INTR?DU?TI?NRetailing as we ?an say is the sale ?fg??ds ?r assets fr?m a fixed ?r parti?ular pla?e, su?h as a department st?re,in small quantities f?r dire?t ??nsumpti?n by the pur?haser. Retailers are atthe end ?f the supply ?hain. Vend?rs ?f pr?du?ti?n pr?du?ts ??nsider the retailpr??ess a ne?essary part ?f their ?verall distributi?n strategy as retailing pr?videsthem a rea?h t? the market with?ut whi?h the ??mpany ?r pr?du?t has n? life. Gl?bally,the ??ntributi?n ?f retail se?t?r t? the w?rld’s GDP is alm?st ab?ut 27%.
N?w, if we talk ab?ut the retailindustry in India, we ?an say that it is und?ubtedly ?ne ?f the fastest gr?wingretail industries in the w?rld. Being the largest ?f all industries and a???untingab?ut 10% ?f the ??untry’s GDP, it empl?ys ab?ut 8% ?f the w?rkf?r?e. In India,there has been seen a drasti? ??mmer?ial rev?luti?n in terms ?f pur?hasing behavi?ur?f ??nsumers that is a m?dernizati?n and devel?pment fr?m sh?pping malls t?multi-st?rey sh?pping malls that ?ffer sh?pping, entertainment and f??d under ?ner??f. It is be?ause ?f this trend that the retail se?t?r is witnessing a rev?luti?nlike many new f?rmats markets su?h as hypermarkets, supermarkets and departmentst?res. India was als? the main supply destinati?n in the w?rld in 2016-17 andparti?ipati?n in this ?ateg?ry is 55 per?ent. In India, mu?h ?f the middle ?lassand even the untapped retail market is an attra?tive f?r?e f?r all retailgiants w?rldwide. ?ur a?tive p?pulati?n with an average age ?f bel?w 25 years,al?ng with emerging ?pp?rtunities in the retail se?t?r, is ?ne ?f the main gr?wthfa?t?rs in the Indian retail se?t?r. Gr?wth in the retail se?t?r is p?sitively expe?ted,as many new entrepreneurs are entering the retail se?t?r.
The t?tal retail industryis estimated at 9 lakh ?r?re, ?f whi?h the ?rganized se?t?r represents ?nly 9 per?ent,indi?ating a large p?tential market ?pp?rtunity. India’s retail se?t?r is experien?inga??elerated gr?wth and retail devel?pment is ???urring als? in Tier-II and Tier-III?ities and n?t ?nly in large ?ities and metr?p?litan areas, whi?h pe?ple presumeit t? be gr?wing. The pur?hasing p?wer ?f the ??nsumer plays an imp?rtant r?lein the de?isi?n making ?r the lifestyle ?f the pe?ple and here we ?an see thatthe pur?hasing p?wer ?f the Indian ??nsumer is gr?wing in ?ateg?ries su?h as ?l?thing,??smeti?s, f??twear, wat?hes, drinks, f??d and even jewellery. Due t? the expansi?n?f the middle men f?ll?wing their pur?hasing p?wer and the ease ?f d?ing businesswhere there is a simplified tax stru?ture after the intr?du?ti?n ?f the G??dsand Servi?e Tax, India ?an f?resee and expe?t gr?wth in the Retail Industry. MARKET SIZE AND ?HARA?TERISTI?S MARKET SIZE ?F THE INDUSTRY The Indian retailindustry is ?ne ?f the fastest gr?wing industry in the w?rld.
India’s retail se?t?ris expe?ted t? gr?w t? $ 1,100 billi?n in 2020, fr?m $ 672 billi?n in 2017. India is thefifth fav?rite retail destinati?n in the w?rld. The ??untry is am?ng the highestin the w?rld in terms ?f availability ?f st?res per ?apita. The Indian retail se?t?ris experien?ing an exp?nential gr?wth and retail devel?pment is ???urring n?t ?nlyin large ?ities and metr?p?litan areas, but als? in level II and III ?ities.
