report shopping malls (1).doc
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ARESEARCH REPORT
On
Submitted for the partial fulfillment of the requirement for the award
of Master of Business Administration
(2013-15)
Submitted To: SUBMITTED BY:
Ms. Kanika MehtaAsstt. Prof.
Pankaj Sharma Roll No. 1362270068
MBA IV Sem.
MODERN INSTITUTE OF TECHNOLOGY AND MANAGEMENT, GHAZIABAD
TABLE OF CONTENTS
TOPICS
Introduction Executive Summary Industry Overview Literature Review Retailing in India Global Formats Key Facts About Retail Sector in India Foreign Investment in India’s Retail Sector Rationale of the Study Shopping Malls Scenario in NCR Objectives of the Research Study Hypothesis of the Study Comparative Study of Five Malls Research Methodology Data Analysis Preparation Survey Discussion Conclusion Recommendations Bibliography
Annexure Questionnaire
ii
ACKNOWLEDGEMENTPerfect is a famous saying and when a person gets practical experience
under the guidance of experts of the respective field, the knowledge gained
is priceless.
With a sense of great pleasure and satisfaction, I present this project report
entitled “___________________________” completing a task successfully
is never a one-man effort. Similarly completion of this report is a result of
invaluable support and contribution of number of people in direct and indirect
manner.
In the light of the foregoing, first of all my heartfelt gratefulness and thanks
goes to _______________________________, without his indispensable
cooperation the project won’t have been completed within the stipulated
timeframe.
Finally, I would like to thank all the people, without whose insights and
opinions, this project would have been impossible.
RAJIV KUMAR SINGH
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EXECUTIVE SUMMARY
Till the early nineties, the organized retail industry had not evolved. There
was no consumer culture, there were limited brands and people bought what
was available. There were no shopping areas. The retail industry lacked
trained manpower. It was difficult to compete with the unorganized sector
because they operated with minimal labor costs and overheads. Tax laws
and government restrictions added the problem. Liberalization has changed
all this. Today customer is with more spending power, is better educated,
and more importantly, exposed to brands and products through television
and foreign trips. The Indian consumer now has the desire to acquire.
Personal consumption is on the rise. Customer segments, already diverse,
have been sub-divided with joint families giving way to nuclear families, and
the increasing number of working couples. These changes along with
increased availability of retail space and qualified manpower have had a
positive impact. New players are now entering the market. Instead of retail
evolution, there is a retail revolution in India.
The emerging purchasing power of the urban educated middle class and the
growing work culture of the working women has changed the buying habits
of families, who are experiencing a growth in income and dearth of time.
Rising incomes have led to increasing convenience and service.
Consumers have started caring about where they would like to shop, be it
multi brand outlet, exclusive stores or malls with development around them
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but are also more demanding. They want superior quality at an affordable
price and they want it instantly.
Thus, we see that there is a strong trend in favor of one-stop shops like
malls and supermarkets. A Mall/supermarket appeals because of its
pleasant surroundings, better product display and the availability of a wide
variety of brands. The store has accurate measure controls and allows
economies of scale. A shopper also has the option of shopping for all
household necessities under one roof. In the future, with more dual income
families, the consumer ability to spend will increase, but at the same time, it
is predicted that the time available for shopping will go down. In such a
scenario, the retailers will have to increasingly develop shopping as an
experience and at the same time, the more successful ones will be those
that provide faster service. Malls, in particular, are contributing hugely to the
development of organized retail.. Malls are coming up both within cities and
at the outskirts vowing to create destinations that will attract thousands of
customers every day.
India is experiencing a “mall boom”. Shopping malls are set to one of the
most visible faces of the Indian retail scene in the next few years. According
to estimates apart from the metropolitan and larger cities, as many as 50
new malls will be coming up by 2005 in the smaller cities as well.
In India Shopping Malls industry is upcoming industry in India. Today in India
Shopping Mall industry is worth 17000 Cr. Industry. In NCR (National Capital
Region) Gurgaon is the most favorite place for the shopping malls. M.G.
(Meharuli – Gurgaon) Road is the place for all famous shopping malls in
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Gurgaon. On M.G. Road Gurgaon MGF Group has two shopping malls in
operation MGF Metropolitan Mall, MGF Plaza, Sahara Group has its Sahara
Mall and DLF Group has its City Centre.
This project involves around the study of THE Consumer Behavior And
Experience About Shopping Malls; A Comparative Study. The methodology
adopted to study the project is through survey in Sahara, Ansal Plaza,
Center stage Mall, Shipra Mall and Metropolitan shopping malls on M.G.
Road, 100 consumers were surveyed. The survey is done through the
personal interviews by putting a set of structured questionnaire to the visitors
of Shopping Mall.
Consumer purchasing power is the main factor, which determines their
buying behavior and brand of shopping malls. Shopping Malls are the places
for the fun & entertainment, family outing, shopping and eating’s. In
shopping Malls age factor is also one of the dominant factor in daily footfall.
What I studied that in different shopping malls different age group
consumers come and they impact on the buying behavior.
With new shopping-malls having become operational in many cities across
India, it is interesting to observe how the shopping-behaviour of consumers
in the vicinity of these malls has changed and thereby draw some lessons
that could be of some use to the developers of hundreds of new malls that
are currently under planning or construction across India.
It is still not too long ago that the operators of a particular new shopping-mall
at Mumbai had to contemplate restricting entries of visitors by imposing
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conditions that such entry was limited to those having mobile phones or
credit cards a.k.a., the income tax department's one in six criterion for filing a
tax return.
Mall developers also have to create distinctive identities for their specific
malls, much like the identities that have developed over time for major
shopping-high streets in various cities in the country.
Their work is not done just when the mall has been commissioned! As for
the would-be retailer tenants, it is important to realise that merely moving
into a mall does not guarantee business for them.
They have to work as hard to draw consumers to their own stores once the
latter have entered the mall, and then have the right value proposition for
them to get converted into customers, and then become repeat customers.
The final, obvious, conclusion is that mall developers have to invest in
getting a better understanding about the retail business, while retailers have
to get a better understanding about the dynamics of operating at a new
location.
4
INTRODUCTION
Malls in India are a relatively new format for retailing. While this format may
have existed in the Western economies for several decades, in India this
phenomenon could be estimated to be only about fifteen odd years old.
One of the earliest large floor-area retailers in India, was "Shopper's Stop".
However, the first of the current format of the malls was the Crossroads mall
in Mumbai, which was established by the Piramals in period around 2000-
01. Crossroads then had the highest rent per sq. meter of establishment that
the vendors had to bear. Due to the exorbitant rent, Crossroads initially had
a rough ride. Also, the mall format was new, and was a novelty for most
Indian consumers. This led several visitors to the mall, but never converted
to actual purchases, since most were visiting the place out of curiosity.
However, the situation had changed drastically now. Malls seem to be
springing up across several cities in India. Notable among these is Gurgaon,
a upcoming city near NCR.
INDIA – A Vibrant Economy & Resplendent Market
- 4th Largest economy in PPP terms after USA, China & Japan.
- To be the 3 rd largest economy in terms of GDP in next 5 years.
- 2 nd fastest growing economy in the world.
- The US $ 580 billion economy grew 8.2 percent in the year 03-04
- Among top 10 FDI destinations
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- Stable Government with 2 nd stage reforms in place
- Growing Corporate Ethics (Labour laws, Child Labour regulations,
environmental protection lobby, intellectual and property rights, social
responsibility).
- Major tax reforms including implementation of VAT.
- US $ 130 billion investment plans in infrastructure in next 5 years
- 2nd Second most attractive developing market, ahead of China
- 5th among the 30 emerging markets for new retailers to enter
With over 600 million effective consumers by 2010 India to emerge as one of
the largest consumer markets of the world by 2010.
Five Reasons why Indian Organized Retail is at the brink of Revolution:
Scalable and Profitable Retail Models are well established for most of
the categories
Rapid Evolution of New-age Young Indian Consumers
Retail Space is no more a constraint for growth
Partnering among Brands, retailers, franchisees, investors and malls
India is on the radar of Global Retailers Suppliers
Looking Ahead
Many strong regional and national players emerging across formats and
product categories Most of these players are now geared to expand far more
6
rapidly than the initial years of starting up Most have regained / improved
profitability after going through their respective learning curves.
Malls in India
A decade ago – not a single mall
A year ago – less than half a dozen
Today – 40 malls
2 years from now – 300 malls
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LITERATURE REVIEW
Retailing consists of the sale of goods/merchandise for personal or
household consumption either from a fixed location such as a department
store or kiosk, or away from a fixed location and related subordinated
services. In commerce, a retailer buys goods or products in large quantities
from manufacturers or importers, either directly or through a wholesaler, and
then sells individual items or small quantities to the general public or end
user customers, usually in a shop, also called store. Retailers are at the end
of the supply chain. Marketers see retailing as part of their overall
distribution strategy.
Shops may be on residential streets, or in shopping streets with little or no
houses, or in a shopping center. Shopping streets may or may not be for
pedestrians only. Sometimes a shopping street has a partial or full roof to
protect customers from precipitation.
Shopping is buying things, sometimes as a recreational activity. Cheap
versions of the latter are window shopping (just looking, not buying) and
browsing.
Kinds of Retailers
There are three major types of retailing. The first is counter service, now rare
except for selected items. The second, and more widely used method of
retail, is self-service. Quickly increasing in importance are online shops, the
third type, where products and services can be ordered for physical delivery,
downloading or virtual delivery.
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Even though most retailing is done through self-service, many shops offer
counter service items, e.g. controlled items like medicine and liquor, and
small expensive items.
A large shop is called a superstore. A shop with many different kinds of
articles is called a department store. Local shops can be known as brick and
mortar stores in the United States.
Many shops are part of a chain: a number of similar shops with the same
name selling the same products in different locations. The shops may be
owned by one company, or there may be a franchising company that has
franchising agreements with the shop owners (see also restaurant chain).
Some shops sell second-hand goods. Often the public can also sell goods to
such shops. In other cases, especially in the case of a nonprofit shop, the
public donates goods to the shop to be sold (see also thrift store). In give-
away shops goods can be taken for free.
The term retailer is also applied where a service provider services the needs
of a large number of individuals, such as with telephone or electric power.
Retail Pricing
The pricing technique used by most retailers is cost-plus pricing. This
involves adding a markup amount (or percentage) to the retailers cost.
Another common technique is suggested retail pricing. This simply involves
charging the amount suggested by the manufacturer and usually printed on
the product by the manufacturer.
9
In Western countries, retail prices are often so-called psychological prices or
odd prices: a little less than a round number, e.g. $6.95. In Chinese
societies, prices are generally either a round number or sometimes a lucky
number. This creates price points.
