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

13. Thank You