new trends in business education

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Dept of Commerce and Management studiesAndhra UniversityUGC Seminar On

new trends in business education4th Dec, 2012


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Session on Experience sharing with retail Focus

Under the EsteemedGuidance of

Prof. B. Mohan Venkat Ram

By:

Sobha Rani Peddini


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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.

Retail Basics


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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


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Major global RetailersRetailer Home Country

Wal-Mart Stores

Carrefour Group

The Home Depot, Inc

The Kroger Co.

Royal Ahold

Metro AG

Target CorporationAlbertsons,Inc.

Sears, Roebuck and Co.

Kmart Corporation

USA

France

USA

USA

Netherlands

Germany

USAUSA

USA

USA


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Major Domestic PlayersRetail Group Store

Future Group PantaloonK.Raheja group Shoppers stop

Tata group West side

RPG SpencersLandmark Group Lifestyle

Bharati-walmart Walmart

Reliance group Reliance retailA V Birla Group Louis Phillipe, Van Heusen

Metro Metro cash and carry

Viveks Ltd Viveks


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Retail Formats


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Other classification of retail formatsMom-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


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Indian Retail Scenario At A Glance The contribution of retail industry to Indias 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 Indias population is engaged in

retail


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Indian Retail Scenario At A Glance

Indias 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.


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Indias 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.

Indian Retail Scenario At A Glance


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Issues in International Retailing

Legislation and Regulation -- FDI

Taxation and Cross Border Shopping

Variations in Retailing Practice andCustoms


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Introduction to fdiFDI 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 anenterprise 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


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FDI in IndiaName of the sector Increase in FDi

Insurance 49%

Broadcast sector 74%

Retail and consumer

products(Multi brand)

51%

Retail and consumer

products (single brand)

100%

Aviation 49%


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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


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Better cold storages prevent loss of fruits

and vegetables

Opening up of large retail houses willupgrade systems, supply chain, upgrade

people and their abilities and skills. Consumers will be benefited first

Scope of FDI in retail sector


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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 Haveli,

have expressed support for the policy in writing.

FDI in Retail

l f


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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 witha 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 of

their choice, preferably the largest city


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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 FDIback-end infrastructure will includeinvestment made towards processing,

manufacturing, distribution, designimprovement, quality control, packaging,logistics, storage, ware-house, agriculture

market produce infrastructure etc.

FDI proposed conditions


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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 logistics

FDI proposed conditions

Safeguards


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Safeguards

A three year timeframe has been fixed for setting

up the back-end infrastructureThis 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 thecondition.

Farmers stand to benefit from the significant

reduction in post-harvest losses


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There is a conditionality requiring at least 30%

procurement from Indian small industriesThis 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


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BenefitsGlobal 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 productquality


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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

Benefits


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FDI- Vizagites perspective


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Male

44%

Female

56%

Sample distribution

Upto 20

8%

21-30

60%

31-40

22%

41-50

8%

51 &

above

2%

Age of the individuals

6%

43.5%

37%

9%4.5%

business employes Student H.W Others

Occupation of individuals

G th f Sh i ll i t i b fi i t th


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16% 15.3%

10%

3%

21.5% 21.7%

12%

0.5%

0

5

10

15

20

25

30

35

40

Strongly agree Agree Disagree Strongly disagree

Growth of Shopping malls in recent years is beneficiary to the

customers

Female

Male

37.5% 37%

22%

3.5%

Central Go ernments recent decision on FDI helps for the


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8%

17.2% 15.3%

3.5%

13%

28.3%

14.7%

0

5

10

15

20

25

30

35

40

45

50

Strongly agree Agree Disagree Strongly Disagree

Central Governments recent decision on FDI helps for the

growth of retailing in India

Female

Male

45.5%

30%

21%

Wh d f t h ?


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22.3% 22%

25.7%30%

0

10

20

30

40

50

60

Kirana Shops Shopping mall

Where do you prefer to shop?

Female

Male

48%

52%

Do you think foreign retailers intervention will effect small


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33%

11.4%

49%

6.6%

0

10

20

30

40

50

60

70

80

90

Yes No

Do you think foreign retailers intervention will effect small

scale retailers business

Female

Male

82%

18%

Do you think foreign retailers offer products at cheaper


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29.6%

14.3%

38.4%

17.7%

0

10

20

30

40

50

60

70

80

Yes No

Do you think foreign retailers offer products at cheaper

rates

Female

Male

68%

32%


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ConclusionEntry 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.


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The small scale intermediaries are however given priority

by the foreign players as they need local networking fortheir 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 Governments recent decision.

Conclusion


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Thank You

Under the Esteemed Guidance ofProf. B.Mohan Venkat Ram

new trends in business education

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