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7/30/2019 WHAT LIES IN STORE FOR THE RETAILING INDUSTRY IN INDIA?
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WHAT LIES IN STORE FOR THE
RETAILING INDUSTRY IN INDIA?
BY
Sunil
Prabhu
Praveen P
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Facts
India currently having about 5-12 millionretail outlets all over the country.
Organized retailing constitutes nearly 2% of
the total retail sector whereas unorganizedretailing constitutes the rest 98%.
Indian retailing industry is expected to grow
from the current US$350M to US$427M by2010 and to US$635M by 2015.
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ECONOMIC ENVIRONMENT
Indias impressive economic growth rate of
9% Increase in population leading to
growing size of the consuming class.
Increase in per capita income leading toincrease in purchasing power.
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Since the unorganized retail sector
constitutes about 98% of the total retail
sector, political parties are often quite
offensive towards the growth of the
organized retail business in order to protect
the unorganized vendors.
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TECHNOLOGICAL ENVIRONMENT
The progression of IT is now aiding the growthof retail sector also.
IT is now providing support to quick
information processing, decision making,reduction in processing cost, real time
monitoring, security of transactions etc.
Implementation of SCM system & CRM arealso helping in ordering & tracking inventory
items, warehousing, transportation etc.
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REGULATORY ENVIRONMENT
Foreign investment up to 100% is still not
permitted. Real estate laws at the statelevel not yet clear on the issue of allowing
large commercial stores. Tax structure for
the retailing industry still needs to be
restructured.
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SUPPLIER ENVIRONMENT
The biggest constraint to the growth ofretail industry in India. Due to the vast
geographical size of the country, presence
of traditional, fragmented distribution &retailing networks and erratic logistics
system and poor SCM system, reaching the
customers cost-effectively is a big problem
in India.
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TECHNOLOGICAL ENVIRONMENT
The progression of IT is now aiding thegrowth of retail sector also. IT is now
providing support to quick information
processing, decision making, reduction inprocessing cost, real time monitoring,
security of transactions etc. Implementation
of SCM system & CRM are also helping inordering & tracking inventory items,
warehousing, transportation etc.
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Opportunities
OPPORTUNITIES ECONOMIC GROWTH
POSITIVE GROWTH RATE
GROWING SIZE OF CONSUMING CLASS
INTERNATIONAL MARKET AWARENESS
MORE EXPOSURE TO INTERNATIONAL
MARKETS THROUGH TV & INTERNET
GROWING MARKET
INCREASING NUMBER OF YOUTHS &
INCREMENT IN INCOME LEVEL
ADVANCING TECHNOLOGY
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THREATS:
ORGANIZED RETAILERS ARE OFTEN RESISTED INORDER TO MAINTAIN SUPPORT FROM
UNORGANIZED VENDORS REGULATORY ISSUES
DIRECT FOREIGN INVESTMENT NOT PERMITTED REAL ESTATE LAWS FOR SETTING UP
INFRASTRUCTURE RESTRUCTURING OF TAX
WEAK SUPPLY SYSTEM
DIFFICULTY IN COVERING SUCH A LARGE AREA #TRADITIONAL, FRAGMENTED DISTRIBUTION &
RETAIL NETWORKS
ERRATIC LOGISTICS BUYERS PSYCHOLOGY
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TaxpoliciesInterestrates
&monetary
policies
Demographics,
Population
growthrates,Agedistribution
Industryfocus
ontechnological
effortInternationaltrade
regulationsand
restrictionsGovernment
spendingLabor/social
mobilityNewinventions
and
developmentContract
enforcementlaw
Consumer
protection
Unemploymen
tpolicy&
Taxation
Lifestyle
changesRateof
technology
transfer
Competition
regulation Inflationrates Fashion,hypesInformation
TechnologyHealth
consciousness
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