Content.1. History2. Global scenario3. Factors affecting global scenario4. Indian scenario5. Major key players in organized retailing in India.6. Stock performance7. Revenue analysis8. SWOT analysis9. Government policy.10.Challenges 11.References

History• the Romans are the first civilization to establish a

sophisticated form of retailing.• after 1850 American retailing institutions originated. It is the

first country to start retailing.• The origin of retailing in India can be traced back to the

emergence of kirana stores . These stores used to cater local people.

• In the 1980s manufacturer’s retail chains like DCM, Gwalior Suiting, Bombay Dying, Calico, Titan etc. started making its appearance in metros and small towns.

Continued• Multi brand retailers came into the picture in the 1990s• India in 1997 allowed foreign direct investment (FDI) in cash and

carry wholesale• At that time the companies required government approval. The

approval requirement was relaxed, and automatic permission was granted in 2006.

• Between 2000 to 2010, Indian retail attracted about $1.8 billion in foreign direct investment, representing a very small 1.5% of total investment flow into India

Global Scenario

• The retail sector has played a phenomenal role throughout the world in increasing productivity of consumer goods and services.

• Example of some middle class country’s scenario

• Brazil: Rankings dip, but still strong. Brazil’s retail growth slowed in 2013, and the country drops to 5th in the GRDI after two consecutive years in first place. While GDP growth picked up 2.3 % in 2013, compared with 1 percent in 2012.

• Peru: A steady retail opportunity. Peru’s controlled inflation (less than 3 percent), growing economy, and business confidence make it a solid retail opportunity. Prudent fiscal policy and monetary discipline remain the pillars of Peru’s economic policy.

• Colombia: Strengthening middle class. Colombia drops three spots to 21st in this year’s GRDI, but its fundamentals are strong. GDP growth was 4 percent in 2013, while household spending increased and unemployment dropped.

FACTORS AFFECTING GLOBAL SCENARIO • Bring it home: just in time for personal use. There is evidence that a growing

number of people do not bother to go down to the store and bring home products themselves anymore. This trend is seen even in the food business, where groceries and fresh food are delivered right to your door by firms such as Linas Matkasse in Sweden and Årstiderne in Denmark.

• Always online: Now in these days people always use internet to search any product.

They do not go to any shop to find information about the product. • Mobile retailing: Mobile retailing, or m-commerce, is growing even more rapidly

than any other kind of retailing activity. eBay’s global mobile sales reached close to USD 2 billion in 2010. In 2011 this figure more than doubled, to USD 5 billion. In the US, m-commerce amounted to 9.8 per cent of all online sales on a single day last autumn.

• Social commerce: Social commerce takes place when online social networks and group activities are combined with e-commerce and/or offline retailing. The key to social commerce is to create an interest among buyers so that they spread the word to their contacts on social networks and other places.

•

Contribution in world & Indian GDP.• Total retail sales in the US topped $4.53 trillion in 2013.• ecommerce accounted for a significant portion of that growth, up 16.9% in

2013—or nearly $40 billion.• In 2013, retail represented 27.0% of nominal US GDP, up from 26.8% in

2012• In 2013, retail mcommerce—which includes products and services ordered

on mobile devices, including tablets—increased 70.0% to reach $42.13 billion. eMarketer estimates that in 2014, that figure will increase another 37.2% to total $57.79 billion.

• A 2012 PWC report states that modern retailing has a 5% market share in India with about $27 billion in sales, and is growing at 15 to 20% per year.

There are many modern retail format and mall companies in India.

Indian scenario • The Retail sector of India is now among top five fastest growing

markets • Currently India constitutes only 8% of organized retail and

remaining 92% is left unorganized.

• The Indian retail industry has experienced growth of 10.6% between 2010 and 2012, and is expected to increase to USD 750-850 billion by 2015.

• Retail growth of 14% to 15% per year is expected through 2015 to 2018• The current market size of Indian organized retail industry is about US$

520 bn (Source: IBEF).• The sector contributes to around 10 per cent of GDP and 6-7 per

cent of employment.

Continued..

