13135311 retail industries in global environment (1)
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PROJECT
ON
EMERGING TRENDS IN RETAILING
(WITH REFERENCE TO RETAIL OUTLET IN THE MARKET)
PROJECT SUBMITTED TO SYMBIOSIS CENTRE FOR DISTANCE LEARNING,
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE DEGREE OF POST GRADUATE DIPLOMA IN BUSINESS ADMINISTRATION
IN MARKETING MANAGEMENT
By
Name: - Rajni MenonAddress:-58/86B, Prince Anwar Shah Road
Kolkata-700045Registration No-200606967
SYMBIOSIS CENTRE FOR DISTANCE LEARNING
PUNE
2010
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DECLARATION
I hereby declare that the project entitled EMERGING
TRENDS IN RETAILING submitted for the Degree of
Post Graduate Diploma in Business Administration in Marketing
Management is my original work and the project has not
formed the basis for the award of any degree, diploma,
associate ship, fellowship or similar other titles. It has not been
submitted to any other university or Institution for the award of
any degree or diploma.
Place: Name: Rajni Menon
Date: Registration No.:
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NO OBJECTION CERTIFICATE
This is to certify that Ms Rajni Menon is an employee of this
organization for the past 6 years
We have no objection for her to carry out a project work titled
EMERGING TRENDS IN RETAILING in our organization and for
submitting the same to the Director, SCDL as a part of
fulfillment of the Post Graduate Diploma in Business
Administration in Marketing Management Program.
We wish her all the success.
Place:-
Date:-
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ACKNOWLEDGEMENT
It is with real pleasure that, I record my indebtedness to
my academic Guide, Mr. Hemant Mundhra for his counsel
and guidance during the preparation of this project.
Place Name: Rajni
Menon
Date: Registration No:
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CERTIFICATE
Certified that the project is a work done by Ms. Rajni Menon
during the period of her study under my guidance, and that the
project has not previously formed the basis for the award of
any degree, diploma, associates hip, fellowship or similar other
titles and that it is an independent work done by his.
Place: Name: Hemant Mundhra
Date: Product Manager-PowercellBusiness
Eveready Industries IndiaLtd
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TABLE OF CONTENT
Chapter Content Page
No.
Acknowledgement II
List of Tables VI
List of Diagrams
VII
(1) Introduction 01-
44
1.1 Retail Industry
02-19
What is Retail Industry?
02-05
Structure of Retail Industry
06-11
Evolution of Retailing
12-13
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Indian Scenario of Retail Industry
14-16
Retail Worldwide scenario 17-19
1.2 Objectives and Role of Retail
Industry 20
1.3 Review of Literature
21-27
Major / Minor Challenges in Industry
21-26
Example of Some Published Issues
27
1.4 Hypothesis28-39
Past/ Present/ Future of Industry
28-35
Impact of Retail Industry in India
36-39
1.5 Limitations of the Study
40-42
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1.6 Methodology
43-44
Source of Data
43
Other Source 44
(2) Significance of the study
45-48
2.1Opportunities of the Western
46
Retailers in India
2.2 Contribution of FDI In Retailing
47-48
2.3 Benefits To The Indian Consumer
48
(3) Research and Analysis
49-69
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3.1 Latest Trends in Retail Sector
50-53
3.2 Major Player of Retail Industry
54-69
(4) Finding & Conclusion
70-73
(5) Bibliography 74-
76
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Table No. Title of the Table
Page No.
1.1. Growth of Retail Industry08
1.2. Continuation of GDP
14
1.3. World Organization Trade18
1.4 . Comparison of Retail Industry
29
3.1. World-Wide Retail
66
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Table No. Title of the Diagram
Page No.
1.1. Indian Retail Market
03
1.2. Map of Income Classes
05
1.3. Organized Retail Market
06
1.4 . Growing Format in India
10
1.5 . Retailing Map in India
11
1.6. Journey of Organized Retail
13
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1.7. Total Retail Sales 2007
16
1.8. US Retailing Format 18
1.9 Penetration of Retail
19
1.10 Challenges in Retail Market21
1.11 Retail Challenge
25
3.1 Retail Analysis51
3.2 Retail Market
52
3.3 Retail Segment53
3.4 Retail Touches Economy
73
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Chapter (1)
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Part-1.1
RETAIL INDUSTRY
The word "Retail" originates from a French-Italian word.
Retailer-someone who cuts off or sheds a small piece from
something. Retailing is the set of activities that markets
products or services to final consumers for their own personal
or household use. It does this by organizing their availability on
a relatively large scale and supplying them to customers on a
relatively small scale. Retailer is a Person or Agent or Agency
or Company or Organization who is instrumental in reaching
the Goods or Merchandise or Services to the End User or
Ultimate Consumer.
Retail is India's largest industry. It accounts for over 10 per
cent of the India's GDP and around eight per cent of the
employment. Retail sector is one of India's fastest growing
sectors with a 5 per cent compounded annual growth rate.
India's huge middle class base and its untapped retail industry
are key attractions for global retail giants planning to enter
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newer markets. Driven by changing lifestyles, strong income
growth and favorable demographic patterns, Indian retail is
expected to grow 25 per cent annually. It is expected that retail
in India could be worth US$ 175-200 billion by 2016.
Emerging markets such as India and China are the final
frontier for retail taking the focus away from saturated Western
markets. Since 2001, 49 global retailers entered 90 new
markets, but at the same time, 17 retailers left markets in
2005.
The Indian retail industry in valued at about $300 billion
and is expected to grow to $427 billion in 2010 and $637 billion
in 2015. Only three percent of Indian retail is organized.
Retailers of multiple brands can operate through a franchise or
a cash-and-carry wholesale model.
The Indian retail environment has attained $ 210bn quiche,
witnessing a strong development pace of five percent per year
as per latest survey by Price Waterhouse Coopers. As per the
estimation 200 malls, presenting additional 50mn sq ft of retail
space will be ready in next two years. Existing retail space in
160 malls is nearly 32mn sq ft
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1.1 Indian Retail Market
The analysts foresee bright future of the retail sector. A
huge number of shopping malls, nearly 100, have come up in
the recent past, generating 20mn sq ft. retail space, extending
more space of about 12mn sq ft to it. Nearly 60 malls are on
the verge of completion and may be operational by the end of
current financial year. A forecasted number of nearly 200
malls, in a move to make additional 50mn sq ft of retail space,
will be completed within the next two-years.
India retail industry is expanding itself most aggressively,
as a result a great demand for real estate is being created.
Indian retailers preferred means of expansion is to expand to
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other regions and to increase the number of their outlets in a
city. It is expected that by 2010, India may have 600 new
shopping centers.
In the Indian retailing industry, food is the most
dominating sector and is growing at a rate of 9% annually. The
branded food industry is trying to enter the India retail industry
and convert Indian consumers to branded food. Since at
present 60% of the Indian grocery basket consists of non-
branded items.
The global retail giants like Wal-Mart, Gap, Tesco,
Versace, K-Mart/SEARS, Carrefour, ZARA, FCUK, Fendi, NEXT,
Mother Care, lKEA, Trussardi, DKNY and Debenhams have
made plans to march in the Indian market.
ESPRIT, GUESS, Chanel, Mango and many other global
marked their presence in India by implementing licensing and
franchisee agreements. The global retailers on the line of
control, awaiting the green signal from Govt. to enter Indian
retail market. However, the current scenario has encouraged
Indian players to speed up retail expansion and fresh retail ven
tures.
