retailing - a study

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Retailing A study

RETAILING A STUDY

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A PROJECT REPORT ON

RETAILING A STUDY

SUBMITTED BY

SHER MOHD CHOWDHARI

FOR THE DEGREE OF

THE BACHELOR OF MANAGEMENT STUDIES

UNDER THE GUIDANCE OF

MISS SUSAN ALEX

SHOBHA JAYARAM SHETTY COLLEGE FOR BMS.

BHANTARA BHAWAN MARG, KURLA (E)MUMBAI 4000 70.

ACADEMIC YEAR 2010 - 2011

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DECLARATION

I ,SHER MOHD CHOWDHARI, OF THE HABIB COLLEGE 0F COMMERCE &

ECONOMICS FOR BMS,PRINCIPAL SHAIK HASAN MARG,KESAR BAUG,

DONGRI, MUMBAI 400009. HEREBY DECLARE THAT I HAVE COMPLETED

THE PROJECT ENTITLED RETAILING A STUDY IN PARTIAL

FULFILLMENT OF THE REQUIREMENT FOR THE THIRD YEAR OF THE

BACHELOR OF MANAGEMENT STUDIES COURSE FOR THE ACADEMIC YEAR

2010-2011

I FURTHER DECLARE THAT INFORMATION SUBMITTED BY ME IS TRUE AND

ORIGINAL TO THE BEST OF MY KNOWLEDGE.

DATED: SHER MOHD CHOWDHARI

Name of the student

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CERTIFICATE

I MISS SUSAN ALEX HEREBY CERTIFY THAT KHAN IMRANSTUDYING IN

TYBMS AT SHOBHA JAYARAM SHETTY COLLEGE FOR BMS,BHANTARA

BHAWAN MARG,KURLA (E), HAS COMPLETED A PROJECT ON RETAILING

A STUDY IN THE ACADEMIC YEAR 2010-2011 UNDER MY GUIDANCE.

I FURTHER CERTIFY THAT THE INFORMATION SUBMITTED IS TRUE

AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.

DATED:

Place:

Name of the guide

Examiners Sign &Date PROJECT GUIDE

College Seal PRINCIPAL

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ACKNOWLEDEGEMENT

I EXPRESS MY SINCERE THANKS TO MISS SUSAN ALEX FOR her

VALUABLE GUIDANCE IN DOING THIS PROJECT.

I WISH TO TAKE THE OPPORTUNITY TO EXPRESS MY DEEP SENCE

OF GRATITUDE TO PRINCIPAL Dr.CHEEMA SIR and PROF. SUSAN ALEX

FOR THEIR INVALUABLE GUIDANCE AND SUPPORT IN THIS ENDEAVOUR.

THEY HAVE BEEN A CONSTANT SOURCE OF INSPIRATION.

FINALLY IT IS THE FOREMOST DUTY TO THANK ALL MY

RESPONDENTS, FAMILY & FRIENDS WHO HAVE HELPED ME DIRECTLY OR

INDIRECTLY IN COMPLETING MY FIELD WORK, WITHOUT WHICH THIS

PROJECT WOULD NOT HAVE BEEN SUCCESSFUL.

Name of the student

Sr.no Contents Page. No

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PREFACE

Departmental stores may be a comparatively recent phenomenon in India,

with a specially created ambience making shopping an experimental affair.

Indeed, we are even beginning to demand places where we can avail the

luxuries of spending the whole day in one place, taking advantage of a

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bouquet of services in which shopping is only a part. So you can browse,

window shop, make purchases, break off for a meal, take in some

entertainment, and listen to music. This concept of organized retail

marketing, which has caught on like lightning, is really just the creation of a

distribution network that cuts out various intermediary costs and creates a

much smoother interface between manufacturer and customer. This

organized network which bridges the distance between the manufacturer and

the consumer has seen many of the world's leading entrepreneurs

successfully walk down a particularly profitable road. With total sales going

up to $6.6 trillion, the industry today is the world's largest private industry

and accounts for over 8 per cent of the GDP in western countries. And now,

it's India's turn. Today, we stand at the crossroads of a retail revolution. After

50 years of unorganized retailing and fragmented kirana stores with very

basic offerings, fixed prices, zero usage of technology and little or no

ambience the industry have finally begun to move towards modernization,

systematization and consolidation.

Retailing has now become a key growth area. There has been an attitude

change in the way the Indian consumer thinks about shopping. What, were

and how they buy is now the big question. Over the last decade, there has

been a significant evolution in his psyche, a change that has been carefully

recorded and documented by behavioral pundits. Although it is most

noticeable in large metros, its impact is also seen in small towns. The change

was kicked off by the economic liberalization of the 1900's and accelerated

by the media (cable) boom following the Gulf War, when the radical

explosion in media images exposed the Indian consumer to the lifestyle

enjoyed in more affluent countries. And even within his own country.

Earlier, it was the lack of consumer culture along with low incomes that

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become significant brands in their own right. Similar departmental

stores/multi brand outlets are likely to develop into a significant format in

the Indian market over the next decade. The players who can make

organized retailing an integral part of India will be the ones who reap the

benefits at the end of the change process. The industry however will have to

work in tandem with the government and manufactures to build a more

positive environment for retail and cater to the demand for better products

and retailing from India's first generation of demanding cash rich consumer.

Introduction

Retailing is the final step in the distribution of merchandise - the last link in

the Supply Chain - connecting the bulk producers of commodities to the final

consumers. Retailing covers diverse products such as foot apparels,

consumer goods, financial services and leisure.

A retailer, typically, is someone who does not effect any significant change

in the product execs breaking the bulk. He/ She is also the final stock point

who makes products or services available to the consumer whenever require.

Hence, the value proposition a retailer offers to a consumer is easy

availabilities of the desired product in the desired sizes at the desired times.

In the developed countries, the retail industry has developed into a full-

fledged industry where more than three-fourths of the total retail trade is

done by the organized sector. Huge retail chains like Wal-Mart, Carr four

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Group, Sears, K-Mart, McDonalds, etc. have now replaced the individual

small stores. Large retail formats, with high quality ambiance and courteous,

and well-trained sales staff are regular features of these retailers.

Top Ten Retailers Worldwide

Rank Retailer No of stores

owned

Sales US$

Millions

1 Wall-Mart Stores Inc.

(USA)

4178 $180,787

2 Carrefour Group (France) 8130 $61,0473 The Kroger Co. (USA) 3445 $49,000

4 The Home Depot, Inc.

(USA)

1134 $45,738

5 Royal Ahold

(Netherlands)

7150 $45,729

6 Metro AG (Germany) 2169 $44,189

7 Kmart Corporation (USA) 2105 $37,028

8 Sears, Roebuck and Co.

(USA)

2231 $36,823

9 Albertson's, Inc. (USA) 2512 $36,726

10 Target Corporation (USA) 1307 $36,362

Overview of Indian retail sector

The retail sector in India is witnessing a huge revamping exercise as

traditional markets make way for new formats such as departmental stores,

hypermarkets, supermarkets and specialty stores. Western-style malls have

begun appearing in metros and second-rung cities alike introducing the

Indian consumer to a shopping experience like never before. Rated the fifth

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most attractive emerging retail market, India is being seen as a potential

goldmine. It has been ranked 2nd in a Global Retail Development Index of

30 developing countries drawn up by A T Kearney. The list was developed

as a response to requests from retail chains facing saturated demand in most

western markets.

