Retailing as we ?an say is the sale ?f
g??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 at
the end ?f the supply ?hain. Vend?rs ?f pr?du?ti?n pr?du?ts ??nsider the retail
pr??ess a ne?essary part ?f their ?verall distributi?n strategy as retailing pr?vides
them 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 retail
industry in India, we ?an say that it 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. 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 ?ne
r??f. It is be?ause ?f this trend that the retail se?t?r is witnessing a rev?luti?n
like many new f?rmats markets su?h as hypermarkets, supermarkets and department
st?res. India was als? the main supply destinati?n in the w?rld in 2016-17 and
parti?ipati?n in this ?ateg?ry is 55 per?ent. In India, mu?h ?f the middle ?lass
and even the untapped retail market is an attra?tive f?r?e f?r all retail
giants 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?wth
fa?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 industry
is 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?ing
a??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 presume
it t? be gr?wing. The pur?hasing p?wer ?f the ??nsumer plays an imp?rtant r?le
in the de?isi?n making ?r the lifestyle ?f the pe?ple and here we ?an see that
the 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 business
where there is a simplified tax stru?ture after the intr?du?ti?n ?f the G??ds
and 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 retail industry is ?ne ?f the fastest gr?wing
industry in the w?rld. India’s retail se?t?r is expe?ted t? gr?w t? $ 1,100
billi?n in 2020, fr?m $ 672 billi?n in 2017.
India is the fifth fav?rite retail destinati?n in
the w?rld. The ??untry is am?ng the highest in the w?rld in terms ?f
availability ?f st?res per ?apita. The Indian retail se?t?r is experien?ing an exp?nential
gr?wth and retail devel?pment is ???urring n?t ?nly in 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 retail market as well. Healthy e??n?mi? gr?wth, an ev?lving
dem?graphi? pr?file, an in?rease in 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?n between 2016 and 2020.
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?m
third-party pur?hasing ?ffi?es t? establish their fully-managed and fully managed
pur?hasing and pur?hasing ?ffi?es.
The Indian g?vernment has intr?du?ed ref?rms t?
attra?t f?reign dire?t investment (FDI) in the retail se?t?r. The appr?val ?f G?vernment
f?r 51% FDI in multi-brand retailers and in?reasing the limit ?f f?reign dire?t
investment t? 100% in the retail st?res ?f a single brand is a sign ?f b??st f?r
in?reasing the market size ?f retail and attra?ting Gl?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?m third-party pur?hasing ?ffi?es t?
establish their fully-managed and fully managed pur?hasing and pur?hasing ?ffi?es.
The retail se?t?r ??nsists ?f many
vari?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??ming
years there are pr?spe?ts f?r in?rease in the gr?wing herbal segment.
Key Drivers ?f Indian Retail Industry’s
Large w?rking p?pulati?ns
M?re ?f nu?lear
Easy ?ust?mer ?redit
and ??nsumer behavi?ur
Reas?nable real estate
The retail industry ?an be ?lassified
int? tw? ?ateg?ries:
?rganized Retail – These types ?f retail
st?res are st?res whi?h are li?ensed and are registered. They are usually l??ated
in urban areas and are hard t? find in rural areas. They usually have ?hains ?f
st?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 Retail
Un?rganized Retail – These types ?f retail
st?res are st?res whi?h are independent in themselves and la?k a ba?king ?f a ?entral
entity. They are usually f?und in rural areas where pe?ple usually refer t? su?h
sh?ps as kirana st?res. They a???unt f?r ar?und 92% ?f the Indian Retail
As we say that the w?rld is n?t ??nstant
and keeps ?hanging ?ver time. S? is the s?enari? with the retail industry where
there has been drasti? ref?rmati?n and ?hanges ?ver time where the retail
industry has devel?ped a l?t in the past few de?ades and always m?ving t?wards
m?re enhan?ement and gr?wth. If we see the br?ader view first, we ?an see that
relati?n industry was there in earlier time, th?ugh it wasn’t the way we see it
t?day in f?rmats ?f malls and supermarkets. In earlier times, the retail
industry was in the f?rm ?f haats, mela, and mandi. Later these traditi?nal f?rmats
started 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 retail
industry where every?ne is m?ving t?wards the ?rganized retail, that is spe?iality
malls, hypermarket, and multiplexes. Hen?e we ?an see that with time, there has
been 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 the time was a
nati?n that strived f?r devel?pment. The effe?t ?f this hunger has been witnessed
?n several levels and this has br?ught a w?nderful ?pp?rtunity f?r the retail
industry t? thrive. The ev?luti?n ?f the retail se?t?r began first in the metr?p?litan
areas and in the main ?ities and then ended up filtering als? in the sub-urban
and rural markets. The retail trade in India was initially ??mpletely dis?rganized
