Pestel and SWOT Analysis of Indian Retail Industry

This report provides a Pestel and SWOT analysis of the Indian retail industry. It discusses the political, economic, social, technological, legal, and environmental factors affecting the industry. The report also highlights the strengths, weaknesses, opportunities, and threats of the industry. The study material is relevant for international marketing courses.

International
marketing
Table of Contents

..............................................................................................................................................................1
Introduction..........................................................................................................................................3
MAIN BODY............................................................................................................................................3
Pestel analysis of retail industry in India...........................................................................................3
SWOT analysis..................................................................................................................................4
CONCLUSION.........................................................................................................................................6
REFERENCES..........................................................................................................................................7
Introduction
Retail industry consist of process in which retailers are involved in selling the final
service or product to the end consumer. Retailer is known as the individual who is involved
in managing the functions of processing different orders and not indulging in to government,
wholesale or corporation. The retail industry is involved in operating at lowest level of supply
chain management. Item clothes completing the selling process of retailers and in this they

are playing a key role for the management of stores, shops, shopping malls and streets and e-
commerce stores (Grosso, Castaldo and Grewal, 2018). The chosen country in this report is
Indian market and there are several retail companies which have tried to enter this market for
international expansion.
MAIN BODY
Pestel analysis of retail industry in India
Political factor: Government regulation and political influence are the major factors
which are considered by any retail company before entering any foreign market.
These laws impact upon profits and revenues of the business. When political
environment of the country changes then it is involved in disrupting supply chain off
services and products. In this way, business is not able to run the operations smoothly.
Economic factors : these include economic and government Switcher involved in
appreciating business activities. It includes development of favourable environment
for the business to grow and enhance. These include motivating customers for
spending their money on the product or service. When there is decline in business
activities, it means that unemployment is higher and individuals are having fewer
resources (Mishra and Koul, 2021). This is different from the environment well
Fanny economy. This is involved in creating different mindset of people. Then there
are individuals who are not having job that resources are limited and they have to
operate in a saving mode. Economy of a country develops an environment In mindset
of people which is involved in managing the areas whether to spend the money or not.
When economy is well established then people are having source of income as well as
jobs. This is a feasible market for any retail company to operate business.
Social factors: these include societal trends as well as shopping habits which are
developed in individuals of the country. It also contributes to behaviour, attitude off
individuals for transforming different factors. There are rural customers who are
involved in buying a food item and then deciding on the basis of needs and
requirements whether it will be desirable or not. Indian beliefs, culture and values
must be followed effectively for managing the operations of retail companies. Indian
market entry for retail sector is possible when there is proper following of culture and
values of Indians.

Technological factors: this means an online retail store or a physical shop is directly
influenced by the technological advancement. These include generating sales report,
store management, sales record and sales report. It is very important for different
businesses to adopt software as well as hardware technology for moving in time with
latest technology. There are different e commerce stores which are benefited by the
use of latest technology. Through online retailers, Internet and websites, it is easy to
advertise products and services across the world. In India, there are technological
advancement and all the new techniques are followed by the retail companies this
demonstrates that India is a visible market for retail industry.
Legal factors: there are different retail stores which are operated in legal environment
of the country. There is need for following and prevailing local labour laws, taxation
regulations as well as business laws which have to be followed in order to manage the
functioning of any retail company (Ojha, 2020) . When businesses are not able to
decide whether to follow local regulations and rules off some countries then there are
restrictions, ban, bankruptcy and foreclosures which businesses have to tackle.
Environmental factors: these include managing the environmental factors associated
with the business operations. This means that business activities are not harming the
environment in any manner. In India, there are several rules made by government in
order to protect environment from any type of harm caused by retail industries. For
any company Off retail industry to enter international market of India has to follow all
the environmental rules and regulations provided by the government.
SWOT analysis
Strength
 Large working population: Indian retailing market is involved large working
population including young generation, women . With the increase in population , the
demand for emerging opportunities are the key factors to grow large retailing market.
 Focus on long term growth: India is providing higher rate of investment to grow in
long term to diversify its business in Indian retailing market.
 Pricing is USP : Indian market aims to set pricing policy to ensure benefit to the
customer to create brand value in the market (Pande and Narayan, 2019) . Many retail
market offers product at lower price to compete in the competitive market.

Weakneess
 Employee Turnover: This is the one of the major weakness of the retailing market
that employees are not satisfied with the business policy which may increase the employee
turnover .
 No advertising : This is the weakness of retailing market that they never advertised
their product which may reduce the market value of the retailing company to compete with
their competitors.
 Customer Loyalty: Sometimes,the retail industry fails to understand the customer's
expectation and nature in relation to the need of the product which may lose customer loyalty
from particular brand.
Opportunities
 Expansion through technology: The use of technology system provides efficiency
in the retailing industry as it ease the medium of doing business.
 Huge population that attract stores: The huge population of India ensures an
opportunities to the retail industry to attract towards stores to meet the demand of the product.
 Digitalization: The digitalization in commerce industry provides great opportunity to
the employee and customers to make easy transaction while purchasing the product and any
other activities related to it.
Threat
 Economic slowdown: Economic has greater impact on consumer spending. Many
economic changes may adversely affect the purchasing power of the customer.
 Rigid Governmental policies: Many rules and regulation of the government may
restrict the entry of new industry to expand the new business (Ramakrishnan and
Ravindran, 2020). It may cause threat to implement the new governmental policies.
 Entry of International retailing industry: Indian market cover large share of Indian
retail market but sometimes, entry of International retail industry may cause threat to
Indian retail industry to implement the new innovation as adopted by the
International industry.

CONCLUSION
From this above report, it has been concluded that Indian retail market is the source of
expansion of business due to availability of resources ,Customer population, and provides
great opportunity of employment to the people. The Indian market finds great place of
diversify their business due to easy policy and rules of the government related to business.
There are many strength and weakness are associated with these kind of industry as it
depends upon the retail industry to identify such threats and weakness at early stage to avoid
decrease in productivity. The retail industry has to acknowledge the opportunities to use it
for enhancing their brand value.
REFERENCES
Grosso, M., Castaldo, S. and Grewal, A., 2018. How store attributes impact shoppers’ loyalty
in emerging countries: An investigation in the Indian retail sector. Journal of
Retailing and Consumer Services, 40, pp.117-124.
Mishra, H.G. and Koul, S., 2021. SUCCESS OF TRADITIONAL RETAIL MARKETS IN
INDIA: A WAY FORWARD. Academy of Marketing Studies Journal, 25(4), pp.1-
4.

Ojha, S.C., 2020, December. How Technology Affects the Brand Behaviour? A Case of
Indian Retail Sector. In A Case of Indian Retail Sector (December 21, 2020). e-
journal-First Pan IIT International Management Conference–2018.
Pande, S. and Narayan, A., 2019. Evaluating Emerging Indian Retail Scenario: Consumer
Preferences, Perceived Risks, and Uncertainties–Store Brands vs. National Brands.
In Maintaining Financial Stability in Times of Risk and Uncertainty (pp. 282-306).
IGI Global.
Ramakrishnan, M. and Ravindran, S., 2020. Measuring retail service quality using RSQS and
validating RSQS in the context of South Indian retail stores (Doctoral dissertation,
Anna University).
Thakur, T. and Kumar, T., 2019, November. Retail Market in India and Its Best Practices: A
Review on Initiatives and Challenges. In International Conference on Sustainable
and Innovative Solutions for Current Challenges in Engineering & Technology (pp.
437-442). Springer, Cham.