Unit I

Introduction to Retailing
 Unit I

Introductions to Retailing

Retailing Meaning & Definition

Retailing is derived from the French word Retailier, which means, to

cut a piece of.

Thus, retailing can be defined as a set of business activities that adds

value to the products and services sold to the final customers for their

personal, family or household use.

A retailer is the key player in the marketing process as he regularly

interacts with the end customer.

From a marketers point of view, retailing can be defined as a set of

marketing activities designed to provide satisfaction to the end customer

and profitably maintain the customer base by continuous quality

improvements across all areas concerned with selling goods and services.

What is retailing?
 Retailing is a distribution channel function where one organization buys

products from supplying firms or manufactures the product themselves,

and then sells these directly to consumers.

A retailer is a reseller (i.e., obtains product from one party in order to sell

to another) from which a consumer purchases products.

Retailing Involves

1. Understanding the needs of the consumers.

2. Developing good assortment of merchandise

3. Displaying the merchandise in an effective manner so that consumers

find it easy and attractive to buy.

Who is Retailer?

A retailer is any business establishment that directs its marketing efforts

towards the end users for the purpose of selling goods and services.

Retailers comprise street vendors, local kirana stores, supermarkets, food

joints, saloons, airlines, automobile showrooms, video kiosks, direct

marketers, vending machine operators, etc.

 an organization qualifies to be a retailer only when it derives a major

chunk of its revenues from its transactions with end users.

Thus, a seller is said to have conducted a retail transaction when he sells

goods to the end consumer while a wholesale transaction is conducted

only when the seller sells goods to a business concern.

List of retail institutions operating in the Indian market

Motor vehicle dealer Shoe store

Catalog and mail-order houses Florists

Motorcycle dealers Grocery stores

Food stores Liquor stores

Childrens and infants wear stores Hardware stores

Radio, television , and consumer

Retail bakeries
electronics stores

Camera and photographic supply

Book stores
stores

Fuel dealers Stationery stores

Lumber and other building material Mens and boys clothing and
dealers accessory stores

Drapery, curtain and upholstery

Home furnishing stores
stores

Womens accessory and specialty stores Womens clothing stores

Sewing, needlework, and piece goods

Used merchandise stores
stores

Musical instrument stores Dairy products stores

 Luggage and leather goods stores Variety stores

Department stores Eating places

Sporting goods stores and bicycle shops Tobacco stores and stalls

Gift, novelty, and souvenir shops Gasoline service stations

Family clothing stores CDs and VCD stores

Apparel and accessories stores Paint, glass and wallpaper stores

Hobby, toy, and game shops Candy, nut and confectionery stores

Optical goods stores Household appliance stores

Jewelry stores Floor covering stores

Furniture stores Fruits and vegetable markets

Retail nurseries, lawn and garden supply

Drug stores and proprietary stores
stores

Retailers Role in Distribution Channel

A retailer is a last entity in the distribution channel.

Retailers include all businesses and individuals who actively participate in

the transfer of ownership of goods and services to their end users.

Manufactur Final
er Wholesaler Retailer Consumer
 A retailer usually plays the role of an intermediary, which links the

producers, wholesalers, and the other suppliers with consumers.

Companies generally prefer to specialize in manufacturing the products,

leaving the task of selling the products to an outside party i.e. few

wholesalers or retailers.

Functions of Retailer / Benefits of Retailing / Service of a

Retailer

A) Benefits to Consumers

Retailer act as buying agents for consumers. They perform various

business activities that increase the value of the goods and services they

sell to the end consumer. If there were no retailers in the distribution

system, consumers would have to personally visit the manufacturers to

procure the goods and services required by them. As a buying agent, a

retailer performs various activities to satisfy the end consumer.

These activities include:

 1. Breaking bulk

2. Providing assortment

3. Holding inventory

4. Providing after sales services

5. Providing information

1. Breaking Bulk

Breaking bulk refers to delivering single units from distribution centers

to retail outlets rather than the multiple units bundled together by

manufacturers termed casepacks. The focus is largely on the benefits

to space management at the retail level, rather than the more obvious

reduction in inventory costs. Using data from the grocery industry,

results indicate that retail unit profitability can be increased

substantially by breaking bulk - but only if current inventory

replenishment practices are changed. In essence, breaking bulk allows

for either higher product variety within a store or identical variety in

smaller stores. This work seeks to quantify the order of magnitude of that

benefit.

