Retail Marketing in India Assignment

Retail Marketing in India Assignment Words: 837

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 Carney’s Global Retail Development Index (GRID) 201 2, India is the 5th most favorable destination for international retailers (Fig 1). Of the total Indian retail market, 8% constitutes the organized 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.

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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 organized retail according to the Global Retail Index report by the World Retail Conference. Country Brazil Chile China Uruguay India Georgia united Arab Emirates Oman 2012 Rank 12345678910 2011 Rank 1 2634 Unranked 8 Unranked Unranked 7 Change 00+3-1 -1 N/A +1 N/A N/A -3 3 Sources: Rooney, Population Data Bureau, International Monetary Fund, World Bank, World Economic Forum, Economist Intelligence Unit, Planet Retail: A.

T. Carney analyst. Specialists in retail service recruitment www. Michaels. Co. In Share of Different Retail Verticals in Modern Retail Pharmacy 2% Mobile & Telecoms 11% Consumer Electronics 8% Entertainment & Gaming 3% Leisure 2% Home & Interior* 5% Fashion Accessories 1% Food Service 7% Footwear 4% Food & Grocery 2% Jewelry 6% Aware 1% Timelier 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 FDA 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 mall 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 IIS$OHIO million with at least half of the amount invested in back end infrastructure. They will have to source 30% of their goods from small and medium-sized Indian suppliers. ; E-commerce is not allowed as an alternate channel as it can serve the customer beyond the physical location of the store. INDICATIVE MAP OF STATES AND THEIR CONSENT STATUS STATES IN FAVOR 1. Andorra Pradesh 2. Assam 3. Delhi 4. Harlan 5. & Did and Draw and Magna Have States against FDA States undecided States in favor of FDA 4 Talent Pool Availability The introduction of the FDA in retail policy will impact the availability of talent.

Many institutes have now introduced specialized post graduate degrees in retail management; I. E approximately 6,000 qualified professionals with expertise in the field of retail management are being trained every year. Until now, retailers have sponsored courses in some of the top a-schools to attract talent at a Junior level as shown in fig. 4 below, while hiring at a mid to senior level has primarily been from competitors. Name Of Retailer Pantaloon Karakas group RPG group Future group Barilla group Garage group Institutes with Sponsored Retail Courses L.

N Wellbeing SKIMS RPG institute of retail management GOING Biometric Garage institute of management We believe that the current trends and the rapid growth of the market will create an acute shortage of talent at the mid to senior level, creating high demand for candidates that are experienced in setting up large retail chains as well as candidates with international exposure. This increase in demand is likely to drive up salaries.

The figure below illustrates the inflation rate in India over the last 5 years;, consequently average annual increase in salary will be between 12-18% in the retail sector as a result of skill shortages spurred by the entry of new foreign players. In edition, salary increases are likely to go up by 20-25%. On a sector basis, demand is likely to be highest for candidates with experience within Clothing & Apparel followed by the Food & Grocery sectors which constitute the highest part of the organized retail market as well as the areas where foreign retailers are likely to enter the fastest.

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