The most direct and significant result of economic growth in India and China is the amazing improvement in the quality of life (or at least the power) for an increasing share of the population. The transition from 'poverty' to 'adequate food and clothing'; the burgeoning factions of the population getting closer to 'well-to-do lifestyles' represents a tremendous opportunity for retail to sell to Indian consumers.In the highest growth forecast in average incomes, most gains in India and Russia are expected to figure among the lower and middle-income groups.

The consumption expenditure does not necessarily increase in a linear fashion with the rising income across all categories. Therefore, new consumption patterns – expressed in demands for increasing variety, quality and individuality in the goods purchased – are developing. They are held to be leading to an increasing demand for flexibility in supply, both in meeting variations in the size of order and in meeting the rapidly-shifting demand patterns for particular products. Wherever these changes in demand are occurring, they will be articulated through the demands made by retailers on their suppliers and through the attempts of the manufacturers to provide retailers with the goods they believe the consumer is now demanding.

#1 India

Global Consumer Confidence Survey

65%

Consumption expenditure - Food, Housing, consumer durables etc

$500 billion

Retail Industry in India

When a country that calls itself a nation of shopkeepers fears the entry of Walmart, there is a lot to debate about. The first fact to acknowledge is that while companies may be international, retail is strictly a local business. Today, international brands coming to India are struggling to find an answer to the dichotomy between maintaining an air of exclusivity and becoming a premium brand, when they are a mass brand in their own market and getting the brand to be perceived as over-exposed to claim a lion's share in the Indian market.

The Government of India, while recognizing the retail opportunity and the abilities of Indian retailers, has finally opened the doors for FDI in multi-brand retail. As Indian retail policies become more transparent, making conducting business a more straightforward task, the questions at the top of one's mind are: Who will come?, and will the arrivals happen as a flood or will they simply trickle down?; Which sectors will see more action – Fashion or Grocery?; Would international Home retailers succeed in India, when the Chinese brands have failed to raise eyebrows among the Indian consumers? The success of CDIT International retailers and what it says about the Indian market again stands to be analyzed.

India # 5

largest Retail Industry in the World

40 Millions

Indians are employed In Indian Retail Industry

150+

International brands have entered India since 2006

In the last decade, luxury-retailers have been disarrayed between evaluating the Indian market from a growing number of high earning individuals' potential to spend or the rapid growth in the overall consumption. What has come to light is that the upcoming consumers are in for a big shift.

The key consumers' base of luxury brands is all set to shift from the traditionally wealthy to high net-worth individuals including young professionals as well as the first-generation entrepreneurs. More than ever before, it is now important to evaluate luxury goods-consumption needs from two perspectives- on the one hand, the flamboyance, materialism and the surplus, symbolizing luxury as a social statement and, on the other hand individual lifestyle, hedonism and the culture of extravagance, denoting luxury as an individual style. These dimensions, taken together, will forecast retail strategies for luxury brands Whether it still makes sense to partner with Indian investors, or should one open one's own shop in the wake of FDI policies: how to work one's way around one-third of the Indian market sourcing or what is the ideal luxury real estate in India, are some of the crucial aspects one shall have to earnestly ponder over befor taking that much-apprehended leap.

� 217 Billion

Global Luxury Goods Market estimated in 2013

$14 Billion

Estimated growth for India's Luxury market

India Ranks
# 11

For Households with Annual Disposable Income over
US $300, 00

Considered a fad till about five years back, e-retail has come to be hailed as the biggest retail revolution in the history of retail. In reality, what's growing is physical retailers' extension into a multi-channel world. Today's consumer is vastly different and has more sophisticated expectations from a product, service, value and environment than five or even three years ago.

In the new multi-channel reality, the boundaries between virtual and physical space are increasingly becoming blurred and the retailer's shift from the world's largest retailer to the neighbourhood entrepreneur happens generally in a frenzy to create a platform to give customers speed and convenience together with a more personalized approach. Designing and building human-centred digital experiences is what will allow Retailers to survive and thrive in the coming times. Mobile phones will perhaps come to provide the biggest opportunity to connect the product and the services provided more closely to the pre-store experience and to enrich the experience during the store.

Rs 62,967

crores�e-commerce market

16%

share of e-retail in E-commerce

400+

e-commerce portals

If a brand is the relationship between a business and its customers, then the store is its most visceral conversation. Increasingly, retailers across several sub-sectors of retailing are narrowing their physical distribution to a single channel, focusing on localisation and 'newness' by creating independent retail franchisees to reach out to their customer.

