Introduction
The retail sector is one of the fastest rising sectors of India. According to the retail Asia report 2011 (business standard bureau Oct 4,2008), Indian retail sector accounts for 23 % of the India’s GDP and contributes to 7 % of total employment. Hypermarkets, currently occupies 15 % of mall space and are expected to witness high growth, and demographic divided with over 50 % of country population under 22 years of age is an important driving factor for modern retail sector. Current contribution of retail sector in India is approximately 200 billion U.S. $.things has started looking better and brighter for retail sector in India.
Economic liberalisation was initiated 20 years back. In last 20 years Indian economy has expanded and income of middle class has increased as well. The earning has increased and so has purchasing power of people. However as compared to other countries India has been slow in opening up its retail sector to foreign investors but this may change soon as Government of India has introduced bill in the parliament which supports the investment of foreign investors in retail sector. There is strong indication by the foreign retail stores like Walmart ( USA), Carrefour ( France), Tesco, Metro & Marks & Spencer might open their retail shops once FDI is allowed in India. These retail stores are keen in investing in India and see India as largest growing market.
There is restriction of Foreign Direct Investment in the retail sector in India. . First time the government eased retail policy and, allowed up to 51% FDI through single brand route in year 2006. There has been steady increase in revenue of foreign retailer who has invested in single brand. Cumulative FDI in single brand retail has been closed at 195million $ . During global economic crisis foreign investors became resilient in the single brand retail sector. Keeping India’s large population and rapidly growing middle class, there is robust and growing demand of foreign brands and Indian market is definitely growing.
Larger retailers have experienced substantial growth around the world in last few decades. Survey done by ICRIER ( Indian council for research on international Economic relations) propose that impact of entry of large retail chain on employment and incumbent mom-and-pop stores is mixed but there is possibility of substantial benefit to consumers in terms of low prices and lowered price inflation. There is an indication of improved distribution which will result into improved warehousing technologies hence large retail chains are in a position to provide better price signals to farmers and will serve as a platform for enhanced exports. Therefore it will definitely enhance India technological strength in farming, warehousing,& distribution. Of all the stakeholders farmers will be benefitted most as they will get correct price for their goods..
Retailing provides crucial link between modern market & economy. The performance of this sector has a strong influence on consumer welfare. Retailer not only provide consumer with the wide range of products but also wide range of complementary services which can help consumers to take informed decision while purchasing the products. They also provide information to producers about consumer demand pattern which in turn can help them produce as per the demand. Through backward and forward linkages performance of retailing sector attracts the performance of interlinked services such as recreational, food processing industry, manufacturing of consumer goods. Etc.
The structure of retail sector of country reflects its socio – demographic characteristics. The size and density of retail outlets are determined by demand related formula such as population density, level of urbanisation, participation rate of women labour, access to cars, taste, personal consumption, expenditure. Etc. The structure also varies with the level of development of the country and speed of adaptation of new technology such as use of credit cards. In the early stage of development bulk of retail enterprise consists of single shop or sole proprietorship. As economy of country increases these small shops turn into larger enterprise. This in turn results in consolidation and currently more than 50 fortune 500 companies and around 25 Asian top 200 companies are retailers. With increased sophistication of products many smaller shops has re-emerged as part of large chain of shops which are cooperating in franchising agreements, often oriented towards a specialised segment. With the development of economy there has been vertical integration of the distribution chain. This has reduced the role of traditional wholesalers since large retail chains are directly interacting with the manufacturers bypassing middle man of the chain. This kind of trending has been seen in food retailing. Improvement in IT has impacted a lot towards this trend by allowing the retailers to fine tune their inventory needs and reducing the warehousing role of traditional wholesalers. Larger retailer groups are integrating the wholesale and retail functions. Many large retailers have developed in-house product lines and brands and established their own regional distribution centres to improve the flow of goods. On the other hand some wholesalers have moved away from the traditional activities and diversified their operations by offering additional services and moving into specialised retailing markets. IT has also improved the operational efficiency of this sector. The next big thing in terms of technology is to integrate retailing on mobile. Mobile can be next big thing in terms of retailing on Mobile by introducing NFC ( Near field communication), M commerce or Mobile couponing.
- NFC devices can be used to make payment or can be termed as payment systems, similar to those currently used in credit cards and electronic ticket smartcards, and allow consumer to make payments through their mobile. Before apple its Android phones which embedded the new technology into their phone. For example, Google Wallet allows consumers to store credit card and store loyalty card information in a virtual wallet and then use an NFC-enabled device at terminals that also accept MasterCard Pay Pass transactions. Germany, Austria and Latvia have trialled NFC ticketing systems for public transport. And China is using it all over the country in public bus transport. In India NFC based transaction is being implemented in box offices for ticketing purposes. But for NFC to boom along within retailing support is required from Government, retail stores etc.
Middle class and unexploited retail industry are the key important & impulsive forces for Global retail giants wanting to enter into newer markets and increase their source of revenue and this in turn will help the India Retail Industry to grow faster. By 2016, predicted annual growth of Indian retail is 25%, modern retail in India could be worth US$ 175-200 billion. 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 annum. The future of Indian retail industry is promising with the growing economy as well as growing market with the enhancement of technology.
The concept and idea of shopping has undergone complete change in urban part of India as we can observe drawing change in terms of retail format and consumer buying behaviour, helping to bring revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centres, multi-storied malls and the huge complexes that offer shopping, entertainment and food all under one roof.
Key factors in the growth of organised retail sector in India are increase in working women population, evolving opportunities in the service sector, nuclear families, young working population. Etc. Expected growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the India Retail Industry.
India is also the country which has the most unorganized retail market. Traditionally it is a family with their shop in the front and house at the back which is the source of livelihood, while they run the retail business. More than 99% retailer functions in less than 500 square feet of shopping space. Organised retailing in India is expected to touch Rs.2,30,000 crore in year 2012 constituting roughly 13 per cent of the total retail market as per business.gov.int. The Indian retail sector is estimated at around Rs 900,000 crore ( retail Asia report 13th May 2011), of which the organized sector accounts for a mere 13% indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer.
There is an increase in purchasing power of Indian urban consumer. Branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewellery, are slowly becoming lifestyle products which is widely accepted by the urban Indian consumer. Indian retailers should take advantage of this growth and should aim to diversify and introduce new formats and means of running business in most effective way. They should think about building brand among the consumers and use the new technological inputs shared by foreign retailers. The emphasis should be on branding the retail business. Indian retailers should prepare themselves for fierce competition and competitive pressure. Indian retailers must recognize the value of building their own stores as brands to reinforce their marketing positioning and they must communicate effectively quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy.
Indian retail scene is booming, there is no doubt about it. Tata, Raheja, Piramals, Goenka are few corporate houses which has made their foray in this arena, with beauty and health stores, supermarkets, self-service music stores, new age book stores, every-day-low-price stores, computers and peripherals stores, office equipment stores and home/building construction stores. Today the organized players are present in every retail category. There have been too many players in Indian retail scene which has further crowded several categories. Indian retail still needs to work on their branding strategy and should work & leverage on core competencies.
OPPORTUNITIES TRENDS AND STRATEGIES
Next flourishing industry in India is retailing. There is change in business format and consumer buying behaviour which has led to revolution in shopping in India. Many straggling shopping centres, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof has opened in India. There is predicted growth of organised retailing and Indian retailing is at an inflexion point which will further help taking Indian retailing at next growth level. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail sector in India.
GROWTH OF RETAIL SECTOR IN INDIA
Retail and real estate are the two booming sectors of India in the present times. According to industry experts both the sectors Retail and real estate are mutually dependent on each other. Retail, one of India’s largest industries, has presently emerged as one of the most vibrant and fast paced industries of our times with several players entering the market. The India retail market is estimated at US$ 470 Bn in 2011 ( TCS report 2011), accounting for ~35% of GDP and is expected to grow to US$ 675 Bn by 2016, @ CAGR of 7.5%. The organized retail market is estimated at US$ 26 Bn and accounts for ~6% of the overall retail market for 2011. The organized retail market is projected to grow to US$ 84 Bn by 2016, @CAGR of 26%. With an estimated market of US$ 325 Bn, the Food & Grocery segment is the single largest retail category and accounts for ~70% of the total retail market in 2011. The organized retail segment for Food & Grocery is estimated at ~US$ 9 Bn and accounts for 35% of all organized retail .Retailing is gradually growing and next booming industry.
As the contemporary retail sector in India is reflected in sprawling shopping centres, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behaviour, steering revolution in shopping pattern in India. This has also contributed to large-scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector in India are
· Low share of organized retailing
· Falling real estate prices
· Increase in disposable income and customer satisfaction
· Increase in expenditure for luxury items
An article in Times of India has shown the predicted Mall space distribution in India which is one of the reasons of to believe that retail industry growth is on positive side. One of the important factors in the prospects of the retail sector in India is the growing young population. The changing culture in India is also one of the key factors of growing disposable income because now in changing India young working population has hefty pay packets, there is increase in nuclear families in urban areas, increasing working-women population and emerging opportunities in the services sector. These key factors have been the growth drivers of the organized retail sector in India which now claim of retailing almost all the preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and many more. Soon the world will see new face of retail sector in India as traditional marketing will be replaced by new formats such as departmental stores, hypermarkets, supermarkets and specialty stores.