This gr?wth and devel?pment pr?p?rti?nally in?reases the size ?f the retailmarket as well. Healthy e??n?mi? gr?wth, an ev?lving dem?graphi? pr?file, an in?reasein disp?sable in??me, urbanizati?n, tastes and ?hanging ??nsumer preferen?es are?ther fa?t?rs behind the gr?wth ?f the retail market ?rganized in India. Even the?nline retail market is expe?ted t? in?rease fr?m $ 14.5 billi?n t? $ 60 billi?nbetween 2016 and 2020. Gl?bal retailerssu?h as Walmart, GAP, Tes?? and J? Penney are in?reasing their pur?hases fr?mIndia and are m?ving fr?m third-party pur?hasing ?ffi?es t? establish theirfully-managed and fully managed pur?hasing and pur?hasing ?ffi?es. The Indian g?vernmenthas intr?du?ed ref?rms t? attra?t f?reign dire?t investment (FDI) in the retailse?t?r. The appr?val ?f G?vernment f?r 51% FDI in multi-brand retailers and in?reasingthe limit ?f f?reign dire?t investment t? 100% in the retail st?res ?f a singlebrand is a sign ?f b??st f?r in?reasing the market size ?f retail and attra?tingGl?bal retailers.
We ?an see that gl?bal retailers su?h as Walmart, GAP, Tes??and J? Penney are in?reasing their pur?hases fr?m India and are m?ving fr?mthird-party pur?hasing ?ffi?es t? establish their fully-managed and fully managedpur?hasing and pur?hasing ?ffi?es. The retail se?t?r ??nsists ?f manyvari?us segments ?ut ?f whi?h s?me imp?rtant ?nes are F??d and Gr??ery, Apparel,Jewellery, ??nsumer durables and IT, Furniture and Furnishing, Pharma?y and f??twear.The year 2017 was fav?urable f?r the herbal-ayurvedi? brand and hen?e in up??mingyears there are pr?spe?ts f?r in?rease in the gr?wing herbal segment.
Key Drivers ?f Indian Retail Industry’sGr?wth are:· Large w?rking p?pulati?ns· M?re ?f nu?learfamilies· D?uble In??mefamilies· Luxury spending· Easy ?ust?mer ?redit· Brand ??ns?i?usness· Lifestyle ?hangesand ??nsumer behavi?ur· Liberati?ns inFDI p?li?ies· In?reasingUrbanizati?n· Reas?nable real estatepri?es The retail industry ?an be ?lassifiedint? tw? ?ateg?ries: ?rganized Retail – These types ?f retailst?res are st?res whi?h are li?ensed and are registered. They are usually l??atedin urban areas and are hard t? find in rural areas. They usually have ?hains ?fst?res.
Departmental st?re and Hypermarket are few types ?f ?rganized Retail St?res.?rganized Retail st?res ??ntribute t? as less as ar?und 8% in Indian RetailIndustry. Un?rganized Retail – These types ?f retailst?res are st?res whi?h are independent in themselves and la?k a ba?king ?f a ?entralentity. They are usually f?und in rural areas where pe?ple usually refer t? su?hsh?ps as kirana st?res. They a???unt f?r ar?und 92% ?f the Indian RetailIndustry. MARKET TRENDS As we say that the w?rld is n?t ??nstantand keeps ?hanging ?ver time. S? is the s?enari? with the retail industry wherethere has been drasti? ref?rmati?n and ?hanges ?ver time where the retailindustry has devel?ped a l?t in the past few de?ades and always m?ving t?wardsm?re enhan?ement and gr?wth. If we see the br?ader view first, we ?an see thatrelati?n industry was there in earlier time, th?ugh it wasn’t the way we see itt?day in f?rmats ?f malls and supermarkets.
In earlier times, the retailindustry was in the f?rm ?f haats, mela, and mandi. Later these traditi?nal f?rmatsstarted t? establish and with time these haats and mandis transf?rmed t? kirana?r ??nvenien?e sh?ps. And n?w we are witnessing the emerging f?rmats ?f the retailindustry where every?ne is m?ving t?wards the ?rganized retail, that is spe?ialitymalls, hypermarket, and multiplexes. Hen?e we ?an see that with time, there hasbeen a drasti? ev?luti?n in the way retail industry has transf?rmed. N?w, if the trend is m?re ?learly underst??d,we ?an see that India was a ??untry??mp?sed ?f hundreds ?f ?ities and t?wns, bef?re liberalizati?n. India at thetime was a nati?n that strived f?r devel?pment. The effe?t ?f this hunger has beenwitnessed ?n several levels and this has br?ught a w?nderful ?pp?rtunity f?r theretail industry t? thrive. The ev?luti?n ?f the retail se?t?r began first in themetr?p?litan areas and in the main ?ities and then ended up filtering als? inthe sub-urban and rural markets.
