Retail Industry Analysis: Australia vs. India, Fall 2023

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Retail Management
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Table of Contents
Executive summary..........................................................................................................3
Introduction...................................................................................................................... 3
Background of retail industry of Australia and India.........................................................3
Section 1: Differences in the structure..........................................................................4
Section 2:Potential size and profitability of retail industry in both countries..................5
Section 3 Problems facing the retail industry................................................................6
Section 4 Consideration of cultural aspects..................................................................8
Conclusion and recommendations...................................................................................9
References.....................................................................................................................10
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Executive summary
The present research focuses on highlighting the situation of Australia and Indian retail
industry. Further, the retail industry of India has a skilled, dynamic workforce, and it is
fast growing. Smart newly introduced players are there within the sector. On the other
hand, in the case of Australia, the societies are urbanized. They are famous worldwide
for this reason. The GDP of Australia is high in terms of per capita. The retail industry in
India is expected to grow from the US $ 672 billion by 2021 to the US $ 1,200 billion by
2021. On the other side, Australia recorded a considerably higher per capita GDP,
valued at around US $ 50,000. Due to high customer demand, Australian retail sectors
such as grocery store and other entities are facing competition and strong business
marketing strategies. This will make an impact on company performance. Indian retail
sector is facing issue such as lack of skilled workers, low use of technology etc. Hence,
these are the key confronts faced by the retail industries of both the nations.
Introduction
The retail industry is made up of corporations that earn profits mainly by providing
intangible products and services to the customers. Retailers meet the identified
requirement by the supply chain. Retailer providers accomplish small orders from a
large number of individuals (Fernie, and Sparks, eds., 2018). Shopping commonly
considers the act of buying commodities in order to satisfy the needs and demand — for
example, food, clothes, shoes, beauty product and many more.
The present report is focused on the retail industry of Australia and India. The current
report identifies the difference in the structure of the retail market of both countries.
Further, the assessment evaluates the potential size and profitability of the retail
industry in Australia and India. The study also analyzed the critical problem faced by
both the countries and cultural impact in this industry.
Background of retail industry of Australia and India
The retail industry of India has a skilled, dynamic workforce, and it is fast growing.
Smart newly introduced players are there within the sector. The retail sales which are
online are forecasted at the rate of growth of 31% year-on-year to reach US$ 32.70
billion in 2018. E-commerce markets are present in India (IBEF, 2019). The trading of
Indian retail has received foreign direct investment equity inflows which give a total of
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US$ 1.66 billion during the time of April 2000- 2019 March. They are completely
according to the rules and regulations of the department of industrial policies and
promotion. Various initiatives are taken by the government for the development of the
sector.
On the other hand, in the case of Australia, the societies are urbanized. They are
famous worldwide for this reason. The GDP of Australia is high in terms of per capita; its
value can be stated as USD 50,000. The growth rate of this sector is 5%, 3% and 2.6%
in various places called New South Wales, Victoria and South Australia. Disruption is
faced by the retail sector (Mordor Intelligence, 2019). The economic growth of Australia
is mostly driven by investments done privately. Investments are made in markets of
housing and mining, 1.75% inflation occurs. The products in demand are leggings and
sports footwear. An online distribution channel is also present there.
Section 1: Differences in the structure
It has been observed that the retail business is one of the fastest-growing sectors in
India. The Indian retail industry is predictable to nurture from the US $ 672 billion by
2021 to the US $ 1,200 billion by 2021. Further, India comes to the fifth position chosen
largest retail destination worldwide. The country has the uppermost per capita retail
store accessibility in the world. India's retail division is growing continuously; retailing is
not the only occurrence in main cities and metros, but also in rural areas. Retail Sector
Structure in India is vast. It included manufacturer, distributor, suppliers and customers
— manufacturers who produce the products and develop the services (Chernev, and
Hamilton, 2018). Distributor and suppliers are those who supply item to retailers. The
retail market structure in India is classified into organized and unorganized sectors.
Organized retailing indicate to trade exercises enforce by licensed retailers those who
are list for sales duty, income tax, etc. It involves hypermarkets, retail chains,
confidentially owned great retail businesses.
On the other hand, Unorganized retailing, refers to traditional form of low-cost trade, for
instance, local grocery stores, general shops, convenience stores, hand carts and
sidewalk vendors, Kirana etc. Along with this, apparel is the next major in the Indian
retail group and is predicted to grow 12–15% every year (Fibre2fashion.com, 2019).
Apparel is expected to control the food and grocery as well as organized retail category.
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Internet retailing is predictable to appear as the next major retailing channel in India
during the anticipation. Internet retailing is likely to comprise 1.5% of total retail value
sales in India by the end of 2018 (TarunSpeaks, 2014).