Now the people in India are becoming familiar with the new shopping formats. Tier II cities are also not behind the race. The retailing configuration in India is fast developing as shopping malls are increasingly becoming familiar in large cities. When it comes to development of retail space specially the malls, the Tier II cities are no longer behind the race. The studies of Tata consultancy services and Ernst and young (2011 studies) show that the total projected upcoming malls are 139, shopping malls are 220 and remaining 81 in the tier II cities. Government of Delhi and NCR are enthusiastic about permitting the use of land for commercial development and thus they are increasing the availability of land for retail space; thus making NCR ready to host 50% of the malls in India.
The real GDP is expected to grow at 8-10 % per annum in the next five years as shown in below table
GDP Growth Actual and projected
As a result, the consuming class with annual household incomes above Rs. 90,000 is expected to rise from about 37 million in 2006-07 to 920 million in 2012-13. Consequently the retail business in India is estimated to grow at 13% annually from US $322 billion in 2006-07 to US $ 890 billion in 2012-13 ( EFY times April 12 2012). India is considered as next stop for retail investors from all over the world and latest research has shown India as top destination for retailer. It also emphasize on the fact that India soon will become the most attractive emerging market for retail. Inspite of the fact that India has over 5 million retail outlets, it still lacks the modern retail concept. This creates an opportunity for international retailers. It is expected that organised retail sector will grow stronger than GDP in next five years and the main reason or the factors responsible for this change is changing lifestyle, growing income and favourable demographic outline.
INDUSTRY EVOLUTION
If one looks into the history of retailing one can find the roots are linked with the emergence of neighbourhood kirana stores catering to the need of consumers. In the era of government support for rural retail: Khadi bhandars run by Government of India which involved the rural people and created job opportunity in rural India. 1980’s saw slow change as India slowly opened up economy. Initially textile sector saw the emergence of retail chains. Few examples are Bombay dyeing, Raymond’s, S Kumars, and Grasim. Later we saw Titan emerging as next big thing in the retail sector. Titan was the first organisation which created the concept and established a series of showrooms for its watch business. Indians got the flavour of organised retailing with titan shops for premium watches. There was huge shift from manufacturing business to retail business. E.g Subhiksha, Foodworld in food and FMCG; Planet M & music world in music; crossword in books. India witnessed the emergence of shopping centres post 1996 specially in urban areas which included the facility of car parking. It was targeted to provide the one shop destination for all the consumer needs like clothes, accessories, etc. Value, Variety and volume are the 3 benefits which current hypermarket and supermarket provides to the consumer. Other revolutionary activities are introduction of sachet – Touching the bottom of the pyramid through Sachet revolution.
RECENT TRENDS
KPMG has done the extensive study of Indian retail market and their study clearly indicates that Indian retail market is estimated to be US $200 billion of which organised retail is going to contribute 13% or U.S. 23 billion. Also the annual growth rate of the department stores is estimated to be 24%. Indian retail market has been ranked fourth in Global Retail Development Index and rated fifth most attractive emerging retail market. In the GRDI total of 30 countries have been measured and India stand is fourth.
High Population density in the metropolitan cities and surrounding tier 1 towns is driving the geographic penetration of modern retail. Nationwide, the retail penetration has been the highest in the south in Tamil Nadu, Kerala, Karnataka and Andhra Pradesh moving towards the west along Maharashtra and Gujarat and now penetrating the north in Delhi’s NCR. The fresh crop of modern retail in the late 1990’s started in the southern region as south India has clusters of metro cities and tier 1 towns. In addition less complicated licensing regulation by the state and local authorities have played an important role in the spatial penetration along the regions. In Andhra Pradesh the licensing process is online, thereby reducing the time lag. Broadly retail firms are following three routes for their market entry 1) the acquisition route which gives jumb start to take advantage of the already experienced manpower, infrastructure front end property of the acquired firm. 2) The JV partnerships a preferred route for firms seeking foreign collaboration for technical know – how and assistance in the backend operations as well as future export opportunities 3) The green field investment route for market entry. A few firms are also following a mixture of acquisitions and JV routes for quick market access. Additionally firms are strategically expanding verticals by forming subsidiaries or holding firms that acts as catalysts to their retail business.
Typically, firms are positioning themselves in one or both of the segments – Lifestyle and value retailing under multiple retail formats. Retail firms are adopting a combination of formats including, mega (hyper and /or super), medium (department/or speciality) and small size (convenience/or discount) for expansion. This strategy benefits firms in several ways. It helps to 1) attain critical mass 2) economies of scope in sourcing by accruing costs across stores 3) reach out to consumers in the local neighbourhood locations.
Regardless of the route followed, the domestic retail industry is witnessing an increase in domestic investment, technical know-how expertise, improvements in supply chain and logistics and demand for store brand private labels.
CHALLENGES & OPPORTUNITIES
In the organised retail one-stop shopping model, subhiksha distinguishes itself as the “no fancy frills” store working on mass consumer’s daily needs. The company’s business model focusses on high volume and low margin by 1) keeping small sized functional stores within the range of 1000-1500sq ft. area 2) clustering in close proximity to each other 3) locating in high population density residential area . The company concentrates on daily need essentials and repeat buying nature of its product categories in fruit and vegetables fast moving consumer goods and medicines. In a typical store in Delhi, the average footfall as per Tata consultancy services 2011 report and Ernst and young 2011 report is around 600-700 walk ins of which approximately 78% turn into bills.
The modern retailers follow either a spiral or a cluster approach for retail expansion and in India typically the cluster approach is more popular. In the cluster approach the firm initially launches in an urban city and then expands towards surrounding places. Retailers have taken completely different approach towards retailing. Its no more traditional way of retailing. Its not about only merchandising. Now a day’s consumers have also become smart. Their aspirations and desires have evolved. Their expectations have improved. Now a days manufacturer doesnot only rely on sales to take place by ensuring mere availability of the product. Today retailing is not only selling products but also selling hopes, aspirations, and above all an experience that consumer can cherish and would like to repeat.
Now a days manufacturers and service providers are working towards bringing value to customers through retail. Apollo hospital, Kaya skin, VLCC Cavin kare are catering to consumer needs through retail outlets. And last mile connectivity seems to be increasingly lively and experiential. Rural market is not completely tapped due to last mile connectivity issue. Today innovative concepts and models can only survive the test of time and investments. However there are few manufacturers and service providers who are not that technically sound and will face competition from specialist retailers
Expansion of Organised retail by format
The total number of organised retail outlets rose from 3125 covering an area of 3.3 million sq ft. in 2001 to 35,198 with an area of 40.3 million sq.ft. in 2012 ( TCS report 2011). Small sized single category speciality stores dominated the organised retail in the beginning with almost two-thirds of total space in 2001. Departmental stores came next with nearly a quarter of total space and supermarkets accounting for the balance of about 12% of organised retail space. There were no hypermarkets in India in 2001, speciality stores are still the most common modern retail format with over half of total modern retail space in 2006. Supermarkets and department stores occupied nearly an equal space of 15-16 per cent each in 2006. In 2006, India had about 75 large sized hypermarkets carrying a tenth of the total modern retail space in the country. This format is expected to gain more prominence in the future.
Regulatory Framework
There had been no specific restrictions on the entry of foreign retailers into the Indian market till 1996. A few foreign players were granted permission for retailing under this earlier regime. However, in 1997 it was decided to prohibit FDI in retailing into the country. In January 2006, however a partial liberalisation took place in policy in which foreign companies are allowed to own up to 51% in single brand retail JV’s as approved by the Foreign investment promotion board. Besides this, foreign companies were allowed in wholesale cash-and carry business and export trading with 100% equity through the automatic route in year 2003. Cash and carry in India is worth around $140 billion, out of the $350-billion retail business. Source ( business standard published on Nov 28)Foreign companies with 100% equity can also carry out trading of items sourced from the small-scale sector and do test marketing of products for which company has a manufacturing approval under FIPB route.
With regard to domestic regulation, the organised retailer has to secure a number of licences and clearances from various central, state and local authorities before it starts its operations. They are related to operations, infrastructure, labour, taxation, and other general matters. The number of licences varies from state to state and it also depends on the type of store format. First, a retailer, has to obtain a trade licence from the local authority which grants permission to carry on the retail business. It has also to obtain licences from the agricultural producemarketing committees (APMC) of each state for procurement and sale of fruits, vegetables, and staples within respective market areas of each APMC.
In addition, in case a new building or mall is to be constructed for use in retailing, the organised retailer has to obtain “no objection certificates” (NOC’s) from different state authorities in charge of traffic, electricity, water, fire and pollution control. Zoning restrictions are also applicable to the organised retail outlets which can be set up only on land earmarked for the local authority for commercial establishments.
At the same time, public outcry over the impact of these chain stores on other retailers and local communities is reported around the world. Small retailers, farmers, and even large organized have concerns about the entry of large global chain stores. On balance, however, in this paper we will try to analyse the effect of new FDI policy on different stakeholders and ecosystem players.
Executive Summary
Various studies have shown that India is fast emerging as a major destination for investment by the global retail chains, which are increasingly facing a saturated domestic market and are targeting the emerging economies like India with growing disposable income. India has been ranked as the world’s second most attractive retail destination after Russia, ranking even above China in a recent global retail industry survey by A.T. Kearney (2011). According to this study a number of international giants, including Walmart and Carrefour are considering entry into India if restriction on FDI is removed. The price water house coopers has ranked India among the six most attractive destinations for investment in retailing alongside China, Turkey, Thailand, Malaysia and Hungary.
