Retail Marketing Strategies and Analysis: India and Australia

This report provides a comprehensive comparison of the retail sectors in India and Australia. It begins by defining retail marketing and its significance, then explores the structures of the retail markets in both countries, highlighting the organized and unorganized sectors in India and the more consolidated structure in Australia. The report analyzes the potential size and profitability of the retail industry in both nations, noting the rapid growth in India and the established market in Australia. It also identifies potential problems facing the retail sectors, such as competition, space constraints, and workforce shortages in India, and changing consumer demands in Australia. Furthermore, the report examines the impact of cultural aspects on the retail sector, followed by recommendations. The report concludes with a summary of the key findings and includes references to the sources used.

Running head: Retail marketing
Retail marketing
2018

Retail marketing
Table of Contents
Introduction.................................................................................................................................................3
Retail market in India and Australia............................................................................................................3
Differences in the structure of retail market in India and Australia.............................................................3
Potential size and profitability of retail industry in India and Australia.......................................................5
Potential problems facing the retail industry in India and Australia............................................................8
How cultural aspects impact on the retail sector in India and Australia.....................................................10
Recommendations.....................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................11
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Retail marketing
Introduction
Retail sector is mandatory for every country because it has a great impact on the profitability and
economic development. Retailing is becoming an intrinsic part of people’s daily lives. The main
purpose of the report is to discuss about the role and significance of retail sector in India and
Australia. A comparison between Australia and Indian retail industry has been shown in the task
briefly. The retail sector is quite good and powerful as compared to the Australia. The paper
further outlines that how retail sector faces various issues and challenges in India and Australia.
The potential size, growth and structure of retail industry in both the countries also are presented
in the paper. The impacts of cultural aspects on retail industry also have been explained in the
task. More detail of the report is discussed below.
Retail market in India and Australia
Retail may be defined as a process of selling consumer products and services to the customers
through various distribution channels to maximize profitability globally. Retailers identify and
analyze the needs, preferences and choices of the customers through an effective and unique
supply chain management (Price, 2011). Retail marketing refers to a range of activities and
processes undertaken by a retailer to encourage sales and awareness of the organization’s
products and services (Helena Chiu, Fang and Tseng, 2010). Retail market plays a significant
role in each and every company because it helps in providing ample of consumer products and
services across the globe (Sandilands, 2018). On the other hand, it is noted that retailing in
Australia experienced a favorable performance. Despite a weak success and growth in wages, the
country is achieving success and growth in retail sector (Sutton-Brady, Kamvounias and Taylor,
2015). Wesfarmers, Coles and Woolworths are successful example of retail sector in the country.
The retail industry is one of the biggest Australia’s employers employing and engaging 1.2
million people in 2009-2010 (Australian government productivity commission, 2011).
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Retail marketing
Differences in the structure of retail market in India and Australia
It has been analyzed from the various analysis that structure of retail market is quite different in
Australia and India. The structure of Retail market in India is categorized in two parts such as
organized and unorganized sector (Pantano, 2014). The unorganized sector is major and biggest
sector that may help to attract and retain the maximum number of customers globally. The
divisions of retail sector have been discussed below.
Unorganized retail sector: It entails various local kiranas, hand cart and vendors on the
pavement etc. This industry comprises about 98% of the total retail trade but foreign direct
investment is predicted in the retail sector to minimize the employment in the unorganized sector
and expand that in the organized one (Economywatch, 2010).
Organized retail sector: In this sector trading is derived by the licensed retailers who have
registered themselves to sale and income tax as well. The organized retail sector includes retail
chains, and hypermarkets. The private biggest business enterprises are also comprised in the
organized retail sector. The organized retail industry is further subdivided into instore retailers.
Instore retailers: This type of retail format is well known as the mortar and brick format. The
fixed point sale outlets are included in the instore retailers. In India, the supermarkets are
generally self service retail stores who offer commodities and consumer products at reasonable
prices (Economywatch, 2010).
Apart from this, the retail format in India could be divided into the modern and traditional forms.
The traditional forms entail street markets, multiple brand stores, Kiranas and Kiosks. On the
other hand, the modern formats comprise department stores, hypermarkets and specialty chains.
In today’s modern world, the trade parks and forgo retailing are also going on. Trade parks are
generally business complexes that encourage international trade and business whereas forecourt
retailing is done by the oil corporations to maximize and enhance their revenue and outcomes.
They do not render fuel but also provide other services to its customers in the competitive
market.
In the contrast, organized and unorganized retail market is not undergone in Australian market.
The structure of retail industry is quite different in Australia. There is no specific structure of
retail industry in such country (Fernie and Sparks, 2014). The retail industry is constantly
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maintaining its momentum, carried by social and economic development and expansion. The key
elements in the growth and success of the retail industry are increasing population, rapidly
economic growth and rising population. The retail sector in the country would explore and
expand at a CAGR of 2% over 2013-18 (Mordorintelligence, 2018). The success and growth of
the retail sector in Asia pacific in Australia in second lowest. Australian market is quite flexible
for retail sector as compared to India. Along with this, sudden downfall and rise in the retail
industry is common in the country. In 2013, the general size of retail market is $11USD in
Australia (Mordorintelligence, 2018). During last few years, the low interest rates have given a
relief to supermarkets in the country. The purchasing power of customers and income level was
increased due to low and poor interest rates.
Retail market structure and concentration in Australia
Category Major supermarket chains share of
sales(approx)
Packaged groceries 70%
Fruits and vegetables 50%
Fresh meat 50%
Bakery products 50%
Dairy products 50-60%
Deli products 50-60%
Eggs 50%
Potential size and profitability of retail industry in India and Australia
The potential size is large and wide for retail industry in both the countries. The Indian retail
sector is one of the dynamic and effective sectors due to the entry of various players. The total
consumption expenditure is predicted to reach around US$3,600 from US$1,824 billion by 2020
(IBEF, 2018). The retail market in India is predicted to maximize by 60 percent to reach US$1.1
trillion by 2020, on other hand, some other factors also like income, and consumption also have
been increased in the country. While whole retail market is estimated to grow and rise at 12
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Retail marketing
percent per annum and further formulated retail market contributed 7% of the total retail sector
and unformulated and unorganized retail sector contributed rest of 93% of the sector. The online
retail also has been grown by 23% in 2017. India is estimated to be a fastest and leading e-
commerce market, carried by healthy investment in the retail sector and quickly maximize the
internet users in the global market (Sathish and VenkatramaRaju, 2010).
On the other hand, luxury retail market of the country is estimated to rise to US$ 30 billion by
the end of 2018. The size of the dynamic and modern retail sector in India is estimated to each
near US$ 11.25 billion in 2019 from US$ 13.51 billion in 2016 (IBEF, 2018). It is seen that
private equity companies and wealth organizations are investing money in Indian retail sector to
each US$ 800 million in 2017. With favorable demographics factors, the retail sector in India has
been able to attract and retain maximum target audience in the global market (IBEF, 2018).
After the various studies, it is reported that India has acquired a considerable position and brand
name in global retail rankings. It is seen that India’s around $670 billion retail market is still
unformulated and unorganized with approx 93% thus, it may affect the progress and success of
the industry widely (Tandon, 2018). Mumbai based supermarket like D-Mart is continuously
growing and maximizing its profitability in a hassle free manner.
(Source: Kothekar, 2018)
On the contrary, the various studies explicate the condition of Australia and estimate the growth
and success of its retail sector. The retail market in the country has been observing high growth
and success over the past few years and designing to be one of the biggest and unique
competitive markets at international level. In today’s era, the consumers of the country are
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Retail marketing
becoming more demanding and stylish, there are favorable and unique signs to be positive about
the ample of opportunities being generated in the changing global market. The main key retail
vendors in Australia are Woolworths, Wesfarmers, ALDI stores, Metcash and JB Hi –Fi
(Prnewswire, 2016). Internet retailing is well known and ongoing in Australia to attract
maximum people in the market. Apart from this, grocery retailers are stronger and unique rather
than non-grocery retailers over the past few years. It is analyzed that Wesfarmers was the biggest
and fastest retailer in the country in 2017 having various retail channels. The company’s value
and sale is highly carried by its strong and dynamic performance in various channels like
stationers, home, garden specialist and mass merchandisers. It has been found that Australia is
one of the biggest concentrated food retailer industries across the world (Prnewswire, 2016).
(Source: The conversation, 2013)
The above mentioned diagram shows that there are four major players in the country who control
98% of the market (The conversation, 2013)
.
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(Source:https://www.businessinsider.com.au/australian-retail-sales-fall-flat-in-december-2016-2)
Potential problems facing the retail industry in India and Australia
The Indian retail is the largest retail industries across the globe and has appeared as the most
unique and effective industry (Sathish and VenkatramaRaju, 2010). The Indian retail sector is
estimated to nearly double by 2020 from 2015. But there are various challenges or problems the
retail industry entertaining in India that has been discussed below.
 It is noted that Indian consumers are satisfied with only essential and effective
requirements. There is no space for unnecessary luxuries, requirements and needs. The
multiple attractive and unique malls, stores and supermarkets are fueling the needs, wants
and desires of the Indian consumers. It may affect the profitability and returns of the
retail industry in Indian market.
 There is stiff and high competition in organized retail sector in India which could affect
the sustainability and effectiveness of the industry adversely.
 Opposition to FDI from small traders may affect retail sector in the country (Tyagi,
Singh and Agarwal, 2017).
 There is high shortage of retail space in downtown and central locations which is
becoming a major challenge for retail sector in India. The retail sector is further facing
ample of opposition from politicians, and traders therefore the government has to
originate a separate and unique policy for the industry.
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 Trained and skilled workforce shortage is a major challenge entertaining the retail
industry in India. The Indian retailers are failed to find trained and qualified staff for the
stores and malls. Along with this, they have to pay more for retaining them in the
workplace. This brings down the profitability and revenue of Indian retail sector.
 Changing in the choices and preferences of the consumer is another major concern for
retail sector in India. It also affects the buying behavior of the consumers and becomes a
cause to reduce the outputs and returns of the firm (Akhter and Equbal, 2012).
 One of the vital issues that undergoing in Indian retail market is inventory management.
Shortage of inventory may affect the revenue of retailers adversely. Along with this, most
of the consumers are not willing to pay online which minimizes the sale and profit of the
companies in Indian market.
 VAT and various taxation issue is also a biggest challenge for Indian retail sector (Tyagi,
Singh and Agarwal, 2017).
In the contrast, Australia retail companies also are facing enormous challenges while selling the
retail products and services to the customers across the world. Some of the major issues which
are being dealt by retail companies in Australia have been elaborated below.
 There is high and intense competition among the retail companies in Australia which
could impact on the revenue and performance of the retail industry in the country. Times
are complex thus the customers are saving their money widely so investing money is
down and further very few people are visiting at the stores (Theretailsolution, 2018).
 Online is a biggest serious threat to current retailer. Due to online presence, people do not
prefer to go in the market for buying consumer goods and products, they buy the products
through online channels.
 Customer experience and service are also going decline that affect the performance and
effectiveness of retail sector in Australia (Theretailsolution, 2018).
 It is seen that retail sector in the country is facing disruption. The expectations and needs
of the customers are growing and technology is changing buying behavior of the
customers across the world.
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How cultural aspects impact on the retail sector in India and Australia
It is measured that globalization has changed the way people behave, action, think and do
business. There are various culture aspects such as language, actions, identity, validity,
experience, history and space. All these culture aspects may influence the income level of the
customers in Australia and India. Acquiring western look, changing lifestyle, cultural habits, and
increasing awareness may put direct impact on the growth and targets of retail industry in India.
There is hectic lifestyles of Indian consumers which could also affect the long term mission and
vision of retail sector in the country. Stiff competition is major factor that directly puts various
impacts on the income level of the Indian consumers. Along with this, people from upper class in
India have a tend to invest money on luxury retail items on the other hand, middle class people
would find it hard to invest huge amount on the luxury items. Thus, it affects the mission and
targets of Indian retail companies (Pookulangara and Koesler, 2011).
On the other hand, culture aspects also affect the consumer’s level of income in Australia. The
culture of Australia is unique and dynamic, carried primarily from Britain but also affected by
the effective and unique geography of Australia. The social and cultural factor such as customer,
values, beliefs, religious and income level also affect the purchasing power of the Australians.
Apart from this, Australia is a diversified country thus, retail companies can take ample of
opportunities by selling the consumers products in the global market. It is analyzed from the
various studies that retail companies can boost and augment their profitability and outputs in
Australia. The demographic factors such as income level, religion, education and average size of
a family could also have a direct impact on the retail industry in Australia. Thus, both the
countries need to focus on the cultural aspects while selling the products widely (Ozdemir and
Hewett, 2010).
Recommendations
Some of the suggestions to handle and overcome the retail industry issues in both the countries
have been detailed below.
 It is stated that Indian and Australia should analyze and identify the potential target
audience to earn maximum returns and revenue in the competitive market.
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Retail marketing
 Eating habits of the customers, lifestyle, technology and buying behavior of the
customers shall be considered by both the countries so that they enhance and uplift
revenue of retail industry.
 Australia should focus on the plans, policies and strategies of the Amazon and Lidl to
augment outputs and returns of the retail industry. On the other hand, Indian retail
industry must focus on the prices of the retail and consumer products so that they can
increase and enhance the sale of retail products.
 Promotional and advertisement strategies shall be used by retail companies in both the
countries in order to promote and enhance the retail products.
 Cross cultural dimensions must be used by both the countries to promote and enhance
retail business globally. This model further helps in eliminating cross cultural issues in
both the countries.
Conclusion
It concludes from the above mentioned study that retail sector is essential for both the countries
such as Australia and India. This sector helps in increasing GDP of the country and further
necessary for economic growth and development. The above analysis indicates the significance
and role of retail sector in two countries like Australia and India. In today’s globalization world,
the retail sector is facing several challenges that may impact directly on the income level and
actions of the customers. The above mentioned study also concludes that how ample of cultural
aspects affect the profitability and growth of retail industry in both the countries. It is concluded
that Australian retail sector is more powerful and dynamic as compared to the Indian retail sector
because there is no shortage of skilled and talented workforce in Australia.
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References
Akhter, S. and Equbal, I., 2012. Organized retailing in India-challenges and
Opportunities. International Journal of Multidisciplinary Research, 2(1), pp.281-291.
Australian government productivity commission.2011. Economic structure and performance of
the Australia retail industry [Online]. Available from
https://www.pc.gov.au/inquiries/completed/retail-industry/report/retail-industry.pdf [Accessed as
on 2nd October 2018].
Economywatch.2010. Structure of the retail industry in India [Online]. Available from
http://www.economywatch.com/business-and-economy/indian-retail-industry-structure.html
[Accessed as on 2nd October 2018].
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Helena Chiu, Y.T., Fang, S.C. and Tseng, C.C., 2010. Early versus potential adopters: Exploring
the antecedents of use intention in the context of retail service innovations. International Journal
of Retail & Distribution Management, 38(6), pp.443-459.
IBEF.2018. Retail industry in India [Online]. Available from
https://www.ibef.org/industry/retail-india.aspx [Accessed as on 2nd October 2018].
Kothekar.K.2018. Enhancing profitability of retail chains:Using the fundamental principles
[Online]. Available from https://www.vectorconsulting.in/insights-publications/consumer-
industry-insights/enhancing-profitability-of-retail-chains-using-the-fundamental-principles/
[Accessed as on 2nd October 2018].
Mordorintelligence.2018. Australia retail market [Online]. Available from
https://www.mordorintelligence.com/industry-reports/retail-industry-in-australia [Accessed as on
2nd October 2018].
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