...FDI in Retail India: Impact on Farmers, Consumers and Industry Nilesh Kate, Research Scholar Sinhgad Institute of Management and Computer Application, Pune nileshkate503@gmail.com 9096714133 ****************************************************************************** Abstract: The retail sector in India is expanding and modernizing rapidly in line with India's economic growth. It acts as a major catalyst in the development of a country through up-gradation of technology, managerial skills and capabilities in various sectors. Rise in purchasing power, growing consumerism and brand proliferation has led to retail modernization in India. The growing Indian market has attracted a number of foreign retailers and domestic corporate to invest in this sector. FDI in the retail can expand markets by reducing transaction and transformation costs of business through adoption of advanced supply chain and benefit consumers and suppliers (farmers). The overall retail market (organized and unorganized) is expected to grow at a compounded rate of 15% over the next 5 years from INR 23 trillion in 2011-12 to INR 47 trillion in 2016-17. Rising incomes will be the primary driver of this growth. Favorable demographics, increasing urbanization and nuclearisation of families are other factors which will drive retail consumption in India. Organized retail, which constituted a low 7% of total retail in 2011-12, is estimated to grow at a CAGR of 24% and attain a 10.2% share of total retail by...
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...updated information, please visit www.ibef.org 1 FMCG NOVEMBER 2011 Contents Advantage India Market overview and trends Growth drivers Success stories: Major players Opportunities Useful information For updated information, please visit www.ibef.org 2 FMCG NOVEMBER 2011 Advantage India Growing demand • Attractive opportunities • 2018E Market size: USD74 billion Rising disposable income of the young population has been a major growth driver for the sector Emergence of organised retail has boosted the distribution of FMCG sector Low penetration levels in rural market offer room for growth Consumers are highly adaptable to new and innovative products • • • Advantage India Increasing investments • There is a growing market for premium products Policy support • Industry saw heavy FDI inflows as they accounted for 2.1 per cent of the country’s total FDI 2000-10 Many players are pursuing inorganic growth by acquiring regional players Automatic investment approval of up to 100 per cent foreign equity is allowed Have improved on the infrastructure facilities which has increased access to the industry • • 2010 Market size: USD28 billion Notes: Market size estimates from Technopak 2018E – estimated figure for 2018 For updated information, please visit www.ibef.org ADVANTAGE INDIA 3 FMCG NOVEMBER 2011 Contents Advantage India Market overview and trends Growth drivers Success stories: Major players Opportunities Useful information For updated...
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...Walmart-Bharti Retail Alliance in India: The Best Way Forward? ABSTRACT: India had become an alluring destination for the foreign retailers and Indian conglomerates alike. While large Indian conglomerates easily start their own retailing arm, lack of expertise and supply chain woes trouble them continuously. Moreover, most of the domestic players need much funding for their operations and expansion. The only solution is allowing Foreign Direct Investment (FDI) in the retail sector. But, India's strict regulations against allowing FDI in retail sector prevent the entry of the foreign retailers to the country. However, with recent developments, 100% FDI is allowed in wholesale cash and carry business and many of the global retailers are finding an opportunity to enter a potential market. To reduce the risk of being in a new territory, most of the foreign companies are trying to tie up with an Indian company to start their business in India. World's largest retailer, Walmart was not left behind in the competition and decided to use the new found opportunity efficiently. It is the first foreign retail company to enter India after 100% FDI has been allowed in the wholesale sector. Partnering with India's Bharti Enterprises, a telecom giant who aims to be a business conglomerate, Walmart's entry to the subcontinent was in style. However, the biggest retailer Walmart's entry to the wholesale business, a completely different game from its favorite retail and Bharti's lack of experience...