Retailers
|
Type
|
Status
|
7-eleven
|
Supermarket
|
Conducting market Evaluation
|
Amway
|
Multi-Level Marketing
|
Operating
|
Auchan
|
Hypermarket
|
Conducting market Evaluation
|
Carrefour
|
Retailer
|
Conducting market Evaluation
|
Dairy Farm
|
Retailer
|
Joined hands with RPG
|
J C Penny
|
Product sourcing
|
Operating
|
Landmark
|
Department store
|
Operating
|
Lee Cooper
|
Product sourcing
|
Operating
|
Levi’s
|
Product sourcing
|
Operating
|
Mango
|
Apparel retailer
|
Operating
|
Marks & Spencer
|
Department store
|
Operating
|
Metro
|
Cash & Carry
|
Operating
|
Oriflame
|
Direct Selling
|
Operating
|
Reebok
|
Joint Venture
|
Operating
|
Shoprite
|
Wholesale Cash and Carry and franchising
|
Operating
|
Sony
|
Manufacturer retailer
|
Operating
|
Wal-Mart
|
Hypermarket
|
Tied up with Bharti Group
|
· Source : Company website.
Arguments against FDI
· Indian retailers have not consolidated their position
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· It is assumed and the pattern has been observed in other Asian countries that foreign retailers will drive domestic retailers out of business leading to widespread unemployment.
· Domestic player’s source raw material in-house where as foreign players prefer to import.
· Global retailers resort to predatory pricing to increase market share.
· Very little investment is required in retailing – Foreign players would remit profit.
· Foreign retail will destroy existing jobs as foreign retailer will bring automated process.
Arguments favouring FDI
· Strong supporting data which shows that retailing has attracted significant FDI
· FDI will help India retail sector to enhance technical expertise and skill set.
· It is assumed that it will speed up growth of organised retailing, set up supply chains and lead to enhancement of Information Technology.
· Joint Ventures will help in easing out capital constraints of existing organised retailers
· Indian Retail industry will be exposed to global best management practices of retailing.
· Skilled labours will be in great demand.
· More investment in upstream and allied sectors
· Competition would lead to price war hence beneficial for end consumer
· Modernisation of retail sectors & development of different retail format can be considered as one of the benefit of FDI
Impact on Jobs
· FDI would lead to an increase in productivity and efficiency.
· It would lead to an improvement in quality of employment in terms of salary & other benefits.
· It would help improving the work environment.
· It would require companies to spend more investment in training and skill up gradation.
· It depends on economic performance – if the economy is on a high growth path, employment will grow.
· Strong indication that it will lead to job displacement due to reduction in number of intermediaries, middlemen etc.
· FDI in retail will definitely increase the demand in allied sector. Skilled employee in allied sector such as food processing industry will be in high demand.
· Quality employment opportunities for educated unemployed.
Impact on organised and unorganised sector.
· Nearly half of the unorganised retailers feels that there is no difference between domestic organised and foreign retailers
· Unorganised retailers are upgrading and consolidating their position to face competition.
· Even though FDI is not allowed, foreign retailers are present in the country.
· Small retailers have gained from the presence of Metro cash and Carry GmbH
Impact on Consumers
· Consumers gain from organised retailing in terms of choice of products, quality, shopping, ambience and services.
· Majority of consumers are in favour of FDI
· It would take some more time for consumers to change their shopping habits, especially in segments such as food and grocery
· Unlike developed countries there are no major consumer groups in India who can present their views before the policy makers. In policy decisions consumers are therefore somewhat neglected.
Impact on Farmers, Food processing industry, Small Manufacturers, Intermediaries
· While setting up of supply chain and removal of intermediaries farmers/manufacturers, etc. would get better prices for their products and hence income will increase.
· Global retailers would link Indian farmers/manufacturers to their international chains.
· Farmers and manufacturers would have access to state-of-the-art technology.
· There would be up gradation in production technology and improvement in quality.
Impact on Manufacturers
· Foreign retailers will put pressure on Indian manufacturers/Suppliers to upgrade the scale of production
· Indian manufacturers/ retailers can use foreign investors to enter in the international market.
· Foreign brand is giving competition to local/Indian brands.
· Existing Foreign players have made significant investment in India and have sourced from India hence boosting revenue generated by Indian manufactures.
Need for Study
The Indian retail Sector is highly fragmented, consisting predominantly of small, independent, and owner managed shops. The domestic organised industry is at a nascent stage. At the macro level factors such as rising disposable income, dominance of the younger population in spending, urbanisation, shift of the traditional family structure towards the nuclear family are buttressing the organised retail growth in India. The current regulatory environment is not very conductive to the growth of modern retail in India. The Government of India prohibits FDI in retail except for single branded JV’s with upto 51% equity share. Retailing is linked with Indian agriculture as well. Indian agriculture is in the midst of a grave crisis with its growth rate steadily falling to just 5.4%/annum in year 2011 -12, as against annual growth rate of 6.2% during 1980’s and 3.2% during 1990’s. Organised retail will result in a complete revamp of the agricultural supply chain in the country. A recent study by CRISIL has estimated annual total loss of about 1,000 billion in the agricultural supply chain, 57% of which is due to avoidable wastage and the rest is due to avoidable costs of storage and commissions ( CRISIL Research 2007). Organised retailers have already started procuring fruits and vegetables from farmers directly bypassing the various intermediaries who add more costs than value to the food chain. They are investing heavily on logistics in the form of centralised warehousing and distributing centres, transport and cold storage either directly or through third party logistics companies. They are also employing a large number of unskilled workers for sorting, grading, packaging and labelling. All these will enhance farmers realisations improve quality of the product at the shop and ultimately reduce the consumer price. There has been a creeping internationalisation of retailing over the recent period. As home markets have become crowded and with opportunities in emerging markets rising, modern retailers from developed countries have been turning to new markets. On an average each of the top 250 retailers in the world have operated on an average in 5.9 countries in 2005-06 against 5 countries in 2000-01 ( Deloitte Stores report 2007). Foreign business accounted for 14.4 % of retail sales of these companies in 2005-06 up from 12.6% in 2000-01. The retail sales growth of companies which have ventured into foreign markets has been faster than those that have confined themselves to home markets. The Deloitte stores ( 2007) study held that the retail business would slow down definitely over the next decade in developed countries, while it would grow strongly in developing countries. This is based on the projection of three significant changes that will occur. First the population in the age group 50-70 years above in the developed world will explode, shifting the share of consumer spending further away from goods towards services such as travel, health care and maintenance of the elderly. Second the population growth in the age group of 20-35 years in these countries will be relatively modest making the hiring of entry level workers difficult, while the population in the age group 35-50 years will decline leading to acute shortage of middle and upper management positions. Third in developing countries, there will be plentiful supply of workforce and consumers in the younger age groups. Besides this demographic shift will make the developing countries more dynamic and risk taking enabling them to grow much faster than the developed world. Driven by these trends, it is expected that retailers in the developed countries will increasingly move to the markets of developing countries for growth.
The Growth of Indian retail trade is associated with Indian Economy. Gross Domestic product grew by an annual rate of 6.6 % during 1994-2000 but the growth slackened to 4.7%/annum during the next 3 years before the growth remarkably rose to 8.7%/annum in the last four years. This meant substantial growth in disposable income of Indian households since mid 1990’s. Based on Market Information survey of households ( MISH) of the national council of applied Economic research ( NCAER), the number of people in the income group of “aspirers” and the middle class with annual income ranging from Rs. 90,000 to 1 million more than doubled from 157 million to 327 million during the last decade 1995-96 to 2005-06. The data from central statistical organisation indicate that the growth of real private final consumption expenditure, which dipped from an average of 5.7% /annum during 1944-2000 to 4%/annum during 2000-03 shot upto 6.7%/annum during 2003-07. As per TCS study - With a GDP of US$ 1.7 trillion (2010-11), India is today one of the leading economies of the world while in PPP (purchasing power parity) terms, it is already the fourth largest economy globally. The country has grown at an impressive 7.45% rate between 2000 - 2011 and with strong fundamental drivers in place, this growth is expected to continue over the long term as well
As per KPMG study - Retailing in India is currently estimated to be a USD 200 billion industry, of which organised retailing makes up 13 % or USD 23.4 billion. By 2012, organised retail is projected to reach USD 32 billion. The optimism about Indian retail is corroborated by the KPMG Retail Survey. More than 70 % of our survey respondents expect to grow in excess of 40% per annum in the next three years. Going by the growth plans of the retailers we met, Modern retailing is expected to double in terms of the number of outlets and retail space in the next three years, with emergence of more national retail chains
Retail sales (in nominal terms) in the country also followed a similar pattern. The international consulting firm A.T. Kearney annually ranks emerging market economies based on more than 25 macroeconomic and retail specific variables through their global retail developments index (GRDI) for the last 3 years ( 2009,2010,2011) India has been ranked as number four indicating that the country is the most attractive market for global retailers to enter. The high economic growth during the last few years raising disposable incomes, rapidly, favourable demographics placing incomes on younger population with less dependency and urbanisation are some of the major factors fuelling the Indian retail market.