Often prices are fixed and displayed on signs or labels. Alternatively, there
can be price discrimination for a variety of reasons. The retailer charges
higher prices to some customers and lower prices to others. For example, a
customer may have to pay more if the seller determines that he or she is
willing to. The retailer may conclude this due to the customer's wealth,
carelessness, lack of knowledge, or eagerness to buy. Price discrimination
can lead to a bargaining situation often called haggling — a negotiation
about the price. Economists see this as determining how the transaction's
total surplus will be divided into consumer and producer surplus. Neither
party has a clear advantage, because the threat of no sale exists, whence
the surplus vanishes for both.
Chain stores (also called retail chains) are a range of retail outlets, which
share a brand and central management, usually with standardized business
methods and practices. They are a type of business chain. Such stores may
be branches owned by one company or franchises owned by local
individuals or firms and operated under contract with the parent corporation.
Features common to all chains are centralized marketing and purchasing,
which often result in economies of scale, meaning lower costs and
presumably higher profits.
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These characteristics also apply to chain restaurants and some service-
oriented chain businesses. Some argue that the standardized products
which result from such centralization are culturally detrimental; for example,
chain music stores are frowned upon by some for stocking works of more
popular music if they exclude less well known, usually independent artists.
Critics of chains allege that they are economically damaging to communities
because they extract capital that otherwise would recirculate in the local
economy with independently owned businesses.
The displacement of independent businesses by chains has generated
controversy in many nations and has sparked increased collaboration
among independent businesses and communities to prevent chain
proliferation. Such efforts occur within national trade groups such as the
American Booksellers Association and Council of Independent Restaurants
of America as well as community-based coalitions such as Independent
Business Alliances. National entities like the American Independent
Business Alliance and The New Rules Project promote these efforts in the
U.S. In Britain, the New Economics Foundation promotes community-based
economics and independent ownership.
By 2004, the world's largest retail chain, Wal-Mart, was the world's largest
corporation in terms of gross sales.
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A department store is a retail establishment, which specializes in selling a
wide range of products without a single predominant merchandise line.
Department stores usually sell products including apparel, furniture,
appliances, and additionally select other lines of products such as paint,
hardware, toiletries, cosmetics, photographic equipment, jewelry, toys, and
sporting goods. Certain department stores are further classified as discount
department stores. Discount department stores commonly have central
customer checkout areas, generally in the front area of the store.
Department stores are usually part of a retail chain of many stores situated
around a country or several countries.
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RETAILING IN INDIA
Despite being one of the largest employing industries in India and
contributing a significant portion to GDP, it still lacks a clear policy which
would allow Indian retail players to firmly establish themselves and enable
them to face competition on an equal footing.
Indian retailing industry has made huge strides over the last 10 years. The
retail trade in India is expanding by 22 per cent per annum with addition of
25 million middle class customers. Despite the recent boom in the retail
sector in India, organized retail forms only around 3 per cent of the entire
industry.
Despite being one of the largest employing industries in India and
contributing a significant portion to GDP, it still lacks a clear policy which
would allow Indian retail players to firmly establish themselves and enable
them to face competition on an equal footing.
Large-format retailing in India has added razzmataz to the urban shopping
experience. The interesting part, however, is how retailers are using modern
management to turn profitable.
For a while, there was disappointment. What had promised to be an
engaging 'Store Wars' saga had ended up as just another beauty contest. A
few glamorous mega-stores here and there, with people pausing to look
them up and down, before getting back to their old shopping routines at the
round-the-corner kirana stores.
13
Years and years into liberalisation, it seemed as if big-format retailing would
never come to India. Well, guess what - things have started changing.
Retailing, investors have realized, can be good business proposition, if
infused with cutting-edge management processes and strategies.
Globally, retailing is big business, worth a staggering $6.6 trillion, according
to a recent report published by McKinsey Co. in partnership with the
Confederation of Indian Industry (CII).
In India, the sector is the second-largest employer after agriculture, and is
the world's most fragmented too. There are some 12 million retail outlets in
India (compared to 905,000 in the US), half of which are low -cost kiosks
and pushcarts. In fact, if there is any sector that shows how starkly India
differs from the West, it is the way Indians shop. The organised sector
accounts for just 2 per cent (and modern stores just 0.5 per cent) of the
estimated $ 180-billion worth of goods that are retailed in India every year.
That total figure is the equivalent of the turnover of one single US-based
chain: Wal-Mart.
But it won't be that way for long. The growth of high-income, time-starved
nuclear families is prodding change. More than a third of India's population is
in the 20-44 age-group, says Urvi Piramal, vice chairperson, Piramal
Enterprises Ltd, who runs Crossroads, a swanky mall in Mumbai that has
become an island of glamour in a sea of greying concrete. "Attitudes are
changing", she says, "and people are more exposed to the world
environment, where they see so many brands and so many different
lifestyles. They try to emulate that. Also, import restrictions will soon be
14
lifted, and the whole scene will change. People will want convenience and
service".
Besides, Indian youth desperately need 'hangout' places that satisfy their
notion of a 'cool' ambience.
McKinsey expects the organised sector to be around $ 18 billion (6 per cent
of the retail market) by 2010, which could support at least a couple of $450-
million-plus chains in grocery retailing and some $250-million-plus chains in
grocery retailing and some $250-million-plus stores in apparel, perhaps even
specialised categories like CDs and books. At the moment, more than half
the retail sales in India are groceries, which meet needs at the base of
'Maslow's hierarchy'.
"The investment wave has begun. Large format supermarkets are coming
up. Among centrally air-conditioned malls, Crossroads is the main test case.
Other than that, there is Chennai's Spencer Plaza and NCR's Ansal Plaza.
All of them seem perpetually crowded. The result: some 50 new malls,
making up around five billion sq. ft of fancy mall space, are currently under
development across the country. More will follow.
In all, around Rs. 3500 crore of investment is being put in. Construction firms
form one set of players. The other are industrial houses such as the RPG
and Piramal groups, which are looking at the retail sector as a high-growth
area that could create huge enterprises over the next decade. Other
industrial houses are getting ready for action too. This is one sector where
local expertise counts for a lot making it easier to compete with global
businesses if and when they are allowed in (foreign investment is not
permitted in retail).
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WHERE IT STANDS
Retail sales in 1998 (in $ billion)
Size of largest player (in $ million)
Source:CII/McKinsey
Small store domination
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GLOBAL FORMATS
Supermarkets: Classic self-service 4000-20000 sq. ft stores with
shopping carts, as popularized in India by 'Crazy Boys' firms, with typical
focus on regular groceries, household goods and personal care products,
Tesco and Safeway are famous chains. In India, Nanz, Food World and
Nilgiris.
Hypermarkets: These are huge (over 40000 sq. ft.) out of town stores
with ample parking, aimed at the monthly bulk shopper. They store a
wider variety of products (electronics, clothing and so on, apart from
groceries et al). Europe's leader Carrefour is famous here with its typical
100,000 sq. ft format.
Mass-merchandizers: These, like Wal Mart, are large 'destination' stores
that sell almost everything, often at comprehensive prices. These have
cross-country operations with centralized sourcing and hub-and-spoke
distribution.
Discounters: Aimed at bargain buyers, these are bare-frame
supermarkets that offer less choice in each category but deep discounts
(on bulk-sourcing deals). Costs are kept super tight and inventories low.
Germany's Aldi is famous for this format.
Convenience stores: These are small (under 2000 sq.ft) stores located
at such convenient points as petrol stations that keep long hours and
sometimes do odd jobs for time-starved customers (clothes laundry,
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medicine prescription pick-up). These are designed for 'streamlined'
shopping.
Specialists: These like Toys 'R' Us, are seen as 'category killers'. Like
boutiques and high-end restaurants, these often have skills that can't be
duplicated and are closely related to the product. These are moving
towards 'consultative shopping', where salesmen are trained well enough
to offer specialized advice to customers.
Mom-and-pops: Traditional format. These are small (under 1000 sq.ft)
family-owned corner shops.
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KEY FACTS ABOUT RETAIL SECTOR IN INDIA
Even though India has well over 5 million retail outlets of all sizes and
styles (or non-styles), the country sorely lacks anything that can
resemble a retailing industry in the modern sense of the term. This
presents international retailing specialists with a great opportunity.
It was only in the year 2000 that the global management consultancy AT
Kearney put a figure to it: Rs. 400,000 crore (1 crore = 10 million) which
will increase to Rs. 800,000 crore by the year 2005 – an annual increase
of 20 per cent.
Retailing in India is thoroughly unorganised. There is no supply chain
management perspective. According to a survey b y AT Kearney, an
overwhelming proportion of the Rs. 400,000 crore retail market is
UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market
is organised.
As much as 96 per cent of the 5 million-plus outlets are smaller than 500
square feet in area. This means that India per capita retailing space is
about 2 square feet (compared to 16 square feet in the United States).
India's per capita retailing space is thus the lowest in the world (Source:
KSA Technopak (I) Pvt Ltd, the India operation of the US-based Kurt
Salmon Associates).
Just over 8 per cent of India's population is engaged in retailing
(compared to 20 per cent in the United States). There is no data on this
sector's contribution to the GDP.
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From a size of only Rs.20, 000 crore, the organised retail industry will
grow to Rs. 160,000 crore by 2005. The total retail market, however, as
indicated above will grow 20 per cent annually from Rs. 400,000 crore in
2000 to Rs. 800,000 crore by 2005 (Source: survey by AT Kearney)
Given the size, and the geographical, cultural and socio-economic
diversity of India, there is no role model for Indian suppliers and retailers
to adapt or expand in the Indian context.
The first challenge facing the organised retail industry in India is:
competition from the unorganised sector. Traditional retailing has
established in India for some centuries. It is a low cost structure, mostly
owner-operated, has negligible real estate and labour costs and little or
no taxes to pay. Consumer familiarity that runs from generation to
generation is one big advantage for the traditional retailing sector.
In contrast, players in the organised sector have big expenses to meet,
and yet have to keep prices low enough to be able to compete with the
traditional sector. High costs for the organised sector arises from: higher
labour costs, social security to employees, high quality real estate, much
bigger premises, comfort facilities such as air-conditioning, back-up
power supply, taxes etc. Organised retailing also has to cope with the
middle class psychology that the bigger and brighter a sales outlet is, the
more expensive it will be.
The above should not be seen as a gloomy foreboding from global retail
operators. International retail majors such as Benetton, Dairy Farm and
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Levis have already entered the market. Lifestyles in India are changing
and the concept of "value for money" is picking up.
India's first true shopping mall – complete with food courts, recreation
facilities and large car parking space – was inaugurated as lately as in
1999 in Mumbai. (this mall is called "Crossroads").
Local companies and local-foreign joint ventures are expected to more
advantageously positioned than the purely foreign ones in the fledgling
organised India's retailing industry.