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...FDI policy – Indian Perspective 11th September 2007 Macro-economic Overview Sustained Economic growth • Growth of over 8.0% during last 3 years • Fourth largest economy in the world in PPP terms Services account for over 50% of GDP Manufacturing sector growing annually at over 9% (17.4% in GDP) Foreign exchange reserve of over US $ 200 billion FDI inflows grew by 72% in 2005-06: the growth in 200607 was 184%. FDI inflows continue to be impressive this year as well with US$ 4.9 billion already recorded for the first quarter of 2007-08 India- Advantages as a destination for FDI Young Demographic Profile- 54% population below 25 years Abundant availability of Skilled Human Resources Adequate natural resources and raw materials Large and growing domestic market Established rule of law and a vibrant three tiered democracy Economic Reforms Industrial Policy Reforms • Compulsory licensing limited to only 5 sectors: on security, public health & safety considerations and where items are reserved for the SSI sector • FDI policy liberalisation since 1991calibrated progressive liberalisation followed • Technology collaboration liberalised Liberalization of FDI Policy New sectors opened FDI up to 100% allowed in most sectors FDI up to 100% allowed in some sectors FDI up to 74/51/50% allowed In 111 sectors Only a small negative list FDI limits Increased Procedures Further simplified Automatic Route introduced FDI up to 51% Allowed In 35 priority sectors FDI Allowed...
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...FDI IN RETAIL: BENEFICIAL OR DETRIMENTAL AND IT’S FUTURE AFFECT ON INDIAN ECONOMY BY HARJOT KAUR PARMAR (UGC NET, MBA, PGDM, BBA,) ABSTRACT FDI is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor. Regardless of today’s crisis, India is considered as one of the most superlative place by foreign investors because of its increasing young population and rising disposable income among the middle class society, that is why large corporations like walmart are showing keen interest in initiating there retail operations in India. But mass round of discussions and debate has started after Government decision on 14 September 2012 allowing FDI in aviation up to 49%, in the broadcast sector up to 74%, in multi-brand retail up to 51% and in single-brand retail up to 100% with high level of disagreement and resistance from the opposition who believe that entry of Big Corporations in retail sector will badly effect the crores of retail shopkeepers and vendors resulting in depart of kirana stores, Whereas government is in favor and believe that it will generate large scale of employment, benefit both farmers as well as consumers and will help in reducing inflation. This research paper aim is to find why foreign investors are attracted towards India, find arguments in favor and against of FDI and what will be its effect on Indian economy in future, whether FDI will be favorable...
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... . The market is estimated to be worth INR 97.69 bn in 2010. Increasing role of the government to support FDI in India and easy availability of financing will also drive the industry. The report begins with the market overview section that gives an insight into the consumer durable industry, its market size and segments. This is followed by the overview of the domestic refrigerator market in India which includes the market size and growth as well as the market share of major players, with a brief description of the penetration level of various consumer durable products. Distinction between various types of refrigerators on the basis of their mechanism and features is also included in this section. Market share based on the type of refrigerator is provided. Domestic refrigerator exports and imports of India have also been covered, both in terms of value and volume. Imports of refrigerator have declined in the recent past; however, the decline is relatively stable in comparison to that of exports. Furthermore, a Porter’s five forces model is provided to understand the competitive scenario prevailing in the domestic refrigerator market. An analysis of the drivers and challenges explains the factors leading to the growth of the industry. Increasing disposable income has been one of the key factors augmenting the demand for domestic refrigerators. In addition, growth in retail sector and improved social indicators such as increase in discretionary spending also promotes the growth...
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...Marketing in FMCG Sector 2014 Submitted by: Mohit Shrivastava - 47 Abstract This study deals gives an overview of the FMCG sector. What products constitute as fast moving, market size and government initiatives undertaken to promote this sector. It will also cover the aspects of a product that draws a customer towards a particular product. In addition, it will cover the road ahead (growth opportunities) in this sector. Introduction India has been a consumption-driven economy for the last many decades. Consumer spending in the country is expected to increase about 2.5 times by 2025. Broadly categorized into urban and rural markets, the Indian consumer segment is gaining high attention and pampering from marketers across the globe. Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) is a product that is sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, Over-the-counter drugs, toys, processed foods and many other consumables. Malviya, S. (2014), The Economic Times Marketing of FMCGs (Fast Moving Consumer Goods) plays a pivotal role in the growth and development of a country irrespective of the size, population and the concepts which are so interlinked that, in the absence of one, the other virtually cannot survive. It is a fact that the development of FMCG marketing has always kept pace with the economic growth of the country. Both have experienced evolutionary changes rather...