In this situation the argument of opening up the retail sector to foreign direct investments has become a sensitive issue. Industry, people and politicians are having debates and having arguments on both pros and cons. Though it is accepted by groups that FDI has always led a positive results on economy and in the long run in retail as well it will lead to efficiency and improvements of standards in addition to the larger integration to global economy and players. The groups debate how this is going to benefit consumers in the long run in terms of price and variety of products which is brought by technology and knowhow of best practices across the globe. This will lead to greater output and domestic consumption. The most lethal argument against FDI in retail sector is the practice of large retailing which some groups think that it can only be achieved by displacing labour in the traditional retail sector, though this is not entirely true. Though it make sense in short run if we are able to create a large scale jobs in other sectors like manufacturing and services such policy which results in elimination of jobs can be put on hold. The groups favouring the flow of FDI are not saying without any merit, there are lot of value adds that the FDI is going to bring in and thereby reshaping to a large extent the retail sector. However any government cannot create layoffs in process of creating competencies, the government is responsible for creating and providing employment opportunities for people. Today no FDI is permitted in retail trade and any consent to provide 20% to 50% of FDI will bring immediate changes and will have consequences.
The next step should be to then compare the thoughts of the groups, people and labours in retail and agriculture sector by talking to them in person. The objectives of this step should include the sentiment on the FDI and foreign players and explore thoughts on the issues faced by the sector. The next step post this one will be to conclude the suggestions and changes to Govt. policy
By doing the research on this topic, an effort will be made to find significance of retail on Indian society. Also to develop clear understanding of the impact of FDI on different stake holders like farmers, small retailers, manufacturers and other ecosystem players.
The aim of this report is to provide an analysis of the arguments for and against of FDI in India’s retail sector, in order to provide the recommendations on reform to Government policy that could reduce the risks of lifting restrictions on FDI in retail. The reports objectives are to investigate& study the Indian retail industry and review current policy and regulations with regards to foreign investors so as to gain an understanding of the current position on FDI, as well as an overview of the Indian system. This will be followed by the literature review (Literature which are printed in media, online interviews. Etc.) This will enable us to assess the key factors to be considered in making policy changes in the future
The next objective will then be to compare the thoughts and opinions of people working within or alongside India’s domestic retail sector via literature study/talking to them in person. The objective also includes to study the sentiments towards foreign investment and to explore thoughts on the issues faced by the sector. After doing the deep study I will be able to conclude the suggestions, changes to the existing Government policy.
Literature Review
Under this section studies of online portal has been done and reviewed.
Link 1
Review of the above article
Retailing is one of the most important sectors in India, and it remains one of the most unorganised sectors. However it provides livelihood, direct and indirect employment to huge population. India has witnessed a huge growth in this sector and it is one the fastest growing sectors in India. May Indian companies have invested in this area and announced multiple projects. However the opinions are divided upon the growth of the sector. It is presumed that at one side this will enable better access of markets to farmers and small producers and thus enabling higher prices for them and in turn will have lower prices for the end consumers. The companies will make up this supply chain and will maintain these will small margins. Govt have supported the FDI and had introduced a bill in parliament followed by media outcry on the issues.
Government has always supported FDI in retail and have initiated the bill in parliament, followed by hue and cry by media and different related stakeholders of retailing.
BJP ( Bhartiya Janta Party) opposition national sitting party of India has opposed to the FDI bill stating that Bhartiya Janata Party is opposing the bill in the parliament stating that foreign investment in multi brand retail would adversely impact the retail sector which is growing sector and will expose the countries food chain system to foreign firms.
BJP leaders have argued that India would lose both manufacturing and service sector jobs with the entry of foreign retailers... Indian economy is dominated by the services sector accounting for 58% of GDP and country is still not ready for FDI in the retail sector. BJP leaders have compared India with China and argued that “It will be wrong in comparing with China as China was predominantly a manufacturing economy and the largest supplier to Wal-Mart and other international majors. Mr. Jaitely said “It generates a huge number of manufacturing jobs by being such a supplier. It obviously cannot say ‘no' to these chains. India, on the contrary, would lose both manufacturing and services sector jobs.”
Some people have argued in favor of FDI stating that India needed a supply chain to help the farm sector and only foreign players could make the supply, the BJP leaders said it was perilous to put the entire food chain in the hands of foreign retailers. Creation of storage and cold chains was the government’s responsibility and outsourcing the job to foreign companies would endanger the country’s food security.
Congress however is supporting this move and spokesperson Manish Tewari said “The PM has made it clear that it is a well thought-out decision and the party supports it,"
The party’s senior most leaders including Sonia Gandhi and PM met to discuss the strategy on introducing FDI in retail sector. Las Minister Mr. Salman Khurshid said that the government is also talking to the opposition to find a way out the impasse that has led to non starter winter session of parliament. And Commerce Minister Mr. Anand Sharma has confirmed that Government is not considering to roll back the bill of FDI in retail. He also mentioned that "Mamata Banerjee has been spoken to. I have addressed her concerns. The BJP cannot accuse us of not having full-fledged discussion in Parliament on the issue. This was discussed and deliberated for over 40 minutes on August 3 in Parliament," he said. Mr Sharma also said the government will take steps to reassure small-scale retailers.
Link 2
http://www.caclubindia.com/articles/fdi-in-indian-retail-sector-highlights-analysis-12546.asp
In this article the author has tried to analyse the present situation of retail in India. There are different forms through which retail is carried out in India.1) Single brand retail shops 2) Multi brand retail shops 3) Convergence retail shops. Keeping in mind the welfare of the stakeholders India has not yet open FDI in retail. Government has kept 15million small retailers in mind and have not yet opened FDI in retail to protect the interest of small retailers. As per the current guidelines Government has allowed
· 100% FDI in Cash and Carry wholesale trading and export trading
· 51% FDI in single brand products with prior Government approval
· FDI is not permitted in Multi brand retailing in India
Changes suggested in current FDI policy by Government of India are as follows:-
· India will allow 51% FDI in multi brand sector
· Single Brand retailers as Apple & Ikea can own 100% of their Indian retail stores.
Other important drivers of the bill proposed by Government of India are as follows :-
· Both Single and Multibrand retailers have to source 30% of goods from small & medium sized Indian suppliers.
· All retailers can start their operation where Indian operation is over 1 million. An Approx. 55 city in India satisfies this criterion.
· Foreign Investors must invest $100 million. Out of this half of the amount should be invested back in back end infrastructure such as cold chain refrigeration, transportation, packing, sorting etc. Government objective to enforce investment by foreign retailers is to reduce post-harvest losses and to bring remunerative prices to farmers.
· The opening of retail outlets in the state will have to be in boundaries of state law.
Huge controversy and issue have been raised by opposition parties and small retailer at large. They have emphasised that there will be huge job losses. Companies like Walmart are highly automated and that can lead to huge job losses. Big players can enter into market with low prices and can throw the competition out, once the competition is out they will have the monopoly and will misuse their position and eventually will hike the prices. This trending is evident in case of Campa cola. Campa was thrown out of the market by Pepsi and Coke. India doesnot need foreign retailers as domestic retailers can support the existing demand in the market. Same as BPO industry, foreign companies will earn in India and will transfer the prices to their international arm. There is huge and cry in the Indian political arena over the introduction of FDI bill. Political leaders like Mamta Banerjee have requested Ruling Government Congress to put the bill on hold till the consensus is arrived with in the coalition. Other leaders like Uma Bharti and Sushma Swaraj have threatened the Government that they will set fire to Wal Mart outlets and have blamed Wal Mart to ruin American Economy. Pratap Mehta president of the centre for policy research voiced out that dissolving the bill will result into loss of face in international arena. The Mom and Pop farmers of India support these reforms. The Indian consumer also supports this reform. Other leaders which support this reform are Deepak Ganguly & Ashok Parikh.
In the above article RBI have raised concerns on slowing FDI in various sectors including retail and points out that too an extent the issues such as polity uncertainty with government are hampering the sentiments of the investors. The recent developments of cancelling of Telecom licenses in March 2012, the taxation issues with global companies like Vodafone are sending wrong signals to the investors and as a result the FDI in all the sectors have fallen. The biggest blow of the retail sectors comes when the Govt in 2012 budget session rolled back the decision to allow FDI in retail sector. However the study confirms that all is well with the macroeconomic levels of the economy. But together these factors are also putting pressure on economy and responsible for a weaker rupee.
Conclusions/findings on the article --
Political stability is very important when comes to protecting the sentiments of investor, however lately the Govt is not able to provide the comfort to the companies ready to invest in India.
The messages that government sends to others leading economies are of prime importance if government wants to attract the FDI in India in all the sectors. This includes the policy decisions, the stability of Government and its ability to take strong measures.
In this case the govt. is hampering its own laid policies when they act against the companies who have invested in India for good and are contributing to the economy at large. The prime example is Vodafone and other Telecom companies.
The Govt should take action on the arbitration of issues raised by the companies with the govt policies and shouldn’t let the investments go down the drain by not taking a quick and swift action in protecting the companies and the investments.
Govt should think the companies foreign or Indian as partners to the development of the economy. It been proved to a very large extent in telecom and will prove similarly in all other cases as well including retail.
Overall all measures to protect the investor money will help government in long run and will help the currency too to gain the lost ground in spite of measure taken by the central bank.
Link4
The article talks about the economic survey of 2011- 2012 in which it is recommended to allow FDI in retail in the phased manner. The survey points out that some Policy decisions which can help leveraging the kirana stores may be propagated initially and then the full flow of FDI can be recommended. The Survey points out that “The value of trade (inclusive of wholesale and retail in the organised and unorganised sectors) in India's GDP at constant prices has grown from Rs 433,967 crore in 2004-05 to Rs 7,42,621 crore in 2010-11, at a CAGR of 9.4 per cent”. With such growth it puts back the emphasis on the retail sector as a sunrise sector of the future.