2. Providing Assortment

Retailers evaluate the products of various manufacturers and offer the

best collection of products from which the customers can select the
 product of his/her choice. Retailers select the product assortment

depending on the testes and needs of their target customers. The variety

in assortment offered makes the buying process easier.

3. Holding Inventory

Retailers carry inventory and make the products available to customers

at a convenient place and time. Retailers make it possible for consumers

to make instant purchases. This reduces the cost of storage and enables

the consumer to invest his money profitable.

For example, a customers can walk into an electronic goods showroom

and buy a music system whenever he wants, or pick up music album

from any music album from any music retail outlet. Such spontaneous

shopping would not be if retailers do not stock the goods.

4. Providing Services
 Apart from selling goods, retailers also provide a variety of value added

services, which make it easier for customers to buy and use products.

These services include providing free home delivery, accepting credit

cards, accepting payments on installments basis, arranging loans, etc.

5. Providing Information

Retailers play a major role in providing product related information to

their consumers. Retailers use advertising and in-store salespersons to

provide product information, which helps the consumer to simplify his

purchasing process.

B) Benefits to Manufacturers and Wholesalers

Manufacturers and wholesalers consider retailing as a channel for

delivering their products/ services to the end customer. By selling

products and services (of a manufacturer on a much larger scale),

retailers provide the manufacturer with greater revenues, which could be

reinvested in production and sales of the manufacturers products.

Retailers function as the sensory organs of manufacturers. While

designing new products or upgrading an existing product, manufacturers

depend on retailers to gather information regarding the tastes and

 preferences of customers. Retailers provide feedback on the goods and

services offered by them. This helps them to make modifications to the

existing products or launch new products to satisfy the needs of

customers.

Retailers also share some of the risks of the manufacturers by paying for

the goods before they are actually sold to the final customer.

A retailer is exposed to three types of obsolescence risks:

1. Physical Obsolescence

2. Technological Obsolescence

3. Fashion Obsolescence

1. Physical Obsolescence

Physical obsolescence risk arises from the damage or wear out caused to

the products while they r stored in the retail outlet. This type of risk is

common for stores dealing in handicrafts, books, greeting cards, gift

items etc.

2. Technological Obsolescence
 Retailers dealing in high technology products that are upgraded very

frequently face risk of technology obsolescence. Retailers who deal in

personal computers and computer components face this risk quite often.

In this industry (computers), upgraded versions are introduced very

frequently and these are available at a lesser price than that of the lower

versions, which may result in severe losses for the retailer.

3. Fashion Obsolescence

Fashion obsolescence risk is very common for apparel retailers who deal

in merchandise of varying style, design or color.

C) Benefits to the economy

The retailing business is the largest private industry in the world with a

turnover of US $6.6 trillion.

Retailing plays a crucial role in the management of world economy and

retailers and retailers constitute a tenth of the Fortune 500 companies.

In India, retailing accounts for over 10 per cent of the countrys GDP

and around eight per cent of the employment, only next to the

agricultural industry.
 The value of the total retail trade in India was Rs. 400,000 crore in 1999

and analysts feel that this will increase at the rate of 20 per cent every

year and touch Rs. 800,000 crore by the year 2005.

In the year 2000 Indias per capita GDP was $ 468 and per capita retail

sales amounted to $ 220.

Characteristics of a Retailer

1. Acting as the last link in the chain of distribution.

2. He purchases goods in large quantities from the wholesaler and sell in

small quantity to the consumer.

3. He deals in general products or a variety of merchandise.

4. He develops personal contact with the consumer.

5. He aims at providing maximum satisfaction to the consumer.

6. He has a limited sphere in the market.

Types of Retailers
 Types of
Retailers

Itinerant
Fixed Retailers
Retailers

Small-scale Large-scale
Hawkers
Retailers Retailers

Second-
Departmental
Pedlars Hand Goods
stores
Dealers

Cheap Street Stall- Mail-Order

Jacks Holders Houses

Market General Co-operative

Traders Shops Stores

Street Special
Multiple Shops
Traders Shops

United
Chain Stores
Stores

Hire Purchase
Shops

Super
Markets

Fixed-price
Shops
A) Itinerant Retailers
Included under this heading are those retailers who do not possess any

shop of their own and who move from place to place to sell their wares.

They are travelling or wandering sellers and include the following types:

a. Hawkers

b. Pedlars

c. Cheap jacks

d. Market traders

e. Street traders

f. One-price shops.

Their common characteristic features are

(a) They do not have fixed shops of their own.

(b) They carry very little stock either on their heads or on bicycles or on

hand-carts.

(c) Their capital investment is very small.

