Retail Marketing in India

Topics: Retailing, Shopping mall, India Pages: 6 (1314 words) Published: July 27, 2013
THE INDIA RETAIL SECTOR REPORT 2013

Retail

Specialists in retail service recruitment
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Contents
Introduction Talent Pool Availability How Michael Page Can Help 3 5 6

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Retail

Specialists in retail service recruitment
www.michaelpage.co.in

THE INDIA RETAIL SECTOR
Introduction
The Indian retail market is estimated to exceed US$ 750 billion by 2015, according to the India Retail Report 2013 (IRIS Research), presenting a strong potential for foreign retailers planning to enter India. Until 2011, the Indian Central Government denied Foreign Direct Investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or other retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process. In late 2012, the Government of India passed a Foreign Direct Investment policy which allows foreign retailers to own up to 51 per cent in multi-brand retail and 100% in single brand retail. It is expected that these stores will now have full access to over 200 million urban consumers in India, approximately 47% of which are below the age of 30 with high levels of consumption. According to A T Kearney’s Global Retail Development Index (GRDI) 2012, India is the 5th most favorable destination for international retailers (Fig 1). Of the total Indian retail market, 8% constitutes the organised retail segment which is estimated to grow at a rate of almost 30% by 2015, and hence at a much faster pace than the overall retail market which is forecast to grow by 16% in the same period. Clothing & Apparel make up almost a third of the organized retail segment, followed by Food & Grocery and Consumer Electronics. India currently has a small penetration within the organized retail segment as compared to other emerging markets such as China, which has a penetration of more than 20% within organised retail according to the Global Retail Index report by the World Retail Conference.

Country Brazil Chile China Uruguay India Georgia United Arab Emirates Oman Mongolia Peru

2012 Rank 1 2 3 4 5 6 7 8 9 10

2011 Rank 1 2 6 3 4 Unranked 8 Unranked Unranked 7

Change 0 0 +3 -1 -1 N/A +1 N/A N/A -3
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Sources: Euromoney, Population Data Bureau, International Monetary Fund, World Bank, World Economoic Forum, Economist Intelligence Unit, Planet Retail: A.T. Kearney analyst.

Retail

Specialists in retail service recruitment
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Share of Different Retail Verticals in Modern Retail
Pharmacy 2% Mobile & Telecom 11% Consumer Electronics 8% Entertainment & Gaming 3% Leisure 2% Home & Interior* 5% Fashion Accessories 1% Food Service 7% Footwear 4% Food & Grocery 2% Jewellery 6% Eyewear 1% Timewear 2% The modern retail is close to 8% of the total retail market. The pie-graph shows how each category of modern retail fares against total modern retail. Beauty & Personal Care* 3% Fitness 1% Clothing & Apparel 33%

The new FDI policy implies greater autonomy in functioning for foreign single-brand retail players who can now own 100% of their Indian stores, up from the previous cap of 51% with only the stipulation that they will have to source 30% of their goods from small and medium-sized Indian suppliers.

The new policy allows a maximum 51% ownership for the multi brand retail sector subject to the following conditions: • Each Indian state government has the option to accept or reject the implementation of this policy. • Retailers can only set up in cities with a population of more than 1 million (total of 53 cities in India) provided they have the approval from the respective state governments. The figure below shows state wise acceptance of this new policy. Currently 18 cities are eligible for multi brand retailers to enter under this new policy. • Multi-brand retailers must have a minimum investment of US$100 million with at least half of the amount invested in back end infrastructure. • They will have...
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