Companies like Shoppers Stop, Trent, Reliance, Lifestyle,
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Pantaloons Tanishq, Crossroads, Akbarallys' and Tanishq
already have planned to invest over Rs 5,000cr. Trent is on the
edge to take both its brands 'Star India Bazaar' and 'Westside'
to new cities, meanwhile Shoppers' Stop has recently geared
up for expansion of present ones and to add 11 new stores
including two hypermarkets. Also, Pantaloon has planned to
add eight 'Big Bazaar' malls within the next 6 to 8 months.
After partition, Reliance Industries Ltd (RIL) is substantially
getting ready to enter in field of retailing. RIL is poised to
emerge as the single largest player in this sector. On the other
hand, Toscos, Wal-Marts or Safeway does ultimately enter in
the country. So finally, Shoppers' Stops, Westside, Pantaloons
and West sides in coming years have will face stiff competition.
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1.2 Map of Income Classes
STRUCTURE OF RETAIL
INDUSTRY
The retail industry continued in India in the form of
Kiranas till 1980. Soon, following the modernization of the retail
sector in India, many companies started pouring in the retail
industry in India like Bombay Dyeing, Grasim etc. As has been
mentioned earlier the retail sector in India can be widely split
into the organized and the unorganized sector.
Organized Retail Sector
After 50 years of unorganized retailing and fragmented
Kiranas stores, the Indian retail industry has finally begun to
move towards modernization, Systematization and
consolidation. Today, modernization is the catch phrase and
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2006-07
20
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the key to understanding retail in the next decade.
Traditionally retailers
1.3 Organized Retail Market
Have had localized operations. This localized nature of the
industry is Changing as retailers face lower growth rates and
threatened profitability in home Markets. New geographies
help them sustain top line growth in Addition to enabling global
sourcing and encasing on global advantages of getting the best
products at optimum prices.
There has been a boom in retail trade in India owing to a
gradual increase in the disposable incomes of the middle class
households, as a result of good performance of IT, Service and
Infrastructure sectors. More and more players are entering the
retail business in India to introduce new formats like malls,
supermarkets, discount stores, department stores and even
changing the traditional looks of bookstores, chemist shops,
and furnishing stores.
Organized retail formats prevalent globally
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Supermarkets: Self-service 4000-20000 sq ft stores with
shopping carts typically focused on regular groceries,
household goods and personal care
Hypermarkets: Huge stores over 40000 sq ft situated outside
the town with ample parking space aimed for bulk purchases
stocking electronics, furniture and clothing. Carrefour is the
global major in this format.
Mass merchandisers: Large destination stores that sell
everything at competitive prices. They have cross-country
chain operations with centralized sourcing and a hub-and-
spoke distribution. Makro and Sam's Club are leading players in
this format.
Discounters: Aimed at
bargain buyers offering
less choice but deep
discount on bulk sourcing
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deals through controlled inventory. Aldi is the world leader in
this format.
Convenience Stores: Small stores located at convenient
points like petrol stations working round the clock.
Unorganized Retail Sector
The unorganized retail sector basically includes the local
Kiranas, hand cart, the vendors on the pavement etc. This
sector constitutes about 98% of the total retail trade. As 70% of
the employment is generated in Agriculture sector, hence this
form of retailing is widely seen in those areas and of course to
some parts of the urban. There is a lot of hue and cry in the
sector for opening of sector for direct investment from the
foreign players, but government can not neglect the interests
of small players. One of main reason of not opening this sector
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1.1 Growth of Retail
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to FDI is it may shrink the employment in the unorganized
sector and expand that in the organized.
RETAILING FORMATS IN INDIA
Malls:
The largest form of organized retailing today. Located
mainly in metro cities, in proximity to urban outskirts. Ranges
from 60,000 sq ft to 7,00,000 sq ft and above. They lend anideal shopping experience with an amalgamation of product,
service and entertainment, all under a common roof. Examples
include Shoppers Stop, Pyramid, and Pantaloon
Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the
Mumbai books retailer Crossword, RPG's Music World and the
Times Group's music chain Planet M, are focusing on specific
market segments and have established themselves strongly in
their sectors.
Discount Stores:
As the name suggests, discount stores or factory outlets,
offer discounts on the MRP through selling in bulk reaching
economies of scale or excess stock left over at the season. The
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product category can range from a variety of perishable/ non
perishable goods
Department Stores:
Departmental Stores are expected to take over the
apparel business from exclusive brand showrooms. Among
these, the biggest success is K Raheja's Shoppers Stop, which
started in Mumbai and now has more than seven large stores
(over 30,000 sq. ft) across India and even has its own in store
brand for clothes called Stop.
Hyper marts/Supermarkets:
Large self service outlets, catering to varied shopper
needs are termed as Supermarkets. These are located in or
near residential high streets. These stores today contribute to
30% of all food & grocery organized retail sales. Super Markets
can further be classified in to mini supermarkets typically 1,000
sq ft to 2,000 sq ft and large supermarkets ranging from of3,500 sq ft to 5,000 sq ft. having a strong focus on food &
grocery and personal sales.
Convenience Stores:
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These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of
high-turnover convenience products and are usually open for
extended periods during the day, seven days a week. Prices
are slightly higher due to the convenience premium.
Mob's :
Multi Brand outlets, also known as Category Killers, offer
several brands across a single product category. These usually
do well in busy market places and Metros.
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1.4 Growing Format in India
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RETAILING MAP IN INDIA
Page No.
1.5 Retailing Map
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EVOLUTION OF
RETAILING
Retailing, one of the largest sectors in the global
economy, is going through a transition phase in India. For a
long time, the corner grocery store was the only choice
available to the consumer, especially in the urban areas. This is
slowly giving way to international formats of retailing. The
traditional food and grocery segment has seen the emergence
of supermarkets/grocery chains, convenience stores and fast-
food chains.
The traditional grocers, by introducing self-service formats
as well as value-added services such as credit and home
delivery, have tried to redefine themselves. However, the boom
in retailing has been confined primarily to the urban markets in
the country. Even there, large chunks are yet to feel the impact
of organized retailing. There are two primary reasons for this.
First, the modern retailer is yet to feel the saturation' effect in
the urban market and has, therefore, probably not looked at
the other markets as seriously. Second, the modern retailing
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trend, despite its cost-effectiveness, has come to be identified
with lifestyles.
In order to appeal to all classes of the society, retail stores
would have to identify with different lifestyles. In a sense, this
trend is already visible with the emergence of stores with an
essentially `value for money' image. The attractiveness of the
other stores actually appeals to the existing affluent class as
Well as those who aspire to be part of this class. Hence, one
can assume that the retailing revolution is emerging along the
lines of the economic evolution of society.
It was only in the year
2000 that the
economists put a
figure to it: Rs.
400,000 crore which
is expected develop to
around Rs. 800,000 crore
1.6 Journey of Organized
Retail
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by the year 2005 an annual increase of 20 per cent. Retailing
in India is unorganized with poor supply chain management
perspective. According to a recent survey by some of the retail
consulting bodies, an overwhelming proportion of the Rs.
400,000 crore retail markets are UNORGANISED. In fact, only a
Rs. 20,000 crore segment of the market is organized. As much
as 96 per cent of the 5 million-plus outlets are smaller than 500
square feet area. This means that India per capita retailing
space is about 2 square feet in comparison to 16 square feet in
the United States. India's per capita retailing space is thus the
lowest in the world.
INDIAN SCENARIO OF RETAIL
INDUSTRY
The present value of the Indian retail market is estimated
by the India Retail Report to be around Rs. 12,00,000
crore($270 billion) and the annual growth rate is 5.7 percent.