(d) They do not stick to a particular line of business throughout the year.

(e) They move from place to place in order to sell their wares.

(f) They do not have fixed hours of work or even fixed days of work.

(g) They operate at the minimum cost.

(h) They provide door-to-door service moving about in residential localities

and selling their wares.

(a) Hawkers

They are itinerant traders who move about in residential localities with

their wares usually on bicycles or hand-carts. They usually deal in

consumer goods of a cheap nature. Their range of merchandise varies

from vegetables, fruits to toys, bangles, plastic utensils etc.

(b) Pedlars

They carry their wares on their heads or on their back and move from

one house to the other in the residential localities of a city. They also deal

in cheap goods and usually cater to the needs of the low- income gentry.

(c) Cheap Jack

They do not stay long at one place of business but differ from pedlars

and hawkers in the sense that while the latter do not have shops of their

own, cheap jacks do hire small ships in residential localities to display

their wares. They shift from locality to locality according to the prospects

of getting business.

(d) Market Traders

They are a type of small-scale sole-proprietors who hold stalls at different

places in different localities on fixed days known as market days which

may be once a week. They deal in a variety of cheap goods which are of

consumers interests and which are needed in every household daily.

Toys, cheap cosmetics, cheap readymade garments for kids, imitation

jewellery, sewing and knitting material, etc. are a few examples of the
 items which they usually stock. Market traders are temporary in nature,

in the sense that they do not permanently establish their stalls in

particular place, rather they move from one market place to another.

(e) Street Traders

They are pavement retailers who display and sell their products from

pavements/ footpaths. They are usually seen in crowded cities and

handle light goods.

(f) One-price Shop

It is a typical retail trading where the distinctive feature is the sale at

uniform price of low-priced articles of large variety which are in

continuous demand e.g., pens, toys, handkerchiefs, socks, etc.

Small Independent Retailers

(i) Street Stall-Holders

Such retailers operate on a small-scale from small shops erected in busy

market places. They buy goods in bulk from wholesalers and also from

local sellers, and resell them to customers. Their field of operations is

 very small and limited. They are usually sole traders and deal in goods

needed by customers in their day-to-day use.

(ii) Second-Hand Goods Dealers

They deal in used second-hand goods like books, garments (readymade),

utensils etc. They get their supplies from private or public auctions and

even from private households. Such retailers usually cater to the needs

of poor people who cannot afford to buy new articles.

(iii) General Shops

Such retailers also known as General Merchants and deal in a variety of

merchandise. They have established shops in the market place and stock

goods ranging from food products to daily house needed articles. They

are managed by owners and often employ counter-salesmen to assist

them in their selling activities. They even sell on credit to established and

old customers and also provide free-home delivery facility.

(iv) Specialty Shops

They are retailers who deal only in one line of goods, e.g., books, drugs,

shoes, etc. They operate from established shops by owners themselves,

and since they deal in a particular line of product only, the retailers often

possess sufficient specialized knowledge about the product.

 Large-scale Retailers

a. Department Store
Large retail establishment with an extensive assortment in variety and

range of goods, organized into separate departments. All departments are

housed under the same roof to facilitate buying, customer service,

merchandising, and control.

b. Mail-Order Houses

Method of selling in which buyers and sellers do not make face-to-face

contact. Mail order firms (also called direct mail firms) use personalized

letters and catalogs (disparagingly called junk mail) mailed on the basis

of highly specialized address lists (called mailing lists) sold by mailing

research firms. They also generate enquiries and orders through

advertisements in suitable media including internet. Except industrial

equipment and too bulky goods, almost everything is sold through mail

order, generally at lower than retail store prices.

c. Co-operative Stores

Firm owned, controlled, and operated by a group of users for their own

benefit. Each member contributes equity capital, and shares in the

control of the firm on the basis of one-member, one-vote principle (and

not in proportion to his or her equity contribution).

d. Multiple Shops
 A retail shop that has multiple locations but has common ownership and

management. This is often called a retail chain. Opposite of mom and

pop store.

e. Chain Stores

Group of retail outlets owned by one firm and spread nationwide or

worldwide, such as Body Shop, K-Mart, Wal-Mart. Chain stores usually

have (1) similar architecture, (2) store design and layout, and (3) choice of

products.

f. Hire Purchase Shops

A system by which a buyer pays for a thing in regular installments while

enjoying the use of it.