These drawbacks present opportunity to international and/or
professionally managed Indian corporations to pioneer a modern retailing
industry in India and benefit from it.
The prospects are very encouraging. The first steps towards
sophisticated retailing are being taken, and "Crossroads" is the best
example of this awakening. More such malls have been planned in the
other big cities of India.
An FDI Confidence Index survey done by AT Kearney, retail industry is
one of the most attractive sectors for FDI (foreign direct investment) in
India and foreign retail chains would make an impact circa 2003.
21
FOREIGN INVESTMENT IN INDIA’S RETAIL SECTOR
After much deliberation and vacillation, on January 18, 2006, India opened
its retail sector – although only a small crack- to foreign investment, by
amending its FDI regulations to allow single brand retail stores to be set up
in India, with not more than 51% foreign shareholding.
This means that single product brands like Rolex, Louis Vuitton, Versace,
and multiple product umbrella brands like Samsung, Sony and Hitachi,
would be able to invest in captive retail stores in India, through structures
having 49% or more of the shareholding being held by Indian partners /
shareholders.
This decision comes after strong internal opposition from within the coalition
government, especially from the Communist Party of India (Marxist) which
saw the entry of large players as a threat to the small unorganized retailers
that presently account for more than 95% of retail sales in India. The
government was able to prevail upon its coalition members by justifying the
move as part of India’s market access commitments to the WTO and also
submitting that premium, single brand outlets do not compete with the small
retailers.
However, foreign brands are not exactly waiting to crash in. Our reasons:
Many premium brands, as a policy, do not follow a captive retail
model in international markets, and work with franchised outlets.
Therefore, retail investments are not made by the brands themselves.
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India already allows franchising and authorized retail outlets on a third
party basis, for nearly all kinds of products, and most internationally
known brands are already present in India through this route.
Ownership of retail operations will only increase statutory costs for
foreign brands, in form of employment regulations, social security
(provident fund) registrations, and complicated closure, relocation and
exit procedures (closure and relocation of retail units is more common
than industrial manufacturing establishments). The authorized dealer’s
route does not impose any such requirements on the foreign brand.
Previous experience suggests that premium brands derive their
aspiration value from their exclusivity and inaccessibility. As a result, they
tend to lose their franchise among their highest echelon consumers,
when they become easily accessible in local markets.
There is a proliferation of grey market and parallel imports in many
luxury goods, which competes formidably against official retail outlets.
Often, such competition is not discouraged by the global headquarters,
on grounds that Indian import tariffs are the very reason for the grey
market in the first instance. Authorized service centres are obliged to
handle products bought on the grey market or from parallel import
channels, as long as they are not counterfeit.
A 51%-49% does not give the foreign partners sufficient management
control over Indian operations, as an Indian partner with more than 25%
shareholding has veto powers on several important subjects, under the
23
Companies Act 1956.
Under the present conditions, the justification for ‘owned retail outlets’ can
only come from other considerations, such as:
A compelling need to combat spurious and counterfeit products,
Ownership benefits of retail real estate (high appreciation),
An expectation that eventually, investment regulations would be
relaxed to allow 100% foreign ownership, or
Mainstreaming of ‘indirectly-funded’ franchise outlets, in which
currently the brand reimburses all costs of exclusive retail outlets through
a management or administrative margin over and above the normal sales
commissions (this is practiced by at least one leading consumer
electronics company)
Repositioning brands through a retail strategy of ‘exclusive store’
formats.
Table: India’s Retail Sector Revenues, By Product Category, Rs Billion
2011-12Total Organised
retailShare
Food & Grocery 6150 29 0.5%Clothing, Textiles & Fashion 800 109 14%Jewellery 435 9 2%Catering Services (F & B) 350 20 6%Furniture & Furnishings 330 22 7%Consumer Durables 320 25 8%Health & Beauty care Products (including Pharmaceuticals)
300 5.5 2%
Mobile handsets and accessories 130 8 6%Footwear 100 25 25%Books, Music & Gifts 82 8 10%Watches 28 11 40%
24
Health & Beauty care Services 25 1.5 6%Entertainment 25 6 3%Total 9300 280 3%Source: Statistical Outline of India and several primary surveys
After leading the it bandwagon, India is poised to grow as a retail hub. it is
imperative to sustain the modernization of the retail sector and cater to the
growing taste of the Indian consumer and dispel the myth that the game is
big vs small or traditional vs modern or organized vs unorganized or local vs
foreign. What is needed is to promote consumption – which will ultimately
lead to economic growth of the country. For the Indian consumer, the
gradual and step-wise entry of foreign companies in retail involves three
pivotal changes – modern technology, better transparency in dealings and
sharing best practices.
Key initiatives that the government and the industry need to take together
Ensure that the opening of this sector to foreign players is a win-win
for all
To ensure that Indian retail dynamics are very different from other
countries. hence to ensure that though we learn from global
experiences, we do not go all out to “copy global models”
Defining the way forward
FDI would serve the purpose of much needed capital and bring a boom in
the retail sector. As, some of the global retailers are already coming in
through other channels there is no justification to keep fdi in retail on hold.
However, the industry also feels that capital formation is needed and this will
take at least 2 to 3 years time. hence, retailers, for capital formation, need
25
this lead-time, reiterating the fact that fdi should be allowed gradually. but
this should not constrain the growth of the retail sector.since objective of fdi
is to increase investment, there is also a need to explore alternative funding
routes, in addition to FDI. for example, if a capital turnover ratio of 1:5 is
assumed, then it requires at least Rs. 20,000 crores of investment. hence
foreign institutional investors (FII’s) and venture capital (vc) firms should be
legalized and encouraged for investment in the primary market.
FII’s and VC firms are currently allowed to participate in the growth of the
listed retail companies present in the secondary market; they have the
necessary financial muscle and are increasingly on the lookout to invest in
India. Retail is a sunshine sector with tremendous growth potential –
allowing them to invest in retail companies in the primary market will enable
many of these emerging companies to increase operations, improve
infrastructure, set up the latest systems, achieve critical mass and enhance
employment opportunities.
Another objective of FDI is to enhance infrastructure. While there is no
dearth of potential investors in metro cities, the tier-2 and lesser cities are
getting sidelined. FDI should be initially allowed in tier–2 and lower cities to
facilitate infrastructure building. The more such investment, the more
incentives to operate in metro cities. Models similar to airline operators and
telecom operators need to be explored. With this the focus would be on
incremental business and create a level playing field for all and not on
cutthroat competition. The government is already considering a host of
conditions for bringing in FDI. One of them is to impose a minimum limit of
26
10,000 sq ft on the floor space of foreign retail chains and limit the number of
stores to one per million once FDI in retail is allowed. this also serves to
create level playing fields for all players. also, inclusion of a clause for
reserving at least 500-600 sq ft (out of 10,000 sq ft) of retail space for foods
& processed foods alone will further help to protect the interests of certain
sectors like agriculture and integrate them with the organized retail supply
chain. These measures are to be applicable for a short while only, as the
department of industrial policy and promotion (dipp) is considering easing
some of these restrictions with time. Hence, with an objective of enhancing
Indian economy by increasing consumption, a recommended CII policy for
introducing FDI in retail is as follows:
FDI should be gradually allowed first in relatively less sensitive
sectors – garments, lifestyle products, houseware, entertainment etc.
Alternative funding mechanisms and investment opportunities should
be considered like FII and venture capital in the primary market, in
addition to FDI.
At least 2-3 years lead-time should be given to the Indian retail
industry for much needed capital formation by Indian retailers and to
promote a level playing field for all.
Promote FDI in tier –2 and less developed cities to focus on the thrust
for infrastructure growth.
27
RATIONALE OF THE STUDY
Shopping Mall industry is an upcoming industry in India, as Shopping Malls
are changing the way middle-class Indians shop. With fully air –conditioned
stores, escalators and quality service resembling any international Mall.
Today a customer pays greater attention to product availability, display, in-
store service and of course, the ease of shopping. Indian families are also
looking at entertainment as a escape. Entertainment is equated with
shopping, food and options like cinemas and bowling alleys.
The decade old economic reforms have engendered a new, shop till you
drop breed of middle class Indians who after experiencing the shopping in
big cities overseas, have fueled the demand for the rise of Shopping Malls.
There are number of families who are starved of attractive entertainment
options and with rising disposable income, who want to spend a greater
proportion of their expenditure on shopping in world class ambience where
convenience is combined with entertainment. From boring oh no routine to a
fun filled yes outing for the entire family, shopping for the typical household
has come a long way indeed. Multi-Storyed malls have most definitely made
an impact offering shopping, entertainment and food all under one
comfortable roof.
Giant malls are coming thick and fast in Gurgaon to completely transform the
$200 billion Indian retail sector. More than 200 malls are in planning and
construction stage across the country and to in-cash the sudden resurgence
of interest in shopping India, big corporate such as the TATAS, PIRAMALS,
28
RAHEJAS, SAHARA , DLF AND RPG ENTERPRISES are racing to
revolutionize the Indian retail industry and fuel a construction boom.
India is becoming the hub of Shopping Malls. In Gurgaon particularly lots of
shopping malls are opening up. In October 2004 India’s first Mall exclusively
dedicated to Jewelry (Gold Souk) was opened in Gurgaon, on the outskirts
of the capital. The Gold souk's retail space has been leased out or sold with
about 70 retailers including 35 major national and international brands for
business. Leading brand names have occupied space in the gold souk
include Hammer Plus, Espirit, Hugo Boss, Citizen, Celeste, Asmi, Sangini
and Nakshtra.
This project helps me in finding out how the Shopping Malls are changing
the Indian retail industry in general and redefining consumers’ shopping
experience due to increase in their overall exposure to the different varieties
of product under one roof.
29
SHOPPING MALLS SCENARIO IN NCR
Shopping Malls across the world contribute in a major way to shopping
requirements of domestic and foreign tourists. Of late the concept of
Shopping Mall has become popular with Indians too. But no real Shopping
Malls have come up in anywhere in the country. What we do have are really
hyper markets, huge shopping complexes etc.
A shopping mall (or simply mall), shopping center, or shopping arcade is a
building or set of buildings that contain stores and have interconnecting
walkways that make it easy for people to walk from store to store. The
walkways might be enclosed. In the United Kingdom and Australia these are
also called shopping centres, shopping arcades as well as shopping malls.
In North America the term "mall" is preferred.
Strip malls are a recent development, corresponding to the rise of suburban
living after World War II in the United States. As such, the strip mall
development has been the subject of the same criticisms leveled against
suburbanization and suburban sprawl in general. In the United Kingdom
these are called retail parks or out-of-town shopping centres.
Malls in NCR
Pacific Mall, Kaushambi (Having 3-D movie theater also)
Ansal Plaza, South NCR
Ansal Plaza (Factory Outlet Mall), Vaishali
Centrestage mall, NOIDA
30
SAB Mall, NOIDA
Shipra Mall, NOIDA/Ghaziabad
Pacific Mall, NOIDA/Kaushambi
Shopprix Mall, NOIDA
Spice World Mall, NOIDA
Senior Mall, NOIDA
MGF Metropolitan Mall, Gurgaon
Sahara Mall, Gurgaon
DLF City Centre, Gurgaon
SRS Plaza, Faridabad
East End Mall, Ghaziabad
The India Mall, New Friends Colony
TDI Mall, Rajori Garden
City Sqare,Rajouri Garden
The retail business in India is set for a heady growth in the coming years
with the number of shopping malls in Asia's third largest economy rising to a
staggering 358 by the end of 2007, according to a study.
The country has some 100 malls now, with the National Capital Region
(NCR) and Mumbai accounting for maximum numbers of the gleaming
shopping centers.
31
But the retail sector is expected to see over 34 million sq ft of shopping
centre space by the yearend, said the report on shopping centre
development in India.
"Performance beyond expectation is all the more significant in the backdrop
of adverse reports and predictions on this sector," said Amitabh Taneja,
director (India) of International Council of Shopping Centers.
According to Images, there are a total of 96 operational malls in India with a
total built-up area of 21.6 million sq ft. The number will rise to 158 malls by
the end of the current year. Droves of middle-class Indians have broken off
their love of traditional stand-alone Indian stores that have no air
conditioning, organised parking and other public amenities.
Experts say malls throughout the country are getting bigger as they are now
being positioned as a one-stop-shop for shopping, entertainment, leisure
and eating-out needs rather than a place only for shopping for fashion
products.
By 2007, north zone will account for 39 percent of total mall space, followed
by west zone (33 percent), south zone (18 percent) and east zone (10
percent), says the Images study. The study also added that a lot more
activity on the mall development front was expected from the smaller cities in
the coming years.
The retail industry in India is currently estimated at $205 billion, which is
likely to grow at a rate of five percent per annum in the coming years. It is
32
projected to grow at the rate of 25-30 percent per annum to touch $8 billion
by 2005 and $24 billion by 2010, said the study.
The fast growing middleclass population, the rise in women workforce and
consumerism over the decade has been the major forces in driving demand
in the retail sector.
33
OBJECTIVES OF THE RESEARCH STUDY
The first step in any Marketing Research calls for the researcher to define
the project scope and then define problem carefully and formulate the
research Objectives. An old age says, “A problem well defined is half
solved.”
1. To study the reasons behind the growth of Shopping malls in India
2. To study the recent trends in Shopping malls in India.
3. To understand the implications of opening up of FDI in Retail sector
4. To understand the strengths and weaknesses of shopping malls in India
5. To study the inherent benefits of Shopping malls to the end user.
6. To study the profile of consumers visiting different Shopping Malls along
with their motives.
7. To find out different buying behaviors of consumers in different Shopping
Malls at NCR & NCR.
8. To analyse the future of shopping Malls in India.
34
HYPOTHESIS OF THE STUDY
“Shopping malls in India are poised to change how
retailing is done in India.”
35
COMPARATIVE STUDY OF FIVE MALLS
ANSAL PLAZAHUDCO PLACE, KHEL GAON MARG ANDREWS GANJ, NEW NCR - 110 049 TEL:+(91)-(11)-26261305, 26255532
A part of HUDCO Place built on 35 acres of land, Ansal Plaza is a shopping
complex situated near South Extension, one of the posh markets of rich
South NCR. Branded cloths, trendy jewellery and other designer items are
some of the things that you can shop for at Ansal Plaza. The Plaza complex
competes with the best international shopping complexes in the world in its
architectural splendor, aesthetic details and shopping experience. A perfect
hangout destination, it is built in a circular fashion around an amphitheater
with a center stage. Different cultural functions are organized here from time
to time such as fashion shows, live band performances and performing arts
to promote the retail area. One can access the retail floors of the complex
through lifts and escalators.
The 45-feet high atrium with a French glass curtain wall that filters out
ultraviolet and other harmful radiation is visually appealing. The second and
third floors of the complex house corporate offices and are accessible
through elevators. The twin-level basement car parking area can
accommodate 700 cars while another 300 cars can be parked on the ground
level. There are water cascades and fountains all around and corridors,
passages and lobbies of the complex are laid with granite and marble
combination flooring. Smoking is not allowed here. Easy accessibility,
36
environment-friendly design and ample infra-structural facilities make Ansal
Plaza, the best shopping complex in NCR.
37
SAHARA MALLMEHRAULI-GURGAON ROADGURGAON - 122002TEL:+(91)-(124)-5048592, 2387741
This is India’s first Brand Super Mall launched in March 2001 spread over
3.89 acre on the main Mehrauli-Gurgaon road. Created with a project worth
of Rs.13814.5 lac, the mall comprises company owned brand outlets and
flagship stores promising complete range of products and latest offerings. A
shopping mall that has set new standards in contemporary design and latest
facilities making it one of the most preferred shopping zones for the
consumers, with international class retailing environment. It has earthquake
resistant construction, a classy entry, multiple openings and wide corridors
besides two-level parking lots in the basement. It offers an international
class environment global brands and a comprehensive package recreational
and leisure activities.
From ground floor to the third floor there is an array of international and
national brands including Pantaloon, Big Bazaar, Airtel, L.G., Cafe Nescafe,
Nakshatra, Archies, Planet-M, Hallmark, Effinity, Haldiram’s, Panjabi Tadka,
Ros Thai, Tangerine, Crave and Odyssey. The grand atrium welcomes the
customers and invites them to experience a world of class and lavishness.
Matching the occupants it has been built with full dignity and grace. The
renowned firm Chesterton Meghraj has taken the responsibility of managing
the mall.
This is India's first Brand Super Mall launched in March 2001 spread over
3.89 acre on the main Mehrauli-Gurgaon road. Created with a project worth
38
of Rs.13814.5 lac, the mall comprises company owned brand outlets and
flagship stores promising complete range of products and latest offerings. A
shopping mall that has set new standards in contemporary design and latest
facilities making it one of the most preferred shopping zones for the
consumers, with international class retailing environment. From ground floor
to the third floor there is an array of international and national brands
including Pantaloon, Big Bazaar, Airtel, L.G., Café Nescafe, Nakshatra,
Archies, Planet-M, Hallmark, Effinity, Haldiram’s, Panjabi Tadka, Ros Thai,
Tangerine, Crave and Odyssey. The grand atrium welcomes the customers
and invites them to experience a world of class and lavishness. Matching the
occupants it has been built with full dignity and grace. The renowned firm
Chesterton Meghraj has taken the responsibility of managing the mall.
39
MGF METROPOLITAN MALLMehrauli-Gurgaon Road, Gurgaon - 122002Tel:+(91)-(124)-5014606-07
Close to the NCR-Haryana border on the Mehrauli Gurgaon Road is this
mega shopping mall that is a promising leisure and entertainment centre.
The favourite eating joints of childrens and teens like McDonald's Debonair's
Pizza and Hot & Juicy Corner are on the ground level while formal family
restaurants have the rooftop zone reserved for the.
The facility is fully equipped with central air-conditioning, power back-up,
ample parking, state of the art safety management systems, modern
telecommunication system, property management services and
computerized parking access.
400,000 sq. ft fully air conditioned state-of-the-art Shopping Mall with 7-
screen Multiplex (Operator PVR), Departmental Store, Shops and Food
Court. The Project has been a landmark Mall development in Gurgaon and
it's tenants include Shoppers Stop, McDonald's, PVR, Nike, Benetton to
name a few. The facility is fully equipped with central air-conditioning, power
back-up, ample parking, state of the art safety management systems,
modern telecommunication system, property management services and
computerized parking access. The Metropolitan Mall is truly a Shopper’s
paradise .
From furnishings to cosmetics, jewellery to designer wear, the complex
covers varying budgets, tastes, and needs. The Metropolitan promises a
40
veritable feast with its 6 specialty restaurants offering Continental, Chinese,
Mediterranean and Frontier cuisine. In jazz bar exclusively for musically
inclined, live performance from talented musicians and groups are organized
to attract the music lovers to stay there for longer hours. Also theme based
restaurants like sports cafes appeal to the younger crowd. Metropolitan top
floor have a multiplex PVR Cinema hall to screening the latest blockbusters
to draw crowds to upper floor stores, encouraging impulse buying.
Metropolitan also has a discotheque which serves as a crowd puller during
after commercial hours, along with serving as a venue for exciting events
and promotions. It has a host of arcade games, pool, bowling, crazy cars
and virtual reality games which aimed to attract the younger crowd .the
constantly changing signage and cutouts of recent attractions add variety.
Exclusive fitness club boasting modern equipment and facilities are also
featured by the club along with the branded parlors and trial outlets by
leading fashion names are the features of Metropolitan Mall.
It also has an atrium which is designed as the heart of the complex which
serves as the converging point for the flow of visitors and as the primary
node from which they can start their journey to the Mall. To give ease to the
customers once they are finished with the shopping there are designated
resting areas for the visitors
41
SHIPRA MALLSHIPRA SUN CITY, INDIRAPURAM, GHAZIABAD,UTTAR PRADESH (U.P.) – 201012
Shipra Group, launched its largest mall in NCR inspired by classical Roman-
style architecture. Situated at Indirapuram with 4.5 lakh sq. ft of total area,
Shipra Mall commits to offer a unique shopping experience with over 100
national & international brands and entertainment. The mall has been
designed as a one-stop-destination for entertainment and leisure. Its state-
of-the-art 3 Screen Multiplex, ‘Just About Movies’ (JAM) has one of the
widest and the largest screens in India.
The new Shipra Mall has taken retail to a mega scale. With a total area of
4,50,000 sq ft comprising of 3,60,000 sq ft of retail space, Three New
Generation of Cinemas, 17,000 sq ft of Kids Zone, 15,000 sq ft of Food
Court, Amphi Theatre & parking for 1000 cars. 80 percent of mall space has
already been leased out to retailers like Shoppers Stop, Globus, Food
Bazaar, Fashion Station etc. The mall has been designed with twin atriums
for better space and visibility for the retailers and free flow for shoppers.
Shipra Mall, developed by Shipra Motel & Restaurants Limited is
designed to be more than just a Cineplex / Multiplex.
It's an experience, a lifestyle destination, mesmerizing families with
hours of quality time.
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Indirapuram is an upcoming retail hub after Gurgaon and Noida.
Being a junction for three cities i.e. Ghaziabad, Noida and NCR,
Indirapuram has become a destination point with an easy access.
Shipra Mall promises to offer customers a never-ending shopping
experience under one roof as well as convenience of ample parking
space.
The Shipra Mall is the first and the only International Standard Retail
cum Entertainment Mall and the launch pad of more than a dozen
retail and food brands in the city.
Outlets / Stores Type Phone / Mobile Description
Bombay Selections 0120-2957788
Cottons by Century Menswear 0120-2957637, 9213970761
Fashion StationApparel, Accessories & More
0120-2957652
Food Bazaar 0120-3028393
Gangoly Bros. Watches 0120-2957581
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Hakoba Womenswear 0120-3029290
Jashn Sarees 0120-3208002, 3208811
Just About Movies (JAM) Multiplex 0120-2957610,2957620,2957630
Koutons Menswear 0120-2957572
Men.xs Menswear 0120-2957575
Paisleys Womenswear 0120-2957579
Planet M Music Store, Gifts 0120-2957661-63
Shoppers' Stop Multi-brand Outlet 0120-3028070, 3028072
Sona Exclusive Women
Spaces Home Furnishings 0120-3026702
Zodiac Menswear 0120-5517728
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CENTRE STAGE MALLL-1, SECTOR 18NOIDA - 201301TEL:+(91)-(120)-2512260, 25122642626 1305
Centra Stage Mall is a hot entertainment destination for those living in the
vicinity while for others it doubles up as a great landmark in Noida. It offers
include Waves- a three-screen multiplex, posh showrooms from USI,
Westside, Gyans and Meena Bazar among others eateries like Geoffrey's
Mircheez, McDonald's and Ruby Tuesday. Representing global trends in
retail and entertainment, Centrestage Mall, a joint venture of the Chadha
group and the Shipra group, located in sector 18, the shopping hub of
NOIDA, plans to offer world class shopping ambience with cinema
experience.
This is the beginning. The retailing map of India seems to be in for a sea
change. Retailing is emerging in all sorts of permutations and combinations.
Various international role models are there but it remains to be seen how
much we would be ready to absorb and assimilate.
It is located in the commercial hub of Noida, that is in sector 18. It is the
most popular shopping mall in NCR. All popular showrooms have now
opened in this mall. It also has a popular Cinema Theatre called Waves.
There is a food court in the basement. Centrestage Mall also provides
underground parking.
45
Centrestage mall was a project that was first of its kind taken up by Shipra in
NCR that today is a landmark in Noida. Spread in an area of more than 3-
lakh sq. Ft with 5 movie theatres, kids’ zone, food court etc. Owing to its
appeal and the variety it offers, it acts as a sheer crowd puller. The mall had
witnessed phenomenal footfalls of over 25,000 on Christmas last year.
The Centrestage Mall (CSM) is designed to be more than just a Cineplex /
multiplex. It’s an experience, a lifestyle destination, mesmerizing families
with hours of quality time.
Taking retail to a mega scale, with an area of 3,48,460 sq ft comprising of
1,38,500 sq ft of retail space, 12,000 sq ft of night club, 93,000 sq ft for
parking in 2 levels and 1,04,360 sq ft of food & entertainment area.
Features
In the offer are a 63 seater multi-branded Food Court and WAVE SHIPRA,
the 1770 + 34 Platinum Class seater Multiplex (5 theaters) making it as one
of the first in the city. The anchor shop, Tata Westside spread over two
floors covers an area of 14,500 sq. ft. Also, CSM is the first and only
46
International Standard Retail cum Entertainment Mall and the launch pad of
more than a dozen Retail and food brands in the city.
The building is earthquake resistant with state-of-the-art technology. It
operates on a an integrated “Building Management System” with multiple
levels of Intelligence centralized operations of building services. It gives
absolute control over the operation and monitoring of HVAC, Lighting, Fire-
Alarm, Plumbing and DG systems. The building has a centrally air
conditioned system with ionization for regular inflow of pure fresh air.
The mall has a state-of-art architecture. We can move up and down by
escalators and elevators.
50% of the 'Sector 18 Crowd' is found in the Centrestage mall. The demand
of products in the mall has led to the improvement in business of many
small shops which did not have a good income at other places.
The food court provides many different mouth watering dishes like Chinese and
Indian.
Outlets / Stores Type Phone / Mobile
Barista Cafe 0120-3096236
Cafe Coffee Day Cafe 0120-2591462, 51659403
Chikankari Ladieswear 0120-2591549, 5312207
Cookie Man Bakery 0120-5312708
Elevate Club (Weekends) 0120-2513904
FoodPlus Supermarket & Family Store 0120-2513445
Geoffrey's British-style pub 0120-2512020
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Maamouchee Food Multi-cuisine 0120-5312241, 2517036-37
McDonald's Fast Food 0120-2511024, 3090408
Men.xs Menswear 0120-2513722
Mircheez Food - Indian 0120-3092726
Orange Caezar Food Multi-cuisine 0120-3948422, 33
Pizza Corner Fast Food Dine in outlet 0120-51664110, 11
Planet M Music Store, Gifts 0120-2517773
Ruby Tuesday Food, drinks 0120-5332477, 5313478
Shayan Home Furnishings 0120-2510408
Shiva Motors Car 9891755603, 9837500981
Subway Fast Food 0120-3947679
Tropical Smoothie Cafe Beverages 0120-3944729
Walk in M&B Footwear
Wave Multiplex 011-51832222
Westside Men, Women, Kids, Home 0120-2517761
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RESEARCH METHODOLOGY
Research Plan: Research Plan is no specific for all types of research; it is
decided depending upon the nature of the problem. It can be –Exploratory,
Descriptive or Causal.
To study the Consumer Behavior and experience about Shopping Malls is a
descriptive research.
Designing a research plan calls for decisions on –
1. Data sources
2. Research Instruments
3. Sampling plan
4. Contact methods.
Data Sources: The research involves gathering Secondary as well as
Primary data.
Primary data: A survey was conducted to gather primary data from the
market here the main emphasis will be given on the consumers to gather
information as consumers are the ones who decide the brand of any
shopping mall and they are different from each other on various aspects. It
will help us to know their purchasing behavior in different shopping malls.
They are the one who constitute the market and the target of the business.
In Shopping Malls Industry until and unless we have the knowledge of
consumer buying behavior and where they spend the most and what they
think about the mall cannot increase the footfall and conversion ratio.
49
Secondary data: Secondary data regarding foot falls in shopping mall,
buying pattern and other related was collected from the internet and mall
management itself.
Research Instrument
In marketing research the main research instrument used in collecting
primary data is the Questionnaire. For this research a set of questionnaire
was used to gather information on the consumer buying behavior and their
perception towards the shopping malls. The questionnaire had both open
ended and close ended.
Sample Plan
The Sample Plan calls for three decision
· Sampling Unit,
· Sample Size,
· Sampling Procedure
CONSUMER SURVEY: -
Sample Unit: Consumers.
Sample Size: 100
Sample Unit: Sahara Mall, Shipra Mall, Metropolitan Mall, Ansal Plaza &
Center Stage Mall.
RETAILER SURVEY: -
Sample Size: 50
50
Sample Procedure: (Random Sampling) Non-probability Convinces Sample
is adopted i.e. the most accessible members of the population are randomly
selected.
CONTACT METHOD: The best-suited method for this kind of survey is
Personal Interview. Through this method of conducting research more
questions can be asked and it helps in collecting additional information.
51
DATA ANALYSIS PREPARATION
RETAILERSDo you agree that there is trend towards organised retail in India?
Do you think large organized retailers would be controlling a substantial
portion of the retail trade?
52
How do you perceive the development of Shopping malls in NCR and NCR
Region?
What according to you is the purpose of the customers visit to the Shopping
Malls?
53
What according to you are the reasons for buying at that particular shopping
mall (Please rank them in order of preference?)
Rank (1-6) the following factors, which influence the customer purchase
decision at a shopping mall.
54
Do shopping malls have the following advantages?
Do you think India has a potential in the Retail industry?
55
Do you think that organized retail will provide many opportunities both to
existing players as well as new entrants?
Do you think India is prepared for open competition?
56
PRE-REQUISITES FOR SHOPPING MALLS
A good anchor: for the generation of initial foot falls, the anchor store
comes in handy. Sahara mall for example, the biggest crowd puller
there being the big bazaar. The anchor store also communicates the
positioning of the mall.
A kid’s center: young mothers don’t want to divide their attention
between the various flashy brands, stores on one hand and their kids
on the other. So the malls should arrange for a set up where
caretakers are present to take care of their kids.
Food courts: people are spending more chucks of time in the malls.
So they are likely to get hungry as well. Families who come for a real
shopping experience necessarily look for wholesome eating
experience as well. This can be provided not by one particular kind of
cuisine but one, which can satisfy many a taste bug. A good example
is the food court in the metropolitan mall on mg road in GURGAON.
Disciplined parking: it goes with out saying that majority of the
footfalls in any shopping mall belong to the own vehicle category.
Visitors expect guidance inside the parking and speedy acceptance of
payment and verification.
Valet parking: nothing at all should lead to exit of a prospective
footfall. So better still give the visitors the comfort from the moment
he/she enters the premises. Given the condition of traffic, they would
57
welcome if some one could park the car and they are ready to pay for
it.
Centralized administration: such a move should provide for an office
inside the mall premises where the customers can avail the following
services:
1. Lost and found
2. Announcements for lost children or relatives
3. Baby carts
4. Common shopping carts
5. Lockers for the visitors
Sticky tools: these are the facilities which encourage the customers to
sit and while away time inside the mall and lead to greater
conversions of footfalls into sales. The mall should provide for free
sitting area so that each time the visitor is tired after shopping they
don’t necessary spend money to sit inside a foot parlor and take rest.
Signage's: This would guide the customers towards the store as they
would not face any difficulties in locating the shop.
Lift & Escalators: Lift & Escalators are integral for the convenience of
the customers.
Fire Security: Proper security against fire is an essential pre-requisite
for the convenience of the customers in Shopping Malls.
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Schemes: Various schemes are essential to attract the customers for
e.g. lucky draw organised by Malls.
Air Conditioning: Air conditioning of the mall is also a very important
pre – requisite of shopping malls.
ADVANTAGES OF SHOPPING MALLS
Time Factor: As consumers get one stop shopping for their entire
daily needs; it cuts down on their time, money and energy. One stop
shopping is very convenient for them especially when they have less
time to spend on shopping.
Discount schemes: on their bulk purchases they receive good
discounts so they prefer shopping from shopping mal
Fun and entertainment and the varieties offered by shopping malls.
Adequate parking space: especially for four wheelers.
Kids section: customers can make their babies sit there while they are
shopping; this is more convenient for the working mothers who are
tired after their long working hours.
More disposable income in hand: people prefer to gain shopping
experience in better place with convenience and variety.
The shops are scattered all over the place in the normal market which
lead the customer to do a lot of running around, which saps the
energy while in shopping malls one can shop in an international
ambience with air condition all-around.
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Indian consumer is on a spending spree, burning 90% of disposable
income on non-essential items. There is a major cultural shift for a
traditionally savings- conscious India people want good life, they have
money, they are willing to spend and they find shopping malls the
best place to fulfill their needs.
Malls are anchored in our sociological evolution: it is about being
seen at prices that we cannot afford but in reality the products
available in Malls are not only affordable but are off good quality and
are also conveniently available.
The malls are being built to take advantage of a real estate boom and
not necessarily a shopping boom. Gurgaon is the mall capital of India,
almost 82% of the revenues in the malls are generated from movies
and food than any other thing but this phenomena is rapidly changing
and now customers do go to Malls for purchasing goods.
THE PROBLEMS FACED BY SHOPPING MALLS
High rentals: The malls are being sold and as a result speculators
enter the market and charge high rentals.
Preference of customers towards kirana stores: customers still prefer
kirana store than shopping malls as the people living in NCR still find
difficult for them to reach Gurgaon as it takes more than 90 minutes
for them to reach there so they prefer to shop from near by stores
instead of wasting their time reaching Gurgaon in huge traffic and
facing difficulty parking their vehicles.
60
Retailers not getting enough discounts from the manufacturers: the
manufacturers don’t want to give huge discounts, even if the retailers
are reasonably big, because that causes dissonance with other
dealers who would then refuse to stock their goods.
Developing a supply chain with consistent and large enough
quantities is easier said than done especially for the Indian suppliers.
The behavior of and Indian consumer is not conductive to malls: As
we still don’t have multi shop options to scour for the same kind of
product since one mall will carry only one brand of home furnishings
secondly we are convinced that if a shop is in a mall, then the pricing
is loaded and we are paying for that shop’s rent and infrastructure
costs, not to mention the air-conditioning. And we also believe that
the mall choices are very limited.
India is a check out nation: we check out pieces and then checkout of
the store. Rarely will we make purchases without checking the
competitive scene.
Lack of logistical support: simply put, logistics is all about making
available the required merchandise to the customer at the right place.
This was one factor that was unattended by retailers in India but has
gained tremendous importance of late. Retail stores are now better
equipped when it comes to figuring out what exactly are the needs of
the customer and make sure that they provide the same pro-actively.
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ANALYSIS CUSTOMERS
CONSUMER BUYING BEHAVIOUR IN MALLS
1. Age group
The visitors of Shopping Malls in NCR and NCR are almost of all age group,
the maximum no. of visitors is in the age group of 20-25 and 25-35, followed
by below 20 yrs and 35 yrs and above.
2. Occupation
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Question 1: What is the Annual household income of your family?
Interpretation: 46% respondents had income below 2 Lakhs and 36%
respondent had income in range 2-5 Lakhs. 12% respondent had income
between 5-10 Lakhs and 6% respondents had income above 10 Lakhs.
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Question 2: How much you spend on an average on you’re per visit to
Shopping Mall?
Up to Rs. 200 Rs. 200-500 Rs.500-2500 Rs. 2500 and
above
- 36 59 5
Interpretation: 59% respondents average spend was between 500-2500.
36% respondents average spend was between 200-500. Only 5%
respondent had spend level above 2500.
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Question 3: What is the frequency of your visit to the Shopping Malls?
Daily Once in a
week
Twice in a
week
Any other
8 66 26 0
Interpretation: 66% respondent visited the malls once a week, while 26 %
respondents visited the malls twice a week. 8 % respondents visited malls
daily.
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Question 4: Please rate the purpose of your visit to the Shopping
Malls?(1 Being most the most important and 6 being least important)
Purpose RatingFood and Beverages 1
Music and Entertainment 6
Life style products 4
Latest Fashion and Clothing 3
Choosing gifts 5
Consumer Durable 2
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Question 5: Please rate the following Shopping Malls, which
you prefer the most?
Metropolitan Mall
Sahara Mall Ansal's Plaza Centre Stage Shipra Mall
4 5 1 2 3
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Question 6: Please specify the reasons for the preference on
the scale of 1 to 7 (1 being the most important and 7 being the
least important)
Ansal's Plaza
Centrestage Sahara Mall
Metropolitan Mall
Shipra Mall
Good Eating Place 5 1 3 1 5
Good Place for Family Shopping and Bargaining
1 5 1 5 1
Branded Shops 2 3 4 3 2Sales and Promotional Activities 3 6 2 6 3Services and Facilities 6 7 5 7 6Fun and Entertainment 4 2 6 2 4Advertisements 7 4 7 4 7
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SURVEY DISCUSSION
FINDINGS IN ANSAL PLAZA
Ansal Plaza is preferred by the consumers in the age group of 25-35 years
and above. Consumers were homemakers, businesspersons and
professionals. They come to the mall for branded items and clothing's items.
They spend in the shopping mall more then Rs. 2500 and above.
Consumers in mall were brand oriented and only purchase the branded
products.
CONSUMER BUYING BEHAVIOR IN CENTERSTAGE MALL
Consumers come for the purchase the branded clothing and home
furnishing items.
Consumers in the mall were the only serious buyers and don’t come for
the entertainment.
Consumers spends the money more then Rs. 2500
CONSUMER’S EXPERIENCE IN CENTERSTAGE MALL
The Shopper Stop brand attracts consumers in the mall.
Consumers were also come due to the Branded shops like Marks &
Spencer's and Music World.
Another Important eating outlet is the Oriental Bloom and Mac Donald's.
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FINDINGS IN METROPOLITAN MALL
Consumers in mall were mostly in the age group of 20 – 25 yrs and 25 - 35.
They came to the mall mainly for the entertainment in PVR and shopping in
the Shoppers Stops. Consumers in mall were all age group and almost all
were brand oriented regarding the products. The average spending was in
the mall between 500 – 2500 and more then Rs.2500. The annual holds
income of the mall between the Rs.2-10 Lakhs. Consumers in shopping mall
accepted that Metropolitan Malls the best shopping mall on M.G.Road in
Gurgaon
CONSUMER BUYING BEHAVIOR IN METROPOLITAN MALL
Consumers usually spend their money on Food, entertainment, Apparels,
and sports & footwear.
Consumers in the age group of below 20 – 25 yrs and 25 – 35 were in
the maximum numbers.
Consumers in Mall spend money between 500 – 2500 and more then Rs.
2500.
Consumers in mall come to the mall either once in a week or twice in a
week.
Consumers in Mall either students or in services or professionals in the
maximum numbers.
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CONSUMER’S EXPERIENCE IN METROPOLITAN MALL
Consumers in mall mostly know mall as PVR, Shoppers Stop and
Metropolitan Mall.
Consumers in mall are mostly Brand oriented regarding any thing.
Consumers accept that this mall is the best place for the fun &
entertainment and good food joint.
Consumer’s mostly motivates to come to the shopping mall by friends
and relatives.
FINDINGS IN SAHARA MALL
Consumers in Sahara mall were mostly in the age group among 25- 35 and
35 and above. In consumers the numbers of Homemakers and Services and
professionals were in the maximum numbers. Consumer visits the mall
generally the mall once in a week and twice in a month. Consumers come to
the mall for the households shopping, eating and purchase for the apparels.
Consumers influence by the Discounting schemes, and for the
entertainment. The annual house holds income between 2 – 10 lakhs.
CONSUMER BUYING BEHAVIOR IN SAHARA MALL
Consumers in mall come for the house holds shopping.
Consumers come to the mall mostly homemakers and service class.
According to them Sahara Mall is the best for the middle class.
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CONSUMER’S EXPERIENCE IN SAHARA MALL
As a brand the Sahara Mall is famous a mall fore the middle class due to
the Big Bazaar.
Big Bazaar, Pantaloon, and Haldiram is the most popular among the
consumers
The popular brands also the Haldiram and the Pantaloon.
Sales and discount schemes attracts them to come to the mall.
FINDINGS IN CENTERSTAGE MALL
Centerstage Mall is preferred by the consumers in the age group of 25-35
years and above. Consumers were homemakers, businesspersons and
professionals. They come to the mall for homefurnishing items and
electronics items. They spend in the shopping mall more then Rs. 2500 and
above. Consumers in mall were brand oriented and only purchase the
branded products.
CONSUMER BUYING BEHAVIOR IN CENTERSTAGE MALL
Consumers come for the purchase the branded electronic items and
home furnishing items.
Consumers in the mall were the only serious buyers and don’t come for
the entertainment.
Consumers spends the money more then Rs. 2500
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CONSUMER’S EXPERIENCE IN CENTERSTAGE MALL
The Westside brand attracts consumers in the mall.
Consumers were also come due to the Branded shops like Electrolux,
Philips and LG electronics.
As a brand in shopping malls consumers said that Plaza is the best for all
necessary home items like electronics and furniture.
FINDINGS IN SHIPRA MALL
Consumers in Shipra mall were mostly in the age group among 25- 35 and
35 and above. In consumers the numbers of Homemakers and Services and
professionals were in the maximum numbers. Consumer visits the mall
generally the mall once in a week and twice in a month. Consumers come to
the mall for the households shopping, eating and purchase for the apparels.
Consumers influence by the Discounting schemes, and for the
entertainment. The annual house holds income between 2 – 10 lakhs.
CONSUMER BUYING BEHAVIOR IN SAHARA MALL
Consumers in mall come for the house holds shopping.
Consumers come to the mall mostly homemakers and service class.
According to them Shipra Mall is the best for the middle class.
CONSUMER’S EXPERIENCE IN SAHARA MALL
As a brand the Shipra Mall is famous Bite Inn - The Food Court & U -
The Fun Place for Kids & Wave Shipra Cinemas.
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Shoppers Stop, Globus, Food Bazaar, Fashion Station etc are also
popular among the consumers
It is known as International Standard Retail cum Entertainment Mall .
CONCLUSION
The organized retail in India is expected to cross INR 1000 billion mark by
2010 and around INR 200 billion investments are in the pipeline. The size of
the organized retailing market stood at Rs. 280 billion in 2004, thereby,
making up a mere 3% of the total retailing market. Moving forward,
organized retailing is projected to grow at the rate of 25%-30% p.a. and is
estimated to reach an astounding INR 1000 billion by 2010. Further, its
contribution to total retailing sales is likely to rise to 9% by the end of the
decade. Currently the fashion sector in India commands a lion's share in the
country's organised retail pie. This is in line with the retail evolution in other
parts of the world, where fashion led the retail development in the early
stages of evolution and was followed by other categories like Food &
Grocery, Durables, etc. The last few years have seen rapid transformation in
many areas and setting scalable and profitable retail models across
categories. Indian consumers are rapidly evolving and accepting modern
formats overwhelmingly. Retail Space is no more a constraint for growth.
India is on the radar of Global Retailers and suppliers / brands world-wide
are willing to partner with retailers here. Further, large Indian corporate
groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa &
Piramal Groups etc and also foreign investors and private equity players are
74
firming up plans to identify investment opportunities in the Indian retail
sector. The quantum of investments is likely to sky-rocket as the inherent
attractiveness of the segment lures more and more investors to earn large
profits. Investments into the sector are estimated at INR 20 – 25 billion in the
next 2-3 years, and over INR 200 billion by end of 2010.
Stocks in the retail sector are also becoming increasingly attractive from an
investor's point of view. Successful development of value based concepts as
well as development of retail space in smaller cities and towns shall drive the
organized retail into the next levels of cities. Retailers have responded to this
phenomenon by introducing contemporary retail formats such as
hypermarkets and supermarkets in the new pockets of growth. Prominent
‘tier-II' cities and towns, which are witnessing a pick-up in activity, include
Surat, Lucknow, Dehra Dun, Vijaywada, Bhopal, Indore, Vadodara,
Coimbatore, Nasik, Bhubaneswar, Varanasi and Ludhiana among others.
With consumption in metros already being exploited, manufacturers and
retailers of products such as personal computers, mobile phones,
automobiles, consumer durables, financial services etc are increasingly
targeting consumers in tier II cities and towns. In addition, petro-retailing
efforts of petroleum giants scattered through out the country's landscape
have also ensured that smaller towns are also exposed to modern retailing
formats.
On the supply side, mall development activity in the small towns is also
picking up at a rapid pace, thereby, creating quality space for retailers to
fulfill their aggressive expansion plans. Thus, the ‘retail boom', 85% of which
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has so far been concentrated in the metros is beginning to percolate down to
smaller cities and towns. The contribution of these tier-II cities to total
organized retailing sales is expected to grow to 20-25%.
Favorable demographic and psychographic changes relating to India's
consumer class, international exposure, availability of increasing quality
retail space, wider availability of products and brand communication are
some of the factors that are driving the retail in India. Over the last few
years, many international retailers have entered the Indian market on the
strength of rising affluence levels of the young Indian population along with
the heightened awareness of global brands and international shopping
experiences and the increased availability of retail real estate pace.
Development of India as a sourcing hub shall further make India as an
attractive retail opportunity for the global retailers. Retailers like Wal-Mart,
GAP, Tesco, JC Penney, H&M, Karstadt-Quelle etc stepping up their
sourcing requirements from India and moving from third-party buying offices
to establishing their own wholly owned / wholly managed sourcing & buying
offices shall further make India as an attractive retail opportunity for the
global players. Buying volumes for many of these players are already in the
range of INR 10-20 billion per year, with reported plans to step up to INR
100-150 billion within the next 3-4 years.
Manufacturers in industries such as FMCG, consumer durables, paints etc
are waking up to the growing clout of the retailers as a shift in bargaining
power from the former to the latter becomes more discernible. Already, a
number of manufacturers in India, in line with trends in developed markets,
76
have set up dedicated units to service the retail channel. Also, instead of
viewing retailers with suspicion, or as a ‘necessary evil' as was the case
earlier, manufacturers are beginning to acknowledge them as channel
members to be partnered with for providing solutions to the end-consumer
more effectively.
INDIA RETAIL BY 2006-07
50 million sq ft of quality space under development
7 major cities to account for 41 million sq ft development
300 malls, shopping centres and multiplexes under construction
To open 35 hypermarkets, 325 large department stores, 1500
supermarkets and over 10,000 new outlets
To add US $ 10 billion of business to organised retail.
The food and personal care retail market in India is currently valued at about
10 billion US dollars and is expected to grow by 5-7% year on year
according to reports by A.T.Kearney. The average Indian family spends
about 31% of its income on food and this is expected to grow to about 36%
in the near future. This scenario obviously has led a number of players to
think about opening up retail chains that cater to food and personal care.
Even Walmart and other global players are thinking of making a foray into
the Indian market.
For a long period of time the debate has been whether the large retail
players would be able to dislodge today’s “Mom and Pop” stores which
currently service the food and personal care need of Indians.
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The Mom and Pop stores have distinct advantages over the other players in
terms of low overheads and avoidance of sales tax. The introduction of VAT
in the Indian market would nullify the tax advantage to a certain extent but
there is another innate advantage that these stores enjoy. Various studies
conducted by institutes such as the Department of Economics, University of
Connecticut, have shown that the most important factor for a retail store is
distance. The “Mom and Pop” stores being the nearest to the consumers’
home have therefore remained as the first choice for food and personal care.
Critics argue that with the emerging socio-economic trends in India such as
the phenomenon of increase in women joining the work force, brand
consciousness, faster nuclearization of families and a fast-paced life would
lead to Mom and Pop stores being dislodged by bigger stores.
Another factor of importance here is technology. Critics argue that the bigger
stores would be able to bring in better efficiencies and therefore would be
able to provide better variety and lower prices. The fact however remains
that the high real estate cost and other existing inefficiencies in the Indian
market do not allow for cost efficiencies. Such efficiencies can only come if
the entire market structure from the supplier to the end consumer becomes
integrated into one. Even if the retailers have the right integrating technology
it mitigates cost inefficiencies only to a certain extent as the vendor and
transporters still operate inefficiently.
Analysts have compared the socio-economic changes in India to the ones
that occurred in the US and they argue that the way malls and big retailers
became a common phenomenon in the US the same would happen in India.
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The fact however remains that while the socio-economic changes have
taken time to trickle down the technological changes especially in terms of
internet etc. have been faster, which therefore may lead to a totally new
scenario in India.
While it is correct that a large population of India does not have Internet
access etc. but at the same time it is also true that the socio-economic
changes we talked about have also only come about largely in the middle
and upper class. Therefore a scenario might emerge where India bypasses
the stage of big retailers in the food and personal care segment. The socio-
economic changes would take time. It might be possible that the
technological changes take place faster than the sociological changes and if
that happens then the market could be served directly through the net and
through e-tailing. The changing face of the food and personal care market
has negated the need of a consumer to actually be there physically. All items
including pulses etc. are packed and therefore do not require physical
inspection. Even vegetables and dairy items are coming in packs therefore
there is no question of checking these items physically. Therefore if the
technological changes are faster, then India might move into e-tailing for the
food and personal care market without having any major retailer in this
segment.
This could be true also for other products where physical presence is not
required and where the goods are standardized commodities.
So the next time someone tells you that he or she is very excited about
Wal*mart coming to India, think about the race of changes.
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With new shopping-malls having become operational in many cities across
India, it is interesting to observe how the shopping-behaviour of consumers
in the vicinity of these malls has changed and thereby draw some lessons
that could be of some use to the developers of hundreds of new malls that
are currently under planning or construction across India.
It is still not too long ago that the operators of a particular new shopping-mall
at Mumbai had to contemplate restricting entries of visitors by imposing
conditions that such entry was limited to those having mobile phones or
credit cards a.k.a., the income tax department's one in six criterion for filing a
tax return.
NCR and Gurgaon saw some of the initial mall developers become parking
lot operators as well by charging exorbitant parking fees from all visitors.
Rentals, rather than going down with more malls coming up, started moving
up even as the quality of services within the malls started deteriorating. In
this context, therefore, it is somewhat surprising that questions are already
being asked, albeit in whispers, whether shopping-malls can survive and
operate profitably in India.
Many tenants lament about the low percentage of conversions from those
who walk through the portals of these malls, and casual observers routinely
find shopping-bags missing in the hands of the supposed shoppers visiting
these malls as an indicator that the initial euphoria about shopping in the
malls is already on the wane and that consumers are reverting to their
traditional shopping-destinations.
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There are some myths and some realities about these observations. It is,
indeed, true that many Indian retailer tenants in the shopping-malls have
now become familiar with terms such as footfalls, conversions, average
transaction value, and repeat customers.
However, it is also true that for many of these tenants, it has been their first
expansion beyond their traditional high street locations and hence, they have
expectations born more out of hype than by any real experience.
For instance, I would like to speculate that daily or weekend footfalls in
traditional shopping high streets of India such as South Extension and Karol
Bagh in NCR, Linking Road in Mumbai, Commercial Street or Brigade Road
in Bangalore, or for that matter, T Nagar or Anna Nagar in Chennai would
easily exceed the more carefully estimated (or measured) footfalls in any of
the malls in the country.
Similarly, if one were to carefully observe the ratio of visitors having
"shopping-bags" in their hands in these high streets versus those in the new
malls, it is not going to be very different. As far as individual retailers'
performance is concerned, even in the traditional markets some established
retailers do extraordinarily well while many other shops see a change of
"shop boards" very frequently.
There is no reason to believe that it should be any different in a shopping-
mall, which, in any case, is fundamentally no different from a traditional
shopping-high street, except that a mall has a more modern and compact
structure, in most cases a single roof. Local retailer tenants who move into a
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new mall for the first time should not expect any customer loyalty being built
up overnight.
For example, in NCR's case, it is possible for a retailer to be very successful
in Karol Bagh or Lajpat Nagar shopping-districts but he would have to start
from scratch in terms of building up brand recognition as well as generating
customer conversions in a new location such as Gurgaon or Noida. In
contrast, national retailers such as Shoppers Stop, or national exclusive
brand outlets such as those operated by Madura Garments, Arvind Brands,
Raymond, and Zodiac, have national brand recognition and hence the
performance of their outlets in shopping-malls is usually comparable (or
even better) with their outlets in traditional shopping-markets.
Secondly, with most mall developers having blindly opted for a questionable
winning formula of shopping, entertainment (read Multiplex) and food (read
MacDonald's/Pizza Hut as the main draws), it is no surprise to find many
mall visitors having no shopping-bags since they have been enticed to visit
only for watching a movie and/or having a burger or a pizza or even a cup of
coffee. The situation pertaining to shopping, for instance, would be no
different in locations such as Saket or Vasant Vihar in NCR, which are better
known for their movie theatres and eating options. What is the lesson for
mall developers and for the prospective tenants? For the developers, the
critical lesson is to invest some quality effort in understanding the shopping-
needs of customers in their targeted "catchment" areas and then build a
carefully planned portfolio of retail options that can meet the needs of these
targeted customers.
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In many instances, customers would only need shopping and eating options
rather than a multiplex as well. The developers also have to understand that
their retailer tenants have to earn a profit and hence the rentals have to be
aligned to what the retail business can bear (usually 5-8 per cent of gross
revenues). Mall developers also have to create distinctive identities for their
specific malls, much like the identities that have developed over time for
major shopping-high streets in various cities in the country.
Their work is not done just when the mall has been commissioned! As for
the would-be retailer tenants, it is important to realise that merely moving
into a mall does not guarantee business for them. They have to work as hard
to draw consumers to their own stores once the latter have entered the mall,
and then have the right value proposition for them to get converted into
customers, and then become repeat customers.
The final, obvious, conclusion is that mall developers have to invest in
getting a better understanding about the retail business, while retailers have
to get a better understanding about the dynamics of operating at a new
location.
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RECOMMENDATIONS
Though lucrative opportunities exist across product categories, food and
grocery, never the less, presents the most significant potential in the Indian
context, as consumer spending is highest on food.
More Shopping malls should be opened in more and more cities across
India.
The next level of opportunities in terms product retail expansion lies
in categories such as apparel, jewellery and accessories, consumer
durables, catering services and home improvement. These sectors have
already witnessed the emergence of organized formats though more
players are expected to join the bandwagon.
Some of the niche categories like Books, Music and Gifts offer
interesting opportunities for the retail players.
Kids and teens: The IMAGES-KSA projections indicate that by 2015,
India will have over 550 million people under the age of 20 – reflecting
the gargantuan opportunities possible in the kids and teens retailing
segment.
Wholesale trading is another area, which has potential for rapid growth.
German giant Metro AG and South African Shoprite Holdings have
already made headway in this segment by setting up stores selling
merchandise on a wholesale basis in Bangalore and Mumbai
respectively. These new-format cash-and-carry stores attract large
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volumes from a sizeable number of retailers who do not have to maintain
relationships with multiple suppliers for all their needs.
Rural Retailing: Of late, India's largely rural population has also caught
the eye of retailers looking for new areas of growth. ITC launched the
country's first rural mall ‘ Chaupal Sagar' , offering a diverse product
range from FMCG to electronics appliance to automobiles, attempting to
provide farmers a one-stop destination for all of their needs. There has
been yet another initiative by the DCM Sriram Group called the ‘Hariyali
Bazaar' that has initially started off by providing farm related inputs and
services but plans to introduce the complete shopping basket in due
course. Other corporate bodies include Escorts, and Tata Chemicals
(with Tata Kisan Sansar) setting up agri-stores to provide
products/services targeted at the farmer in order to tap the vast rural
market.
FDI could indeed do a lot in this sector as entry of international retailers
would bring in the required expertise to set the supply chain in place which
would result in elimination of wastage, better prices and quality for
consumers and higher income for farmers besides of course farm produce
retailing getting a facelift.
Tapping the fresh farm produce sector, the group plans to take its recently
launched retail concept – Nature's Basket - to newer cities steadily. Godrej
Group's Agro and Food division, Godrej Agrovet Ltd. (GAVL) operates the
format, selling a variety of vegetables, fruits and herbs - both local and exotic
thereby introducing the concept of 'farm-to-plate' to urbanites. Godrej plans
85
to open four more Nature's Basket stores in Mumbai before taking them
national. Setting up cost of a store is about INR 5-10 million and per stores
sales are expected in the range of INR 30- Rs 50 million a year.
Interestingly, the world's largest corporation, Wal-mart, also had its roots in
rural America. Unlike many other retailers who started from urban centres
and then trickled down to rural areas, Wal-mart had started from rural areas
and then came closer to cities over a period of time. Many more such
concepts are likely to be tested in the future as marketers and retailers begin
to acknowledge that the rural consumer is more than a ‘poor cousin' of the
urban counterpart. The IMAGES KSA Report avers that these concepts are
likely to go a long way in bringing a huge untapped population within the
purview of organized retailing, thereby, increasing the size of the total
market.
Potential for all Formats to Thrive:
Most of the global powerhouses in the retailing sector such as Wal-Mart,
Carrefour, Tesco etc have adopted multi-format and multi-product strategies
in order to customize their product offering for distinct target segments.
Similar trends are likely to be exhibited in India as all formats present
prospects for growth, the Report says.
Further, with the emergence of larger store formats like superstores and
hypermarkets in countries like UK, France, Germany, Spain since the 1980s
and Eastern Europe more recently, traditional food retailers have been able
to stock more extensive non-food ranges. In fact, Tesco, UK's leading
86
grocer, has become the number one apparel retailer in the Czech Republic
and also a major player in Hungary apart from being one of the fastest
growing clothing retailers in the UK. Together with its rival, Wal-Mart-owned
ASDA, Tesco is one of the food sector's most successful exponents of
clothing in Europe.
There are wide variety of roadblocks that hamper the growth of otherwise
upbeat scenario. A few of them are regulatory barriers, fragmented
suppliers, lack of skilled personnel, differential taxation system, labour
legislation and lack of ‘industry' status. Recounting some critical success
factors in retail the IMAGES-KSA report emphasises that all and any
solutions aught to be India-centric even as strategic and operational
attributes like value proposition, service, experience, efficiency, hygiene etc.
must be benchmarked with global standards. It also favours adopting an
effective private label strategy and the necessity to pass on operational
gains achieved to end-consumers in order to offer a superior price-value
equation, thereby, competing effectively with the unorganized segment.
On the vexed issue of Foreign Direct Investment (FDI) it notes that most
players are cautious and have preferred to adopt a wait-and-watch attitude
even as the government is expected to announce its stand on FDI in the
retail sector soon.
Retailing is well past the stage of infancy where only a handful of players like
the German retailer Nanz bought international formats to virgin Indian
territory, and that too, with limited scale and operations. During the late
1990s, Indian retailers underwent an experimentation phase when new
87
formats (department stores like Shoppers' Stop & Pantaloon) and product
categories (like consumer durables retailing, music retailing etc) were
introduced. As the country marched into the new millennium, the organized
retailing scenario began to stabilize, especially over the last 3 - 4 years when
players like Big Bazaar, Barista, Pizza Hut, Shoppers' Stop etc became
successful in establishing a national footprint. This was also the stage when
international retailers like McDonald's, Subway etc adopted a mix of global
and India-specific strategies in order to entice the local population.
India is now ready to leapfrog into the next stage of evolution where a large
number of Indian and international retailers would build scalable models with
a pan-India appeal with a view to be sustainable in the long term. Already,
players are becoming profitable after having gone through their respective
learning curves indicating the viability of organized retailing across formats.
Opportunities are abundant, across formats and categories, as the new
Indian consumer has clearly demonstrated a readiness for all organized
retailing segments. Moreover, as has been the case in retail markets across
the globe, the influx of foreign brands into India shall transform the retail
landscape as domestic players grow bigger and become more innovative in
the face of enhanced competitive pressures.
All this can only spell good news for the Indian consumers who will be
inundated with a flurry of state-of-the-art products and services at
reasonable prices – a state they have long craved for.
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BIBLIOGRAPHY
Retail Survey: A.T. Kearney (2001-2002), Retail Survey: KSA Technopak
(2002-2003)
Supermarket Key Attributes and Location Decisions by Daniel Serra
BOOKS
Fundamental of Marketing; William J. Stanton
Marketing Management; Kotler (Philip)
Creating Customer value; Gopal K. Gureja
Marketing Management; Saxena
Marketing Planning for Services; Malcolm
McDonald, Adrain Payne
MAGAZINE
Business India: The Magazine of the Corporate
World; December, 2004.
JOURNAL
Journal of Marketing; November 2004
WEBSITES
www.google.com
www.businessworld.com
www.saharaindia.com
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www.mgfindia.com
ANNEXURE
QUESTIONNAIRE FOR CUSTOMERS
Dear Sir/Madam I am conducting a Survey on “Consumer Behavior and Experience about Shopping Malls: A comparative study. May I have five minutes of yours to help me fill up the Questionnaire?
Please specify your profile: Name:____________________________________________________Profession: _______________________________________________
Question 1: What is the Annual household income of your family?
(a) Below 2 lakhs(b) Rs 2-5 Lakhs(c) Rs. 5-10 Lakhs(d) Rs. 10 lakhs and above
Question 2: How much you spend on a average on you’re per visit to Shopping Mall?
(a) Up to Rs. 200(b) Rs. 200-500(c) Rs.500-2500(d) Rs. 2500 and above
Question 3: What is the frequency of your visit to the Shopping Malls?
(a) Daily(b) Once in a week(c) Twice in a week(d) Any other
Question 4: Please rate the purpose of your visit to the Shopping Malls?(1 Being most the most important and 6 being least important)
Purpose 1 2 3 4 5 6Food and BeveragesMusic and EntertainmentLife style products
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Latest Fashion and ClothingChoosing giftsConsumer Durable
Question 5: Please rate the following Shopping Malls, which you prefer the most?
(a) Metropolitan Mall(b) Sahara Mall(c) MGF Plaza Mall
Question 6: Please specify the reasons for the preference on the scale of 1 to 7 (1 being the most important and 7 being the least important)
Factors Sahara Mall Metropolitan Mall MGF Plaza
Good Eating PlaceGood Place for Family Shopping Branded ShopsSales and Promotional ActivitiesServices and FacilitiesFun and EntertainmentSelf MotivationBetter BargainingFriends and RelativesExposure to New Trends and FashionEmotional SatisfactionAdvertisements
Thank You
91
QUESTIONNAIRE FOR RETAILERS
This questionnaire bears reference to our academic purposes only and no feedback given in this Questionnaire will ever be disclosed.
Name: Mr. Ms. ___________________________________ (optional)
Retailer Name:_________________________________________________
Address: _____________________________________________________
City: _________________________________________________________
Pin: _________________________________________________________
Phone: (O)__________________________ (M)_______________________
Q.1 Do you agree that there is trend towards organised retail in India?Yes No
Q.2 Do you think large organized retailers would be controlling a substantial portion of the retail trade?
Yes No
Q.3 How o you perceive the development of Shopping malls in NCR and NCR Region?
Healthy Trend Unhealthy Trend
Q.4 What according to you is the purpose of the customers visit to the Shopping Malls?
Purpose Yes NoFood and Beverages Music and Entertainment Life style products Latest Fashion and Clothing Choosing gifts Consumer Durable
Q.5 What according to you are the reasons for buying at that particular shopping mall (Please rank them in order of preference?)
Nearness to your house/locality Good range available Friendly shopkeeper/ good relations Good ambience Good bargain
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Q.6 Rank (1-6) the following factors, which influence the customer purchase decision at a shopping mall.
Price
Brand
Location of Mall
Outlet/Mall
Appealing fragrance
Advice from acquaintances
Q.7 Do shopping malls have the following advantages?Yes No
Time Factor Discount schemes Adequate parking space Individual sections of all categories Good shopping experience in better place with convenience and variety.
Organized shops with international ambience &air condition all-around.
Q.8 Do you think India has a potential in the Retail industry?Yes No
Q.9 Do you think that organized retail will provide many opportunities both to existing players as well as new entrants?
Yes No
Q.10 Do you think India is prepared for open competition?Yes No
Thank you
93