The retail trade in India was initially ??mpletelydis?rganized and appeared in the f?rm ?f small sh?ps run by small and medium-sizedentrepreneurs in the f?rm ?f ??rner sh?ps. S?me internati?nal a?t?rs su?h as Levi’s,Pepe, Marks and Spen?er, et?., had entered the market, dire?ted t? the uppermiddle ?lasses ?f the Indians.
H?wever, what is imp?rtant t? keep in mind, isthat ?ver 50% ?f the p?pulati?n ??mp?sed ?f pe?ple bel?nging t? the medium-l?wand l?w ?lass, the wh?le range ?f the market had n?t yet been ??vered. Thisshift between supply and demand was subsequently ?aptured by brands su?h as BigBazaar and Pantal??ns, whi?h made their pr?du?ts available t? all ?ateg?ries ?fpe?ple and t?day have the first benefit ?f the m?t?r?y?list in the Indian retailmarket. An?ther phen?men?n that pr?bably ??ntributed t? gr?wth in the Indian retailse?t?r was the expl?si?n ?f sh?pping ?enters a?r?ss the ??untry. This ??mmer?ial?ulture br?ught with it a retail f?rmat ?rganized in India that was previ?uslyla?king. T?day these sh?pping ?enters are ?hanging the way Indians buy. In the present s?enari?, we ?an say that the retail industry is underg?ing a ?hange where retail has be??me b?th physi?al and digital.
Retail industry is d?ing very well in the market and as a matter ?f pr?je?ti?ns it ?an be said that the ?rganized retail in India will d? well and by 2020 will try t? grab 24% ?f the retail market. But presently, the retail se?t?r still needs t? ??me up with inn?vative ??n?epts and m?dels as presently retail se?t?r is a?tually fa?ing a threat fr?m dis??unts pr?vided by e-??mmer?e ??mpanies. But the use ?f analyti?s as well as having a keen understanding ?f the ?hanging demands ?f the ?ust?mers will help the retail industry. India is und?ubtedly ?ne ?f the fastest gr?wing retail industries in the w?rld. Being the largest ?f all industries and a???unting ab?ut 10% ?f the ??untry’s GDP, it empl?ys ab?ut 8% ?f the w?rkf?r?e. The future ?fretail industry sees a bright s??pe as there are many present ?hanges in the systemwhi?h is dire?tly linked t? the benefit ?f the retail industry. The all?wan?e ?f100% FDI in single brand retail, the ease ?f d?ing business be?ause ?f implementati?n?f GST, the in?rease in the pur?hasing p?wer and the rapid in?rease in urbanizati?n,the ease ?f getting ?redits, are s?me ?f the ways whi?h make the Indian retailingse?t?r m?re attra?tive and hen?e even in the year 2017, it ??uld be seen thatthe FDI infl?w was US$1098.
81 milli?n during September. It ?anals? be seen f?r the year 2017 that the India’s FDI’s ??nfiden?e Index rankedup a level surpassing Australia. And be?ause ?f the rising middle ?lass and thein?reasing m?ney supply with the ?ust?mers, India was als? ranked t?p in the Gl?balRetail Devel?pment Index. The private label spa?e in the ?rganizedIndian retail industry has begun experien?ing an in?reased level ?f a?tivity.
The share ?f private label strategy in the US and the UK markets is 19 per ?entand 39 per ?ent, respe?tively, while its share in India is just 6 per?ent. Thusthis gives a tremend?us ?pp?rtunity f?r the h?me gr?wn label t? expand its base.India’s pri?e ??mpetitiveness attra?ts large retail players t? use it as a s?ur?ingbase. Many internati?nal retailers are in?reasing their s?ur?ing fr?m India andare m?ving fr?m third-party buying ?ffi?es t? establishing their ?wn wh?lly-?wned/wh?lly-manageds?ur?ing and buying ?ffi?es.