Retail trade 353

Online retail and supporting logistics is expanding in a wide range of advanced and developing economies. In China, where the expansion is occurring extremely quickly, estimates suggest that only part of the expansion is at the expense of traditional retail.

The distribution sector includes commission agents, wholesalers and retailers who act as enablers of trade.

In particular, online retail sales of physical goods amounted to approximately RMB5.08 trillion, while online retail sales of services amounted to nearly RMB1.49 trillion.

Indeed, the Indian government s decision to welcome foreign retailers coincided with French retailer Carrefour s announcement that it will shut down its substantial operations in Singapore by the end of this year. Meanwhile, its British counterpart, Tesco, is shifting away from the large hypermarket format and investing heavily in online systems.

The process of opening the retail sector in China began in 1992 when foreign investment was allowed in retailing on a trial basis.

Recent monthly figures suggest a pick up in retail sales. But, because the official statistics capture mostly sales by larger retailers and exclude the fall in sales by hundreds of thousands of smaller stores and businesses that have failed, consumption looks better than it really is.

And at the same time, certainly in Rwanda, it destroyed the local retailing industry.

New retail plans proposed by different types of industries will lead new retail development into a state of diversified growth.

The increasing concentration has generated strong competition among retail establishments, which has translated into lower retailing margins and benefits to consumers.

In spite of recent developments, retailing continues to be one of the least developed industries in India, and the growth of organized retailing has been much slower than in the rest of the world.

A review of the retail sector in the last 20 years has revealed that the rise of e commerce was similar to the emergence of discount retailers many years ago both were focused on price and convenience.

The retail giant has said it plans to close 100 stores.

Online sales are less common in retail trade (B2C) or in services' industries, with sales accounting for only 1.7 and 1 per cent of total sales, respectively.

Despite a broadband penetration rate of only 30 , e tail commanded 5 6 of total retail sales in China in 2012, on par with the US. And the sector is already profitable Chinese e tailers are logging margins of 8 10 of earnings before interest, taxes, and amortization, which is slightly larger than the average margin for physical retailers.

Retailing is the largest private industry in India and the second largest employer after agriculture.

Only by combining online and offline operations will new retail come into being.

Regulatory divergences among countries constitute barriers to entry into the retail industry.

FDI facilitates the switch from informal to formal retailing.

In most countries, the retail sector has typically developed in three stages first, local or regional players dominate, before a smaller number of national companies takes over, with e tailers ultimately challenging traditional businesses. But China lacks national leaders, with the top five Chinese retailers in different product categories commanding less than 20 of the market, compared to up to 60 in the US.

The government can, say, impose zoning regulations, help small retailers find nbsp specialized niches in the market, or provide skills training to displaced workers. The survival of artisanal retailers should not be used as an excuse to introduce or uphold business regulations that ultimately protect the incumbent rich.

However, the market structures remain quite diverse across countries for example, modern retailing accounts for 85 per cent in the United States but is only nascent in India (where it accounts for 1 to 2 per cent) and accounts for 20 per cent of overall retailing in China.

The Euro Retailer Produce Working Group (EUREP) is a European based trade organization for retailers.

Retail fuel dealers

Growing use by retailers of own brands and discount retailing have also been driving prices down significantly.

With 15 million retail outlets, India has the highest retail outlet density in the world.

The informal retailing sector will have a role to play once markets are opened and formal retailing expands.

In the service sector, the decline is even worse than in manufacturing, because services are heavily regulated and partially closed to foreign competition. In the retail sector, which employs a huge number of Japan s unskilled workers the so called mom and pop shops Japanese productivity is now 25 lower than in Western Europe.

Wholesale and retail petrol

The retail sector is characterized by economies of scale and scope as well as vertical integration and the existence of large retail chains.

Retailers are able to access and tap different cost structures in different countries and are becoming global.

Informal retailers could become the suppliers or the customers of formal retailers, or their franchises.

In an instant, it was as if the words new retail took on magical properties, and became the new catchphrase of industry insiders.

Mass consumption in China and other emerging economies is coming of age in the Internet era. Given that industry structures are still developing in many of these countries, e tail is set to shape not only the retail landscape, but also the manufacturing and financial services industries and even the urban landscape itself.

Magical new retail

China s E Tail Revolution

The growth in concentration in retailing has also given rise to a number of concerns about anti competitive behaviour of major retailers vis à vis other competitors, and abuses of buyers' power with respect to suppliers of products and consumers.

Distribution services in Colombia contribute 4.5 per cent of GDP, of which retailing accounts for 1.5 per cent.

South African retailing companies have expanded to other African countries in search of opportunities not available domestically.

The fresh food supermarket war has escalated, and have become a phenomenal topic in the new retail sector. Just what is new in new retail?

By contrast, Alibaba (which owns marketplaces such as Taobao) and 360buy.com (which focuses on electronics) rank among China s top ten retailers, and already provide national coverage through the reach of express delivery companies. As a result, China s retail sector seems more likely to follow a two stage development path, with e tailers emerging as the major national players.

Light refers to fixed assets, headcount, management processes and other burdens that are less than that of traditional retailers heavy refers to areas such as logistics and storage that require enormous investment.

If investors understand that online distribution is revolutionizing the retail sector, isolating the sector s CEOs from financial markets would just push more resources into a deteriorating, shrinking business model. In this sense (and only this sense), short term thinking that induces change and movement away from obsolete technology here and throughout the economy may well facilitate long term prosperity.

The debate around opening the retail sector to foreign investment is currently being framed, on the one hand, by the need to modernize supply chains and, on the other hand, by the desire to protect small shopkeepers livelihoods. Those who support the decision argue that India s supply chains are simply too wasteful, and that only the finance and knowhow of big, international retail chains can upgrade them.

Business can encounter significant barriers when striving to invest in foreign distribution (retail or wholesale) markets.