India's vast middle class and its almost untapped retail industry are key

attractions for global retail giants wanting to enter newer markets.

A.T. Kearney has estimated India's total retail market at $202.6 billion whichis expected to grow at a compounded 30 per cent over the next five years. .

Indian retail market is growing at a very aggressive rate today, which

contributes to some 14% of the countrys GDP. Experts feel that the

organized retailing sector is going to emerge as the biggest source of

employment in coming days. Several reasons and trends have lead to rise of

this industry such as rising income levels, growing literacy, increase in

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WeeklyMarketsVillage Fairs

Melas

ConvenienceStoresMom andPop/Kiranas

PDS OutletsKhadi StoresCooperatives

Exclusive BrandOutletsHyper/SuperMarketsDepartment StoresShopping Malls

Traditional/Pervasive Reach

GovernmentSupported

Historic/RuralReach

Modern Formats/International

Evolution of Indian retail

Source ofEntertainmen

t

NeighborhoodStores/Convenie

nce

Availability/Low Costs /Distribution

ShoppingExperience/Efficie

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media penetration, etc. In overall the retail sector has immense potential and

the sector is eyeing new heights with high growth rate with opening up of

new avenues by tapping new markets.

Retailing in India is thoroughly unorganized. 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 an Rs.20,000 crore segment of the market

is organized.

The Indian retail sector is worth roughly $292 Billion, and roughly 2% of

this is classified as organized retail. Of the 12 million stores in India almost

95% are less than 500 sq. ft in area. The retailing sector in India is expected

to grow at roughly 8.3% during the next 5 years, with organized retailing

growing at rates anywhere between 24 to 49%.

From supermarkets such as Big Bazaar or Food world, which are large self-

service stores selling a variety of products at discounted prices to malls and

department stores such as Crossroads, Lifestyle and Westside, the Indian

consumer is fast catching up with his / her global counterpart.

New retail stores have traditionally started operations in cities like Mumbai

and Delhi where there has been an existing base of metropolitan consumers

with ready cash and global tastes. The new perspective to this trend is that

new entrants to the retail scenario should first enter smaller cities rather than

focusing entirely on the metros. Spending power in India is not concentrated

any more in just the 4 metros (Delhi, Mumbai, Chennai, Kolkata ). Smaller

but upcoming cities like Chandigarh, Coimbatore, Pune, Ahmedabad,

Baroda, Trivandrum, Cochin, Ludhiana, Simla etc will fast be catching up to

the metros in their spending capacity.

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Cities in south India have taken to the supermarket style of shopping very

eagerly and so far the maximum number of organized grocery and

department stores are in Chennai, Bangalore and Hyderabad. The north has a

long way to go to come up to par. International stores now prefer to gauge

the reaction of the public in these cities before investing heavily in a nation-

wide expansion. Milou, the Swiss childrens wear retailer, recently opened

up its first store in Chennai, bypassing Delhi and Mumbai.

Besides the urban market, Indias rural market has just started to be seen as a

viable option and companies who understand what the rural consumer wants

will grow to incredible heights. The bulk of Indias population still live in

rural areas and to be able to cater specifically to them will mean generating

tremendous amounts of business.

Business, specifically retail business must focus on the most important factor

in the Indian mind-set----Value for Money. Indian consumers are ready to

pay almost any amount of money for a product or service as long as they feel

they are getting good Value for Money. This is often misconstrued as being

tight fisted or interested in lower priced and/or lower quality products.

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E-retailing in India

Want to kiss goodbye to the jostling crowds at your favoriteshopping mall? How about buying online?

The internet revolution has brought a big change in the country. Information

from across the world is available on your fingertips, and communicating

with anybody across the globe has become cheap and easy. Along with this,

there is another big transformation happening in the retail sector. People are

shopping online, the phenomenon being named as online retailing or B2C

(Business-to-Consumer) or e-tailing. There are players providing online

products, services and/or information.

The trends and the future

The online retailing market in India, currently pegged around Rs 255 crore,

is expected to grow to 4,000 crore by 2006-2007. According to the Internet

and Online Association, while railway, airline and bus ticketing comprises

almost 63 per cent of the market, the remaining 37 per cent comprises

categories such as books, music, DVDs and festival shopping. Going by

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these statistics, the online retail industry definitely seems to be on an

upswing.

Means of payment during online retailing

Credit card

All kinds of Electronic money, Ecash (or digital money)

Pay by mobile phone

Cash on delivery (C.O.D.)

Cheque

Money transfer / delivery on payment

Has online retailing actually taken off?

"Certainly not," says a leading Chennai-based retail expert. "Retail itself has

just evolved in India. Online retail has a long way to go," he says.

At the same, this retail expert also says that online retailing does have

potential in India, "The online players should concentrate more on frequently

used categories such as grocery items for which one doesn't necessarily want

to touch and feel the product. Even internationally, online retailing first took

off in the grocery segment." "Online retailers could also look at selling basic

fashion items such as a white t-shirt, hankies or socks which are quite

commoditized. But we haven't reached a stage where real fashion can be soldonline," he adds

"The online players should concentrate more on their logistics and

distribution, instead of just expanding their catalogues. The Indians will

definitely take some time to buy fashion or white goods on the Net," says the

spokesperson of a large format retail store in Chennai.

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Foreign Direct Investment in Retail

India with a population of more than one billion has become a magnet for

many international industries that found their growth to be stagnating due to

a saturated domestic market in their countries. With the government showing

inclination in allowing FDI for high end and grocery retailing, the idea of

permitting FDI in the Indian retail sector is slowly gaining momentum. The

Government may initially allow overseas retailers to set up shops only in

major cities. Again, there will be limits on the number of outlets for each

company, the size and nature of the outlets. Besides, FDI will be allowed in

phases and in select areas only, something that China did when it allowd FDI

in its retail sector back in 1992. An analysis on the various aspects of

permitting FDI in the Indian retail sector is presented below.

FDI in Indian retailing:

Advantages

There definitely is a strong case for permitting FDI in retailing in India. At

present, industry players as well as the government is in sync to take this

crucial and vital step, which would pave way to a structured retail industry in

India. A critical analysis of allowing FDI in the Indian retailing industry is asfollows:

Change in competitive landscape:

A study by AT Kearney on global retailing trends reports that India is

least competitive and least saturated of all major global markets. One

definite advantage of FDI inflow in retailing would be an increase in

competition. FDI can be a powerful catalyst to spur competition.

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Competition is the key to diffusing FDI-introduced innovation across

Indian retailing. India can become a giant in a short time span in food

processing and textiles.

