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1. Dept of Commerce and Management studies
Andhra University
UGC Seminar On
“ new trends in business education”
4th Dec, 2012

2. Session on Experience sharing with retail
Focus
Under the Esteemed
Guidance of
Prof. B. Mohan Venkat Ram
By:
Sobha Rani Peddini

3. Retail Basics
Definition: A business or person that sells
goods to the consumer, as opposed to a
wholesaler or supplier, who normally sell their
goods to another business.
Retail consists of the sale of goods or
merchandise for final consumption by the user
and not for further sale or processing.

4. Organized Retailing – trading activities
undertaken by licensed retailers those who are
registered for sales tax, income tax, etc., these
include the corporate-backed hypermarkets and retail
chains, and also the privately owned large retail
businesses.
Unorganised retailing – traditional formats of low-
cost retailing, for example, the local kirana
shops, owner manned general stores, etc

5. Major global Retailers
Retailer Home Country
Wal-Mart Stores USA
Carrefour Group France
The Home Depot, Inc USA
The Kroger Co. USA
Royal Ahold Netherlands
Metro AG Germany
Target Corporation USA
Albertson’s,Inc. USA
Sears, Roebuck and Co. USA
Kmart Corporation USA

6. Major Domestic Players
Retail Group Store
Future Group Pantaloon
K.Raheja group Shopper’s stop
Tata group West side
RPG Spencers
Landmark Group Lifestyle
Bharati-walmart Walmart
Reliance group Reliance retail
A V Birla Group Louis Phillipe, Van Heusen
Metro Metro cash and carry
Viveks Ltd Viveks

7. Retail Formats

8. Other classification of retail formats
Mom-and-pop Stores – Family owned businesses
Department stores – Karachiwala
Category Killers – best buy, sports authority
Malls – Forum mall, Spencer Plaza
Discount Stores – Brand factory
Supermarkets – Trinethra
Hypermarkets -- Big bazaar

9. Indian Retail Scenario At A Glance
• The contribution of retail industry to India’s GDP is
more than 13%.
• Spreads over more than 6 million outlets (2.4 million
urban and 3.6 million in rural).
• There is no supply chain management perspective.
• Over 8 per cent of India’s population is engaged in
retail

10. Indian Retail Scenario At A Glance
• India’s per capita retailing space is the lowest in the
world. (2 square feet).
• In India still, more than 60% sales in retail comes from
food items only
• No role model for Indian suppliers and retails to adapt
or expand in the Indian context. Hence Indian
retailers have to find a suitable model and adopt it to
the Indian context.

11. Indian Retail Scenario At A Glance
• India’s first true shopping mall was inaugurated in
1999 in Mumbai. (This mall is called “Crossroads”).
• An FDI Confidence Index survey showed that the
retail industry is one of the most attractive sectors
for FDI (foreign direct investment) in India.

12. Issues in International Retailing
• Legislation and Regulation -- FDI
• Taxation and Cross Border Shopping
• Variations in Retailing Practice and
Customs

13. Introduction to fdi
FDI refers to the capital inflows from abroad that is invested in
or to enhance the production capacity of the economy
Methods:
The foreign direct investor may acquire voting power of an
enterprise in an economy through any of the following methods:
•by incorporating
•by acquiring shares
•through a merger or an acquisition of an unrelated
enterprise
•joint venture with another investor or enterprise

14. FDI in India
Name of the sector Increase in FDi
Insurance 49%
Broadcast sector 74%
Retail and consumer 51%
products(Multi brand)
Retail and consumer 100%
products (single brand)
Aviation 49%

15. Scope of FDI in retail sector
After agriculture, retail sector is the
highest employer, employing 7% of the total
work force in the country.
Retailing in India accounts for more than
13% of its GDP

16. Scope of FDI in retail sector
Better cold storages prevent loss of fruits
and vegetables
 Opening up of large retail houses will
upgrade systems, supply chain, upgrade
people and their abilities and skills.
 Consumers will be benefited first

17. FDI in Retail
On September 14th 2012, Government of India allowed
FDI in Multi-brand retail up to 51% and in single brand
retail up to 100%
The choice of allowing FDI has been left to state
governments.
The Chief Ministers of
Delhi, Assam, Maharashtra, Andhra
Pradesh, Rajasthan, Uttarakhand, Haryana and
Governments of the State of Manipur and the Union
Territory of Daman & Diu and Dadra and Nagar