Retail market for food and grocery with a worth of Rs. 7,43,900
crore is the largest of the different types of retail industries
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present in India. Furthermore around 15 million retail outlets
help India win the crown of having the highest retail outlet
density in the world. The contribution of retail sector to GDP
has been manifested below:
Country Retail Sector's share in GDP
(in %)
India 10
USA 10
China 8
Brazil 6
1.2 Continuation to GDP
As can be clearly seen, retailing in India is superior to those of
its contenders. Retail sector is a sunrise industry in India and
the prospect for growth is simply huge. There are many factors
that have stimulated the rise of the shopping centers and
multiplex-malls in a jiffy. Some of them can be listed as follows:
1. Rise in the purchasing power of Indians- the rise in the
per capita income in the last few years has been magnificent.
This has led to the generation of insatiable wants of the upper
and middle class. The demand of new as well as second hand
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durables has risen throughout the country thus providing the
incentive for taking up retailing.
2.Favorable to farmers- retailing has helped in removing the
middlemen and has thus enhanced the remuneration to
farmers. This is a new revolution in the agricultural sector in
India and will go a long way in amending the condition of
agriculture, a major concern among policy makers.
3. Use of credit- a typical Indian is most conversant with
using credit cards than carrying money. This is led to shift of
the consumer base towards supermarkets and make the
payments in the form of credit.
4. Comfortable Atmosphere- a visit to a retail store appears
to be more soothing for the generation-Y. People and kids prefer
to shop in an air conditioned. The retail industry is the second
largest employer in India. It currently employs about 7 percent
of the total labor force in India. Finance Minister P.
Chidambaram's recent statement salaries ought not to
be legislated is a welcome move as most of the organized
retail is in private hands. Only 4.6% of the total retail trade is
into organized sector. It generates about Rs.55,000 crore
($12.4 billion). The major and minor players desperately need
to work hard in this direction so that next time the figures look
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more decent. The government must also make an attempt to
ameliorate the situation as political instability and
infrastructure namely power and roads are the major
roadblocks in the path of smooth functioning of the market.
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PRESENT INDIAN SCENARIO
* Unorganized market: Rs. 583,000 cores
* Organized market: Rs.5, 000 cores
* 5X growth in organized retailing between 2000-2005
* Over 4,000 new modern Outlets in the last 3 years
* Over 5,000,000 sq. ft. of mall space under development
* the top 3 modern retailers control over 750,000 sq. ft. of retail
space
* Over 400,000 shoppers walk through their doors every week
* 47 global fortune companies & 25 of Asia's top 200
companies are retailers
* Biggest player in India is Pantaloon Retail India Limited
* Growth in organized retailing on par with expectations and
projections of the last 5 Years: on course to touch Rs. 35,000
corers (US$ 7 Billion) or
more by 2005-06
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1.7 Total Retail Sales 2007
RETAIL : WORLDWIDE
SCENARIO
China- the total sales from retail market in China reached
US$755 billion in 2005. However organized retailing in China
accounts for only 20% of it. Also the fragmentation of China's
retail market is so high that top 100 retailers make up for only
10.5% of the total market. The registered sales of department
stores grew by 25.7% and that of convenience stores grew by
36.5% in 2005. The Chinese retail market is expected to reach
new highs as the population of strong middle class is expected
to double by 2020 and mergers and acquisitions among
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retailers are3 going in great guns. The WTO restrictions are also
expected to have a favorable impact on its retail sector. Key
Players Analyzed This section covers the key facts about
players currently operating in the China retail industry
including Shanghai Bailian Group, Beijing Gome Electric,
Carrefour, Wal-Mart Stores, Wuhan Zhongbai Group, and China
Paradise Electronics Retail.
Japan- total annual sales for the Japanese retail industry for
2003 amounted to JPY 133,273 billion. Japan had 1.2 million
retail establishments in June 2004 and there were 42,738
specialty superstores. The year 2002 to 2004 the annual sales
per store increased by 3.8%. The growth was mainly driven by
the grocery superstores but the number of superstores
specializing in clothes gradually came down. The organized
retail sector in Japan couldn't perform at its full efficiency
because of collapse of the 'bubble economy' in the early 90s
Spain- Spain Energy Industry Spain energy consumption is
estimated to have
reached 165 Million Tons
of Oil Equivalent in 2006.
Fossil fuels are the major
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sources for energy in Spain especially Oil (49.5%) & Natural
Gas (19.9%). With the Spanish objective of energy security &
diversity, and clean energy sources, renewable sources are
expected to grow at rapid pace. Key Findings Spain is a net
energy importer, with imports accounting for 99% of its total
annual oil and natural gas consumption and 50% of its coal
consumption key players in Spain energy such as Gas Natural
Group, CEPS Group, Repsol YPF, Endesa S.A. and Gamesa.
United State- Retail
is the second-largest
industry in the U.S. by
number of businesses and
number of employees.
Retail sales in the U.S. (total
retail sales include the categories of gasoline, automobiles, and
1.8 US Retailing
1.3 World Trade
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food service) were up about 3.8% in 2007, to $4.49 trillion
(Plunkett Research estimate). The 2007 growth was driven
partly by higher gasoline costs as well as by deep price
discounting during the Christmas season by mass
merchandisers and year-long discounting by automobile
dealers.
Brazil-Emerging as one of the world's largest retail markets.
The sales in the industry have been growing strongly since
2003 and are expected to continue at this momentum only
over the next few years as constantly declining inflation rate
allows for continued expansion of real incomes (increasing
demand for non durable consumer goods) and credit conditions
ease (sustaining demand for durable goods). A process of
consolidation of the retail industry has been underway but
overall, the market remains relatively fragmented, indicating
substantial scope for the larger players to grow their market
share in future. The top five supermarket chains account for
approximately 40% of total sales.. All the market values have
been converted to US$ at May 2007 exchange rate where, 1
Brazil Real (BRL) = US$ 0.494 (Approx).
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Part 1.2
OBJECTIVES & ROLE OF RETAIL
INDUSTRY
Retail is clearly the sector that is poised to show the
highest growth in the next five years. The sector is set for a
revolution, as both the present players and new entrants are
gearing up to explore the market. This sector contributes 10%
of India's GDP and the current growth rate is 8.5%. The present
size of the organized retailing sector is approximately 3% and
is expected to grow to 25-30% by the year 2010. There are
about 300 new malls, 1500 supermarkets and 325
departmental stores currently under construction. Many players
1.9 Penetration of
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are coming up with huge investments, due to which the present
12 million mom-and-pop shops and Kiranas stores fear losing
their business. Most predictions say that the sector might reach
to US$ 400-600 billion by the year 2010
The retail sector has played a phenomenal role
throughout the world in increasing productivity of consumer
goods and services. It is the second largest industry in the
United States of America in terms of numbers of employees
and establishments. Wal-Mart, the largest retailer in the United
States is also the largest employer in the United States with
annual sales over $ 284 Billion. There is no denying the fact
that most of the developed economies are very much relying
on their retail sector as a locomotive of growth. Analysts, CEOs,
and others are using consumer spending and consumer
confidence data originating from the retail sector as an indicator to
gauge the status of the economy
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Part 1.3
CHALLENGES OF RETAIL INDUSTRY
The big challenge for the Indian retailing industry is the
heterogeneity of the market. It is up to us retailers to evolve
with consumers, predict where and what they will spend on, be
there and take the highest share of their wallet and use this
last leg of the economic chain to build India. At Panta-loon,
through our delivery formats, we touch 52% of the customers
wallet. My vision is to capture where this new, young and
emergent India is
going to spend and
capture as close to
100% of their
shopping.
So far, modern-format retail has scaled up its presence in the
metros and a few cities. However, the
future will see tier-II and,
maybe, even tier-III cities attract more retail outlets. Consumer
mindset and behavior is changing in these cities. A growing
1.10 Challenges in Retail
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groceries and it accounts for 77 percent of total retail sales. So
it is obvious that this is the most preferred section of retailers.
