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Role of fdi in retail brand by bhawani nandan prasad gurgaon india

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Bhawani N Prasad
Bhawani N Prasad

This document discusses the potential benefits of allowing foreign direct investment (FDI) in multi-brand retail in India. It notes that organized retail is still very low in India despite retail being a large contributor to GDP. FDI could bring large capital investments, advanced supply chain and retail practices from foreign companies, lower prices through competition, and improved product quality, safety and shopping experience for consumers. The food and beverage sector is seen as a key target for FDI since it has the lowest organized retail penetration currently. The document argues FDI could drive productivity, employment, and force domestic retailers to improve, ultimately leading to a paradigm shift for Indian consumers in terms of prices, quality, choice, convenience and shopping experience.

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FDI IN MULTI BRAND RETAIL - A PARADIGM SHIFT TO CONSUMER BHAWANI NANDAN PRASAD SMP - IIM Calcutta & MBA - STRATFORD UNIVERSITY USA, M.TECH. IT
RETAIL IN INDIA IS THE LARGEST CONTRIBUTOR TO GDP- ORGANIZED RETAIL IS STILL VERY LOW
INDIA – A VERY DIVERSE COUNTRY There is cultural and religious diversity like nowhere else in the world, a thriving democracy along with bureaucratic inconveniences and serious infrastructure deficiencies.
CHANGING CONSUMER IN INDIA  The growth of Consumerism in India is one of the key drivers fuelling growth in organized retailing  Several demographic trends in India that are factors in the growth of organized retail..  Growing Young Population  Rapid Income Growth  Growing Urbanization  Higher Propensity to Spend  Buy now Save later  Seems fairly safe to assume that Organized Retail will grow rapidly in India and will affect unorganized traditional retailers
LOCAL RETAILER – RESTRICTED ABILITY TO CATER FULLY TO INDIAN CONSUMER’S GROWING NEEDS An outlet run locally by the owner or a caretaker lacks technical & accounting standardization, the supply chain is also run locally to meet local needs, thereby restricting choice for an Indian Consumer
SECTOR WISE REVENUE PENETRATION IN INDIA Food & Beverages vertical constitutes to largest contributor to the revenue but has the lowest Organized Retail penetration of less than 1% , so is likely targeted sector for FDI
WHAT IS FDI IN MULTI BRAND RETAIL  Allowing Foreign Retailers to set up retail stores across India  Foreign Capital Investment  Huge Capital Inflow to Boost Economic Activities  Capital for Infrastructure Development  Sound financial back up to sustain losses up to long gestation period  Investment on technology to drive efficiency
BENEFITS OF FDI  Advanced Knowledge to deliver better Productivity  Inventory Management  Merchandising  New Technology  Foreign Low-cost Big players will adopt their Best Practices of  Integrated Supply chain  Lower prices benefit Consumers
BENEFITS OF FDI  Foreign Retailer will ensure better governance to deliver  Good quality products  Improved customer service  Better Shopping experience to Consumer  Foreign Retailer will also promote links for Domestic suppliers & Farmers to global markets  Strict Quality & Safety standards  Profitable & Reliable Market to sell the products
BENEFITS OF FDI  Foreign Retailer would spread their operations across India, then the Indian Domestic Retailers would  Develop their Supply chain  Strategies  Operations to counter competition  Increase employment opportunity in back end sectors  Foreign Retailer will bring  Development of new retailing formats  Modernization in general
Paradigm Shift for Consumer with FDI in Multi Brand Retail MRP driven Pricing Efficiency Driven Pricing Quality Compromise Defined Quality Standard Issue of Food Safety Controlled Food Safety Standards Limited Choice of Products Access to Global Products Chore Shopping Indulgence Shopping Dusty Noisy Environment Clean, Pleasant Ambience Multiple visits different shops All under one roof Hyper Marts Trader influenced shopping Self service independent decision
WIN FOR CONSUMER: AMBIENCE, CHOICE, CONVENIENCE, SELF SERVICE, PRODUCT SAFETY, LOWER PRICES
Thank You

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Role of fdi in retail brand by bhawani nandan prasad gurgaon india

  • 1. FDI IN MULTI BRAND RETAIL - A PARADIGM SHIFT TO CONSUMER BHAWANI NANDAN PRASAD SMP - IIM Calcutta & MBA - STRATFORD UNIVERSITY USA, M.TECH. IT
  • 2. RETAIL IN INDIA IS THE LARGEST CONTRIBUTOR TO GDP- ORGANIZED RETAIL IS STILL VERY LOW
  • 3. INDIA – A VERY DIVERSE COUNTRY There is cultural and religious diversity like nowhere else in the world, a thriving democracy along with bureaucratic inconveniences and serious infrastructure deficiencies.
  • 4. CHANGING CONSUMER IN INDIA  The growth of Consumerism in India is one of the key drivers fuelling growth in organized retailing  Several demographic trends in India that are factors in the growth of organized retail..  Growing Young Population  Rapid Income Growth  Growing Urbanization  Higher Propensity to Spend  Buy now Save later  Seems fairly safe to assume that Organized Retail will grow rapidly in India and will affect unorganized traditional retailers
  • 5. LOCAL RETAILER – RESTRICTED ABILITY TO CATER FULLY TO INDIAN CONSUMER’S GROWING NEEDS An outlet run locally by the owner or a caretaker lacks technical & accounting standardization, the supply chain is also run locally to meet local needs, thereby restricting choice for an Indian Consumer
  • 6. SECTOR WISE REVENUE PENETRATION IN INDIA Food & Beverages vertical constitutes to largest contributor to the revenue but has the lowest Organized Retail penetration of less than 1% , so is likely targeted sector for FDI
  • 7. WHAT IS FDI IN MULTI BRAND RETAIL  Allowing Foreign Retailers to set up retail stores across India  Foreign Capital Investment  Huge Capital Inflow to Boost Economic Activities  Capital for Infrastructure Development  Sound financial back up to sustain losses up to long gestation period  Investment on technology to drive efficiency
  • 8. BENEFITS OF FDI  Advanced Knowledge to deliver better Productivity  Inventory Management  Merchandising  New Technology  Foreign Low-cost Big players will adopt their Best Practices of  Integrated Supply chain  Lower prices benefit Consumers
  • 9. BENEFITS OF FDI  Foreign Retailer will ensure better governance to deliver  Good quality products  Improved customer service  Better Shopping experience to Consumer  Foreign Retailer will also promote links for Domestic suppliers & Farmers to global markets  Strict Quality & Safety standards  Profitable & Reliable Market to sell the products
  • 10. BENEFITS OF FDI  Foreign Retailer would spread their operations across India, then the Indian Domestic Retailers would  Develop their Supply chain  Strategies  Operations to counter competition  Increase employment opportunity in back end sectors  Foreign Retailer will bring  Development of new retailing formats  Modernization in general
  • 11. Paradigm Shift for Consumer with FDI in Multi Brand Retail MRP driven Pricing Efficiency Driven Pricing Quality Compromise Defined Quality Standard Issue of Food Safety Controlled Food Safety Standards Limited Choice of Products Access to Global Products Chore Shopping Indulgence Shopping Dusty Noisy Environment Clean, Pleasant Ambience Multiple visits different shops All under one roof Hyper Marts Trader influenced shopping Self service independent decision
  • 12. WIN FOR CONSUMER: AMBIENCE, CHOICE, CONVENIENCE, SELF SERVICE, PRODUCT SAFETY, LOWER PRICES