Introduction It has been said that the only thing more difficult than being indifferent to India is to attempt to describe or understand India completely. Most retail and consumer products companies are no longer indifferent to India. It is the fourth largest economy in the world, in terms of Purchasing Power Parity (PPP) and is expected to rank third in 2010, just behind the United States and China. Moreover, recent liberalization of Foreign Direct Investments (FDI) policies for retail trading has reduced barriers to entry for single-brand retailers and for the first time allowed them to control their operations in India. It, thus, comes as no surprise that retail and consumer products are the fastest growing sectors in the Indian …show more content…
Less capital intensive The industry is not very capital intensive since most of the products require low investment in fixed assets. Contract Manufacturing Contract manufacturing to control costs and increase affordability of products is quite common. Marketing Drive The marketing function plays a major role in the brand building process of FMCG products, and hence even well established brands rely on marketing for their existence and well-being. Market Research Market research plays an important role in this industry since understanding the needs and requirements of the customer is paramount for making the topline. Presence of a large unorganized market Factors like low-entry barriers, low capital investment, and low brand awareness in the rural regions have led to a thriving unorganized market According to industry experts, the key to doing well in the Indian FMCG sector is to keep costs low, building a strong distribution network aggressive pricing and build better brands through innovative marketing campaigns and promotions. Major players in the FMCG industry in India are: Proctor & Gamble, Hindustan Lever Ltd. (a subsidiary of global FMCG leader Unilever), Cadbury 's, Britannia CavinKare and Smithkline Beecham Industry Study Retail The Indian retail market is estimated at US$350 billion of which organized retail is just about US$8 billion. Given this unbalanced existence of organized and
Marketing research is very important component of a business used to identify and define the opportunities and problems that they will encounter on the market. The aim
Before launching or expanding a business venture, there needs to be an understanding of the industry, its competitors, and its customers. Market research is vital in assisting companies in the decision-making process and their marketing direction. Data from marketing research is important because it provides companies with ways to identify opportunities, identify market potential, minimize chances of loss, devise effective marketing strategies, gauge customer satisfaction, and serve as an evaluation tool.
• India's $250 billion retail business is the eighth largest in the world and has the potential to grow 7 per cent by 2011. [McKinsey Report] For a company already dominating the world markets, this is an un-passable opportunity.
The FMCG industry has being growing steadily in the last decade mainly because the growth for the middle class population. The key companies in these industries are players such as Nestle with other 31 different plants in Brazil and Unilever with 10 plants.
At a first glance, India seemed to be the most promising market for investment for several reasons. First of all, India’s population increased quickly reaching to be 1.2 billion in 2013. The middle class which was the main Walmart’s target was estimated at 25% of Indian, and was anticipated to grow to 583 million by 2025. Moreover, there was an important economic growth noticing the increase of GDP which did India, the fifth larger retail industry in the world with the size of retail trade to reach at $200 billion. India’s young population which constituted a big purchasing power was growing, too. This generation was born when India’s economy began to boost, so, they regarded that the foreign investments were a good way to create more employment opportunities at the retail sector. Also, because of the advertising and promotional activities, these young people were receptive to foreign stores like Walmart regarding them prestige symbols. Last but not least, Walmart knew that India offers cheap raw materials and workforce. In this way, Walmart tried
With the penetration of modern retailing in the suburbs and semi-urban areas, more and more Indians
FDI in Retailing started with FDI in cash and carry wholesale trading first permitted in 1997 to the extent of 100% under the Government approval route and thereafter in 2006 brought under the automatic route. In 2006 again FDI in Single Brand Retailing was permitted to the extent of 51%. From here it is but natural and logical that FDI would now proliferate to multi-brand retailing. But the progression to FDI in multi-brand retailing cannot take place at the cost of vital concerns raised in connection with this possible change by different groups; viz, the question of adaptability of the retailers in the unorganized sector, the question as to how the FDI in retailing can be harnessed for the benefits of Indian agriculture and Medium and Small Enterprise and above all how to impart into the economy a degree of resilience to withstand the changes that would be ushered in the wake of introduction of FDI in retailing. All these concerns have to be addressed not because the Left wing political parties and the media through their campaign have necessitated such attention but because we are constitutionally bound to do so .The Preamble of the Constitution resolves to constitute India into a Sovereign, Socialist, Secular, Democratic, Republic and to secure to all its citizens JUSTICE, social, economic and political …..EQUALITY of status and opportunity. Directive Principles of State Policy similarly exhorts the state to establish just, equitable and fair order. Article 39(c) states that the state should ensure that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. Though both these features are not enforceable, the Executive and the Apex Court in particular have
As 70% of employment is coming from the agriculture sector, hence this form of retailing is mostly seen in those areas and of course to some part of urban India there is a lot of ups and downs for opening of sector for direct investment from the foreign players but government cannot neglect the interest of small players. One of main reason for not opening this sector to FDI is it may decrease the employment in the Unorganized sector and increase the
In the past few years, Indian Retail sector has seen tremendous growth in the organized segment. Major domestic players have stepped into the retail arena with long term, ambitious plans to expand their business across verticals, cities and formats.
The retail industry India is so pivotal that it accounts up to 14% of the country’s national gross domestic product and provides jobs for nearly 10% of the entire country and is expected to rise at prompt rates. Before the rapid rate in India’s population there were plenty of competition within the Indian retail sector, but not between major licensed retail corporations but amongst small mom and pop stores, mobile carts and pavement vendors which are known as the unorganized retail sector, which in earlier yeas accounted for nearly 98% of the country’s retail market. With India’s population 1billion plan and the GDP growth estimate at 7.5% in upcoming years all sorts of different opportunity for all mass merchants and food retailers to expand their businesses locally and nationally were up for grasp. It was apparent the Indian retail sector was on its way to becoming worth billions of dollars, so the country saw many different companies beginning to funnel into the retail sector with hopes of taking advantage of all the positive changes in the region. As more and more business began entering the market the more competition presented itself.
Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG) is products that have a quick turnover and relatively low cost. Consumers generally put less thought into the purchase of FMCG than they do for other products.
A Replenishment manager must learn the different items they manage, and how they flow through the supply chain. The 3 basic flow methods include:
The Indian retail industry is the largest among all the industries, accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment. The retail industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even and compete with other companies. The Indian retail industry is gradually inching its way towards becoming the next boom industry.
India is the only one country having the highest shop density in the world, with 11 outlets per 1000 people (12 million retail shops for about 209 million households). Rather we can see the democratic scenario in Indian Retail (because of low level of centralization, low capital input and due to a good number of self organized retail).
The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi-storied malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics.