India Retail Sector Expansion Creates New Opportunities .
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADEBY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S.GOVERNMENT POLICYRequired Report - public distributionDate: 7/17/2019GAIN Report Number: IN9062IndiaRetail FoodsRetail Sector Expansion Creates New Opportunities for HighValue ProductsApproved By:Lazaro SandovalPrepared By:Arundhati SawantReport Highlights:The Indian retail sector continues to expand due to sectoral consolidation and efforts to providegreater consumer convenience through alternative grocery outlets (such as e-retail) and paymentmethods. Sustained economic growth will continue to drive demand for imported products whileinnovation in the retail sector will create more opportunities to place high-value, consumer-orientedproducts on store shelves and e-retail platforms.Post:New DelhiPage 1 of 10
Executive Summary:India has emerged as the second fastest growing major economy inthe world and is expected to be one of the top three economicpowers by 2025, backed by its strong institutions and tradepartnerships. India is the second most populated country of theworld with a population of 1.37 billion of which 62 percent isbelow the age of 35. The economy is expected to grow at a rate to6.9 percent in fiscal year (FY) 2019 from an estimated 7.1 percentin FY 2018. India’s population continues to drive annual real GDPgrowth with private consumption accounting for almost 60 percentof GDP. The Indian rupee is also expected to remain relativelystrong which will support consumer purchasing power. Thegovernment is forecasting a recovery in the economic growth ratefor 2020 at 7 percent through structural reforms, credit growth,lower interest rates, greater cash transfers, lower fuel prices, andmore stable macroeconomic conditions. These factors are expectedto contribute to a USD 5 trillion economy by 2025.Food processors, importers, wholesalers, retailers, food serviceoperators are all part of a developing agribusiness sector. Apartfrom being a large food producer, India’s bulk, intermediate,consumer oriented, and agricultural related imports grew from 22billion in 2013 to 25 billion in 2018, an increase of 10 percent.Imports of Consumer-Oriented Products:Imports of consumer-oriented foods, led by tree nuts and freshfruits, are among the fastest growing segments of importedagricultural products and reached 5.3 billion in 2018. The marketfor these imported foods has grown by nearly 68 percent in the pastsix years at annual growth rate of 9 percent. This growth isfacilitated by a growing number of professional, brand-orientedimporters and an increase in the number of modern retail outletsand hotels carrying imported products.Imported nuts and fruits feed into India’s traditional retail channelswith an estimated 90 percent of imported fresh fruit sold inroadside stands and open markets. Imported packaged andconsumer ready foods are found in a growing number of gourmetgrocery stores, in the imported foods sections of larger storeformats, and in thousands of small neighborhood stores. Whileopportunities for imported food in the HRI and food processingsectors are improving, the India market remains limited due to hightariffs, ongoing import restrictions, and strong competition fromthe domestic industry.stores, which hold about 98 percent of the total market share. Themarket share held by modern trade formats like supermarkets andhypermarkets is expected to double from two to four percent by2020 as stores fulfil the evolving needs of consumers. Privateindependent estimates forecast Indian food retail sales to surpassU.S. 800 billion by 2023.Food Retail Sector Key Updates:This past year has seen noteworthy developments in the retail ande-retail space in India. 7-Eleven, the world’s largest conveniencestore chain, announced its intention to set up its first stores in Indiaafter finalizing a franchise deal with Indian retailer Future Group.India’s largest food retailer, Reliance, is seeking to tap into thearea of traditional groceries (kiranas) through business-to-businessecommerce with a digital wholesale marketplace. This platformintends to serve urban areas to remote villages at various ordersizes.Quick Facts Calendar Year 2018Imports of Consumer-Oriented Products: 5.3 billionList of Top Import Growth Products in India Tree Nuts (e.g. almonds and walnuts) Apples, Pears, Grapes, Non-Local/Seasonal Fruit Leguminous Vegetables and Dried Pulses Intermediate Products (e.g., malt, starch, insulin, wheat, gluten) Beverages, Spirits and Vinegar Cocoa and Cocoa PreparationsFood Industry by Channels (U.S. billion) 2018Food Industry Output 258 billionFood Exports 40 billionFood Imports 25 billionRetail 500 billionFood Service 57 billionTop Indian Food Retailers: Reliance Retail – Reliance Fresh, Reliance Smart Aditya Birla Retail Limited – More HyperMarket Avenue Supermarts Limited – DMart Future Value Retail – Big Bazaar, Food Bazaar, KB Fair Price,FoodHall, Food Right, Big Apple, Nilgiris, HyperCITY, Easy DayStores Star Bazaar (Tata Group) - HyperMarket, SuperMarket Godrej Industries Limited – Godrej Nature’s Basket Walmart India – Best Price Modern Wholesale, FlipkartTop Indian Food E-Retailers: Amazon Pantry Big Basket GrofersGDP/Population: Population (billions): 1.37 billion GDP (billions USD): 2.7 trillion GDP per capita (USD): 2,015Sources: Global Trade Atlas, World BankFood Retail Industry:India’s food and grocery (F&G) retail market is considered thethird largest in the world with over U.S. 500 billion in sales,according to private estimates. The F&G retail sector is dominatedby traditional store formats like neighborhood shops or kiranaSWOT Analysis:StrengthsU.S. products held in highregardWeaknessesAwareness of the range and valueof U.S. productsOpportunitiesThreatsGrowth Potential in FoodRetail and E-RetailTariff and Non-Tariff BarriersPage 2 of 10
Section I. Market SummaryIndia has emerged as one of the world’s fastest growing large economies and is projected tobecome the world’s third largest economy by 2025. The Government of India (GOI) reports thatthe gross domestic product (GDP) is forecast to grow at 6.9 percent in fiscal year FY 2019 andwill continue to grow at a similar rate in FY 2020. India has made significant reforms over thepast years to encourage greater domestic consumption and investment. These reforms includesimplification of the tax system through the introduction of the Goods and Services Tax (GST)which replaced various indirect taxes. The government has reduced the time and cost to importthrough the implementation of electronic sealing of containers, the upgrading of portinfrastructure and permitting the electronic submission of supporting documents with digitalsignatures. These reforms helped India jump 23 places to move to 77 out of 190 countries in themost recent World Bank’s Doing Business 2018 report.Despite its efforts to improve the business investment climate, the GOI continues to raise tariffsfor imported food and agricultural commodities. As such, the business climate for imports,though demand is growing, is subject to risk and exporters should conduct their full duediligence when exporting to India. Moreover, the opportunities in the Indian retail market arenot evenly distributed across the country and could more closely be considered as uniqueopportunities in many of India’s leading Tier-1, Tier-2, Tier-3 and beyond cities, though thesense of a national marketplace is emerging.Table 1. India: Grocery Retailers Outlets by ChannelModern GroceryRetailersTraditionalGrocery ,561,38612,630,10612,701,90512,777,575Source: EuromonitorIndia Food Retail Sector Growth Driven by Evolving Consumer Preferences andConvenienceBoth store-based and e-commerce retailing continues to experience strong growth as urbanhouseholds adopt more modern lifestyles, resulting in a preference for modern retail outlets dueto their convenience. In response, modern grocery retailers are developing new marketingstrategies to attract these households to their stores. These strategies include new paymentschemes and options along pricing strategies via the creation of private label products. Inaddition, supermarkets and hypermarkets such as FoodHall and Star Bazaar are allowing theircustomers to shop online through their own mobile apps and providing free home delivery. Dueto evolving lifestyles and purchasing habits, more consumers are choosing to shop at modernretail stores (hypermarkets and supermarkets) on a weekly or monthly basis, instead of shoppingat traditional grocers on a daily basis. This developing pattern is encouraging modern retailers toexpand their product range and invest in innovative product displays, in-store food service, andother comforts to enhance the consumer’s shopping experience. Modern retail outlets arebecoming one-stop shops, providing goods from farm to table. Moreover, these outlets havebegun to provide organic, natural and vegan grocery options to their customers as part of anongoing healthy eating trend emerging in India.Page 3 of 10
Traditional Grocery Retailers/Kirana StoresIndependent small grocery retailers, also known as kirana stores, remain the most popular retailformat in India with over 12 million stores, particularly in lower-tier cities and rural areas. Whilekirana store sales are expected to grow by nearly 10 percent in 2019, they are facing significantcompetition from modern grocery retailers in first tier cities. Due to their convenientneighborhood locations, independent small grocers complement modern grocery retailers, asthey can provide timely service to customers, they have established a close relationship with dueto the family or individual ownership of each store. Few of these retailers are chained and assuch, their expansion into a more organized retail sector is unlikely. These retailers operatethrough a fragmented distribution network with the presence of many intermediaries by sourcingproduct from relatively local wholesale markets or distributors associated with larger foodsuppliers or manufactures.The Emergence of Modern Retail OutletsSupermarkets and hypermarkets will continue to expand due to increasing incomes and evolvingconsumer preferences. In 2019, supermarket sales are expected to grow by 12 percent thanks toexpanding outlets. Reliance Retail continues to dominate with a 22 percent market share,followed by Aditya Birla Retail and Nilgiris Franchises (combined these stores have about 45percent market share). Proximity is allowing modern retailers to compete with kirana stores asmore grocery stores are built within major urban areas and neighborhoods, providing consumersthe convenience to purchase fresh fruit and vegetables, milk, bread and eggs on a regular basis.The modern retail sector continues to be dominated by domestic companies with foreign firmsfocused on expansion into the hypermarket sector.Internet Retailing in IndiaWhile online grocery retailing is the smallest retail channel (representing 5 percent of total retailgrocery sales), it is the fastest growing retail segment and the one with the highest potential.Internet retailing is expected to increase by almost 27 percent in 2019. At present, analystsestimate online grocery sales between USD 500 million to a little over USD 1 billion withexpectations of sales growing to over USD 5 billion in the next 3-4 years. Prospects look goodfor the sector as the consumer base is made up millennial and affluent consumers who prioritizeconvenience and quality over price and who are more open to popular foreign brands. Amazonfirst launched its online grocery business in 2016 in Bangalore. As of 2018, Amazon’s grocerybusiness has expanded to 40 cities. Last year, Amazon launched a network of 15 specializedfulfilment centers to increase delivery speeds. These fulfilment centers are equipped withtemperature-controlled zones, to store and deliver perishables and frozen products.However, the sector continues to be limited to metropolitan cities, and expansion into smallercities and rural areas is hindered by serious logistical obstacles. In addition, most ruralconsumers are oblivious to shopping online or digital transactions. It is also expected that ruralconsumers will be initially skeptical of fresh vegetables, fruit, meat and poultry online, whichwas an initial concern of urban consumers, but this has shifted.Page 4 of 10
Section II. Road Map for Market EntryEntry Strategy: Can your product come into India and the local laws:1. Determine if your product has market access in Indian commerce2. Study India’s varied laws, particularly those pertaining to food and beverages3. Review FAS policy and market reports and consider engaging a market researchfirm to assist with opportunities and challengesFind the Right Partner:1. Identify a reliable importer/distributor who services the food retail sector2. Avoid conflicts of interest3. Consider whether participating in an Indian trade show would be an effectivemeans of identifying a key importer/distributors/partner4. Consider if collaborating/ participating in USDA endorsed promotional activitieswould be an effective way to create market awareness and penetrationSecure Payment Terms:1. Until a successful working relationship is established, exporters may wish toconsider vehicles such as an irrevocable Letter of Credit, advance payment,payment at sight.2. FAS India offices do not have the authority to mediate contractual disputes orserve as a collection agent when differences over payment or other commercialissues arise. For information about local legal services, refer to IN6155.Market Structure:Organized and unorganized retailers procure imported food and beverage items based on theirtarget audience and current market trends. With the rise in organized retail chains and theirexpansion across value formats, there is an increasing awareness and specialization amongcompanies to supply these businesses.Page 5 of 10
Figure 1. India: Distribution Flow Chart for Retail Food and Beverage ProductsSection III. CompetitionIndia’s domestic industry is the primary competitor for U.S. retail food products. India, with itsdiverse climatic conditions, produces a variety of foods and food ingredients at prices belowmost imported products or products made from imported ingredients. In addition, many thirdcountry competitors enjoy a freight advantage and can supply at lower costs. High importduties, labeling requirements (currently under draft revision), and restrictions on a number ofimported packaged retail goods pose additional challenges for direct U.S. exports to the market.Page 6 of 10
ProductCategoryEdible FruitAnd Nuts; PeelOf Citrus FruitOr MelonsSugars nsPreparations OfVegetables,Fruit, Nuts, OrOther Parts OfPlantsAnimal OrVegetable FatsAnd OilsTable 2. India: Competition in Major Product CategoriesStrengths of KeyTotalSupplyImports Major SupplyAdvantages (A) andCountries/(In USD SourcesDisadvantages (D)domesticMillion)of Local SuppliersindustryCY 20183,76768221011710,198USACôte gentinaMalaysiaBrazilPreference forspecific quality,freight advantageDomestic production ofsome of the major fruits andnuts is insignificant (A)Pricecompetitiveness.India is usually a netexporter of sugar (D)Pricecompetitiveness,and freightadvantageDomestic processingindustry willing to replicateseveral recipes using lowcost inputs. (D)Pricecompetitiveness,and freightadvantageDomestic processingindustry willing to replicateseveral recipes using lowc
Jul 17, 2019 · independent estimates forecast Indian food retail sales to surpass U.S. 800 billion by 2023. Food Retail Sector Key Updates: This past year has seen noteworthy developments in the retail and e-retail space in India. 7-Eleven, the world’s largest convenience store chain, an
12.2 Thermal Expansion Most materials expand when heated and contract when cooled. Thermal expansion is a consequence of the change in the dimensions of a body accompanying a change in temperature. 3 types of expansion: Linear expansion. area expansion, volume expansion In solid, all types of thermal expansion are occurred.
Council For Scientific And Industrial Research - CSIR, India Government of India, India Indian Council of Medical Research, India Indian Department of Atomic Energy, India Ministry of Electronics and Information Technology of India, India Ministry of Health and Family Welfare of India, India Ministry of Science and Technology of India, India
Core-Retail Sales: n/a Number of Stores: 182 Jobs in Retail: 3,345 YUKON Total Retail Sales: 799.8 million Core-Retail Sales: 508.8 million Number of Stores: 186 Jobs in Retail: 3,630 BRITISH COLUMBIA Total Retail Sales: 84.3 billion Core-Retail Sales: 54.0 billion Number of Stores: 20,398
Core-Retail Sales: n/a Number of Stores: 182 Jobs in Retail: 3,345 YUKON Total Retail Sales: 799.8 million Core-Retail Sales: 508.8 million Number of Stores: 186 Jobs in Retail: 3,630 BRITISH COLUMBIA Total Retail Sales: 84.3 billion Core-Retail Sales: 54.0 billion Number of Stores: 20,398
Thermal expansion calculation of pipeline & movement capacity of the expansion joints Expansion amount of the pipeline can easily be calculated with below formula, calculated amount is the key parameter for selecting appopriate expansion joint. ΔL α x Δt x L1 ΔL Expansion amount (mm) α Pipe termal expansion coefficient (mm/m C) (To be
clarify allowable retail and non-retail activities and sales under the Federal Meat Inspection Act and the TDA retail meat permit. As a result, a draft educational publication was developed to document, clarify and summarize the regulatory issues related to retail and non-retail meat sales in Tennessee. Finally, in November
RETAIL CHAIN BUSINESS PLAN II. Company Description Starting a new retail business in the United States of America is a good idea. The retail industry is growing in different parts of the world. Both Brick & Mortar and online retail businesses are successful in this region. The name of the new retail chain is Fine Retail Corporation.
Use the English phonemic alphabet page, which you find at the beginning of good dictionaries, as a guide to pronouncing new words. Effective English Learning ELTC self-study materials Tony Lynch and Kenneth Anderson, English Language Teaching Centre, University of Edinburgh 2012 9 3. Don't forget to learn the word stress of a new word. Every English word has its own normal stress pattern. For .