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...1. Title of the paper “Impact of Multi Brand Foreign Direct Investment in Retail Sector in India (Before the approval)” 2. Author Name – Prof. Nikhil Polke 3. Theme – Retail 4. Institute Name & Address Tirpude Institute of Management Education 1, Balasaheb Tirpude Marg, Civil Lines, Sadar, NAGPUR – 440 001 5. Email – n.polke@tirpude.edu.in 6. Contact number - +91 99233 80707 Abstract India has been placed at first position in the category of countries with the best opportunity for investment in the Retail Sector by a survey of A.T. Kearney’s 2005 on Global Retail Development. The increasing disposable incomes among the Indian middle class and increasing young population have been cited as the main reasons for such attractive optimism. This positive opinion of the experts has also encouraged the intense lobbying by certain sections for opening Foreign Direct Investment in this sector. Foreign investors are also very enthusiastic to invest in India’s Retail Sector. At present India does not allow FDI in multi-brand retail but permits upto 51 percent in single brand retail and 100 percent in cash and carry wholesale trading. There is a ban on FDI in big multi-brand retail stores but there is no restriction on companies accessing the foreign equity market through the American and Global Depository Receipts. The Government of India opened up FDI in ‘Single Brand Retailing’ in the year 2006. This was done with a primary motive of giving a boost...
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...UMESH KUMAR (GL) PGP/16/174 CONTENTS 1. | Introduction | 3 | 2. | Research Questions | 3 | 3. | Research Methodology | 4 | 4. | Literature Review | 4 | 5. | Conclusion | 14 | 6. | Tables | 15 | | | | | | | Introduction FDI refers to direct investment in business or production in a country by a foreign company. It leads to capital inflows from abroad into the production capacity of an economy, and facilitates international trade and knowledge transfer. It is a source of employment and capital which results in country's development. It improves the foreign exchange, helps transfer new technologies, increases competition, exports and tax revenues. It benefits the recipient country's business in terms of management, revenue generation by following the best practices which are of global standards. The policies related to FDI underwent major change in 1991 as a part of structural adjustment program. Since 1991, gradual liberalization of India's economy has led to more and more FDI into the country. India is gradually opening up sectors for foreign firms to enter with the recent decisions like removing investment caps in sectors like defense, telecom and insurance. There has been constant opposition to FDI on various grounds like protection of indigenous players, unemployment etc. India, one...
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...Multi Brand Retail 1. Overview of the industry: Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its GDP. The Indian retail market is estimated to be US$ 500 billion and one of the top five retail markets in the world by economic value. Comprising of organized and unorganized sectors, Indian retail industry is one of the fastest growing industries in India. The organised retail trade accounts for merely 8-10% of the total retail. According to the 10th Annual Global Retail Development Index (GRDI) of A.T. Kearney, India is having a very strong growth fundamental base. India's retail market is expected to grow at 7% over the next 10 years, reaching a size of US$ 850 billion by 2020. Traditional retail is expected to grow at 5% and reach a size of US$ 650 billion (76%), while organized retail is expected to grow at 25% and reach a size of US$ 200 billion by 2020. The Government of India had been considering opening up the Multi Brand Retail Trade (MBRT) sector to FDI for some time. They had released a discussion paper in 2010 on the topic and had extensively gathered public, academic and industry views on the issue. In November 2011, the Government came out with its proposal for the new FDI policy. However, unable to achieve political consensus on the issue, they had to shelve their plans for the enactment of the policy. Finally the Government decided to pass the new FDI policy on MBRT in September 2012. 2. Growth over last few...
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... Introduction Joint Ventures represent a combination of subsets of assets, contributed by two or more business entities for a specific business purpose and a limited duration. This can enable a firm to achieve market penetration into new areas over time, enter and develop new product markets, expand into new geographic areas and participate in new technology driven value activities (Sullivan, 2014). For the purpose of this project we decided to analyze the recently concluded Joint Venture between Walmart Inc. and Bharti Enterprises. Bharti Enterprises is an Indian Business conglomerate, which owns various businesses spanning across telecommunications, retail, financial services and manufacturing. It operates in 20 countries across Asia and Africa. Wal-Mart Stores Inc., branded as Walmart, is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. It has over 11,000 stores in 27 countries, under a total 55 different names. A foreign company can invest in an Indian company through a Joint Venture Agreement (or as a Wholly Owned Subsidiary) in areas, which are otherwise not reserved exclusively for the public sector or which are not under the prohibited categories such as real estate, insurance, agriculture and plantation. Foreign investment...