Supply chain improvement:

Retailing is a front-end industry. Therefore, FDI investment would

drive the growth in the entire supply chain. For example, McDonalds

and Metro set up their own supply chain when they entered India by

adopting international standards for their Indian supply chain.

Investment in technology:

Technology in Indian retailing is still at a nascent stage. Widespread

use of barcode readers and computerization of records at retail outlets

is the only visible barometer of advancement in technology. Foreign

retailers currently own most cold-chains in the retailing industry. The

allowing of FDI in the retail would help in introducing state-of-the-art

retail technologies such as an advanced inventory management

systems into the market.

Manpower and skill development:

Currently, for retail is a non-glamour industry in India. Also, there

are no specific curriculum available training people in retailing skills.

Recently Pantaloons India has tied up with Wekingkars Management

Institute to offer a programme on retailing skills. Allowing foreign

invst. would therefore ensure a greater flow of retailing talent into the

retailing industry in India.

Tourism development:

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One lesson that has been observed from the growth of Dubai and

Singapore has been that a strong retailing sector can prove to be major

boost to the tourism industry. The consumer electronics retailing in

Singapore and gold retailing in Dubai are extremely popular in the

international shopping community and have acted as major drivers of

growth in these cities.

Greater sourcing from India:

Once foreign players setup their base in India, they would also start

increasing the levels of their sourcing from India. A point in case of

Wal-Marts sourcing from China grew by almost five times after FDI

was allowed in China and Wal-Mart was permitted to setup its base. A

similar trend can happen here too.

Up-gradation in agriculture:

A long term benefit of FDI in food retailing would be the transfer of

global best practices to the Indian farmer. McDonalds and Metro

already have agronomists in their team who work with the farmers and

educate them on modern practices. In India too, ITC has been working

on a similar initiative. In fact, ITC has gone a step ahead and set-up

Chaupals, where villagers can pick up grocery as well as other house-

hold items in a more organized manner.

Efficient small and medium scale industries:

A huge part of retailing comes from small and medium scale

industries, especially in the food processing sector. Permitting FDI in

retail would create a drive towards efficiency in the related back end

small and medium scale industries.

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Growth in market size:

Introduction of foreign investment is likely to be accompanied by a

huge explosion in the whole sector due to the greater spending power

and better shopping experience.

Greater productivity:

A combination of competition, industry status, better skills, greater

scale, modern technology and better upstream processes, would result

in a huge productivity growth.

Benefits to government:

There are several benefits to the government. They can be broadly

classified into three categories.

o Greater GDP:

Retailing currently contributes to almost 10 percent in the

Indian GDP and is the largest private industry. India is targeting

for its GDP to grow by 8 to 10 % per year. This requires raising

the rate of invst. as well as generating demand for increased

goods & services produced.

o Greater tax income:

Tax collection from modern format stores is much easier from

organized retail sector. Also, the implementation of Vat would

be much easier. Modern retailing formats would also create a

new set of income tax paying population, in the form of the

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skilled labour force that would be employed in the modern

format stores.

o Huge employment generation:

Retailing generates almost eight percent of the total

employment in this country. But this is still less than the 12

percent figure seen in the US and other countries where retail is

sufficiently modernized.

o Easy to buy

Modern retailing is designed not only to provide consumers

with a wide variety of products under one roof, but also of

assured home delivery and information feedback between

consumers and producers. A modern retail outlet will also make

it easy to buy on credit.

Disadvantages

There are some strong arguments against opening up the Indian retail sector.

Some of the specific reasons against permitting Foreign Direct Investment

(FDI) in this sector are as follows:

Competition for Indian retailers:

The Indian retailing market is in a state of inefficiency due to the entry

of foreign retailers. Their main fear is that the entry of MNC giants

like Wal-Mart, Tesco and Carrefour will throw the thousands of the

kirana store owners out of business, leading to millions of job losses.

High cost of capital for Indian retailers:

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The cost of capital incurred by an Indian retailer, especially the

smaller players, is significantly higher than that of foreign players. In

case of the mom and pop stores in India, availability of capital from

the formal lending sources is pretty difficult. Such a situation would

lead to a huge price disparity between the foreign owned retail chains

and local Indian retailers. Devising alternate credit delivery

mechanism in the markets can provide loans to smaller retailers at

lower rates which will reduce the cost of capital to the domestic

retailers making them more competitive

Evolvement of Franchising in India & the Road

Ahead

The retail sector in India has seen immense activity in the last couple of

years. This can largely be attributed to the availability of better

infrastructure, improved technology support and an increase in purchasing

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power among consumers. This has further led to a need for retailers to spread

beyond geographical boundaries and extend their reach to every conceivable

corner of the nation. In fact, the goal of retailers has shifted from just

capitalising on the available demand in the area that they exist, to creating

demand in new regions. In addition to this change in attitude, franchising as

a concept has also taken root and is getting stronger with time, because it

provides the ideal way to tap potential markets that might be out of reach of

a retailer. In US, almost a third of the retail sales come from franchised

business. Globally, there are over a nine hundred thousand franchised outlets

with sales exceeding a couple of trillion of dollars. In India, the industry is a

little over ten million dollars.

What is franchising?

The dictionary meaning of a 'Franchise' is the license to sell a company's

goods or services in a certain area supported by a pre-defined business

model which has been successful over a period of time across locations.

Franchising is a business model that basically implies replicating a

successful business format across a number of locations through a network

of entrepreneurs. It allows a businessman to expand his enterprise to

different markets by making use of entrepreneurial talents of people, who, so

far had not been associated with the enterprise.

Indian Scenario

India being a geographically diverse country, poses numerous problems for

retailers considering expansion. This is where franchising steps in. In fact,

with time franchising has forayed into all industries from food, apparel, fuel

and education to hospitality, lodging and childcare. The concept initially

started emerging in India in the 1990s, was pioneered by the IT education

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sector. In spite of its presence in the nation for over two decades, franchising

is still at a very nascent stage. However, reportedly, this industry has clocked

the growth rate of 25-30 per cent and is the second fastest growing industry.

Also, according to research studies, 45 per cent of the sales come from

franchised business. At the same time, India has the largest density of retail

outlets in the world. The ideal way of expanding the reach of these outlets is

through franchising. These facts clearly indicate the scope available for

franchising in the country. A number of international companies have

forayed into the country.

Though the concept of franchising has

been existing in India for some time

now but after the arrival of the MNC's

like McDonald's, Nike, Levi's,

Domino's, Indian entrepreneurs and

companies have woken up to explorethe franchising route. Despite this, one can safely say that Franchising in

Retail has just taken off in India. Currently, franchise businesses in India

contribute a very small percentage to the country's GDP. It all started off

with the apparel and footwear segment where we saw the entry of

international brands like Nike, Adidas, Reebok and then the other sectors

took off. Namely, IT Education, Preparatory Education, F&B and morerecently the Entertainment industry

Today, even with over 1000 odd franchisors in the country, both domestic

and international, the industry has yet to take off in a big way. In addition to

the market phenomenon, the government hasn't been able to recognize

franchising as an industry. It is still governed by the age old contract act

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unlike other countries where one can get to see a full fledged franchise

governing body supporting both the franchisors and franchisors equally.

Over the last decade, it has been noticed that a number of operators whohave joined the franchise bandwagon have started evaluating franchising as a

growth option. The industry estimates a turnover of Rs.10,000-plus crore

from the Franchise sector itself, so the scope is humungous but there are

areas where we need to be geared up keeping in mind the growth potential.

In fact, the franchise route has pushed several Indian firms like Tropical

Clothing Co., JD Institute of Fashion Technology, Amoretto's Retail and

others to eye the international market in a big way. A lot amongst our home

grown brands are looking at multiple arrangements through Master

Licensing, Joint Ventures both in the domestic markets and internationally,

which goes to prove that the franchise industry is here to stay. The Deal is

very simple - For the Franchisor; it is the fastest and cheapest method to put

his product to millions of people wherein otherwise he would have to invest

huge time, capital, resources etc. on a daily basis. For the Franchisee; he gets

a business system which is proven to be successful over a period of time

across locations, gets a bigger share of profits rather than sitting on his rental

income and of course social recognition.

Sector analysis

Apparel & Footwear:

The more popular and one of the first few sectors to adopt the franchising route, has

multiplied since it first came into existence. Initially, it had the likes of the Batas and the

Raymonds, who experimented the franchise route but now you see a large number of

brands like Lee, Wrangler, Allen Solly, Nike, Reebok, Zodiac, Wills, Tommy Hilfiger,

Arrow, Khadder, entering the retail market in India through the franchise route.

Jewellery & Watches:

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Apart from the apparel retail, the specialty retail segment has seen a major boom recently.

It began with Titan and Tanishq to start off with. After a fair amount of success, a large

number of brands like Oyzterbay, Carbon, Orra, Ethos have come into existence and have

adopted the franchise route for a faster market penetration.

In addition to the franchise format, lots of these brands have taken to the company-

owned-and-operated format or hybrid formats since the business involves large

inventories resulting in huge capital investments, especially in the premium and

metropolis locations.

Home:

Another sector is the Home Furnishings sector which has seen a huge growth in the past

five years, with brands like Style Spa, Durian, Kitchen By Design, the Welspun Group's

Spaces retail brand, and others venturing into the retail segment. The formats on which

this sector operates, is basically Product Distribution and have adopted pure franchise

models with the franchisee involvement as the prime objective, since the business is more

personalised and the response to the customer demands / requirements are the key factors

for the success / failure of this business.

Telecom:

The Telecom or the Communications industry is one which has seen humungous growth

in the past decade. From Rs. 32 to 50 Paisa a minute of call rates, the telecom industry

has come a long way. With players like Idea, Airtel, Hutch, Reliance, TATA Indicom in

the foray, the telecom industry has become going strong with each year passing. All the

players have taken to the franchise route to service their customer base, with maximum

support to the franchise partners.

Education:

In India, the education sector actually pioneered the concept of franchising, with the

initial outburst of the IT Training center.

Typically, in the education sector franchise model the franchisee makes all the

investments as well as the day-to-day operations of the business. An average franchise

requires an investment to the tune of Rs.15-16 lakh, depending on the location andcategory of education. Operationally, the franchisor provides support like site selection,

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layout designing, staff recruitment & training, course material, advertising & marketing,

certifications etc and the franchisee is responsible for all day-to-day activities of the

center, local marketing, financial administration etc

The desired franchisee profile is someone from the education background so that the

franchisee understands the system in a better way and can double up as the faculty also.

The education franchise sector was sub-divided into the following categories: IT Training

including Software & Hardware (Aptech, NIIT, Jetking, and IIHT), Vocational Education

(JD Institute, NIFD, and Pearl School of Fashion), Preparatory Training (Brilliant

Tutorials, IMS, Aakash Institute etc.), Kids Education (Mother's Pride, Euro Kids,

Shemrock.

Health & Beauty

The Healthcare Services sector is

witnessing rapid growth across the world

reaching the $8 trillion market. The Indian

market is estimated to be around Rs.8,000

crore annually and growing at a rate of 10

per cent per annum, with the entry of

several private players in the healthcare

business in the last decade, things seem to

be improving shifting from the age-old

state run clinics/ hospitals to state of the art

health clinics/ hospitals / pharmacies. Some of the names include Apollo Healthcare,

Escorts, Ranbaxy Laboratories, Max Healthcare others

Besides these players in the healthcare services sector, there are several else who have

come up in allied services like diagnostic centers, pharmacies, etc.

A brief analysis of the various sub-sectors & opportunities within healthcare is

provided below:

Healthcare Services

Healthcare services are divided into three sub-categories primary, secondary andtertiary. Currently, there is a fair amount of activity happening in the primary

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category. Apollo Health & Lifestyle Limited is rolling out its franchised Apollo

Clinics across the country. These clinics provide primary healthcare services,

diagnostic facilities and a pharmacy under one roof. They follow a pure franchise

model whereby the franchisee has to invest in the clinic as well as manage the

day-to-day operations of the same. As far as secondary & tertiary sectors are

concerned, most of the activity is limited to management contracts, whereby the

franchisee / investors are required to set up the facility as per the specifications of

the healthcare service provider. The service provider provides its brand name and

expertise and is also responsible for the day-to-day operations of the same. Some

of the players taking this route are Apollo Hospitals and Max Healthcare.

Diagnostic Services

Diagnostic services is another area where a number of players have entered in the

last few years. These include Dr. Lal Path Labs, Dr. Batra's Homeopathy Clinics.

Typically the business model followed by most of these players is a hub and spoke

operation. In almost all cases, the collection centers are franchised out. In some

cases, even basic diagnostic tests are also handed over to the franchisees.

However, in all the cases, the companies themselves control the critical diagnostic

facilities.

Retail Pharmacies

At the retail level, it is the pharmacy chains that have started emerging now.

Major players include 98.4, Guardian Pharmacy, CRS Health, Health & Glow,

the Trust Chemists & Druggists stores etc. All these companies are trying to fill

the gap of reliable pharmacies with a focus to be much more than a normal

neighbourhood chemist through the wider selection of products and services they

offer. Their franchise models are working in the typical specialty retail franchise

style, which means that the franchisee invests in premises, interiors & stocks and

manages the show on a day-to-day basis. The franchisor supports by way of

advertising, sourcing and other corporate functions.

Beauty & Slimming

Some of the major brands within this sector include Kaya Skin Clinics, VLCC,

Personal Point and Lakme Salons. Reasons are quite obvious the need to look

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and feel good!! And, the rapid growth of various national and regional beauty

brands bears testimony to the fact that both consumers and franchisees are lapping

up this sector. The services offered by most of these brands include slimming,

beauty services, hair care, skin care, and fitnessThe typical franchise formats

within this sector vary from management contracts to joint ventures to pure

franchises.