The key messages from the article –
Govt of India can regulated the FDI inflow of retail and protect the sentiments of the kirana stores at the same time by reviewing the FDI inflow. The phased manner of the FDI inflow will help gain approvals of different groups and member of society as well and favouring the economy as a whole.
The trade in increasing with the rising population and with such a growth the FDI in retail sector become very important considering the fact that there is huge population which will consume at both ends of multi brand retail outlets and local Kirana stores.
The FDI will also help the farmers gain from the inflow, the supply chain initiatives by the companies and improving the efficiencies of the logistics.
Govt with the 30% cap on products sold by multi brand outlets should come from the SSI, village and cottage industries have protected the industries as well.
With the above measure a FDI inflow will help the consumers of India and will also give them the benefits of lower prices, the world class shopping experience.
Link 5
The article talks about the sourcing cap of 30% of all the products from the local SSI, village and cottage industries may hurt the single brand outlets in the country. In a situation when the companies are moving to gain the economies of scale by investing in large factories like it happened in china the companies are finding it difficult to adhere to the sourcing clause. Some big retailers like IKEA are rethinking or holding up their plans to enter India with the present clause in picture.
The key inputs from the article --
Though it is helpful to protect the SSI, village and cottage industries in India however it may not be helpful to put the clause straight up with all the foreign single brand outlets. The clause needs to be worked out with specific industries in Picture.
Govt can workout a method where not from the beginning but in within five years of presence in India the companies may need to adhere to the norm. Such policies may help companies to see what products and what sourcing can be done from the Indian SSI.
Although it shouldn’t matter much till the time much of sourcing is happening from Indian industries for single brand outlets. The SSI factor can be very well absorbed by the multi brand outlets where sourcing is for sure happening from the farmers and small industries.
Govt can regulate the sector and revise the policies and look at the examples thrown open by other APAC countries without hurting the local industries.
When operating in India Single brand outlets will look into the local markets sooner or later and will depend upon the product line up of the companies as well. Since most of the companies are focused on the quality and prices the govt should regulate the SSI and get the standards up to the mark of what the companies are seeking. If the single brand outlets are sourcing from the big factories in India the fact of 30% of product or produce should be lowered.
Data Analysis
The above literature review helps in identifying the research issues and gaps for the present study. The review of literature highlights the following facts
· FDI plays an important role in employment generation worldwide
· Small retailers/Intermediaries are against FDI
· Big retailers like Bharti and Future group are looking forward for FDI
· FDI will benefit Indian Economy
· Sitting Opposition party is not supporting FDI bill in parliament which is the biggest challenge for ruling party
· FDI can lead to price war and immense competition
· Monopoly of foreign retailers can arise from new FDI policy
· FDI enhance the growth of developing countries but not developed countries.
· The main determinants of FDI in developing countries are inflation, infrastructural facilities, debts, burden, exchange rate, FDI spill overs, stable political environment.
· It is found that firms in cluster gain significantly from FDI in their region, within industry and across other industries in the region.
· It is also observed that FDI have both short – run and long – run effect on the economy. So, regulatory FDI guidelines must be formulated in order to protect developing economies from the consequences of FDI flows
People Response ( Interview results)
When asked about the size of the business that manufacturers are planning to have in next five years 18 responded that they will surely expand and grow in next five years. Most of them have plans to double their turnover. For this they are planning to increase their production and supply by increasing manpower and machinery. In addition they are planning to improve product quality. Some of the respondents are planning to export their goods and they are working towards that goal. 5 participants one dealing in food products, another in health products ( soya milk, soya food) even had plans to supply their products to big organised outlets. One of them commented
“ As economy is growing, hence spending power of people is also growing and this will definitely impact my profit and my business. I am assuming that my business will grow 3 times in next 5 years”.
The national and state level trading associations such as FICCI, federation of associations of Maharashtra etc. political parties in opposition and other associations have resisted heavily on the fact of FDI in retail. They have pointed out that the present retail structure which is in spirit is run by large number of family owned business and labourers employed will not be able to survive in the competition offered from the foreign players. Retaining contributes to livelihood and self-employment and more jobs will be created when a foreign players will come into the market is a misleading notion. Indian economy where 80% of the people in retaining business are self-employed the numbers don’t stack up even if you extricate 20% of the population. In a City like Mumbai where 5 lakh people will be thrown out of the business due to this, the argument becomes very strong and any math is not going to support the generation of employment story. The government which is unable to provide employment in big cities, this seems logical but in small towns the impact will be devastating. The retailers are supposed invest 30% in creating infrastructure and thereby supporting industries like real estate, woodwork, transport etc. even is this 30% is of the produce they buy locally the international retailers can upset the import balance by sourcing the goods from global markets than from India. Moreover they may resort to predatory pricing initially to capture and destroy markets and once domestic players are out of the market they will be in monopoly position to allow to increase prices and earn profits.
The aggressive marketing techniques including predatory pricing, allow the multinational retailers to capture large portion of the market in short time span, in less than 10 years, organised retailers have acquired 40% of market share in Thailand, 30% in Poland, 19%in china. These increases in market share have been at the cost of domestic unorganised players who are unable to fight the competition. The trading associations have also pointed out that FDI in retail would not attract large inflows of foreign investment. Since very little investment is required to conduct retail business. Goods are bought in credit and sales are made on cash basis. Hence working capital requirement is negligible. On the contrary after making initial investment on basic infrastructure, the multinational retailers may remit the profits earned in India to their own country. Since Indian retailing is growing towards an organised format on its own and the fixed capital requirement is small and can be financed by the Indian business houses, there is no need to open up the sector for foreign investments..
Many organised retailers, retail experts and consultants, agro consultants, consumers some industry associations, some ministries ( such as ministry of textiles & Ministry of food processing Industries), industries such as Arvind Mills and Khadi and a large number of players in the small scale sector are in favour of FDI in retailing. They have argued that allowing FDI would be beneficial for the country in terms of inflow of investment, technical know-how and skills. Organised retailing requires huge investment for fast expansion, setting up of supply chains and implementation of Information technology. FDI would ease the capital constraint and foreign players would bring in the best management practices that can be replicated by the domestic players. They would invest in supply chain, source products from India and provide a platform to domestic manufacturers to export their products in international markets through these retailers..
Proponents of FDI have argued that foreign players are already in country through various grey areas in the regulation and allowing FDI would increase regulatory transparency. Studies have shown that the non-competitive nature of the current retail industry is resulting in steeper prices for consumers and higher margins for retailers. Allowing FDI would increase competition which would force domestic retailers to improve productivity and efficiency and this would lead to lower prices.
International studies ( Basker 2004 b) have shown that entry of low cost retailers such as Wal-Mart leads to an automatic fall in prices. Those in favour of FDI have cited the example of the Indian automobile industry where there had been significant protest against opening up the sector to FDI. The domestic automobile industry enjoyed protection for several decades resulting in a slow growth of the sector and limited choice for consumers. Earnst and young 2011 survey on retail states that the removal of FDI restrictions unleashed competition and investment, resulting in a 256% increase in productivity between 1999 and 2000.Output increased by 280% and prices declined. Employment in automobile sector rose by 11%.
Impact of FDI on jobs would be positive which is evident from the fact that foreign retailers may have to reserve at least half of their jobs in superstores for rural youth and source more than the mandated 30% from micro and small industries as the government tries to salvage the big ticket but controversial economic reform.
An official said the government is likely to have a relook at a proposal that seeks to reserve at least 50% of jobs in foreign-owned superstores for those who have migrated to cities from villages. This proposal was earlier looked at by the committee of secretaries but later dumped.
The government could also consider raising the limit of 30% mandatory sourcing of inputs from small industry to placate lobbies in the small and medium sector that say it is not enough to protect the interests of traders. "The government is mulling strategies to appease various political parties opposing FDI in multi-brand retail. It is open to negotiations on the various clauses that were recommended earlier by the Committee of Secretaries in June 2012 this year but were not included in the cabinet note," the official said.
Small industry has been defined as units that have invested up to 5 crore in plants and machinery.
The government, which has been criticized for not carrying out any credible study on how large retail houses would impact employment in the country, could take up the labour ministry's proposal that such a study be made a part of the initial proposal by foreign investors.
In year 1999, the Cabinet allowed 51% FDI in multi-brand retail and raised the limit for single brand to 100% from 51%.
Under pressure from political parties, the government said foreign retailers must source 30% of their inputs from domestic micro and small enterprises, backtracking from "anywhere in the world" announced earlier.
"This shows that the policy is not full and final and many other clauses can be brought in to mollify the strong negative reactions coming from all quarters," the official said.
However, labour economists say an open-ended employment policy will face several constraints given that urban labour supply operates through various channels of informal markets. "Given that identification is a real problem in India, how will they define rural youth? Moreover, it is difficult for the rural population to work in cities, hence we may see a situation where these 50% seats won’t get filled by rural youth, thereby ultimately benefiting urban labourers," says Arup Mitra, professor, Institute of Economic Growth.
"If the employment is contract based, then again its benefits to rural employment are questionable," he added. Defending the government's move, commerce and industry minister Anand Sharma had said that foreign direct investment in retail will help create 10 million jobs over the next three years.