Major Indian Key Players in organized retailing

Company Size

Pantaloon Retail Ltd (Future Group venture) Over 2 million sq ft of retail space spread over 35 cities with 65 stores and 21 factory outlets

Shoppers Stop(K Raheja Group venture) Over 3.21 million sq ft of retail space spread over 23 cities with 51 stores

Spencer Retail(part of RP-SG Group) Retail footage of close to 1 million sq ft across 45 cities with 200 stores

Lifestyle Retail(Landmark Group venture) Approximately 15 lifestyle and eight Home Centre stores

Bharti Retail 74 Easyday stores with plans to invest about 2.5 billion USD over the next five years to add about 10 million sq ft of retail space in the country

Reliance Retail 700 stores with a revenue of 7,600 crore INR

Aditya Birla ‘More’ 575 stores with approximate revenue of 2,000 crore INR. Recently, purchased stake in Pantaloon Retail

Tata Trent 59 Westside stores, 13 Starbazaar hypermarkets and 26 Landmark bookstores

Expected growth of organized retail in India

Stock PerformanceHere are some major companies stock performance

Share holding of some major companies

Revenue Analysis of some major company(PANTALOON.NS) : Income Statement

Shopper Stop:• Shoppers Stop reported a consolidated loss of Rs.1.1 crore for the quarter ended 30 June.• Standalone revenue for Shoppers Stop grew at 20% to Rs.537.07 crore in the June quarter

from Rs.441.32 crore a year ago.• Speciality stores such as Crossword and Mothercare, grew 13% to Rs.866 crore.

Trent Ltd:• Trent reported a net profit increase of 36% in the June quarter to Rs.17.34 crore from

Rs.12.76 crore a year ago. Total sales increased by 15.4% to Rs.252.40 crore from Rs.218.70 crore in the same quarter a year ago.

Period Ending 31-Mar-2014 31-Dec-2012 30-Jun-2012 30-Jun-2011

Total Revenue 113,427,000 135,279,000 130,313,000 122,820,000

Cost of Revenue 81,119,000 89,504,000 85,957,000 84,285,000

Gross Profit 32,308,000 45,775,000 44,356,000 38,535,000

SWOT analysisStrengths: Retailing is a “technology-intensive" industry. It is technology that will

help the organized retailers to score over the unorganized retailers High brand equity. state of art infrastructure. A vast variety of product under a roof. Huge investment capacity. Family shopping experience, where entire family can visit together.

Weakness: Long lines at billing counters, which is very much time consuming. High cost of operation due to large fixed cost. High attrition rate of employees. Over crowd during peak season.

Opportunities: Lot of potential in rural market, and can also expand. Increasing mall culture n India. FDI in retail. Improving store experience according to customer preferences.

Threat: Unorganized business also appears to be threat. Increasing online retail sites. High business risk involved margin of business reducing all time.

Government policyFDI in multi brand retail: Status: policy passed 51% 30 per cent procure meant of manufactured products must be from SMEs Minimum investment cap is USD100 million. Minimum 50 per cent of total FDI must be invested in back-end

infrastructure . 50 per cent of the jobs in the retail outlet could be reserved for rural

youth and a certain amount of farm produce could be required to be procured from farmers.

To ensure the Public Distribution System (PDS) and Food Security System (FSS), government reserves the right to procure a certain amount of food grains .

Multi brand retail would keep food and commodity prices under control. Consumers will receive higher quality products at lower prices and better

service.

FDI in single brand retail:

Status: Policy passed 100% Products to be sold under the same brand internationally. Sale of multi brand goods is not allowed, even if produced by the same

manufacturer. For FDI above 51 per cent, 30 per cent sourcing must be from SMEs. Consumerism of the retail market, Any additional product categories to be

sold under single brand retail must first receive additional government approval.

Challenges The Kiranas continue.

The High Costs of Real Estate.

High Stamp Duties.

Lack of Adequate Infrastructure.

Price War.

Shortage of Skilled Manpower.

Policy Induced Barriers.

Channel Conflicts.

Unique Indian Customer.

Some industries in organized retail market in India