Franchising in India is being increasingly utilized by large established retail firms by employing a chain building strategy to strike a balance between standardization and innovation by building resources that foster trust and encourage knowledge sharing with franchisees .Today the question facing Indian retailers is not whether to franchise, but when to franchise. What should be the dual model of franchise and company-owned stores across markets?

500+

Retail Franchisors in India

1,00,000+

Number of Retail Franchisees

Every Third US $

is coming from Franchised Retail establishment

Until now, Retailers have operated under the paradigm "This is How Indians Buy" with an underlying philosophy that if it ain't broke, don't fix it. Making changes to the business, especially if things are going ok, has been considered risky. Well, the bad news is that the customer has pulled your cushion out, but the good news is that any Innovation you do gets noticed by the customer very fast; and if done with a solid strategy and backed by the right investment and execution, it gets positive results.

Physical stores are still the primary way people acquire merchandise, and it will continue to hold true 50 years from now also. However, Retail is today at a tipping point and innovation is the key to create a difference and a long-term sustainability. In this new reality, if the store just fulfils a specific product need, it fails to take into account the creation of new types of value for the consumer. It is simply transacting. However, the new purpose of the store in the consumer shopping journey is when the store succeeds in manifesting itself as an embodiment of the brand and a "destination" for consumers where they can do much more than simply browse and transact.

72%

Retailers are using data & analytics globally for strategic decisions

Rs 13,668 crore

what modern Retailers will invest by 2017 for innovations

58%

Indian Retailers will be investing capital to drive Multichannel growth

Licensing is a billion-dollar retail market worldwide and that is largely because People today don't really buy products, they buy a story. There are few faster or more profitable ways to grow your retail shelves or increase your merchandise options other than products born through licensing patents, trademarks, copyrights, designs, and other intellectual property to others.

Digest this - 90 percent of the $160 million a year in sales at Calvin Klein Inc. comes from licensing the designer's name to makers of underwear, jeans and perfume. The only merchandise the New York-based company makes itself, in fact, are its women's apparel lines. On the other side of the coin, as a retailer ,there is a big Licensing marriage waiting to happen of your brand with the high-recognition brand name of another company. Internationally, it is regarded as key to a gold mine: Putting a Disney logo, a Chota Bheem character or a Harley Davidson graphic on your product can give a bigger bang for the buck. The licensing industry though small in India, is growing at an aggressive speed. It is time for modern retailers to open up more for licensing and work towards delivering better product designs to the end customer.

$185 Billion

size of Global Licensing and merchandising market

$125 Million

size of Indian market for licensed merchandise

20-30%

growth rate on Y-O-Y for kids Licensed Products

Riding on the back of the growing trend of international brands opening up shop in Indian market, Indian Retail Real Estate has grown remarkably in the last half a decade. The lack of suitable retail property in many markets in India has deterred many retailers from entering in new locations, which were otherwise promising. Barring a few markets, high street shopping is not superb in India making malls the preferred shopping venue in India's major cities.

The retail real estate sector, however, is witnessing a process of polarization – superior malls, where everyone wants a shop come with low space and high rents, while "me-too-malls" are failing to lease. A consolidation in retail real estate would be the key for retailers to become more community oriented and differentiated to offer a destinationexperience and not just stores.

9.5+ Million

sq ft addition of mall space in 2014

240+

operational malls in top 7 cities of India

30%

Growth expected in organised Retail sector

Today retailers have a dual mission to fulfil - to expand successfully and increase profitability. Retailers' strategies have to be aligned with both the long-term trends, and the short-term challenges they face.The new model for retail success involves not simply opening stores but an integrated approach to multi-channel management that will drive traffic, conversion rates, and profitability. Getting this right will require focussing simultaneously on all these imperatives.

Leading retailers have begun treating their offline and online strategies as a single set of decisions, rather than separate ones. Such holistic thinking in the process of Modernisation of retail calls for massive investments and integration of the right technology, an efficient supply chain & infrastructure, and most of all, the people who manage the operations at the front and at the back-end. Innovative retailers today need to find the right solutions for appropriate returns on investment.

26% by 2020

Asia Pacific�s contribution to global retail investment activity

$97.29 million

FDI inflows in single- brand retail trading between 2000�2013.

$1.3 trillion

expected worth of Indian retail market by 2020