A discussion paper on allowing FDI in multi-brand retail, floated by the DIPP on July 6, 2010, too, talked about keeping aside 50% of jobs in retail outlets for rural youth.
Organisations need to spend on training of the skilled employees. Expenditure on training will increase with the growth of organised retailing. The average annual expenditure on the training of the retailers has been estimated at Rs.6million. With the growth of organised retailing, management institutes are reorienting their courses to meet the demand of their clients. For instance KJ Somaiya Institute of Management studies Mumbai has begun specialization course in retail management. Pantaloon retail India Limited has signed an agreement with KJ Somaiya Institute of Management studies for an 18 month long course with 6months on the job training at various retail formats of Pantaloon. The Welingkar Institute of management studies in Mumbai is offering a range of curricula structured by industry experts. RPG enterprises have set up a training institute in Chennai. RPG institute of retail management which offers courses to retailers, manufacturers, and other industry professionals. Experiences of other developing countries such as Brazil and Mexico shows that international retailers like Carrefour invest significantly on training. Hence the entry of foreign retailers and growth of organised of organised retailing would lead to manpower and skill development. To cope up with the skill set requirement after entry of foreign retailers in India, Foreign retailers should tie up with the colleges to produce more brains specific to retail industry. Jobs which will be lost due to modification of the technology after entering of foreign retailers can be used in other sectors as farming; can start their own business tourism, join food processing unit. Since labour is cheap in India, lost jobs can easily replaceable with other jobs of other sectors or other sectors can easily absorb the labour.
Since only few foreign retailers are operating in India. It is therefore difficult to analyse their impact on the unorganised retailers. Around 48% of unorganised retailers felt that the impact of foreign retailers on their businesses would be same as that of the domestic organised sector. 29% said that impact would depend on the speed of expansion of foreign retailers and the policies they follow. The remaining felt that they would be adversely affected. The group of retailers which felt that FDI will affect them are suffering from low profitability, high capital cost and competition. They are also not much updated on changing retail scenario. Around 65% unorganised retailer feels that the growth of organised retailing has no impact on their business. Around 25% accepted that they initially suffered losses but had changed their business strategies to face the competition. None of the unorganised players had to close down their operations. These findings are similar to that of other studies. The respondents cited that when Ansal Plaza , the shopping mall in New Delhi came up, retailers in South extension were worried. Unorganized retailers in the vicinity of organized retailers experienced a decline in their volume of business and profit in the initial years after the entry of large organized retailers. The adverse impact on sales and profit weakens over time. There was no evidence of a decline in overall employment in the unorganized sector as a result of the entry of organized retailers. The rate of closure of unorganized retail shops in gross terms is expected to be 4.2 per cent per annum which is much lower than the international rate of closure of small businesses. The rate of closure on account of competition from organized retail is assumed to be lower than 1.7 per cent per annum. There is competitive response from traditional retailers through improved business practices and technology up gradation. A majority of unorganized retailers is keen to stay in the business and compete, while also wanting the next generation to continue likewise. Small retailers have been extending more credit to attract and retain. Customers, however, only 12 per cent of unorganized retailers have access to institutional credit and 37 per cent felt the need for better access to commercial bank credit. Most unorganized retailers are committed to remaining independent and barely 10 per cent preferred to become franchisees of organized retailers.
Across the country, both organised and unorganised players are fast changing their modes of business with the anticipation that foreign players will soon enter the market. Unorganised retailers are upgrading themselves from the mom and pop format to standalone supermarkets and are implementing supply chain management, modern accounting practices, and are reinvesting in store décor and ambience. Indian economy is experiencing a high growth rate and even though organised retailing is growing at rate of 20%, its market share remains 2%, indicating that the organised sector is growing at a much faster rate. Organised retailers such as RPG have pointed out that growth of retailing is highly co related to the growth of the economy and if the economy grows at a rate of 6% or more, retailing would grow. Under these circumstances RPG believes that if Government opens up retailing with conditions such as joint ventures with majority Indian ownership and local sourcing requirements, it would be beneficial for the economy.
Mckinsey study 2011 on retail shows that, in the best case basis the FDI in retail will increase the organised market size to $250 Billion by 2020. This would result in increase in income to the producers by $ 40- $45 Billion per year. This is by no means a small proportion. This will also employ 4 million new workers and around 6 million new jobs in logistics, supply chain and transport. The government of India will benefit from the better monitoring, supply chains methods. It can also expect revenue of $ 30 billion in terms of taxes. FDI will also help in Small and medium enterprises by becoming vendors and producing goods of international quality and become a cost competitive in global arena. Traditional trade will not decline and will continue to grow. Even in current scenarios when modern trade continue to grow by 24% the traditional retail has grown at 12 %. The example of deregulation of SSI in India which speculated the eventually death of SSI have demonstrated that these have growth in terms of output, Units and jobs offered. Another example which shows early period of opening of economy when growth was 16% of 5 years and then to 12% of next 5 years and then again gaining momentum of 19%. Similarly Jobs offered by SSI accelerated from 4%-6% to 19% in recent times. ICRIER study shows no decline of jobs in unorganised sector because of the opening up of the organised sector. Organised sector actually helps to unorganised sector in coming of age and teaches them the self service, home delivery, credit cards and etc. Farmers are the ones which will benefit a lot by opening up of the FDI. They will stand to gain a good chance of price of the produce. For example any agriculture produces like vegetables the farmer’s gain 30% of the price but in developed markets they get 50 to 70 % margin.
Organised retail will help drive efficiencies, faster reach to the consumers, and reducing wastage by 30% and increasing prices by 20%. They will achieve all this by sourcing directly from the farmer or through aggregators. They can also help in bringing in the know-how of improving the produce, improving farmer output and user friendly processes. If the investments are not made in agriculture supply chain it would be difficult to meet India growing demand of the fruits and vegetables. Furthermore the lower prices will help reduce inflation.
The ability to drive innovations, technology and that too at the large scale the trade is able to increase the affordability to consumers. For a low family income the organised trade can reduce the costs by 10% monthly. FICCI spokesperson when reacting to the FDI said "Allowing FDI will bring development of a robust supply chain, which in turn will help in integrating farmers and small and medium size enterprises” FICCI explained that whatever investments the retailers would be made in India a fix part of it should be invested back to get the back end infra right. If the supply chain is corrected the other retailers will also provide quality products and this will set the industry on the right track. Other members supported that such a move will boast competition and as a result consumers will get the best products. They give examples of VAT which was resisted by states like Haryana but now when they examine the benefits they also joined the movements. Small traders will also see the benefits in the years to come.
Government of India report on retail stated that overall the retail sector is $450 billion and which is set to touch $840 billion in next 10 years; it is assumed 35% of the material will come from SME. So the dependency on SME will increase. Carrefour sources 90 per cent of its material from local small and medium enterprises. Quoting another example, he said that 96 per cent of the products sold by Wal-Mart in the United States are sourced from local SMEs. FDI will help SME to take the products to national level. The closure of small scale retailers and business is 5% which is much lower than the international trends. The rate of closure from organised retail will be close to 2%. There will be a competitive response from traditional retailers through improved practices and technology. Local retailers offer credit to attract and retain consumers however only 12% of the organised retail have access to any credit and around 40% feel for better access of the bank credit. Barely 10% of the unorganised retailers offered to become franchises of the big retailers.
Consumers are major beneficiaries of the retail boom. They now have choice of wide range of products, quality and prices. Shopping has become a pleasurable experience. Organised retailing is initiating various measures such as tracking of consumer behaviour, consumer loyalty programmes. Etc to retain their market share. It is predicted that entry of foreign retailers would further increase the range of products available to Indian consumers and improve the quality of services offered. There is study by ICEIMR which shows that consumers across all income groups and cities showed preference to buy their food and groceries from local kirana shop or community/cooperative stores. Consumers from low income group largely bought their food and groceries from small retailers while those from high income groups showed preference from organised retailers. Individuals in the middle income group were equally divided as to whether they purchased apparel and accessories from small retailers or large players but have shown clear preference for large retailer’s inn electronics. Younger generation has shown higher preference for organised retailing across all income groups. The most commonly cited reasons for choosing unorganised retailers are proximity, purchase on credit, home delivery, personalised service. Etc. The reasons for choosing large retailers are quality assurance, wide choice, latest fashion and branded products, ambience, service offered, discounts, pleasure and experience, opportunity to compare different products and prices etc. Overall the unorganised sector has a strong presence in food and grocery segment across the country and their market share is unlikely to go down drastically with the entry of foreign players. Since younger generation has a preference for organised retailing, its share will definitely increase in future.
People in Urban are more exposed to organised retailing and prefer malls and big shops based on their income where people in rural like to purchase from kirana or small shops. With increase in economy and changing culture in India, retail will definitely and so will their consumers. A recent documentary by NDTV has shown that 70% of consumers feel that FDI should be allowed in retailing, since it would increase investment, lead to enhancement of technical know-how, widen the proliferation of brands, lead to innovation, increase choice, offer better quality of products and services, and enhance price competition. Around 23% middle and lower income group felt that the entry of foreign players would increase the price of products, drive out the domestic retailers from the business and increase unemployment. Some criticisers also think that foreign retailers may use developing countries like India to dump substandard/outdated product. However past experience have shown that Indian consumers are quality conscious and have niche for value for money. In order to gain customer confidence, retailers (domestic and foreign) will have to be extremely efficient in their operations, innovative in their promotions and branding.
