Outlets  .

Weekender . Bata. Health and Glow. DLF(DT cinemas) etc. Hiranandani(Haiko). Reebok. Dedicated brand outlets  Nike. Zodiac etc Multi-brand outlets  Vijay Sales. Viveks etc Manufacturers/ Exporters  Pantaloons.Categories of Indian retail     Corporate Houses  Tatas: Tata Trent  RPG group: Food World. etc  ITC: Wills Life Style  Rahejas(ShoppersStop).

Large Indian retailers    Hypermarket  Big Bazaar  Giants  Shoprite  Star Department store  Lifestyle  Pantaloons  Pyramids  Shoppers Stop  Trent Entertainment  Fame Adlabs  Fun Republic  Inox  PVR .

except in:  Single Brand Products  Hi-Tech items / items requiring specialized after sales service  Medical and diagnostic items  Items sourced from the Indian small sector (manufactured with technology provided by the foreign collaborator)  For 2 year test marketing (simultaneous commencement of investment in manufacturing facility required) .FDI in Indian retailing  Current Indian FDI Regime  FDI not permitted in retail trade sector.

It also has right to retail in India . Gets royalty in return  In case master franchise is appointed for region or country. he has right to appoint local franchisees  Nike. Marks and Spencer. Pizza Hut. Mango  Manufacturing  Company sets up Indian arm for production  Bata India.Entry Routes of Foreign Retailers  Franchise  International company gives name and technology to local partner. Tommy Hilfiger.

Hugo Boss  Wholesale trading  Cash and Carry operations  100% FDI permitted  Metro Cash n Carry .Entry Routes of Foreign Retailers  Distribution  International company sets up local distribution office  Supply products to Indian retailers to sell  Also set up franchised outlets for brand  Swarovski.

(51% share of armani)  2nd biggest retailer France’s CARREFOUR by 2009.COMPANIES WHO WANT TO ENTER INDIAN RETAIL MARKET  WALMART (world’s largest turnover company) with BHARTI  Italian designer GIOGRGIO ARMANI with DLF ltd. .  Britain’s MARKS & SPENCER wants to expand in India.

WHY FDI SHOULD BE PERMITTED?    Improve competition Develop the market Greater level of exports due to increased sourcing by major players  Sourcing by Wal-Mart from China improved multifold after FDI permitted in China  Similar increase in sourcing observed for Metro in India  Provides access to global markets for Indian producers .

WHY FDI SHOULD BE PERMITTED?   Investment in technology  Cold storage chains solve the perennial problem of wastage  Greater investment in the food processing sector technology  Better operations in production cycle and distribution Better lifestyle  Greater level of wages paid by international players usually  More product variety  Newer product categories  Increased purchasing capacity of consumers .

WHY FDI SHOULD BE PERMITTED?     Manpower and skill development  Through retail training  Greater managerial talent inflow from other countries Tourism Development  A strong retailing sector boosts tourism as seen from the experience of Singapore and Dubai Investment in whole supply chain  Improved product basket from India for exports Long term benefits  Up-gradation of agriculture  Development of efficient small and medium size industries .

As the people also accept the retailing it will be an advantage to them also. So the government should also open the retail sector to the foreign investment. 'FDI in retailing is the need of the hour' .CONCLUSION FDI in retailing would surely an advantage to India and it would also help India in becoming 'developed country'. So. as it also serves as an employment generator.

RECOMMENDATIONS  Allow FDI in Retailing  First bring foreign companies in less sensitive sector.  FDI regime should be gradual  Invest in supply chain infrastructure  Provide retailers with easy access to finance .


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