18. Some Regulations of FDI
The establishment of the retail sales outlets will be
in compliance of applicable State laws/
regulations, such as the Shops and Establishments
Act etc.
Retail sales outlets may be set up only in cities with
a population of more than 10 lakh as per 2011 Census
In States/ Union Territories not having cities with
population of more than 10 lakh as per 2011
Census, retail sales outlets may be set up in the cities

19. FDI proposed conditions
1} Minimum investment of US $100 million
2} At least 50% of total FDI brought in shall
be invested in 'backend infrastructure'
•within three years of the induction of FDI
•back-end infrastructure will include
investment made towards
processing, manufacturing, distribution, desi
gn improvement, quality
control, packaging, logistics, storage, ware-
house, agriculture market produce

20. FDI proposed conditions
3} Expenditure on land cost and rentals, if any, will
not be counted for purposes of backend
infrastructure
4} There is a conditionality requiring at least 30%
procurement from Indian small industries
5} State Governments are also responsible for
aspects ancillary to MBRT, such as zoning
regulations, warehousing
requirements, access, traffic, parking and other

21. Safeguards
 A three year timeframe has been fixed for setting
up the back-end infrastructure
This condition will bind the foreign investors to
invest in critical back-end infrastructure, which is a
felt need across the country
It would also make the foreign investors
accountable for proper implementation of the
condition.
Farmers stand to benefit from the significant
reduction in post-harvest losses

22.  There is a conditionality requiring at least 30%
procurement from Indian small industries
This would enable them to get integrated with
global retail chains. This, in turn, will enhance their
capacity to export products from India
The final decision will be taken by the state
governments
This gives a control on approvals for
number, size, format and type of retailer, based on
the favorable conditions of that concerned state

23. Benefits
Global experience indicates that organized and
unorganized retail co-exists and grow
Consumers stand to gain the most..
•firstly, from the lowering of prices that
would result from supply chain efficiencies
•secondly, through improvement in product
quality

24. Benefits
The young people joining the workforce will
benefit from the creation of employment
opportunities
The policy will facilitate greater FDI inflows,
additional and quality employment, global best
practices and benefit consumers and farmers in
the long run

26. FDI- Vizagites’
perspective

27. Age of the individuals
Sample distribution 51 &
above
2%
41-50 Upto 20
Male 8% 8%
44% 31-40
22%
Female
56%
21-30
60%
Occupation of individuals
43.5%
37%
6% 9%
4.5%
business employes Student H.W Others

28. Growth of Shopping malls in recent years is beneficiary to the
customers
40
37.5% 37%
35
30
21.5% 21.7% Female
25 22%
Male
20
12%
15
10
16% 15.3% 3.5%
5 10%
0.5%
3%
0
Strongly agree Agree Disagree Strongly disagree

29. Central Government’s recent decision on FDI helps for the
growth of retailing in India
50
45.5%
45
40
35
30%
30 28.3%
25 21% Female
14.7%
20 Male
15 13%
10
17.2% 15.3%
5 8%
3.5%
0
Strongly agree Agree Disagree Strongly Disagree

30. Where do you prefer to shop?
60
52%
48%
50
40
30%
25.7%
30 Female
Male
20
10 22.3% 22%
0
Kirana Shops Shopping mall

31. Do you think foreign retailers intervention will effect small
scale retailers business
90
82%
80
70
60
49%
50
Female
40 Male
30
18%
20
33% 6.6%
10
11.4%
0
Yes No

32. Do you think foreign retailers offer products at cheaper
rates
80
68%
70
60
50 38.4%
40 32% Female
Male
30
17.7%
20
29.6%
10
14.3%
0
Yes No

33. Conclusion
Entry of foreign investors into the country will
improve the GDP of the nation. It creates efficient
storage facilities, infrastructures, improve supply
chain matrix, upgrades the existing technology
, creates millions of jobs and consumers are
benefited more The studies shows that FDI approval
is more beneficial to the nation in the long run, but
with some conditions in order to safeguard the
interests of small and middle intermediaries.

34. Conclusion
The small scale intermediaries are however given priority
by the foreign players as they need local networking for
their business activities. But still few will be endangered
because of their low supply capabilities.
Majority of Vizagites opined that they will get quality
products at a cheaper rates. They also opined that the
small scale retailers will be effected by the intervention of
big players. Majority of the sample agreed with the
Central Government’s recent decision.

35. Thank You
Under the Esteemed Guidance of
Prof. B.Mohan Venkat Ram