Unlike retailers and manufacturers who have strong association to put forward their request in front of government, consumer associations are weak, suffer from inadequate funding and largely concentrate on protecting rights of consumers against unscrupulous traders. In developed countries, consumer forums are very well organised and they can exert pressures on their governments. Although this survey showed that a large majority of the consumers are in favour of FDI in retailing, none of the associations have made any effort to present their views before the government.
In the absence of strong consumer representation, the views on FDI are lopsided i.e. government receives many representations against FDI from trading associations and stake holders but none from the consumers. Consumer forums have pointed out that since they lack the necessary finance, government should fund a yearly consumer survey to track the changes in consumer shopping patterns. Even existing consumers surveys do not have specific questions on FDI in retailing. Consumer groups have pointed out that there are wide variations in the standard of products available to consumers and strict measures should be taken by the government to ensure the quality standards of goods produced domestically and imported. This is especially true in case of electronic goods. They also felt that consumer awareness is low in India and very consumers are aware of branded products and quality standards. Consumers will definitely gain from organized retail on multiple counts. Overall consumer spending will increase with the entry of the organized retail. While all income groups saved through organized retail purchases, the survey revealed that lower income consumers saved more. Thus, organized retail is relatively more beneficial to the less well-off consumers. Proximity is a major comparative advantage of unorganized outlets. Unorganized retailers have significant competitive strengths that include consumer goodwill, credit sales, and amenability to bargaining, ability to sell loose items, convenient timings, and home delivery.
2/3rd of India’s population is dependent on agriculture and related activities. Enhance agriculture productivity and value addition in agricultural produce would help to increase the productivity and consequently farmer’s income. Enhancing the purchasing power of the large segment of Indian society,i.e. farmers would generate increased demand for other goods and services thereby strengthen the whole economy. Land holding in India is highly fragmented, very few farmers have the technical knowledge of best agricultural practices or finance needed to implement such practices. Although many private players such as HLL, ITC, are investing in contract farming, direct marketing and are linking the farmers to retail chains, private investment in agriculture is growing at a much slower rate compared to other sectors of the economy. Moreover although India is self-sufficient in agricultural production, a large part of the produce gets wasted due to inefficient supply chains, resulting from inadequate infrastructure, poor logistic management, improper handling etc. The existence of several intermediaries and complicated regulations such as restrictions on interstate movement of certain commodities add to inefficiencies in supply network increases the price of the products but farmers receive only small portion of the price.
Organised retailers are trying to set up the supply networks by sourcing directly from farmers. They are in the process of implementing agriculture practices such as contract farming which enables farmers to produce for the international market. Organised retailer such as Cash and carry GmbH are in the process of developing institutionalised relationships with farmers providing them with seeds, technology and other inputs for the varieties needed for the processed food industry. Entry of foreign retailers is also providing access to food processing industry to market their products in other countries through the global chain of these retailers. During the survey done by Ernst & Young a metro supplier of the bottled fruit juice in the small scale sector pointed out that although his prices were low, he did not have distribution channel prior to Metro. Metro worked closely with his unit to upgrade quality and packaging as a result his company has an 83% increase in turnover. Small scale manufacturers in the food processing sector are of the opinion that the sector is highly unorganised. Some of them have not adapted to the best practices such as barcoding of the product, which imposes additional costs on the retailers. With the growth of organised retailing, these small manufacturers would be forced to upgrade and implement such practices. If FDI in retail is introduced, Intermediaries will be adversely affected.
There is however some negative impact on the profit of the intermediaries dealing in products likes fruits, vegetables and clothing. Over two third of such businessmen plan to expand the business in response to increased business opportunities thrown open by retail only 22% of intermediaries don’t want their generation to come to into the family business. Organised retail will offer profits to farmers which is 25% more than what they get from Govt Mandi. Profit realization is at 60% and the difference is much higher when commission of mandi usually 10% is taken into account.
Large manufacturers have started feeling the competitive advantage of selling through organized retail. Manufacturers have responded through increasing the own retail presence, adopting small retailers and setting up dedicated team to deal with modern retailers. The Sector will also reform the logistics industry. This will create a significant impact across the economy. Small manufacturer didn’t report any significant impact of the organized retail in the country. At present all the international retailers are coming into the premium segment. The share of branded products is less than 10% and indicates the under penetration of the market and room for the new entrants.
There are some issues of margins also with manufacturers, Future group big bazzar is not stocking the products of Reckitt where as it is filled with products of HUL and CP. This is when Reckitt started to offset the margins after increase in the input costs. These issues are not uncommon and are with other top end retailers as well. Earlier Big Bazzaar stopped selling products from Pepsi on its counters and about two years ago it pulled Kellogg’s after the later refused to increase margins. Though all parties say that margins have gone up in the last one and half years it is agreed that all the parties should work on efficiencies. Manufacturers usually pass on the inefficiencies to the retailer by squeezing margins. Many companies in consumer durables and FMCG can do better in these grounds. Aditya Birla Retail CEO adds the companies are only giving 16-18 % of the margins whereas we need 24 % to cover the costs. Some companies who give 27% margins are helping us to make some profits. Manufacturers differ on this and add that modern retailers should demand better margins but where it is acceptable. They think the retailers need to manage efficiencies better. Another director of marketing adds that modern retailers have typically high overheads since they manage the consumer experience, rentals, hiring, training and development costs. All these items push up to over heads. This puts pressure on margins. Devangshu Dutta, chief executive of retail consultancy firm Third Eyesight says the conflict between the two parties is “inevitable”, given the increasing cost burden.
Both parties manufactures and retailers also differ on the volumes of the trade contributed by organised retailers. The percentage of organised retailers is only 9% whereas the major volumes are coming from the traditional store and is at whooping 86%, the rest coming from company owned stores.
Compare this with other countries where organised retail in China contributes 30%, Thailand it is whopping 50% and in developed economies it is close to 70% of total sales of the company says Mike Duke Walmart CEO.
Modern retailers have better bargaining power however in developed economies the margins are regulated differently for traditional retailers and modern one. Indian companies are also beginning to understand that they need different yardsticks when it comes to organized retail.
Retailers argue when they are helping manufacturers achieve volumes besides help them save costs they can always pass on the larger share of savings. E&Y adds that trouble becomes when you don’t see the channel partner as business partner and looks the relationship as more transaction based and not collaborative. But retailers also add when bulk of the volumes are coming from traditional volumes modern retailers tends to get side stepped. Both modern and traditional retailers enjoy margin of 10-20 % in consumer durables but high costs of former brings down the margins to 5%. As you add volumes you will ask for better margins and power will shift from manufacturers to retailers. In consumer durables the organized retail contributes 20% of the sales volumes. Not all manufactures are into the collision path with retailers, companies like Godrej have no plans to cut retailers margins. Though organised retail is 8% of the total volume but it is still small. HUL MD Nitin Paranjpe says the challenges are always there but we have excellent relationship with retailers and we will continue to create value.
The racks meant for toilet cleaners at Future Group’s Big Bazaar outlet in Lower Parel, Mumbai, are filled with Hindustan Unilever’s (HUL’s) Domex, Future’s own Clean Mate and other brands. The one missing in the segment is Reckitt Benckiser’s popular product Harpic.
The case is the same in the section meant for hand wash liquids. Here, HUL’s Lifebuoy gets most of the space, then come Future’s Caremate, Colgate-Palmolive and others. Here also, Reckitt’s Dettol is missing.
“There are some issues between us and Reckitt. We are not stocking their products,” says a salesperson at Big Bazaar.
The margin “issue” between retailers and manufacturers has resurfaced big time — whether between Reckitt and Future or consumer durables giants and Tata group’s Croma.
After Reckitt wrote to retail chains saying it would cut their margins two per cent to offset the increase in input costs, Future Group held back purchases from the FMCG company, while others expressed their intent to follow suit.
A senior Future executive tries to play down the issue: “We believe we will be able to find a middle ground.”
Chander Mohan Sethi, chairman & managing director, Reckitt Benckiser, remained unavailable for comment.
Such fights are not new for Future Group. In early 2007, it had boycotted Pepsi’s Frito-Lay products over commercial terms, including margins. About two years ago, it had pulled Kellogg’s off its shelves at Big Bazaar outlets after the breakfast cereal maker refused to increase margins.
Though retailers as well as manufactures agree that costs have gone up in the last one-and-a-half years, putting pressure on their margins, both the parties say the other side should work better on efficiencies.
“Manufactures tend to pass on their inefficiencies in the supply chain by squeezing retailers’ margins. Many consumer durables and FMCG companies can do much better on this front,” says Vineet Kapila, chief executive officer, Spencer’s Retail.
But manufactuers have a different take on this. “Modern retailers should manage their costs better. While they are well within their rights in demanding higher margins, the point is whether it is acceptable. I think they need to manage efficiencies better,” says Ravinder Zutshi, deputy managing director, Samsung India.
Manish Sharma, director (marketing), Panasonic India, agrees: “Modern trade retailers typically have high overheads, since they are into providing a better consumer experience. Steep rentals, better ambience, hiring costs, training and development — all push up overheads. This puts pressure on margins.”
Manufacturers and retailers also differ over the contribution of modern trade to manufacturers’ volumes.
The percentage of consumer goods sales coming out of modern trade in India is about 8-9 per cent for a manufacturer, while traditional trade contributes the lion’s share, at 87 per cent. The remaining 4-5 per cent comes from company-owned outlets.