Catering Services

The Indian scenario: Explosion of coffee shops; the growing numbers of pubs &

bars; the success of the South Indian cuisine restaurants; and the crowds at the

local dhabas prove the fact that the Indian consumer is willing to spend money on

eating out. The increased acceptability of eating out even within conservative

families is demonstrative of the changes in our socio-cultural behavioral patterns.

Gradually, the Indian consumer is also becoming adventurous and is trying out a

variety of cuisines.

The growth whatever has been seen has been restricted to A / B Category towns

and haven't taken a pan India presence. The growth in the F&B industry in India

till date has been through company-owned-and-operated outlets which involves a

huge amount of capital investment. Companies like Barista Coffee Co. have

preferred to retain control over the standardisation of their format, in the absence

of assured logistical support and human resource skills. Arguably, franchising in

the Catering Services has never been able to take off in India because of a variety

of factors.

These include:

Logistics & supply chain mechanisms in India are still developing

Lack of skills & the attitude to manage a food business

F&B business involves fairly high investments

Despite the above-mentioned issues, several companies have already started to

experiment the franchise route to grow aggressively in the Indian market. Additionally,

the interest from overseas F&B franchisors to enter the Indian market through the Master

Franchise route is a positive sign for the F&B industry graph.

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Convenience Stores

Recently, we have seen a growth in the

Convenience store business but in spite of the

positive signs, franchising is way too far for the

sector. Right now the convenience store business

is at the experimental stage the seven Dollar

stores operating in India are representative of the

early days of convenience discount formats. in

India what is needed is a business model that takes into account the nuances of the Indian

market and be localised.

Food, Grocery & Discount Retailing

South India has led the way in Food & Grocery retailing with retailers like Nilgiri's and

Subhiksha expanding through franchise formats across states. Discounting is one feature

in India which cannot be ignored. We have seen all major brands go into the discounting

mode almost twice a year some even more often, which gets absorbed in the system.

Recently, we all have witnessed the sudden growth of Second's outlets or Factory

Outlets(e.g. The Loot Store outlets) where the discounts go on all the year around.

Typically, the Factory Outlet business is majorly a franchised business where all

companies have started exploring.

In Conclusion

The Franchising Industry received a fillip in during the 1990s due to the opening up of the

economy. Since, then, sales from franchised business have grown at an average rate of 20

30 per cent compared to an economic growth rate of 6-8 per cent. The Franchising

Association of India (FAI) predicts that the introduction and penetration of new

technology will create new opportunities for franchises. Mergers and Acquisitions will

increase as larger franchisers take over smaller ones. These factors combined with the low

rate of franchise failure and considerable return on everybodys investment, have made

franchising a major force in the Indian economy at this point.

FRANCHISING MARKET

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According to recent studies, India is the worlds second largest franchise

market and is growing at the rate of 25-30 %

Get the IT power in RETAIL

Technology is the backbone of any successful business. The proper implementation

of technology can work wonders for retail revolution.

In India, probably the retail industry is the recent to be bitten by the IT bug is retail and

the bite seems to be a hard one too. Anyone who is playing some role in the retailing

show, even a cameo, seems to be honing their IT prowess. And why not, as usage of ITnot only makes operations easier, but also makes it cheaper in the long run. Result: a win-

win solution for everyone including the consumer. Surely it's a great idea to go tech-

savvy for all - something, someone, somewhere in retailing.

But what is debatable is the scope of IT and to what extent does it make an impact?

Aspects such as the length, width and depth of IT and its role are often unclear as is its

role today and tomorrow. The answer lies in the very word IT...Information Technology.

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Information rules and the technology that brings it to notice with efficacy, decides the

rulers.

Organized retailing is not just selling various goods under a roof displayed in an

organized fashion. It is a whole new paradigm adopted to facilitate an enriching

experience for the entire activity of goods exchange between a producer and consumer in

an efficient manner. It optimally uses the entire supply chain, the benefits of economies of

scale and scope and passes them judiciously to the customer. Due to the volumes

involved, one often finds by activity-based costing that even at regular store prices, these

retail chains can maintain a healthy margin despite the costs of establishing and

maintaining such elegant looking retail outlets at various places. Therein lies the crux of

the business of organized retailing. But the margins are thin and rope tight. And with

increased competition, the margins are likely to be even thinner. Thus, technology often

provides the crucial lead. The entire supply chain, right from the supplier via distribution

centers to the customers, involves a whole lot of activities, which affect the final product

and its cost in a large way. IT helps synchronizing these activities. The purpose of any IT

implementation is to make the whole process 'SMART' (a leaf plucked from our Indian

Governance philosophy): Simple, Moral, Accountable, Reliable and Tenable. The same

can said about the purpose of IT in Retailing.

Over the years as the consumer demand increased and the retailers geared up to meet this

increase, technology evolved rapidly to support this growth. The hardware and software

tools that have now become almost essential for retailing can be into 3 broad categories.

Customer interfacing systems

Bar coding and scanners

Point of sale systems use scanners and bar coding to identify anitem, use pre-stored data to calculate the cost and generate the total

bill for a client. Tunnel Scanning is a new concept where the

consumer pushes the full shopping cart through an electronic gate

to the point of sale. In a matter of seconds, the items in the cart are

hit with laser beams and scanned. Payment through credit cards has

become quite widespread and this enables a fast and easy payment

process. Electronic cheque conversion, processes a cheque

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electronically by transmitting transaction information to the retailer

and consumer's bank.

Operation support systems

ERP System

Various ERP vendors have developed retail-specific systems which

help in integrating all the functions from warehousing to

distribution, front and back office store systems and

merchandising. An integrated supply chain helps the retailer in

maintaining his stocks, getting his supplies on time, preventing

stock-outs and thus reducing his costs, while servicing thecustomer better.

CRM Systems - The rise of loyalty programs, mail order and the

Internet has provided retailers with real access to consumer data.

Data warehousing & mining technologies offers retailers the tools

they need to make sense of their consumer data and apply it to

business. CRM (Customer Relationship Management) Systemsallows the retailers to study the purchase behavior of consumers in

detail and grow the value of individual consumers to their

businesses.

Advanced Planning and Scheduling Systems - APS systems can

provide improved control across the supply chain, all the way from

raw material suppliers right through to the retail shelf. These APS

packages complement existing (but often limited) ERP packages.

They enable consolidation of activities such as long term

budgeting, monthly forecasting, weekly factory scheduling and

daily distribution scheduling into one overall planning process

using a single set of data.

Strategic decision support systems Store Site Location

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Demographics and buying patterns of residents of an area can be

used to compare various possible sites for opening new stores.

Today, software packages are helping retailers not only in their

locational decisions but in decisions regarding store sizing and

floor-spaces as well.

Visual Merchandising - The decision on how to place & stack

items in a store is no more taken on the gut feel of the store

manager. A larger number of visual merchandising tools are

available to him to evaluate the impact of his stacking options. The

SPACEMAN Store Suit from AC Neilsen and ModaCAD are

example of products helping in modeling a retail store design.

