Introduction to the Industry
The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10 per cent of the country’s Gross Domestic Product (GDP) and around 8 per cent of the employment. India is the world’s fifth-largest global destination in the retail space.
Market Size- India’s retail market is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015, driven by income growth, urbanisation and attitudinal shifts. While the overall retail market is expected to grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent.
India’s Business to Business
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This is the business strategy the draws people to the physical store. Online-to-offline commerce, or O2O, identifies customers in the online space through various strategies and then try to direct them to the shops. This activity is to bring the potential customers from online channels to physical stores. This is done through email marketing and internet advertising and many more things are done in order to entice the potential customers. This is a pure combination of online marketing as well as offline marketing. O2O is termed when the deal is done online and the transaction is done offline. The best part of this model is that instant gratification is acquired unlike e-commerce model. The model is best suited for the perishable goods that can be instantly …show more content…
First, there are On Demand companies. Uber is the king of the on demand O2O industry. On demand has been a very fast growing industry, the idea that you can click a button on your phone and a car shows up, or someone comes to your house to clean, or food arrives at your house is all very appealing and there are already numerous billion dollar companies in the on demand O2O space. Secondly, there are Daily Deals: Groupon and LivingSocial were the first to almost crack the O2O code. The fact that Google, Facebook, Amazon, Yelp and thousands of other online companies all started a daily deal website in the same year is unprecedented. One could smell the greed in the air, and it topped out with Groupon’s $20B public valuation just 3 years after its launch, making Groupon the fastest growing business in history. But today Groupon is worth less than 10% of that value ($1.75 billion as of 1/10/16) and there is a graveyard full of failed daily deal sites. The 50% discount offer and the 25% fee just are not sustainable for offline merchants. Offline is still the king as the 95% of retail sector still is in brick & mortar. Prices vary on a continuous basis as per demand and supply in the
Currently majority revenue is generated by store sales but online sales from the stores’ websites are increasing. With US dollar getting weaker, international sales from these US based websites are increasing too. This creates significant positive outlook for the large incumbent players but also acts as a significant barrier of entry for new players.
Likewise, in article 2 the author is very specific about the target. He has tried to fill the gap that had been created due to lack of research on the small retail shop which shares a very large portion of Indian market. I assume there are more to research in this area and the article could have conducted some practical test to enhance the report.
The fast changing macro and micro environment, consumer expectations, and competition has resulted in several changes in the retail sector. Today consumer has more sophisticated expectations of product, service; value and environment that what used to be 3-4 years back. In India the growth of urbanization, increasing youth market with high disposable income and economic liberalization has supported fast growth of organized retail and influencing changes in the retail market.
The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and Next into the Indian market. The organised apparel segment is expected to grow at a compound annual growth rate (CAGR) of more than 13 per cent over a 10-year period.
Brick-and-mortar businesses can use these technologies and the behavior of consumers to enhance their business. Customers are used to shopping online therefore businesses should give them the opportunity to shop online even at the...
Barriers to growth remain, however. High import duties make luxury goods expensive. Rich Indians tend to travel widely and may simply buy elsewhere. Finding suitable retail space is also proving a headache. So far most designer boutiques are situated in five star hotels.
In today’s competitive market, consumers are the kings. They are the decision makers. The behavior pattern of the Indian consumer has undergone a major change in the organized retail sector. The consumer landscape is changing very fast. Occupational changes and penetration of media have caused a significant change in the way the consumer lives and spends his money. Consumer now wants to eat, shop and get entertained under the same roof. Consumers today see an exciting explosion of choices, new categories and new shopping options and have increasing disposable income to fulfill their aspirations. They are looking for more information to make these choices. Consumers are increasingly seeking convenience in shopping and want the shopping experience to be enjoyable. Shopping is no
2. Organized Retail: The emergence of organized retail have lead to more variety with ease in browsing, opportunity to compare with different products in a category, one stop destination (entertainment, food and shopping) etc, which is playing an important role in bringing boom in the Indian FMCG market. Currently the modern trade is capturing 5% of the total retail space, which will increase to 10% and 25% in 2010 and 2025 respectively. Also, as the credit card and organized retail trend picks up, people won’t think much while buying and buy more.
Retailing comes on the second place after farming in India. It employs 40 million people. A sizeable majority of owner/employees are in the business because of lack ...
Organized retail is expected to be a opportunity for local, global, and nation player in India. Customer relationship management is regarded very much vital as if it works effectively which allows a retailer to gather customer data swiftly, identify the most valuable customers overtime and increase customer loyalty by providing customized products and services. Retailer now have to come up with strategies so as to capture the market in this competitive environment. To add value to services, they have to be innovative in their approach. The unorganized retail sector basically includes the local provision store, hand-made cart etc. This sector constitutes about 98% of the total retail exchange.FDI in the retail sector is expected to shrink the employment in the unorganized sector and expand that in the organized one. Retailers must showcase the value they are offering. Firms will need to proactively review and the sales composition, branding, logistics system and price structure to cope with pressures from powerful retailers. Retailers are not only concentrating in adding value but for the future growth as well. Beside this, customer are more satisfied with the personalized shopping event which requires a detailed study of individual consumer behavior. The retailers should continue to benefit from the cost advantage and the variety
Retail outlets have sprung up practically in all the villages. In interior villages retailing is a part time chore unlike the case of the retailer in town. In a part of their house, the villagers make retail counter. The maintenance costs for retail outlets in interior villages are also low with most of the cost spent on traveling and transportation.
Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more
Retailing plays a crucial role in the process of economic development by value addition, employment generation, equitable distribution of national income, mobilization of capital and entrepreneurial skills. The retail sector is expanding and modernizing rapidly in line with India’s economic growth. It offers significant employment opportunities, employing 7 % of the total workforce (only agriculture employs more) in the country. The total retail business in India will grow at 13 % annually from US $ 322 billion in 2006-07 to US $ 590 billion in 2011-12 and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion people. Recognizing the important role, that, retail sector play in the national economy, the Central and State Governments have taken active steps to promote and foster their growth. The government policy is favorable to FDI in the retailing sector in phased manner so as to avoid opposition to such entry by domestic retailers. These measures have been particularly effective; but many of the problems/Controversy over Indian retail reforms still continues to afflict the retail sectors. Through in the 1990s, India introduced widespread free market reforms, including some related to retails, between 2000 to 2010, consumers in selected Indian cities have gradually begun to experience the quality, choice, convenience and benefits of organized retail industry. The Chief Minister of Maharashtra, the state with the highest GDP in India and home to its financial capital Mumbai has also welcomed the retail reform. India has about 11 shop outlets for every 1000 peoples. Vast majority of the unorganized retail shops in India employ family members, do not have the scale to procure or transport products at high volume wholesale level, have limited to no quality control or
Electronic Commerce as popularly as E-commerce has become a big deal in our growing economy due to the increase use of online systems. E-commerce now of the fastest growing business in the world. The technology has change the way of business. Business that have physical location have now made it an effort to focus their online business. It is the new sort of business platform where you can make use of different technologies like electronic data interchange or transfer document electronically. Online business is an effective of sales.
The article discusses how the international fast food chains once blazed the trail in India when they arrived about “15 years ago” (Rana). During this time, the big global brands such as Domino’s Pizza, McDonald’s, and Yum Brands that includes Pizza Hut and KFC built too many stores due to the anticipation of a larger growth. Now, the market growth has slowed for these original global brands in India. Growth is sluggish because