and appeared in the f?rm ?f small sh?ps run by small and medium-sized entrepreneurs
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 upper middle ?lasses
?f the Indians. H?wever, what is imp?rtant t? keep in mind, is that ?ver 50% ?f
the p?pulati?n ??mp?sed ?f pe?ple bel?nging t? the medium-l?w and l?w ?lass, the
wh?le range ?f the market had n?t yet been ??vered. This shift between supply
and demand was subsequently ?aptured by brands su?h as Big Bazaar and Pantal??ns,
whi?h made their pr?du?ts available t? all ?ateg?ries ?f pe?ple and t?day have
the first benefit ?f the m?t?r?y?list in the Indian retail market. An?ther phen?men?n
that pr?bably ??ntributed t? gr?wth in the Indian retail se?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?usly la?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 ?f retail industry sees a bright s??pe as there are
many present ?hanges in the system whi?h is dire?tly linked t? the benefit ?f
the retail industry. The all?wan?e ?f 100% 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 retailing se?t?r m?re attra?tive and hen?e
even in the year 2017, it ??uld be seen that the FDI infl?w was US$1098.81
milli?n during September. It ?an als? be
seen f?r the year 2017 that the India’s FDI’s ??nfiden?e Index ranked up a level
surpassing Australia. And be?ause ?f the rising middle ?lass and the in?reasing
m?ney supply with the ?ust?mers, India was als? ranked t?p in the Gl?bal Retail
Devel?pment Index. The private label spa?e in the ?rganized Indian 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 ?ent and 39 per ?ent,
respe?tively, while its share in India is just 6 per?ent. Thus this 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?ing base. Many internati?nal
retailers are in?reasing their s?ur?ing fr?m India and are m?ving fr?m
third-party buying ?ffi?es t? establishing their ?wn wh?lly-?wned/wh?lly-managed
s?ur?ing and buying ?ffi?es.
The change in market trend has also impacted the market
structure of retail marketing over time. There were Kirana Stores in India in
1970s to 1980s. They served the purpose of the retail industry.
Unorganized Retail Sector
These types ?f retail st?res are
st?res whi?h are independent in themselves and la?k a ba?king ?f a ?entral
entity. They are usually f?und in rural areas where pe?ple usually refer t?
su?h sh?ps as local kirana st?res, hand cart, etc. They a???unt f?r ar?und 92%
?f the Indian Retail Industry. Foreign Direct Investment
in this retail sector is expected to shrink the employment in the unorganized
sector and expand that in the organized one.
Organised Retail Sector
These types ?f retail st?res are
st?res whi?h are li?ensed and are registered. They are usually l??ated in urban
areas and are hard t? find in rural areas. They usually have ?hains ?f st?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 Retail
The organised retail sector can
be further subdivided into:
They are also called as brick
and mortar format. These retail stores are in the form of fixed point sale
outlets. They are specially designed to lure the customers. There are different
types of stores through which the instore retailers operate.
Branded Stores appear in the
form of exquisite showrooms. Here the total range of a particular brand is
available and the quality of the product is certified by the government.
There are also multi brand
specialty stores that sell a series of brands so that the consumer can choose
from the wide array of brands.
Department stores have a large
number of brands and products catering to all basic needs to luxurious items as
Supermarkets are basically self
service retail stores.Discount Stores offer commodities at reduced prices.In
Hyper Marts customers have wide variety of products to choose from and they are
also available at discounted rates.
Convenient stores are located
in prominent places within the reach of majority of the customers and do not
operate in stringent work hours.
Shopping Malls are a storehouse
of a large variety of retail shops situated close to each other.
Retail Formats in India
The retail formats in India can
be categorised into the traditional and the modern forms. The traditional
format includes Kiranas, street markets, kiosks and multiple brand stores.
The modern format, on the other
hand includes supermarkets, hypermarkets, department stores and specialty
In discussing about the
structure of the retail sector in India we cannot forgo forecourt retailing and
Trade parks are basically
business complexes that promote international trade. The global players here
have access to the top Indian exporters. To the buyers this would prove to be a
boon since they do not have travel to far off towns to enter into business
deals with the exporters, especially in places where infrastructure is very
poor. By this the exporters not only enhance their visibility but they also
enjoy a host of other advantages. They can design libraries, studio etc, in
order to attract potential customers.
This type of retailing is done
by the oil companies in order to increase their revenue. They not only deliver
fuel but also offer other services to its customers.