But unfortunately the foible taste bias for 'wet market' (i.e.
fresh food available through hawkers) has marred this prospect
also. Therefore supply chain management, storage of fresh
perishable foods and persuading the customers that the food is
inexpensive despite being fresh are genuine challenges to the
newcomers. Diversifying the product base to consumer
products such as readymade garments, furnitures, mobiles and
computers can mitigate the losses, if any from food marketing
and also broaden the reach to consumers.
3. Nostalgia- Indian shopping habits are no different. People
tend to attach qualities like honesty, fair price, good behavior
etc. to shopkeepers with whom they have been dealing right
from childhood. They find no reason to go to a distant
megaspore without any genuine reason. This problem is
difficult to deal with as it demands a change in long-formed
mindset. Organized retail outlets can overcome this problem by
employing eligible local peoples who can interact in vernacular
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language and win the confidence of people.
4. Information Technology- This is a major problem and
India must act fast if it wishes to create a smooth field for
organized retailing. Digitization of services will make transfer of
goods easy and an improvement in supply chain management
will definitely play a significant role in attracting more
consumers and less consumer grievances. Besides, it will
generate easier payments option for customer and easier
money movement for the CEOs of these highly
diversified malls.
MINOR CHALLENGES
1. Human resource crunch- the concern for insufficient
manpower in the industry has been in news for the last few
months. This fear is somehow unfounded. The retail industry
according to recent reports is growing at a rate of 100 percent.
Kishore Biyani's Future Group i.e. the Big Bazaar chain of retail
outlet alone provides employment to more than 18,000 people
and is planning to expand its employment base to 34,000 by
June 2008. If we add to this the foray by mega players like
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Reliance and Bharti-Walmart then the fear can surely turn into
a misperception. Retailing mainly deals with hard-selling of
space, trade of stocks and building of relationships. Since most
of the openings are for front line shop people, a graduation will
suffice. Nowadays many institutes also provide post-HSC and
post-graduate retail-specific courses.
2. Hindrances from government- Some political parties
want the government to amend laws and improve curbs so that
the mega players can't openly decimate the unorganized retail
sector. This is a conclusion based on a myopic outlook and
must be amended for a long term strategy. The fear is baseless
because of the reasons mentioned above. The mega stores will
no doubt provide employment to the less educated masses.
Also taking business away especially from small food vendors is
more easily said than done. Instead the limiting move will send
wrong signals to the investors and will ward off investments
when the states need it most. Allowing 51 percent retail FDI in
single brand retailing is a welcome move in this direction. It is
expected that the government will create further opportunities
for the organized retail to come up as home
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grown investment is always sweeter than foreign investment.
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central to the strategic thrust of the retailing firm.
Merchandising consists of activities involved in acquiring
particular goods and services and making them available at a
place, time and quantity that enable the retailer to reach its
goals. Merchandising is perhaps, the most important function
for any retail
organization, as it decides what finally goes on shelf of the stor
e.
3) PRICING:
Pricing is a crucial strategic variable due to its direct
relationship with a firm's goal and its interaction with other
retailing elements. The importance of pricing decisions is
growing because today's customers are looking for good value
when they buy merchandise and services. Price is the easiest
and quickest variable to change.
4) TARGET AUDIENCE:
"Consumer the prime mover"
"Consumer Pull", however, seems to be the most important
driving factor behind the sustenance of the industry. The
purchasing power of the customers has increased to a great
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extent, with the influencing the retail industry to a great extent,
a variety of other factors also seem to fuel the retailing boom.
5) SCALE OF OPERATIONS:
Scale of operations includes all the supply chain activities,
which are carried out in the business. It is one of the challenges
that the Indian retailers are facing. The cost of business
operations is very high in India.
SOME PUBLISHED ISSUE OF RETAIL
INDUSTRY
The retail industry is expected to grow into a USD 427
billion industry by 2010-FICCI
Indias retail industry, which is in the middle of rapid
growth, has already
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scripted success stories fit to be the subject of a Bollywood
film-Business Standard
The impact of organized retailers that have seen swarming
of malls lately, on the mom-n-pop stores in 20 Indian
cities- Indian Council of Research in
International Economic Relations (ICRIER)
Modern Retailing Comprehensive policy vital- The Hindu
Retail boom triggers ancillary industry growth- The Times
of India
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Part 1.4
PAST/ PRESENT/
FUTURE OF RETAIL INDUSTRY
Before the decade of eighties, India with hundreds of
towns and cities was a nation striving for development. The
evolution was being witnessed at various levels and the people
of India were learning to play different roles as businessmen
and consumers.
Retail-which literally means to put on the market, is a very
important aspect of every city. Without a well organized retail
industry we would not have our necessities and luxuries
fulfilled. Be it our daily groceries or fashion accessories and
everything in between, retail industry brings us the blissful
experience of shopping. Though organized retailing industry
began much earlier in the developed nations, India had not
actively participated. However with its vast expanse and young
population, India in the 21st century emerges as a highly
potential retail market. The journey of retailing in India has
been riveting and the future promises further growth. Here is a
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complete picture deciphering the past, present and future
trends of Indian Retail Market.
It is widely accepted that the retail industry has
undergone a drastic change in last five years and there is yet
more to come. Let us compare the image of Indian retailing in
2004-05 to that of its status in 2007-08 in the following table:
Magnification of the Indian Retail Industry
Yardstick Situation in 04-
05
Situation in
07-08
Value of retail sales Rs. 10,20,000
crore
Rs 12,00,000
crore
Annual growth rate 5% 5.7%
Value of organized market Rs 35,000 crore Rs 55,000 crore
Share of organized
market in the sector
3.4% 4.6%
Forecasts (after 5 years)
about size of organized
retail market
Over Rs.
1,00,000 crore
Rs. 2,00,000
crore
Forecasts about growth Around 30% Around 40%
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rate of organized retail
market
The above table clearly shows that the retail market as well as
the mindset required for it has experienced a thorough revisal
in the last three years. This is just the beginning and Indians
are sanguine that the sector will see rosy days in the future.
This confidence has helped India acquire the No.1 position
among 30 most attractive retailing destinations in the world
according to the Global Retail Development Index of 2005 (by
AT Kearney, India). Among emerging markets, India holds the
second position after China in the list of most favored retail
destinations
Past Retail Industry in India
Before the decade of eighties, India with hundreds of
towns and cities was a nation striving for development. The
evolution was being witnessed at various levels and the people
of the nation were learning to play different roles as
businessmen and consumers. The foundation for a strong
1.4 Comparison of Retail
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economy were being laid, youth were beckoning new
awareness in all spheres. And this brought in an opportunity for
retail industry to flourish. First in the metros and major cities
later to impact sub urban and rural market as well.
Retailing in India at this stage was completely unorganized and
it thrived as separate entities operated by small and medium
entrepreneurs in their own territories. There was lack of
international exposure and only a few Indian companies
explored the retail platform on a larger scale. From overseas
only companies like Levi's, Pepe, Marks and Spencer etc. had
entered targeting upper middle and rich classes of Indians.
However as more than 50 % population was formed by lower
and lower middle class people, the market was not completely
captured. This was later realized by brands like Big Bazaar and
Pantaloons who made their products and services accessible to
all classes of people and today the success of these brands
proves the potential of Indian retail market.
A great shift that ushered in the Indian Retail Revolution
was the eruption of Malls across all regional markets. Now at its
peak, the mall culture actually brought in the organized format
for Retailing in India which was absent earlier.To your surprise
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there was not a single mall in India a decade before and just a
few years ago only a handful of them were striving, today there
are more than 50 malls across different cities and 2 years from
now around 500 malls are predicted to come up.
Present Retail Industry in India
At present the Retail industry in India is accelerating.