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...SWOT ANALYSIS * “SWOT is an acronym for the internal strength and weakness of a firm and the environmental opportunities and threats facing the firm. * SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. * The technique is based on the assumptions that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weakness) and its external situation (opportunities and threats). * A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.” Colgate-Palmolive Company (Colgate) is one of the leading consumer products company in the world. It offers products in various categories including oral care, personal care, household surface, fabric care and pet nutrition. The company has operations in over 200 countries across the world. It operates in North America, Latin America, Europe/South Pacific and Greater Asia/Africa. It is headquartered in New York and employs about 38,000 people. Location of Factor | TYPE OF FACTOR | | Favorable | Unfavorable | Internal | Strengths 1. It is one of the biggest brands in the personal care consumer products industry 2. It has over 38000 employees globally 3. One of the market leaders globally with excellent...
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...Industry Analysis Report FMCG March 11 2014 Submitted By: Ankur Nag – P301412CMG388 Ansuman Singh – P301412CMG340 Ashish Khandelwal – P301412CMG349 Habib Khan – P301412CMG365 Lalatendu Pattnaik – P301412CMG377 Industry Analysis Report FMCG 2014 Contents 1. INDUSTRY PROFILE ........................................................................................................................................... 4 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 2. Sector Overview ............................................................................................................................................... 4 Sector Size ........................................................................................................................................................ 4 Major Segments in FMCG Sector ...................................................................................................................... 6 Competitive landscape ...................................................................................................................................... 7 Supply & Demand and-side Drive .................................................................................................................... 9 Porters‘ Five Force Model .............................................................................................................................. 11 Critical Success Factors .....................................................................
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...COMPANY PROFILE Ikea Group REFERENCE CODE: 6878C795-4BCB-4C85-A319-6F33C508FD80 PUBLICATION DATE: 14 Aug 2014 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. Ikea Group TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 SWOT Analysis.....................................................................................................4 Ikea Group © MarketLine Page 2 Ikea Group Company Overview COMPANY OVERVIEW Ikea Group (Ikea or 'the group') is an international home products retailer. It sells furniture, accessories, and bathroom and kitchen items. Ingka Holding BV, a wholly-owned company by Stichting Ingka Foundation, is the parent company for the Ikea group of companies. The foundation is owned by the Kamprad family. As of August 31, 2013, the group had operations in 43 countries across Europe, North America, Asia and Australia. Ikea is headquartered in Delft, the Netherlands, and employed 135,000 people as of August 31, 2013. The group recorded revenues of E28,506 million (approximately $37,280.1 million) during the financial year ended August 2013 (FY2013), an increase of 3.2% over FY2012. The operating profit of the group was E4,011 million (approximately...
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...University of Nottingham Ningbo China Business School Academic Year 2015/16 Autumn Semester INTERNATIONAL BUSINESS ENVIRONMENT Lianxi Zhou EBay: China and India External Business Macro Environment Entry Report Group 2 Hugo John MASON; ID: 6513963 Boon Long Tan; ID: 6512494 Sung Jun PARK; ID: 6508247 Yasong ZHAO; ID: 6511938 Word Count: 3000 Table of Contents Introduction 2 China 3 Political Environment 3 Political and Legal System 3 Five Year Plan 3 One Belt, One Road 4 Risk 4 Economic Environment 5 Market Size 5 Currency 5 FDI 6 Socio-Cultural Environment 8 Guanxi 8 Hofstede’s Model of National Culture 9 China Recommendation 11 India 12 Political Environment 12 Political and Legal System 12 Opportunity 13 Risk 13 Economic Environment 14 Market Size 14 Currency 14 FDI 15 Regional Trade Blocs 16 Risk 16 Socio-Cultural Environment 17 Socio-Demographic 17 Trust and Uncertainty Avoidance 17 Human Resources 18 India Recommendation 19 Reference 20 Appendix 25 Introduction In recent decades a global shift has arisen and revolutionized the way businesses operate as we move into a more integrated and interdependent global economy. Known as Globalization, the e-commerce industry has been the crux of such a radical metamorphoses of nations. National economies are no longer self-contained and independent. China, having one of the fastest growing e-commerce markets at 22.6% (iResearch, 2014) has...
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