During the repayment period, ownership (title) of the item does not pass

to the buyer. Upon the full payment of the loan, the title passes to the

buyer. UK term; the usual US term is installment buying.

g. Super Markets
A large store that sells a variety of food and household items to

customers.

h. Fixed-price Shops
Different products are available at the same price.
The goods dealt in care of low price and meant for common people.
Goods are sold on cash basis.
There is no bargaining between the seller and the purchaser as the prices

of the commodities are fixed.

The shops are usually situated in the busy shopping centres near railway

stations or bus stands.

 Marketing Concepts Applied To Retailing

A retailer must engage in planning, research and analysis before implementing

a marketing strategy. At the core of any retail marketing plan is the mix

consisting of the four Ps (Product, Price, Place and Promotion) of marketing.

Product

In general marketing terms, the product decision involves deciding what

goods or services should be offered for sale to a particular group of

customers.

An important aspect of this element of the mix is new product

development.

Product decisions also involve choices regarding brand names,

guarantees, packaging and the services that should accompany the

product offering. Guarantees can be an important component of the

product offering.

Product decisions also involve choices regarding brand names,

guarantees, packaging and the services that should accompany the

product offering. Guarantees can be an important component of the

product offering

According to many retailers, the product is the most important element

of the retail mix. Selecting what to sell, making the right purchasing

decisions, organising stock management and arranging how to display

 product ranges is so fundamentally important to retail management.

According to many retailers, the product is the most important element

of the retail mix. Selecting what to sell, making the right purchasing

decisions, organising stock management and arranging how to display

product ranges is so fundamentally important to retail management

Price

Price is a key element of the marketing mix because it represents, on a

unit basis, what the company receives for the product or service that is

being marketed.

It is the only element of the marketing mix that creates revenue, while all

of the other elements represent costs.

Because price affects the value that customers perceive they get from

buying a product, it can be an important element in their purchase

decision

Another strategy is to launch a low-price version of an existing product

targeted at price-sensitive consumers

Many factors affect retail pricing policies. Choosing products and setting

prices is an important part of retail management and the next element of

the mix, place, focuses on where to sell the product assortment

Place
 Place considerations involve decisions concerning the distribution

channels to be used and their management, the locations of outlets,

methods of transportation and inventory levels to be held.

The objective is to ensure that products and services are available in the

proper quantities, at the right time and place

Distribution channels consist of organisations such as retailers or

wholesalers through which goods pass on their way to customers.

Producers need to manage their relationships with these organisations

well because they may provide the only cost-effective access to the

marketplace

Promotions

Retailers constantly communicate with their customers using a variety of

methods and approaches.

Retail promotions involve the management of elements of the promotional

mix, which include advertising, sales promotions, digital and direct

marketing, personal selling, sponsorship and public relations.

 By these means the target audience is made aware of the existence of a

product or service and the benefits (both economic and psychological) it

confers on customers

Retail as a Career

Retail is a people-centric industry, and is one industry which

simultaneously can expose you to many skills and disciplines. It offers

many choices in terms of a career, chief among them are:

1. Buying and Merchandising

Merchandising and Buying is often termed as a combination of art and

statistics. It is a key function for any retailer as this department is

responsible for the procurement of merchandise to be sold in the stores

by it, sourcing it from vendors or manufacturers.

Key tasks in this career area include the selection of vendors, costing of

merchandise procured, allocation of merchandise to the stores,

developing distribution plans and calculating gross margins.

A key aspect to be remembered is that very often, it may require

extensive traveling to locate vendors and exclusive merchandise for the

retail stores.
2. Marketing

In retail, marketing functions may be centralized and may include

different departments like advertising, sales promotion, and public/press

relations.

Marketing would also look at ways of understanding the customer and

his behavior by way of focus groups and analysis of customer buying

patterns to develop strategies and plans that guide marketing

components like advertisement, websites, store signage, etc.

The size of the retail organization would determine whether various

functions would be in one department or would be divided into various

combinations.

3. Store Operations

Retail professionals in the store operations career area oversee the overall

store operations and profits.

Positions include Head of Store Operations, Regional Manager and

District Manager, and responsibilities in this area may include managing

staff functions like loss prevention and/or human resources.

 Responsibilities in operations may vary from being responsible for a

department, floor, the entire store or a group of stores.

4. Sales

Very often, sales are considered to be a part of store operations. Positions

in sales include sales associate, cashier, store stock associate and stock

receiver. The primary duty of a sales staff is to serve customers on the

selling floor, actually selling goods. However In front-end sales staff may

also be involved in receiving merchandise into the store, counting it and

then displaying it on the store shelf. Responsibilities would also include

receiving merchandise returned by customers. These front-end positions

need the ability to deal with people, flexibility and importantly, the ability

to working teams.