Though India is still not at an equal pace with other Asian
counterparts, Indian is geared to become a major player in the
Retail Market. The fact that most of the developed nations are
saturated and the developing ones still not prepared, India
secures a great position in the international market. Also with a
highly diverse demography, India provides immense scope for
companies brining in different products targeting different
consumers.
According to the Global Retail Development Index, India is
positioned as the foremost destination for Retail investment
and business development. The factor that is presently playing
a significant role here is the fact that a large section of Indian
population is in the age group of 20-34 with a considerably high
purchasing power; this has caused the increase in the demand
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in the urban market resulting in consistent growth in the Retail
business.
And though the metros and other tier 1 cities continue to
sustain Retail growth, the buzz has now shifted from these
great cities to lesser known ones. As the spending power is no
longer limited to metros, every tier 2 city in the country has
good market for almost every product or service. Due to this,
tier 2 cities like Chandigarh, Coimbatore, Pune, Kolkatta,
Ahmedabad, Baroda, Hyderabad, Cochin, Nagpur, Indore,
Trivandrum etc. provide a good platform for a brand to enter
Indian market.
However there are a few precautions for every brand that
explores Indian market. As Indian consumers are very curious
and have a broad perspective, they respond well to a new
product or concept and there are very fair chances of a brand
surviving well, but every Indian consumer be it an urbanite or a
small town dweller needs a feeling of value for money.
Although labeled as tight fisted, Indian consumers are great
spenders once they realize that they are getting value for their
money. Also new product /service concepts from the western
world are better adopted first by the urban Indians, the smaller
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markets respond well to the need based retailing rather than
luxury concepts.
As the Indian retailing is getting more and more organized
various retail formats are emerging to capture the potential of
the market.
* Mega Malls
* Multiplexes
* Large and small supermarkets
* Hypermarkets
* Departmental stores are a few formats which flourishing in
the both big and small regional markets.
As the major cities have made the present retail scenario
pleasant, the future of the Indian Retailing industry lies in the
rural regions. Catering to these consumers will bring
tremendous business to brands from every sector. However as
the market expands companies entering India will have to be
more cautious with their strategic plans.
Future Retail Industry in India
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According to a study the size of the Indian Retail market is
currently estimated at Rs. 704 crores which accounts for a
meager 3 % of the total retail market. As the market becomes
more and more organized the Indian retail industry will gain
greater worth. The Retail sector in the small towns and cities
will increase by 50 to 60 % pertaining to easy and inexpensive
availability of land and demand among consumers.
Growth in India Real estate sector is also complementing
the Retail sector and thus it becomes a strong feature for the
future trend. Over a period of next 4 years there will be a retail
space demand of 40 million sq. ft. However with growing real
estate sector space constraint will not be there to meet this
demand. The growth in the retail sector is also caused by the
development of retail specific properties like malls and
multiplexes.
According to a report, from the year 2003 to 2008 the
retail sales are growing at a rate of 8.3% per annum. With this
the organized retail which currently has only 3% of the total
market share will acquire 15-20 % of the market share by the
year 2010.
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Factors that are playing a role in fuelling the bright future of
the Indian Retail are as follows:
The income of an average Indian is increasing and thus
there is a proportional increase in the purchasing power.
The infrastructure is improving greatly in all regions is
benefiting the market.
Indian economy and its policies are also becoming more
and more liberal making way for a wide range of
companies to enter Indian market.
Indian population has learnt to become a good consumer
and all national and international brands are benefiting
with this new awareness.
Another great factor is the internet revolution, which is
allowing foreign brands to understand Indian consumers
and influence them before entering the market. Due to
the reach of media in the remotest of the markets,
consumers are now aware of the global products and it
helps brands to build themselves faster in a new region
However despite these factors contributing to the growth of
Indian retail Industry, there are a few challenges that the
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industry faces which need to be dealt with in order to realize
the complete scope of growth in Indian market.
Foreign direct investment is not allowed in retail sector, which
can be a concern for many brands. But Franchise agreements
circumvent this problem. Along with this regulations and local
laws and real estate purchase restrictions bring up challenges.
And with Good Planning, Timely Implementation and a media
campaign that touches Indian consumers any brand can go far
ahead in the Indian Retail Revolution.
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IMPACT OF RETAIL INDUSTRY IN GLOBAL
WORLD
Organized retailing is spreading and making its presence
felt in different parts of the Country. The trend in grocery
retailing however, has been slightly different with a Growth
concentration in the South. Though there was traditional family
owned retail Chains in South India such as Nilgiris as early as
1905, the retail revolution happened With the RPG group
starting the Food world chain of food retail outlets in South
India With focus on Chennai, Hyderabad and Bangalore
markets, preliminarily. The Experiment has reaped rich
dividends and the group is now foraying into other Territories
as well as. Owing to the success of Food world model of RPG
group, several new models such as Trinethra, Subhiksha,
Margin Free and others have made their foray into this sector
albeit at regional levels. Today the food retail sector in India is
about Rupees Ten Lakh Crores (USD 200 billions) of which the
organized food retail segment is about 1 per cent and
increasing at a pace of over 20% year to year.
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To be successful in food retailing in India essentially
means to draw away shoppers from, the roadside hawkers and
Kiranas stores to supermarkets. This transition can be achieved
to some extent through pricing, so the success of a food
retailer depends on how best he understands and squeezes his
supply chain. The other major factor is that of Convenience
shopping which the supermarket has the edge over the
traditionalKiranas Stores. On an average a supermarket stocks
up to 5000 SKUs against few hundreds stocked at an average
Kiranas stores.
Though with excellent potential, India poses a complex
situation for a retailer, as this is a Country where each State is
a mini-Country by itself. The demographys of a region Vary
quite distinctly from others. In order to appeal to all classes of
the society, retail Stores would have to identify with different
lifestyles. Hence we may find more of Regional players and it
would take enormously long time before nation wide successful
Retail chains emerge. This is the main reason as to why the
successful retail chains in the Countries today operate at
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regional segments only and are not aiming at nation wide
Presence, at least for the time being.
In the organized retail industry, the gestation periods are
long, institutional funding is Difficult, and there is none or little
Government support. But the belief among top Retailer chains
in the country is that the industry will see large investments
coming once. The current ban on foreign direct investment is
lifted. But that could be two-three years Away. Food and
grocery retailing is a tough business in India with margins
being very Low and consumers not dissatisfied with existing
shops where they buy. For example, the next-door grocery
shopkeeper is smart and delivers good customer service,
though not value.
As of now, while Chennai has about five organized food and
grocery retail chains, other big cities such as Delhi, Bangalore,
and Mumbai average only two-three such chains. Almost all
food retail players have been region-specific as far as
geographical presence is concerned in the country. To illustrate
with examples, the RPG Group's Food World, Nilgiris, Margin
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Free, Giant, Varkey's and Subhiksha, all of which are more or
less spread in the Southern region; Sabka Bazaar has a
presence only in and around Delhi; names such as Haiko and
Radhakrishna Food-land are Mumbai-centric; while Adani is
Ahmedabad-centric. Industry topography in India is such that
spreading presence across cities is a tough call. As pointed out
by many experts, organized food and grocery retailing chains
going national requires significant investments. Retailing within
this sector is not just about the front-end, but involves complex
supply chain and logistics issues as well.
The trend and mindset of the present retailer chains in
India can be best understood by studying Food-World as an
example, which came in first in the food and grocery retailing
sector. The chain has no plans to venture beyond the Southern
region just yet. Current plans are to focus on the Southern
markets and achieve saturation. The intention is that by 2005,
they could look at the other regions. Subhiksha, a Chennai
based discount chain, too wants to be the principal store of
purchase for at least 40 per cent of all consumers living within
500-750 meters of the store, that is, within walking distance.
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Part-1.5
There are many problems face by Retail industry in Indian
Market. They are following:-
The format does not suit rural India: While the format
suits the urban areas, it does not suit the rural areas in a
country like India. Today, in Indian, organized retailing is
confined to class A cities, the 23 largest cities. About 82 per
cent of organized retailing comes form the top six cities and
another 12 percent from the next four. Thus, the top 10 cities
account for 94 per cent of all organized retailing in India. The
scattered location of consumers has been the main deterrent
to the rapid spread of the idea in the rural areas.
Purchasing patterns not very conducive: Even in urban
centers, the purchasing patterns of the Indian consumers differ
form those of westerners. Whereas in the west, the purchases
are spread better over the month, in India. Purchases are by
and large made in the first week of the month. Theirs perhaps
has a correlation to patterns of payment of wages; Purchasing
patterns differ also because of the difference in the eating
habits of people.
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Inadequate growth of brands: Inadequate growth of brands
is another factor, In India, branding was almost not-existent in
convenience products until recently; this has naturally inhibited
retailing through sophisticated chains.
Supply chain problems: As suppliers are not properly
organized in the country, replenishment of stock poses
problems for large chains. Source development also poses
special problems.
Being family businesses, retailing enterprises have
limitation in expansion; Yet another reason for the slow pick
up of mega retailing idea in India is that all along retail
enterprises have been family concerns. And, family businesses
usually have a limitation in expansion,
Example of Viveks; The Viveks (Formerly Viveks & Co. ) of
Chennai, is an example. For the past several years, it
remained rather small because of its family character. During
the three decades from 1965 to 1995, it had just three
showrooms. It was a family concern and remained for a long
time, a single store outfit, managed by the father and assisted
by his three sons. Once the father grew old, the sons started
managing the business, and because there were three sons
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engaged in the business, the enterprise went in for three
showrooms. In recent years, however, it has emerged as a
major chain, as it has shed its family business character, now it
is actually the largest consumer durable chain in the country. It
has big sales volumes and multiple locations.
Real estate problems; Real estate is an integral requirement
of large scale chain store operation. One needs a large number
of stores in each city to achieve optimum scale. Also, big
chains have to operate in several cities. Real estate thus
becomes crucial. That is why groups that have been in real
estate and hotel businesses are more comfortable in branching
off into retailing. Fro other firms, real estate development are a
problem; they don not command property in prime locations.
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Other Limitation of Retail Industry
The organized retail industry in India is
faced with stiff competition from the unorganized sector.
There is a shortage of quality real estate
and infrastructure requirements in our country.
Opposition to Foreign Direct Investment
from small traders affects retail industry.
A very high stamp duty on transfer of
property affects the industry.
Shortage of retail space in central and
downtown locations also hinders the
growth of retail industry.
Presence of strong Pro-tenancy laws
makes it difficult to evict tenants and
this is posing problems.
Land-use conversion is time consuming
and becoming complex.
For settling property disputes, it consumes
lot of time.
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Non residents are not allowed to own
property except they are of Indian origin.
Inadequacies in infrastructure such as lack
of high quality road networks, power shortages and
insufficient storage spaces
The retail industry loses to the tune of
US$120 to US$130 million every year
in frauds ,thefts and employee pilferage, shop lifting, vendor
frauds or inaccurate supervision despite using standard and
modern security features.
Part 1.6
SOURCE OF DATA
Datas are the useful information or any forms of document
designed in a systematic and standardize manner which are
used for some further proceedings. One of the important tools
for conducting marketing research is the availability of
necessary and useful data. Some time the data are available
readily in one form or the other and some time the data are
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collected afresh. The sources of Data fall under two categories,
Primary Source and Secondary Sources.
Primary Data- the primary data was collected through the
following activities:
Filled the Retail Industry related questionnaire to managers of
a select group of companies And Paper Conversation
Secondary Data- the secondary data was collected through
the following:
Online Research material of the Various Institution/Outlets
directly or indirectly involved with Retail Industry, Secondary
Data used in External Source of Information Like internet,
magazine, paper cutting
OTHER SOURCE
Information Sources
Information has been sourced from namely, books,
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newspapers, trade journals, and white papers, industry
portals, government agencies, trade associations,
monitoring industry news and developments, and through
access to access to more than 3000 paid databases.
Analysis Method
The analysis methods include the following: Ratio Analysis,
Historical Trend Analysis, Linear Regression Analysis using
software tools, Judgmental Forecasting and Cause and Effect
Analysis etc.
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Chapter (2)
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Part 2.1
OPPORTUNITIES OF THE WESTERNRETAILERS IN INDIA
The retail industries in the western countries have
reached a point of saturation and there is no way of expanding.
In this backdrop the retail giants are trying to make their mark
in the retail market of countries that still have untapped
potential of expansion. India happens to be one of them. AT
Kearney has constructed the Global Retail Development Index
which has helped the western retailers to identify the countries
in which investments could be made. Opportunities in India
have attracted the western retailers like Wal-Mart, Euroset, and
Supervalu who have plans to enter as single branded retailers.
In gauging whether to enter, the companies keep into account
the timing factor that is whether the consumers are ready to
accept the products that are offered by them. It is highly
possible that there are potentials in the market but the
consumer preferences are skewed against the products that
are offered.
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Part 2.2
CONTRIBUTION OF FDI IN RETAILIN
G
Permitting Foreign Direct Investment in the retailing
sector can have immense benefits. It can generate huge
employment for the semi-skilled as well as illiterate
population which otherwise can't be employed in the
already confined rural and organized sector. The retail
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sector is highly dependent on the rural sector. Thus it can
facilitate the improvement of the standard of living of
farmers by purchasing commodities at a reasonable cost.
It also stems out an indirect employment generation
channel by training and employing people in the
transportation and distribution sectors such as drivers,
mechanics etc. It is also evident that real estate is a
genuine challenge for organized retailing. Traditional
retailers can use this situation in their favor by taking
franchisees of the mega players of this industry. On the
other hand, the consumer gains from the wide variety of
choices and a more diversified basket of prices available
under one roof. Secondly the indirect benefits like better
roads, online marketing, expansion of telecom sector etc.
will give a 'big push' to other sectors including the rural
one itself. Last but not the least the huge tax revenue
generated from these retail biggies and collected in
government coffers will gradually wipe out the ugly
looking fiscal and revenue deficits. Besides the transaction
in foreign currencies by these MNCs will create a balance
in exchange rate and will bring in stable funds in the
economy as opposed to FII's hot money. This will in turn
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act as a boost to the developing (or 'transforming', as
suggested by the USAID) economy of India.
Part 2.3
BENEFITS TO THE INDIAN CONSUMER:
One has to agree that the entrance of big players will
ensure the higher quality of service and produce being sold to
the consumers. There are other indirect benefits in terms of
choice and pricing that will be passed along to the consumers
as the big retailers will compete with each Other for greater
share of the market.
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Chapter (3)
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Part 3.1
LATEST TRENDS IN RETAIL SECTOR
Today, retail in India is huge, close to $200 billion, of
which organized retail accounts for just $6 billion. This $200
billion should become $300 billion in the next five to six years.
This is a time when organized retailing is just getting into full
steam and the opportunity is huge. Organized retail in India is
expected to grow at 40% for the next five years, thanks to the
nascent stage of modern retail and the malling of India.
It is expected that by 2016 modern retail industry in India
will be worth US$ 175- 200 billion. India retail industry is one of
the fastest growing industries with revenue expected in 2007
to amount US$ 320 billion and is increasing at a rate of 5%
yearly. A further increase of 7-8% is expected in the industry of
retail in India by growth in consumerism in urban areas, rising
incomes, and a steep rise in rural consumption. It has further
been predicted that the retailing industry in India will amount
to US$ 21.5 billion by 2010 from the current size of US$ 7.5
billion. The retail sector would generate employment for more
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than 2.5 million people by the year 2010, says an analysis by
Ma Foi Management Consultants Ltd. AndA KPMG report
says that the organized retail would grow at a higher rate than
GDP in the next five years
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Recent Trends & Changes
Retailing in India is witnessing a huge revamping exercise as
can be seen in the graph
India is rated the fifth most attractive emerging retail
market: a potential goldmine
Multiple drivers leading to a consumption boom:
Favorable demographics
Growth in income
Increasing population of women
Raising aspirations : Value added goods sales
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3.1 Retail Analysis
Organized retailing in India has been largely an urban
phenomenon with affluent classes and growing number of
double-income households.
Rural markets emerging as a huge opportunity for retailers
reflected in the share of the rural market across most
categories of consumption.
Companies using their own web portal or tie-sups with
horizontal players like Rediff.com and Indiatimes.com to offer
products on the web
Spencer's is also planning to set up 500 more stores by
June 2008 with an investment of nearly US$ 125.89 million
DLF plans to invest US$ 4.02 billion over four years to
develop about 20 large shopping malls across the country
Israeli mall
developer Plaza
Center NV plans to
2 Retail
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invest US$ 1.25 billion over the next five-seven years to set
up 50 malls in India.
Reliance Retail is going ahead with plans worth an
investment of US$ 3.77 billion for setting up 205 stores
IT is a tool that has been used by retailers ranging from
Amazon.com to eBay to radically change buying behavior
across the globe
Experimentation with formats: Retailing in India is still
evolving and the sector is witnessing a series of experiments
across the country with new formats being tested out. Ex.
Quasi-mall, sub-urban discount stores, Cash and carry etc
Unorganized retailing is getting organized:To meet the
challenges of organized retailing such as large cineplexes,
and malls, which are backed by the corporate house such as
'Ansals' and 'PVR the unorganized sector is getting
organized. 25 stores in Delhi under the banner of Provision
mart are joining hands to combine monthly buying. Bombay
Bazaar and E-food mart formed which are aggregations of
Kiranas.
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Emergence of discount stores: They are expected to
spearhead the organized retailing revolution. Stores trying to
emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay
Bazaar, RPGs
3.3 Retail
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Part 3.2
MAJOR PLAYER OF RETAIL INDUSTRY
The Indian retail sector has been euphoria over the last
five years. India topped the A.T. Kearney's Global Retail
Development Index for two consecutive years and this has
infatuated Indian as well as foreign retail players to go gaga on
the merchandising track. According to geographical expansion,
Delhi/NCR and Mumbai are the felicitated regions as the top
companies have rated the spending potential of consumers in
the vicinity of the national capital and the financial capital as
excellent. Other metros such as Kolkata, Chennai, Hyderabad
and Bangalore have caught the sight of investors but their
fortunes are yet to be illuminated. Companies like the Future
Group, Reliance, Bharti-Walmart, DLF etc. have shown the
way for other to enter. The countries are expecting a surge in
the growth sprint and lets hope for the best.
Top Companies: An analysis
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Big Bazaar is a chain of
department stores in India, currently
with 75 outlets. It is owned by the Pantaloon Retail India Ltd,
Future Group. It works on the same economy model as Wal-
Mart and has considerable success in many Indian cities and
small towns. The idea was pioneered by entrepreneur Kishore
Biyani, the CEO of Future Group. Currently Big Bazaar
stores are located only in India. It is the biggest and the fastest
growing chain of department store and aims at being 350
stores by the end of year 2010.
It offers all types of household items such as home furnishing,
utensils, fashion products etc. It has a grocery department and
vegetable section known as the Food Bazaar and its online
shopping site is known as FutureBazaar.com. The real estate
fund management company promoted by the Future Group
expects to develop more than 50 projects across India covering
a combined area of more than 16 million sq. ft. On April 1 2007,
Big Bazaar had to shut its outlets in Mumbai as the 120
retrenched employees called a strike with the support of Bhatia
Kamgar Sena (the trade Union wing of Shiv Sena). Later the
management agreed to reinstate the sacked workers
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Pantaloon Retail India Ltd, is Indias
leading retail company with presence
across food, fashion, home solutions and consumer electronics,
books and music, health, wellness and beauty, general
merchandise, communication products, E-tailing and leisure
and entertainment.
Headquartered in Mumbai (Bombay), has over 450 stores
across 30 cities in India and employs over 18,000 people.
Pantaloon founded by Mr. Kishore Biyani. The company
owns and manages multiple retail formats catering to a wide
cross-section of the Indian society and its width and depth of
merchandise helps it capture almost the entire consumption
basket of the Indian consumer.
Founded in 1987, as a garment manufacturing company,
Pantaloon Retail forayed into modern retail in 1997 with the
opening up of a chain of department stores, Pantaloons. In
2001, it launched Big Bazaar, a hypermarket chain, followed by
Food Bazaar, a supermarket chain. It went on to launch Central,
a first of its kind, seamless mall located in the heart of major
Indian cities. Some of its other formats include, Collection I
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Reliance Fresh is the retail chain
division of Reliance Industries of India
which is headed by Mr.Mukesh Ambani. Reliance has entered
into this segment by opening new retail stores into almost
every metropolitan and regional area of India. Reliance plans to
invest Rs 25000 cores in the next 4 years in their retail division
and plans to begin retail stores in 784 cities across the country.
The Reliance Fresh supermarket chain is RILs Rs 25,000 crore
venture and it plans to add more stores across different g, and
eventually have a pan-India footprint by year 2011. The super
marts will sell fresh fruits and vegetables, staples, groceries,
fresh juice bars and dairy products and also will sport a
separate enclosure and supply-chain for non-vegetarian
products. Besides, the stores would provide direct employment
to 5 lakh young Indians and indirect job opportunities to a
million people, according to the company. The company also
has plans to train students and housewives in customer care
and quality services for part-time jobs.
Reliance Fresh recently (24th Jan, 2007) opened several "Fresh"
outlets in Chennai, New Delhi, Hyderabad, Jaipur, Mumbai,
Chandigarh, Ludhiana increasing its total store count to 40.
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Reliance is still testing its retail concepts by controlled entry
beginning in the southern states
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Subhiksha is an Indian retail
chainwith more than 760 outlets selling
groceries, fruits, vegetables, medicines and mobile phones. It
was started and is managed by Mr. R. Subramaniam, IIM
Ahmedabad alumni. He also plans to invest Rs.500 crore to
increase the number of outlets to 2000 across the country by
2009.
Derived from the Sanskrit word, Subhiksham or "giver of all
things good", It opened its first store in Thiruvanmiyur in
Chennai in March, 1997 with an investment of about Rs. 5 lakh.
The retail chain has seen a considerable growth by offering
goods at cheaper rates and there by increasing its customer
base. It is also dubbed as India's largest retail chain. Vision to
deliver consistently better value to Indian consumers, has
guided Subhiksha to deliver savings to all consumers on each
and every item that they need in their daily lives, 365 days a
year, without any compromise on quality of goods purchased.
Subhiksha now has the pan Indian presence with stores across
Delhi, UP, Punjab, Hariyana, Gujarat, Maharashtra, AP,
Karnataka and TN. It has recently commenced operation in
Kerala also. Today, it is a multi-location, professionally
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managed and vibrant organization. Subhiksha now has even
opened Specialized Mobile shops called Subhiksha Mobile
where mobiles are sold at a discounted price
Subhiksha is India's largest supermarket, pharmacy and
telecom chain. Started in 1997 as a single store entity in South
Chennai, it is now present nationally across 1000 outlets and
spread across more than 90 cities. You can now locate the
nearest Subhiksha store in your area with the Store Locators.
ICICI Venture Capital has a 24% stake in Subhiksha.
Food worldis a chain of supermarket
stores. It was started in May 1996 as a division of Spencer &
Co, a part of the RPG Group. In August 1999 it became a
separate company. Currently it operates 89 stores in Bangalore,
Chennai, Coimbatore, Erode, Hyderabad, Kodai, Pondichery,
Pune, Secunderabad, Salem, Trivandrum and Vellore
DLF Retail Developers Ltd. is one of
the troikas of the DLF Group. Besides being India's largest real
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estate developer, DLF is also of the leaders in innovating
shopping malls in India. It caught public eye when it launched
the 2, 50,000 sq ft. shopping mall in Gurgaon. It has brought a
dramatic change in the lifestyles and entertainment with its
City Centers and DT Cinemas. DLF has plans to invest Rs. 2000-
3000 crore in all the emerging areas from metros to class cities
in the next two years. Till last year the company was involved
in building 18 malls out of which 10 were in the NCR region.
Future plans of DLF involve opening up of 100 malls (specialty
malls, big box retailing and integrated malls) across 60 cities in
next 8-10 years. They are slowly transforming into 'lease' and
'revenue share' models.
Local players like ITC, the A.V. Birla Group and Tatas have given
the hints to enter organized retail. Frances Carrefour SA and
Britains Tesco too were recently in news for their future plans
to explore the Indian retail market
Bharti Retail, a wholly owned subsidiary
of Bharti Enterprises. Has announced two joint ventures
(JV)with the international retailing behemoth, Wal-Mart. The
first JV ensures cash and carry business, in which 100 percent
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FDI is permitted and it can sell only to retailers and distributors.
The second JV concerns the franchise arrangement. Sunil
Mittal, Chairman of the Bharti Group assured that the ventures
will use low prices every day and best practices for the
satisfaction of the customer. Processed foods and vegetables
will be delivered by Bharti Field Fresh, Bharti's JV with
Rothschild. Bharti Retail aims to foray every city with a
population exceeding 1 million. It has plans to come up with an
investment of more than $2 billion in convenience stores,
supermarkets and hypermarkets spread over an aggregate 10
million sq. ft. The expansion drive looks ambitious but analysts
are worried that Bharti may face stiff competition from
Pantaloon and Reliance as they too have sanguine plans to
flood the markets with thousands of retail outlets in the coming
five years. Bharti Telecom also has plans to offer all its fixed
and mobile telecom products and services from a single
window to the SMB (Small and Medium Business) enterprises
under the Bharti Infotel division...
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Lifestyle is part of the Landmark Group, a Dubai-
based retail chain. With over 30 years experience in retailing,
the Group has become the foremost retailer in the Gulf.
Positioned as a trendy, youthful and vibrant brand that offers
customers a wide variety of merchandise at exceptional value
for money, Lifestyle began operations in 1998 with its first
store in Chennai in 1999 and now has 13 Lifestyle stores, 5
Home Centers and 1 Baby shop store across Chennai,
Hyderabad, Bangalore, Gurgaon, Delhi, Mumbai and
Ahmedabad.
Business World-IMRB Most Respected Company Awards Survey
has rated Lifestyle as the Most Respected Company in the
Retail Sector in 2003 and 2004. Lifestyle has also been
awarded the ICICI-KSA Technopak Award for Retail Excellence in
2005, the Reid & Taylor Retailer of the Year Award for 2006 and
more recently, the Lycra Images Fashion Award for the Most
Admired Large Format Retailer of the Year in 2006
The foundation of Shopper's Stop
was laid on October 27, 1991 by the K.
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Raheja Corp. group of companies Shoppers Stop aims to
position itself as a global retailer. The company intends to bring
the worlds best retail technology, retail practices and sales to
India. Currently, they are adding 4 to 5 new stores every year
with an immense amount of expertise and credibility, Shopper's
Stop has become the highest benchmark for the Indian retail
industry Shopper's Stop in the only retailer from India to
become a member of the prestigious Intercontinental Group of
Departmental Stores (IGDS).
With its wide range of merchandise, exclusive shop-in-shop
counters of international brands and world-class customer
service, Shoppers Stop brought international standards of
shopping to the Indian consumer providing them with a world
class shopping experience. The stores offer a complete range
of apparel and lifestyle accessories for the entire family. From
apparel brands like Provogue, Color Plus, Arrow, Levis, Scullers,
Zodiac to cosmetic brands like Lakme, Chambor, Le Teint Ricci
etc., Shoppers Stop caters to every lifestyle need. Shoppers'
Stop retails its own line of clothing namely Stop, Life, Kashish,
Vettorio Fratini and DIY. The merchandise at Shoppers Stop is
sold at a quality and price assurance backed by its guarantee
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stamp on every bill. Their
motto: We are responsible for the goods we sell.
Vishal Mega Mart is one of fastest
growing retailing groups in India. Its outlets
cater to almost all price ranges. The showrooms have over
70,000 products range which fulfills all your household needs,
and can be catered to less than one roof. It is covering about
1996592 lac sq. ft. in 18 states across India. Each store gives
you international quality goods and prices hard to match. The
cost benefits that is derived from the large central purchase of
goods and services is passed on to the consumer the group had
a turnover of Rs. 1463.12 million for fiscal 2005, under the
dynamic leadership of Mr. Ram Chandra Aggarwal. The group
had of turnover Rs 2884.43 million for fiscal 2006 and Rs.
6026.53 million for fiscal 2007 .the groups prime focus is on
retailing. The Vishal stores offer affordable family fashion at
prices to suit every pocket.
Welspun Retail Limited (W.R.L.) was
established in 2003 as a part of Welspun Group,
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one of the fastest growing business conglomerates in India.
Welspun is a U.S. $1 billion group, into diverse businesses,
industries, regions and has six companies under the umbrella
brand. Our International Home Textiles Company; Welspun
India Limited (W I L) launched its Indian retail division, WRL
with an aim to capture the Home Textiles market in 2003. The
Retail brands, SPACES- Home & Beyond has carved its niche
with its fashion driven model in the country's major metros,
while Welhome targets a larger audience with its value for
money model. The turn over of the Retail division stands at 100
crore, expected to double in the next 5 years
Key Differentiating Attributes
W.R.L. is the first Retailer of soft furnishing for "Home" inIndia.
W.R.L. has two models that cater to both, the aspirationclientele and the value for money conscious clientele.
Launched Spaces -Home & Beyond and Welhome (WelspunFactory Outlet) in the same year.
Phenomenal growth anticipated in FY 2007-08.
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Vadodara, Indore, Noida, Gurgaon, Ghaziabad, Mysore, Jaipur,
Lucknow, Nagpur.
Wal-Mart Stores, Inc. is an
American public corporation that runs a chain of large, discount
department stores. It is the world's largest public corporation
by revenue, according to the 2007 Fortune Global 500.
Founded by Sam Walton in 1962, it was incorporated on
October 31, 1969. It opened its home office and first
distribution center in Bentonville, Arkansas. It had 38 stores
operating with 1,500 employees and sales of $44.2
million .Wal-Mart is the largest grocery retailer in the
United States, with an estimated 20% of the retail grocery
and consumables business, as well as the largest toy seller in
the U.S., with an estimated 22% share of the toy market. Wal-
Mart is the largest private user of electricity in the US. Owns a
subsidiary electric company in Texas, and will possibly move
into the power business. It is also undertaking a number of
environmentally conscious initiatives to reduce energy usage
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and waste. Wal-Mart operates in Mexico as Walmex, in the UK
as ASDA, and in Japan as Seiyu. It has wholly-ow