Mr. Devendra Prasad General Manager Hungama Digital shares his view
Why FDI Conceptualization happened
The FDI in retail was conceptualized due to the constantly high WPI( Wholesale Price Index) and subsequent impact on inflation ( High) and Low GDP.
Government agenda was to reduce the number of sell through point in the process of productization( production sites) to the sell point( Shops or any other media). Due to the multiple sell through point there was more than 100 percent rise in product sell price compared to product production cost.
It was also observed that middle man ( Sell through point) was basically inflating the price point which in-turn attracted black marketers to hoard product and created virtual shortage of necessary goods or products to increase prices. It directly impacted WPI, Inflation and in-turn pushed back the buyers buying capacity. Due to that, it impacted the economic growth (Weekly, monthly and quarterly) on IIP (Index of Industrial Production)
Because of the high WPI, Inflation, and subsequently low IIP directly impacted the economic growth negatively due to the lower consumer spending. Due to the above mentioned, government were forced to import necessary goods from other countries to keep the price under control which impact the current account deficit.
Both current account deficit and high WPI, inflation devalued the currency and subsequently impacted FII’s to move out their investment from India and also reduced the FDI.
Why 51% FDI in Retail (single Brand) would not work?
The international and local player to do the tie-ups. They would also require lengthy regulatory, financial clearance both from central and state authority which generally take 6 to 9 months
There are prerequisite that Retailers needs to procure 30% of their product line from the local vendor which raises the concerns about the investment in local production partner to maintain Quality
In most of the other countries, in the same scenario the retailers would get an option to source the product from Local or international partner. The example in US is Wal-Mart as their 90% products are imported from China, Philippines, Taiwan, Mexico whereas in Europe Mark and Spencer 70% product comes from china and Eastern Europe
Due to the above mentioned lengthy process, the big retailers were lobbying to increase the FDI from 51% to 100% and it would decrease the GTM time from one year to three months as multiple regulatory clearances would not be required. ( Please check the regulatory on the same, This is my understanding based on the news and debate on FDI’s in retail)
Why 51% FDI in multi brand got proposed?
Development of single point of product sourcing with defined Quality.
Easier to maintain or develop backend infrastructure because of the volume
Quick regulatory clearance
Better ROI for Retailers
Local Scenario
Why it is opposed?
SME and SMB feels that they would be losing to competition due to volume game as well as flexibility to invest
Lack of awareness - as most of the small scale retailers are not aware of hidden benefit of FDI
Negative propaganda by black marketers as FDI would fill the gap which is currently used by black marketers
Job losses
Why FDI in any form?
FDI would allow retailer to directly source product from production site which would give producers high value for their product
It would reduce WPI and inflation. It would subsequently increase GDP, reduce current account deficit (due to lower import as FDI would remove sell through process).
The impact of point 2 would appreciate currency at appropriate level which would in turn attract FDI’s in other sectors
The clause of sourcing 30% product from local vendor would increase prospects for SME and SMB due to the sheer volume as reduced product price would increase overall consumer spending. That would increase volume.
The above 4 points would remove multiple point based price addition and reduce black marketing and hoarding of necessary products.
It would increase consumer buying power which would impact cascaded industries and would increase job across sectors
The above mentioned points clearly indicates the hidden of FDI’s positives on overall multiple sectors and associated sectors
An interview to CNBC news Rajan Mittal said that they would be investing $2bn in retail outlets in next three years.
Adyta Birla group is also planning to extend their Retail segment
Reliance group is also contemplating the same
Future group would be deleveraging their investment and waiting for FDI clearance
Shopper stop is also awaiting Governments approval on FDI.
Ashish Nanda, partner, Ernst & Young, says: “The moot point here for manufacturers is to view their channel partners as business partners. The trouble begins when the relationship becomes transaction-based, not collaborative.”
Next Retail’s Raman says: “With the bulk coming from traditional trade, modern trade retailers tend to get side-stepped.”
Though both modern and traditional retailers enjoy margins of 8-18 per cent in consumer durables, the increase in costs of the former has led to a squeeze in their margins, bringing them down to about 4-5 per cent.
“As you keep increasing market share, you will ask for more margins. The balance in power will shift from manufacturers to retailers,” says Varghese of Birla Retail. “For instance, in CDIT (consumer durables and information technology), the modern trade contributes 15-20 per cent,” he adds.
Spencer’s Kapila argues, since modern trade saves the manufacturer the need to pay for the wholesaler’s margins, promotion expenses, warehousing costs and so on — which adds up to 20-25 per cent of product costs — retail chains would be more than happy if manufacturers pass those savings on to retailers as margins.
GCPL Chairman Adi Godrej said: “We have no plans to cut retailer margins. Though organised trade comprises 8 per cent of our total offtake, it is still small.”
Though Nitin Paranjpe, managing director, Hindustan Unilever, declines to get into specifics, he says: “We have excellent relationships with all our modern trade customers. There are challenges, but we work together to create value. This creates win-win opportunities for both us and them.
By studying the above arguments we must admit that today manufacturers are in driving seat and have major role in overall retail cycle. FDI will definitely impact manufactures in positive way
Conclusion
Government of India in fact is looking at the larger benefit of the society by bringing in the FDI in retail. However the other groups should logically think and arrive at a conclusion which is –
1. Modernization doesn’t mean the end of Jobs in fact it is job creation. If we look at any examples of manufacturing, IT and other business where once it was thought that modernization would be end of the jobs but actually it helped in creating more jobs and better livelihood for the people of the economy.
2. Groups shouldn’t forget the fact that 70% of India still lives in the rural area and in spite of the self-employment offered by the traditional retail the larger group any days would be the farmers and for them the benefit would surely be the FDI, changes in logistics, better prices, profits and ultimately the better living standard.
3. The second point brings the growth of farmers and it should be taken into account that growth of one group will lead to growth of another. With better purchasing power parity the farmer would defiantly invest back in the farm land, buying more objects from Retails and thereby boosting the traditional retail segment.
4. The increased purchasing power parity will have direct impact back on society with Better GDP of the economy.
5. The products which will gain the most out of the modern retail are food items, fruits and vegetables and products made by SME and SSI. This will also depend upon the volume of the trade offered by organised retail. The Sector will not change all the dynamics of the markets within a year and hence will offer the traditional retail a space for healthy competition and reasons to improve.
6. The Intermediaries will either expand the business and act as aggregators to the large retailers or will offer better services to the farmers to retain the existing business. Thereby expanding the entire market.
7. Traditional retail in advent of the modern trade will try to improve, offer better margins and profits to farmers, improve on logistics, supply chain and market regulations.
8. Retailing as a market will expand will bring in factors like better storage and less wastage and improved efficiencies.
9. Government will get a good hand in reporting, regulation, collection of taxes and thereby investing the same money in creating infrastructure for storage, transportation, exports, regulation of markets and supply chain.
10. The traditional retail will be not go out gear immediately since 90% of the trade still happens from that route. There will a long period of time when such share will reduce to 50% but however this may not be entirely true when referred to market size. Since markets will also grow the safe assumption would be that Morden trade will take up approx. 10%-20% of the traditional retail markets.
11. The competition that FDI will bring on will be more on cities and small cities, a larger portion of the traditional retail which is in villages will remain safe.
12. Traditional Retailers on the big cities will have to modernise and route to best practice which modern retail offers.
13. There will be factors like Retail outlets at strategic places, Outsourcing, Targeted collaboration, technology and adoption of best practices, supply chain and logistics. All these factors will add to jobs creation in the markets.
14. The import of goods and produce from the global markets to India will remain one of the challenges to be faced but the opportunity to Indian traders and manufactures will be similar and will be pushed to make quality products and compete in Global space.
15. The modern trade will all its options will allow the SSI and SSE to move to the global world and offered products and services to the global market.
16. Modern trade at one time can target all the demographics at one go; the shopping experience is great and enlightens the shoppers.
17. Consumers in the social networked world today wants to remain connected and thereby influencing the buying behaviour and patterns, the modern trade will allow consumers to remain connected and give them what they need.
18. The population of India is Young and will increase on the retail spending, the expansion of markets will benefit both traditional and modern retail outlets and thereby expanding the whole market
19. Aggregation of small items will be the key to consumer buying patterns in the new era. Intermediaries who will be become aggregators will benefit the most. Limited editions, time based discounts and customizations will sweep into the markets and India based SSI and SSE can bank on such offers to increase sales.
20. Government should invest in the modernisation of the retail. Help setting up of modern large cash – and – carry outlets which could supply not only small kirana stores but also to licensed hawkers at wholesale price. Cash and carry outlets should directly deal with the farmers and hence removing intermediaries. Government should support by removing tax and capital subsidies on such transactions by cash and carry outlets.
21. Government should allow FDI with the pre requisite in policy to improve the infrastructure of the state and life style of its people.
Annexures
References
http://www.ey.com/IN/en/Newsroom/News-releases/Published-editorial---FDI-in-retail---MNC-retailers-to-select-partners-with-suitable-capabilities
Wal-Mart View
SUPPLY LOGISTICS section for good data points
Kishore Biyani comment – Overall Impact and Projection
CRISIL view on FDI and its Impact
FICCI Report
http://www.technopak.com/resources/retail/Emerging%20Trends%20in%20Indian%20Retail%20and%20Consumer-2011.pdf
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