organised retali

8/11/2019 Organised Retali

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FUTURE OF

ORGANISED

RETAIL IN INDIA

By-:

Ankita Dubey

Kritika SharmaRananjay Chandra

Shubham Wasan

Siddhant Jain


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RETAIL

According to Kotler: Retailing includes all

the activities involved in selling goods or

services to the final consumers for personal,non business use.

In other words, Retailing is the sale of goods

and services to the ultimate consumer for

personal, family or household use .


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ORGANISED AND UNORGANISED RETAILING

Organised Retailing refers to trading activities undertaken by

licensed retailers, that is, those who are registered for sales tax,

income tax, etc. These include the corporate-backed hypermarkets

and retail chains, and also the privately owned large retail

businesses.


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Unorganised Retailing

Unorganised retailing, on the other hand, refers to thetraditional formats of low-cost retailing, for example, thelocal kirana shops, owner manned general stores, paan/beedishops, convenience stores, hand cart, etc


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Some of the Key Players in

Organised Retail


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INDIAN RETAIL SCENARIO AT A GLANCE

According to IBEF, the total retail sector is

approximately US$ 500 billion.

India's retail sector is estimated to touch US$

850 billion by 2015 and US$ 1.3 trillion by 2018

as reported by Deloitte.

The organized Indian retail market is slated to

grow @ 40%, touching US$ 300 billion by 2018.


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Growth in Indian Retail


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Retail formats in India


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Current retail scenario in India

Source:google


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Organized Retail in Nascent Stage

Organized Retail Penetration (ORP) in India is low (8 per cent)

compared to other countries such as the US (80 per cent).

This indicates strong growth potential for organized retail in India.


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Indian retail market is in its nascent

stage; unorganised players control the

market with 92 per cent market share

during 2012

There are over 12 million mom-and-pop

stores

Organised retail is expected to account

for 20 per cent of the overall retail

market by 2020

Organized Retail in Nascent

Stage(contd..)


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4,000

2006 2011

Speciality stores Number of stores

300

2006 2011

Cash and carry Number of stores

30,000

2006 2011

2

30

2006 2011

Hypermarkets Number of storesSupermarkets Number of stores

Source: indiaretailing.com, Aranca Research

50040

10,000

Organized Retail formats


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Future of Organised retail


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Income growth to derive demand

for organised retail

Multiple drivers are leading to strong growth

There is a consumption boom

Significant growth in discretionary income and changing lifestyles

Easy availability of credit and use of plastic money.

Expansion in the size of the upper middle class and advertisement

has led to greater spending on luxury products and high brand

consciousness


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E-commerce industry in India (USD billion)

E-commerce is expected to be the next major area for retail

growth in India. The industry is projected to increase from USD70

billion in 2011 to USD200 billion in 2020

With growth in the E-commerce industry, online retail is estimated

to reach USD70 billion by 2020 from USD0.6 billion in 2011

Online retail in India (USD billion)

70200

2011 2020EOnline retail in India (USD billions)

2011 2020E

E-commerce industry in India (USD billions)

0.6

10

Rising prominence of Online Retail


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Source: MasterCard Worldwide Insights 4Q 2010, Aranca Research

Notes: APMEA - Asia/ Pacific, Middle East and Africa

APMEA Master card regional online shopping indexThe key drivers for growing

importance of online retail are

young population

Easier access to credit and

payment options.

Increasing internet penetration and

speed, 24-hour accessibility,

convenient and secured transactions

Computer peripherals, camera andmobiles, and lifestyle segments

account for a majority of total

purchases

65 6570

30

25 21

30

25 28

62

31 32 33

6357

38

29

36

20

0

40

60

80

SouthKorea

Japan China India HongKong

GlobalIndex

2008 2009 2010

Rising prominence of Online

retail(cont.)


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Source:Aranca Research

Notes: FMCG - Fast Moving Consumer Goods

Large number of retail

outlets

India is the fifth largest preferred retail destination globally

The sector is experiencing exponential growth, with retail development taking place not

just in major cities and metros, but also in Tier-II and Tier-III cities

Rural markets offersignificant growth

potential

FMCG players are focusing on rural market as it constitutes over 33 per cent of FMCG

consumer base in India With increasing investment in infrastructure, retailers will be able to increase their access

to high-growth potential rural market

Private label

opportunities

The organised Indian retail industry has begun experiencing an increased level of activity

in the private label space

Private label strategy is likely to play a dominant role as its share in the US and the UK

markets is 19 per cent and 39 per cent, respectively while its share in India is just 6 per

cent

Sourcing base

Indias price competitiveness attracts large retail players to use it as a sourcing base

Global retailers such as Walmart, GAP, Tesco and JC Penney are increasing their

sourcing from India and are moving from third-party buying offices to establishing theirown wholly-owned/wholly-managed sourcing and buying offices

Ample growth opportunities in retail

industry


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Retail component attracting 29 per cent of total investment in real estate

26 per cent of the overall investors are interested in investing in Tier II

and III cities

Training and warehouse spacing are the other viable options for

investments

Employment opportunities, increased urban amenities and better lifestyle

opportunities are attracting rural population towards cities for better life style

every year

This could be a major driver for the organised retail sector in future as theworking population would consequently increase

Attractive investment segments


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Thank you !!

organised retali

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