On the other side, Australia recorded a considerably higher per capita GDP, valued at
around US $ 50,000. In addition, it is taken as the second-highest average wealth per
adult. Further, the market structure of Australia is divided into five categories. Food and
liquor, departmental stores, Clothing, electrical, hardware are the dimensions of the
structure of the retail industry. Woolworth and Coles are the main retailers of food and
liquor retailing. Moreover, the in department stores Kmart, Big w, Target are the most
significant retailer of the department stores. Along with this, the value of food and wine
retailing in Australia maximize around 3 per cent in 2018 to a total of US $ 119.7 billion
(Global Agriculture information network, 2019). Furthermore, the clothing industry is a
vital dimension of retailing in Australia. It has been observed that just Group, specially
fashion, are the key retailers of the products (Ayers, and Odegaard, 2017).
Hence, both the countries have their own structure of the retail industry. The companies
are working effectively for earning revenue.
Section 2:Potential size and profitability of retail industry in both countries
The entire retail sector of Australia has witnessed positive growth. Further, the
ecommerce fashion industry is quite large in size and it is growing at a faster pace. In
the year 2017 the area of women fashion has witnessed growth of 43.80% and at the
same time major players are contributing a lot in dominating the entire sector. The major
players that have been witnessed in the market are Woolworths group, Aldi, Metcash
etc. All these companies are offering different products in the market (Mordor
Intelligence, 2019).
On annual basis the level of revenue is $576.3 BN of the entire sector and this is
representing the definite effectiveness of the sector in terms of demeanor overall
operations. Moreover, the current growth rate is 1.1% that is showing that positive
growth prospects are present for the entire industry. The market segmentation of the
industry has been done on the basis of food and beverage, apparel footwear, electronic
and household appliance, luxury goods etc. Hence, this segmentation directly assists in
conducting the operations and at the same time customers are easily served that are
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associated with the retail sector. In comparison with the past the size of Australian
industry has increased at a faster pace (Gupta, 2018). At present 140,000 retial
businesses are operating in Australia. On the other hand several restrictions are present
that retailers have to face while serving customers and they restrict them from
competing with the other players present in the market.
The retail market of India has estimation of US$ 600 billion. The economic value states
that India is ranked among the five retail markets of the world. The format is larger for
stores of convenience. The urban centers have supermarkets which deliver products
and services linked with retail and it accounts for 4% of the industry. Central
government of India has now encouraged foreign direct investment within the retail
industry and this will further boost the performance of entire industry. It can be stated
that multi-brand retail is the current nature of Indian Retail industry (Purvis, 2018).
Furthermore, the degree of competition is intense within the industry and retail
businesses are struggling to acquire the desired growth and market share. There are
various multi-brand retailers operating in India and Wal-Mart, Carrefour, and Tesco are
some examples of the same. Various single brands called as IKEA, Nike, and Apple is
also operating in the market of India. Foreign supermarkets are allowed by some states.
Indian retail sector is the one which is well organized. Retail setups are owned by the
company.
Section 3 Problems facing the retail industry
In both countries, the retail industry has faced a huge competitive market that impacts
on an overall organization working. The Australian economy and Indian market are
majorly facing losses in revenues due to continuous increment in online services.
Due to high customer demand, Australian retail sectors such as grocery store and other
entities are facing competition and strong business marketing strategies. This will make
an impact on company performance (Banerjee, and Mishra, 2017). The stock
management problem is majorly faced by Australian retail industries due to continuous
changes in social trends that create a problem and high losses. Along with this firm has
to take an instant decision on remaining goods.
Another main problem is faced by the retail industry is a continuous increment in online
services that create a negative impact on company business strategy (Financial
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Express, 2019). For example, if the entity business strategy for increasing sale is based
on personal relationship program in that condition company will be affected by different
online offers.
The economic growth rate, GDP rate and government law impact on retail industry
business activities. In the case of the Australian economy, companies low - level impact
due to strong economic position.
The retail industry is also facing problems and difficulties in product price method. The
online services set goods and services price at 55% lower rate that ultimately impacts
the retail business (Chernev and Hamilton, 2018).
Another main issue that is faced by the retailers that are operating online is lack of
consumer awareness. It has been found that some customers do not prefer to shop
online. There is a segment of consumers who do not prefer to shop online and this act
as hurdle in earning profits. So, in this way these are some of the key problems that are
faced by Australian retailers.
It can be expressed that at present there are wide ranges of issues and problems faced
by the Indian retail Industry and some of the problems are discussed below as:
The Indian retailers are still struggling a lot in context of adopting the advanced and
upgraded technology and this has further created issues and challenges for the brands.
In the modern era, technology has become a very important part in day to day
operations of business and activities such as billing and stock management can be
easily carried out with the help of technology (Purvis, 2018). However, many retailers in
the country are facing lots of issues and challenges in terms of adopting the technology.
In terms of the Indian retail industry, it can be expressed that poor infrastructure is
present within the nation and this has further created issues for the brands. The poor
infrastructure and facilities linked with logistics have also resulted in creating issues for
the retailers in terms of attracting customers and attaining desired sales (The retail
solution, 2019).