5. Finance

The finance retail career area includes all accounting and treasury

functions like accounting for income, paying expenses, compiling and

maintaining financial records, money management and cash flow control,

banking, investment and managing credit lines.

Auditing of stores for merchandise and money may also be a part of the

responsibilities of this department.

With the rapid development of retail in the country, understanding and

implementing project finance may also emerge as a key area of

responsibility in the next few years.

6. Human Resources

Human Resource in retail may range from recruiting and hiring

employees to larger areas like identifying training needs at various levels

within the organization and then designing and implementing the

programmes.

Responsibilities may also include overseeing compensation and benefits,

and planning for and ensuring legal compliances in hiring and

employment practices.

It is necessary to remember that retail is a people focused business, but

at the same time, it calls for long working hours at both the front and

back end.

The Human Resources department, needs to understand these aspects of

the retail business while creating and implementing performance

appraisals and promotions.

7. Technology and e-commerce

Retail is one of the most mature users of information technology. From

RFID implementation to e- technology-driven training programs delivered

over satellites or the internet, to state-of-the-art cash register and credit

systems.
 Careers in this department may involve the overall responsibility for the

data processing efforts within the chain, including systems design,

programming, computer operations, and information systems (IS).

A retailer who has a presence in the e-commerce segment may also look

for individuals who may be made responsible for strategy development,

procurement of merchandise, fulfillment of orders and payments as

specific areas.

8. Visual Merchandising

Visual merchandising is largely associated with creating the look of the

store. Visual merchandisers are responsible for the total merchandise or

service presentation, the overall business image, and even the building

and placement of design elements.

The increase in competition has necessitated retailers to differentiate

themselves from the competition. While products and services are the

primary methods of differentiation, visual merchandising is fast

becoming an area of differential advantage, as it is believed that

attractive displays attract and stimulate, which in turn is believed to

cause increased sales.

9. Supply Chain Management and Logistics

Supply chain management and logistics are fast emerging as key focus

areas in retail. Supply Chain Management is the integrated management

 of the flow of materials and products, services and information from raw

material suppliers, through operations, to the final customer and back

again.

Supply chain management and logistics is an integral factor affecting

cost. Effective management of the supply chain enhances profitability.

Depending on the size of the organization, a job in supply chain

management may involve analyzing and negotiating contracts with

suppliers, manufacturers and/or distributors, capacity and production

planning, resource allocation and facility location and scheduling the

transportation and logistics of a product/service to its final destination.

Retail in India: Industry Structure

Retail in India - Overview
The retail industry in India is highly fragmented and unorganised. Earlier

on retailing in India was mostly done through family-owned small stores

with limited merchandise, popularly known as kirana or mom-and-pop

stores.
In those times, food and grocery were shopped from clusters of open

kiosks and stalls called mandis.

There were also occasional fairs and festivals where people went to shop.

In the twentieth century, infusion of western concepts brought about

changes in the structure of retailing. There were some traditional retail

chains like Nilgiri and Akbarallys that were set up on the lines of western

retail concepts of supermarkets.

The government set up the public distribution system (PDS) outlets to

sell subsidised food and started the Khadi Gram Udyog to sell clothes

made of cotton fabric. During this time, high streets like Linking Road

and Fashion Street emerged in Mumbai. Some manufacturers like

 Bombay Dyeing started forward integrating to sell their own

merchandise. Shopping centres or complex came into existence, which

was a primitive form of todays malls.

Since liberalisation in early 1990s, many Indian players like Shoppers

Stop, Pantaloon Retail India Ltd (PRIL), Spencer Retail ventured into the

organised retail sector and have grown by many folds since then. These

were the pioneers of the organised Indian retail formats. With the

opening up of foreign direct investment in single-brand retail and cash

and-carry formats, a new chapter unfolded in the retail space. Many

single-brand retailers like Louis Vuitton and Tommy Hilfiger took

advantage of this opportunity.

Major Factors Responsible for the Growth of Retailing in India

1. Growth of middle class consumers: In India the number of middle class

consumer is growing rapidly. With rising consumer demand and greater

disposable income has given opportunity of retail industry to grow and prosper.

2. Increase in the number of working women: Today the urban women are

literate and qualified. They have to maintain a balance between home and

work. The purchasing habit of the working women is different from the home

maker.3. Value for money: Oganised retail deals in high volume and are able

to enjoy economies of large scale production and distribution. They eliminate

intermediaries in distribution channel.