INFORMATION REQUIRED!! We hit upon the first real incentive for retailing people

to have a upon IT system in place. the need for collaboration. Integration of

information from the point of sale (POS) system at an outlet to the desktop of a vendor

supplying the good, real-time is something that only a highly evolved ERP system can

provide. Thats the first role of IT.

Also, in an organized retail store there a large number of goods or articles available for

sales. Every mid-sized to large retail outlets deals with 30000-75000 different types of

products or Stock-Keeping Units(SKUs). Keeping a track of which SKU is getting sold

where and how much of them are getting sold and how soon would we need refilling of

stocks, is something almost impossible to handle manually. So we hit upon the second

incentive- the need for dynamic replenishment.

But all said and done, we need a sound and in-depth comprehension of the information

received to predict the future. This brings us to incentive 3: Forecasting. And finally, we

need assistance to perform the most basic management function: Planning. All these four

functions: Collaboration, Planning, Forecasting and Replenishment or the CPFR, forms

the backdrop for a technology splurge in retailing. The in-vogue concept of Efficient

Customer Response (ECR) also originates from this philosophy.

Indian retailers, in reality are far from implementing this in its true avatar. Most retailers

percent of their system, thus often reducing a full blown Management Information

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System (MIS) to a mere Merchandise Management system. Organized retailing in India is

still very young.

Most players are realizing the fact that if supply chain is the backbone, then Information

Technology serves as the nervous system. The ultimate beneficiary has to be the

customer. This is often quoted in the MasterCard way: There are some things in

business which cannot change, for everything else there is IT.

Sectoral Analysis Of the Retailing

Organized Food Retailing

In a country where there are grocery shops at every

street corner and a vegetable & fruit vendor near

each bus stop, how can organized retail of foodbecome feasible? To counter the unbeatable

advantages of convenience of a hop, skip and a

jump access and home delivery, organized retailers

seem to have just one option - offer attractive prices to the consumer. A successful

retailer's winning edge will therefore come from sourcing - how best it can leverage its

scale to drive merchandise costs down, increase stock turns and get better credit terms

from its vendors. There are obvious and hidden areas where costs can pruned and the

benefits of this lower cost of retailing can be passed on to customers as lower prices,

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which in turn should fuel demand. One way of trimming costs is if the pressure points in

the long, often unnecessary, supply chain for produce and staples can be identified and

suitably dealt with. This is easier said than done. The food supply chain in India is full of

inefficiencies - a result of inadequate infrastructure, too many middlemen, complicated

laws and an indifferent attitude.

Digest this

India is one of the largest producers of milk, fruits and vegetables in the world. Yet, the

organized food retail business in the country is among the least developed. The irony is

not so difficult to comprehend if one looks at the Indian food chain. From the farm to the

store, the links are too many and full of problems. A large chunk of fresh fruits andvegetables is lost due to lack of post-harvest handling, storage and processing facilities.

Tones of grains are wasted due to improper handling and storage, pest infestation and

poor logistics management. Intermediaries or 'middlemen' gobble up a large portion of the

earnings which should go to the farmer. Not only that, these middlemen caused delays

which in a business of perishable goods can be lethal. The result is a chain stuffed with

inefficiencies. For organized retail of food to be successful, it is important to get rid of

these inadequacies so that costs are pruned and, more important, the benefits of the gains

are passed on to the consumer.

India has seen rapid developments in several areas, most notably in incomes,

demographic shifts to younger populations and reach and exposure to media and different

cultures. Indians shell out up to 53 per cent of their incomes on food. Food consumption

has been rising at an average annual rate of about 10 per cent in nominal terms.

However, the retailing of food and staples has remained largely unchanged. Over 90 per

cent of all produce is sold via the wet markets with organized business accounting for just

2 per cent of food and staples retailing.

Although the organized players, which emerged in the late 1990s, have established

themselves quite firmly in the local markets, they have yet to make an impact on a

national level. Subhiksha is large in Chennai and has just started working its way through

Tamil Nadu whereas Margin Free operates in Kerala. FoodWorld has been the most

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adventurous of the three - having ventured into more than one state - but is concentrated

in the south.

While most observers have accepted the role of large format organized retail in clothing

and lifestyle markets, there are still some lingering doubts on how organized retail will

perform in the foods and grocery segment in India. The underlying issue is - can

organized retail in food and grocery compete with the 'mom-and-pop' stores, which offer

the unbeatable advantages of convenience of access - you are sure to find one less than

half a km from your house - and home delivery.

Subhiksha, for example, works on a formula of one store every 1.5 km (although it started

off with one store every 2 km). So these stores expect the customer to travel a bit or plan

their shopping in advance. What will make the customer do that?

Organized retail essentially can look to offer one or more of the following - better range

of merchandise, better ambience or lower prices working on economies of scale. Of these,

the last is what the large chains have focused on since it is something that a one-store

operation cannot match. Subhiksha started off as a discounter - even its stores are

designed to keep overheads low. Food World and Nilgiris seem to be treading a middle

path - some amount of discounting combined with some effort at ambience.

Looking at the trends in the last 2-3 years, discounting appears to be the direction where

food retail seems to be heading and we believe that a successful national chain will be a

discounter. While a discounter needs to keep store overheads low, its winning edge comes

from sourcing - how best it can leverage its scale to drive merchandise costs down,

increase stock turns and get better credit terms from its vendors.

According to a study on food and grocery retail market by KSA Technopak, food retail

sales make up for close to 63 per cent of total retail sales. In absolute terms, food retail

sales had grown from Rs 3,81,000 crore to Rs 7,03,900 crore when the non-food retail

sales grew from Rs 2,22,400 crore to Rs 4,19,000 crore.

Also, the food and grocery sector now accounts for 14 per cent of total organized retail,

after clothing and textiles (at 36 per cent) and watches and jewellery (at 17 per cent).

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Industry experts, however, say that soon food retailing will overtake both the categories

since food accounts for around 50 per cent of a typical households income. Also Indian

consumer are increasingly spending more on eating out as compared to 5 years ago which

clearly indicates that there is high potential for food service players.

The organized retail food and grocery sector constitutes the largest opportunity for growth

and account for 2% of total sales at present. Urbanization, working spouses, increasing

household disposable incomes and convenience of one stop shop with good ambience

drive growth of retailing in India.

Growth of retail outlets in India

Number of retail businesses grew by 26% in past 5 years

Food & food services outlets grew by 33%

Non food outlets grew by less than 30%

Source: McKinsey

Indias Food Retailers

The major formats being followed for organized food retailing in India are supermarkets,

discount stores, fresh product outlets, specialty stores, convenience stores and off price

retailers.

A. Super Markets

Food World

Food World is one of the biggest retail chains in India. The RPG group opened the firstFood World outlet on May 9 1996 at Chennai, which was a 2400 square feet store. It is

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the only national chain, having Foreign Direct Investment to the extent of 49% that is

permitted in India. Now Food World, operates as a 51:49 joint venture with Dairy Farm

International of the Jardine Matheson Group, a US $ 4.5 billion retail giant operating in

the Asia-Pacific markets with the requisite experience.

Food World has decided to concentrate more on local areas rather than to go for a

nationwide presence in its expansion plans at the beginning. South India was chosen, with

focus on Bangalore and Chennai and later in Hyderabad. With total 89 stores, in Chennai

(30 stores), Bangalore (27 stores), Hyderabad (17 stores) and Pune (7 stores), two stand

alone stores in Coimbatore and Mysore.

A typical store is between 3000-3500 sq. ft. in size and carries about 5500 items.

Foodworld handles on average 600 customers per day per store, which translates to 1.5

million transactions per month. It is estimated that the chain serves more than three lakh

families.

Food worlds merchandise is divided into six categories, fresh food, dry groceries,

processed and canned foods, household cleaning, health and beauty and general

merchandising.

Food Worlds share of the organized retail market in the cities in which it operates is

62%, clearly a dominant share. The firm expects the number of Food World stores to

increase to 125 by 2005. A smaller version, Food World Express is also planned to be

launched in future.

Nilgiris

Nilgiris took birth as a small dairy farm in Ooty in Tamil

Nadu in 1905. The present Chairman ofNilgiris, Mr.

Chenniappan, understood the opportunities before him and started the Bangalore

operation in 1939 as a small trader selling butter to the army people. Then he expanded

the business in a large scale by establishing a huge dairy farm at Erode in Tamil Nadu in

1962, which was the major step in our growth.

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Nilgiris grew gradually and presently handles 1-lakh liters of milk, 30,000 to 40,000

lobes of bread. In total we sell around 15000 products, out of which 90% are food

products. We have 26 super markets spread over different states. Bangalore, Chennai,

Coimbatore, Pondicherry, Guntur, Vishakapatnam, Vijayawada and Pune are our major

centers of operation. The companys annual turnover at present is around Rs 220 crores.

Food Bazaar

FOOD BAZAAR' a division of Pantaloon Retail

India Ltd is a chain of large supermarkets with a

difference. It was flagged off in April'02. With

store sizes ranging from 8,000 sq ft to 15,000 sq. ft.in Mumbai (two stores), Kolkata, Bangalore &

Hyderabad, it is opening more stores at Gurgaon

(Delhi), New Bombay & Nagpur.

Food Bazaars core concept is to create a blend of a typical Indian Bazaar and

International supermarket atmosphere with the objective of giving the customer all

the advantages of Quality, Range and Price associated with large format stores and also

the comfort to See, Touch and Feel the products are offered through the Mandi

atmosphere created by displaying staples out in the open, all at very economical and

affordable prices without any compromise on quality. This satisfies the Indian consumer

and comforts her before making her final buying decision. Food Bazaar offers the

Indian consumer the best of Western and Indian values

This positioning platform of Food Bazaar is evident from the higher discounts and the

wholesale price-points which is below MRP.

Truly the Indian consumer now agrees with Food Bazaar: "Ab Ghar Chalaana kitna

Aasaan.

B. Discount Stores

Margin Free Markets

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Margin Free Markets is the largest retail chain in the state of Kerala and one of the

leading retail chains in India. The first outlet of this chain started functioning on 26th

January 1994 at Thiruvananthapuram. There are currently more than 275 franchisees of

Margin Free Markets spread all over south India. The outlets are franchises and are not

actually owned by the chain.

Consumers are assured of quality, quantity and the fair price of the goods sold through the

Margin Free Markets. Any retailer can upgrade his shop into a Margin Free outlet, by

sending in an application to this society. If his application is accepted, he has to make the

necessary investment required.

These shops deal in the entire gamut of goods required by a home for its monthly

consumption, viz., grocery, food and non-food FMCG items, fruits and vegetables,

consumer goods & house hold articles.

Margin Free outlets are typical discount stores, offering one-stop-shop convenience and

self service facility at significant discount to its customers. Most of these customers, in

time turnout to be its permanent customers, by taking discount cards, which permit them

to obtain larger discounts than the non-card holders. The necessity to offer protection

against the rising prices gave birth to the idea of Margin Free Markets. The idea turned

out to be an instant success in Kerala especially because it is more of consumer state

than a producing state.

Grocery and FMCG goods are brought directly from the production units of the

neighboring states. In the process of direct purchase from farmers and manufactures, the

intermediaries are removed and apart of the margin or profits earned is disbursed among

the consumers. The distribution to the different outlets under the chain is taken as a

collective responsibility and is done with the objective to reduce the total transportationcosts.

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Subhiksha

Chennai-based Subhiksha started its service in 1997. Beginning its journey from a single

departmental store, at present this retail chain has 143 stores spread across length and

breadth of the Tamil Nadu and Pondicherry, and has earned a total turnover of Rs 235

crore in 2002-03. Subhiksha expects to close the current fiscal with a total turnover of Rs

290 crore.

According to Mr. R. Subramanian, the Managing Director of Subhiksha Supermarket and

Pharmacy, the chain expects to earn a total turnover of about Rs1200 crore in 2008-09 as

it plans to expand to other larger metros like Bangalore, Delhi, Bombay and Ahmedabad.

The retail food and pharmacy chain plans to have 550 stores in the next five years with an

anticipated investment of about Rs 145 crore for the expansion plan.

The aim of Subhiksha is to setup an outlet every 2 km in residential areas, where the

average monthly income is more than Rs 4000. The retail outlets under this chain are

mainly organized on the concept of a discount store that meets all the monthly household

needs of a family. Subhiksha not only serves its customers through its outlets alone but

also meets their demands through the home delivery concept and currently, the company

makes around 16,000 deliveries every month.

Subhiksha controls price by direct sourcing from manufacturer and farmers, tight

inventory control and logistics through the use of information technology. It has a

centralized purchasing system. This eliminates multiplicity of billings, which would occur

if the stores were to make independent purchases. It buys directly from distributors who

sell at only a small margin above the mill prices and from 150 odd manufacturing

companies.

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C. Fresh Food Outlets

Namdharis Fresh

Namdharis Fresh, a subsidiary of Namdhari seeds is involved in

the production, distribution and export of fresh vegetables and

fruits. It is growing gradually to become the leader in organized

retailing of fresh vegetables and fruits. Namdharis fresh, grows

vegetables and fruits in its own fields and green houses.

To meet the growing demand for fresh vegetables it also out

sources produce from over 2000 growers. Procured vegetables

are transported in refrigerated trucks to the air conditioned grading halls where they are

graded hygienically and packed in bulk and consumer packs and distributed through its

own outlets spread all over the city of Bangalore.. Thus by amalgamating both self

growing activities and outsourcing from large number of farmers Namdharis Fresh

aspires to become a successful organized food retailer.