Workers or employees are considered as one of the main and most important assets in
the retail industry and therefore, businesses in the industry are struggling a lot in terms
of employing skilled and talented workers. The lack of skilled workers has emerged as a
biggest problem for the businesses because they are not able to carry out smooth and
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desired flow of all operations and activities. Considering the case of nation such as
India, courses and programs linked with retail are very less and low availability of
education in this sector has resulted in developing the problem related to shortage of
skilled workers.
Section 4 Consideration of cultural aspects
Indian retail sector is facing diverse changes due to cultural aspects. It has been
witnessed that culture is referred as complex aspect that have diverse changes. Culture
has direct impact on the living pattern of the citizens that also affects the growth of retail
sector. Decision making of customers has been changed as per cultural aspects.
Changes in cultural aspects influence the growth of the retail sector. For example,
current cultural aspects of India indicate that people are more attracted towards small
retail services. It means large scale retail companies are having low scope in the Indian
market. Local retailers are having better opportunities in the market (Gupta, 2018).
Young shoppers are more attracted towards one roof retail services. It is because
young shoppers are more attracted towards mixed cultural values as they prefer both
traditional retailers as well as western retailers. Income level in India is less as
compared to the western nations It means the retail sector is offering products and
services at low cost. Discount offers are also being provided to the customers by retail
industry so that services can be offered as per low income and Indian culture. Use of
cash is also high as per the cultural values of India. It is also a reason that cash
transaction practices within Indian retail industry are high.
Marketing activities performed by Indian retail businesses are rated at high investment.
People in India are not well aware of different retail products. People are not used to
focus on exploratory approach to identify products as per their needs. It is also reason
that marketing investment in Indian retail market is also high. On the other hand, in
Australian market the use of plastic money is high. It means cultural values of Australia
are attracted towards cashless transactions. It has been witnessed that urbanization is
also being promoted within Australian culture that also create opportunities for the big
giants in retail sector (Gupta, 2018). Use of key measures regarding different
promotional tools is necessary to refer. People in Australia are well aware in regard to
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the different services provided at the retail stores. It is also a reason that investment on
marketing in Australian retail sector is less.
Income level is considered as key aspect in the cultural values. In Australia the income
level of people is high so they are attracted towards premium products. It is also a
reason that Australian retail sector is generally having its pricing strategy as per
premium pricing. Also, customers in Australia belief that premium quality products can
be accessed in premium pricing so they are more attracted towards premium products.
People are more concerned about premium products so retail stores in Australia are not
having focus on frequent discount offers. Living standard of Australian people indicates
that they are more attracted towards one roof retail stores. In order to save time and
manage the life style people are visiting less to the small retailers. Wide range of
products and services are being offered at Australian retail businesses.
Conclusion and recommendations
The present report is the summary of Australian and Indian retail industry. The study
helps in knowing the difference in the retail structure of Australia and India. Further, the
potential size of the Indian economy is continuously growing, but on the other side, the
Australian retail industry growth rate is constant. Both countries retail industry is facing
the problem for stock management and competitor's business strategy for surviving in
the market. Further, the Indian retail industry is facing challenge in terms of skilled labor
where right workforce is not present for conducting operations.
Recommendations
Both countries retail industry should focus on business strategy formulation to survive in
the market. The effective business strategy will impact positively on the customer, and it
will increase company sales. On the other side, small retail industries should focus on
product quality and marketing strategy that creates positive impact on customer. The
retail sector entrepreneurs in Australian and Indian market should focus on product
pricing technique to increase firm sale. On the other side, retail companies should focus
on stock management method to save the firm from excess losses. Moreover, company
management should consider the latest technology in the billing system and goods
delivery process especially in the Indian market.
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References
Ayers, J.B. and Odegaard, M.A., 2017. Retail supply chain management. CRC Press.
Banerjee, M. and Mishra, M., 2017. Retail supply chain management practices in India:
A business intelligence perspective. Journal of Retailing and Consumer
Services, 34, pp.248-259.
Chernev, A. and Hamilton, R., 2018. 6. Price image in retail management. Handbook of
Research on Retailing, p.132.
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues
and new challenges in the retail supply chain. Kogan page publishers.
Fibre2fashion.com, 2019. Retail Industry Structure:. [Online]. Accessed through
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Financial Express, 2019. Survey finds huge gap between wholesale, retail pulse prices:.
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Global Agriculture information network, 2019. Retail Food Sector Report:. [Online].
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Gupta, S., 2018. Need of Retail Management in Indian Economy.
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< https://www.ibef.org/industry/retail-india.aspx>. [Accessed on 17th September
2019].
Mordor Intelligence, 2019. AUSTRALIA RETAIL SECTOR - GROWTH, TRENDS AND
FORECAST. [Online]. Accessed through
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<https://www.mordorintelligence.com/industry-reports/retail-industry-in-australia>.
[Accessed on 17th September 2019].
Purvis, M., 2018. Retail management. In The Routledge Companion to the History of
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TarunSpeaks, 2014. Impact of Online Stores on Store-Based Retail format:. [Online].
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online-stores-on-store-based.html>. [Accessed on 17th September 2019].
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[Online]. Accessed through < https://theretailsolution.com.au/the-current-
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