4. Emerging rural market: Today the rural market in India is facing stiff

competition in retail sector also. The rural market in India is fast emerging as

the rural consumers are becoming quality conscious.

5. Entry of corporate sector: Large business tycoons such as Tatas, Birlas,

and Reliance etc. have entered the retail sector. They are in a position to

provide quality products and entertainment.

6. Entry of foreign retailers: Indian retail sector is catching the interest of

foreign retailers. Due to liberalisation multinationals have entered out country

through joint ventures and franchising. This further is responsible for boosting

organised retailing.

7. Technological impact: Technology is one of the dynamic factors responsible

for the growth of organised retailing. Introduction of computerization, electronic

media and marketing information system have changed the face of retailing.

Organized retailing in India has a huge scope because of the vast market and

the growing consciousness of the consumer about product quality and

services.

8. Rise in income: Increase in the literacy level has resulted into growth of

income among the population. Such growth has taken place not only in the

cities but also in towns and remote areas.

9. Media explosion: There has been an explosion in media due to satellite

television and internet. Indian consumers are exposed to the lifestyle of

countries. Their expectations for quality products have risen and they are

demanding more choice and money value services and conveniences.

10. Rise of consumerism: With the emergence of consumerism, the retailer

faces a more knowledgeable and demanding consumer. As the business exist to

satisfy consumer needs, the growing consumer expectation has forced the retail

organizations to change their format of retail trade. Consumer demand,

convenience, comfort, time, location etc. are the important factors for the

growth of organised retailing in India.

Trends in Indian Retailing

The Indian Retail sector has come off age and has gone through major

transformation over the last decade with a noticeable shift towards

organised retailing. A T Kearney, a US Based global management

consulting firm has ranked India as the fourth most attractive nation for

retail investment among 30 flourishing markets.

 The retail market is expected to reach a whooping Rs. 47 lakh crore by

2016-17, as it expands at a compounded annual growth rate of 15 per

cent, accordingy to the Yes Bank - Assocham study.

The retail market, (including organised and unorganised retail), was at

Rs. 23 lakh crore in 2011-12. According to the study, organised retail,

that comprised just seven per cent of the overall retail market in 2011-

12, is expected to grow at a CAGR of 24 per cent and attain 10.2 per cent

share of the total retail sector by 2016-17.

In terms of sheer space, the organised retail supply in 2013 was about

4.7 million square feet (sq ft). This showed a 78 per cent increase over the

total mall supply of just 2.5 million sq ft in 2012.

Favourable demographics, increasing urbanisation, nuclearisation of

families, rising affluence amid consumers, growing preference

for branded products and higher aspirations are other factors which will

drive retail consumption in India, said DS Rawat, Assocham Secretary

General.
Retail Classification in India

Retail industry can be broadly classified into two categories namely- organised

and unorganised retail.

1. Organized retail - Organised traders/retailers, who are licensed for

trading activities and registered to pay taxes to the government.

2. Unorganized retail It consists of unauthorized small shops -

conventional Kirana shops, general stores, corner shops among various

other small retail outlets - but remain as the radiating force of Indian

retail industry.

Key drivers of the Indian Retail Industry

1. Emergence of nuclear families

2. An increase in the double-income households trend

3. Large working population

4. Reasonable Real estate prices

5. Increase in disposable income and customer aspiration

6. Demand as well as increase in expenditure for luxury items

7. Growing preference for branded products and higher aspirations

8. Growing liberalization of the FDI policy in the past decade

9. Increasing urbanisation,

10. Rising affluence amid consumers

Bottlenecks

1. A long way to meet international standards

2. Lack of efficient supply-chain management

3. Lack of required retail space

4. No fixed consumption pattern

5. Shortage of trained manpower

6. Lack of proper infrastructure and distribution channel

Indian Retail Industry - Insights

4th Largest economy in PPP terms after USA, China & Japan

To be the 3 rd largest economy in terms of GDP in next 5 years.

2 nd fastest growing economy in the world.

The US $ 580 billion economy grew 8.2 percent in the year 03-04

Among top 10 FDI destinations

 Stable Government with 2 nd stage reforms in place

Growing Corporate Ethics (Labour laws, Child Labour regulations,

environmental protection lobby, intellectual and property rights, social

responsibility).

Major tax reforms including implementation of VAT.

US $ 130 billion investment plans in infrastructure in next 5 years

2 nd Second most attractive developing market, ahead of China

5th among the 30 emerging markets for new retailers to enter

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