Safal

The Fruit and Vegetables unit of the National Dairy

Development Board (NDDB) was set up in 1988 with the

objective of ensuring a direct link between the farmers and the

consumers. The aim is to ensure that the customer gets the

highest quality produce. The processed products of the unit are marketed with the brand

name SAFAL. The Safal Group acts as the link between the farmer and the consumer in

a procurement process that benefits both. The farmers get the most remunerative price

and the consumers get the best produce at a reasonable price. A large and ultramodern

central distribution facility was set up to handle fresh and frozen fruits and vegetables.

Initial cleaning, grading, sorting is done followed by cooling to ensure the freshness till

the product reaches the consumers.. 279 specially designed modern retail outlets have

been set up in and around Delhi to market fresh and frozen fruit and vegetables, directly

to the consumers. Each shop caters to large number of customers, with a capacity to sell

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1,600 kilos of fruit and vegetables a day. The shops are equipped with electronic

machines that automatically weigh the produce and print item wise bills.

HOPCOMSThe city of Bangalore has a population of over 6 million. During the last four decades the

population of the city grew by 600%. To cater the needs of the people in Bangalore,

Department of Horticulture of the Government of Karnataka took an initiative in 1959

and formed The Horticulture Producer and Cooperative Marketing Society (HOPCOMS)

with farmers as members. The prime objective of HOPCOMS is to promote and

encourage the development of horticultural produce.

This is achieved by selling horticultural produce through retailing and by providing cold

storage and marketing assistance to its members. The Cooperative also provides training,

technical advice and agricultural inputs to its members (farmers). The society has

gradually grown big and presently it has 11,680 member farmers.

HOPCOMS has set up retail outlets throughout Bangalore, Bangalore Rural, Mysore,

Mangalore, Tumkur, Hassan and Kolar districts. There are around 239 outlets in

Bangalore. HOPCOMS collects the horticultural produces directly from its member

farmers as per the prefixed quota and sells them in these outlets. The selling price to the

consumers too is also estimated to be about 10% less than the prevalent retailers price.

Sales have steadily increased from around Rs 10 million to reach above Rs 400 million.

Rythu bazaar

Farmers in India realize less profit due to middlemen intervention. To free the farmersfrom the clutches of middlemen, the Government of Andhra Pradesh had came out with a

new concept of establishing farmers markets called Rythu bazaar. The concept of

Rythu bazaar benefits both the producer and the consumer. Farmer brings the produce and

sells directly to the consumers and realizes better profits. On the other hand consumers

get fresh vegetables and other produces at reasonable prices as the market operations are

free from middlemen who increase the prices to many folds.

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Rythu bazaar was first established in 1999. Presently there are 97 Rythu bazaars spread

all over the state of Andhra Pradesh. The Government officials guide the farmers in

forming the proposed bazaar. After studying the need of setting up a Rythu bazaar the

State Government allots money to the Agricultural Produce Market.

As per Andhra Pradesh State Department of Marketing estimation, over 6,000 farmers

avail the benefits of this direct marketing facility. The total turnover from vegetables and

other essential commodities in these middlemen free markets is about Rs 7.5 crores per

week.

D. Speciality Stores

MTR

It was way back in 1976 that MTR (Mavalli Tiffin Room) ventured into the business of

retailing of groceries and other household general items by opening a Departmental store.

Because of the popularity gained by the company by this period of times, the MTR Group

did not face many problems in making the consumers to readily accept the products sold

by its Departmental Store. Taking this lead now it has grown leaps and bounds. They

have HACCP certificate and it is an ISO 9002 company.

The firm now has 3 stores in Bangalore, that solely deals in its products. Officials at MTR

say, with a view to make the products available, products are designed in all sizes small,

medium and big according to the needs of end users. Target customers of the group are

mainly the working women. MTR has opened its exclusive retail outlet in Bangalore in

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2001 and currently has three outlets. The company plans to open one unit in Chennai.

With the basic strategy of making the product available to the target customers, MTR also

distributes its products through various departmental stores and convenience stores.

With a wide range of product categories and with a consistency in good quality products,

MTR has made its successful presence in the South India and also in countries like U.S.A,

U.K., Gulf, Far East (Singapore, Malaysia, Australia etc. MTR brands in some categories

hold market leadership in the South of India. After being highly successful in South India,

MTR decided to tap the Western and Northern markets of India.

Indias fast food restaurants

Mc Donalds

Mc Donalds was founded by Ray Krok in 1954. Its the largest and best-known global

foodservice retailer with more than 30,000 restaurants in 120 countries serving 46 million

customers everyday.

They plan to preserve their leadership position through great tasting food, superior

service, everyday value and convenience. Their vision is to be the worlds best quick

service restaurant experience. Theyre focused on three world-wide strategies. The mostimportant is "Be the best employer for our people in each community around the world.

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McDonald's opened its doors in India in October 1996. McDonalds in India is a 50-50

joint venture partnership between McDonalds Corporation [USA] and two Indian

businessmen.

Whether it be a Burger or a tikki the key is to provide customers with affordable, good

quality product, whenever and wherever he wants it. McDonald's India has developed a

special menu with vegetarian selections to suit Indian tastes and preferences. McDonald's

does not offer any beef or pork items in India. In addition, they have re-formulated some

of the products using spices favoured by Indians. Among these are McVeggie burger,

McAloo Tikki burger, Veg. Pizza McPuffand Chicken McGrill burger.

The Videshi McDonalds is gradually getting more and more Desi to woo the Indianconsumers.

Heres kudos to someone who seems to be playing the Think Global, Act local game

just right.

Dominos Pizza

Domino's knows the rules of the pizza delivery game. Across the world, Domino's has

earned the reputation of being a home delivery specialist. Thomas Monaghan founded

Domino's with his brother James in 1960. More than 90% of its locations are franchised.

Bain Capitalcontrols 45% of Domino's.

The company is the world's #2 pizza chain (behind YUM! Brands division), with more

than 7,400 locations in more than 50 countries. It features several different styles of pizza

with a wide array of topping options, as well as additional items such as bread sticks,

cheese bread, and chicken wings. Domino's stores are principally delivery locations and

generally do not have any dine-in seating.

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Dominos Pizza India Limited spreads across India across 85 Locations in 22 Cities. In

India, Domino's has made ordering pizzas a lot more simpler by introducing a single

number across the country (dial 1600-111-123 and the call would automatically be

transferred to the nearest Domino's store). Their Sales Model is Take away and deliveries,

deliveries accounting for about 70% of their business.

Caf Coffee Day

CCD is Indias largest and premier retail chain of cafes with 250 cafes in 58 cities around

the country. It operates in Mumbai, Delhi, Bangalore, Hyderabad, Chennai, Pune ,

Mangalore, Chikmagalur etc. It is not just a chain of caf but it is part of India's largest

coffee conglomerate Amalgamated Bean Coffee Trading Company Limited.

(ABCTCL),a Rs.300 crore ISO 9002 certified company.

ABCTCL's most unique aspect is that it grows the coffee it serves in its cafs. It also

invests in coffee research and contributes 15% to India's total coffee exports. It is one of

Indias leading coffee exporters with clients across USA, Europe & Japan. The group is

poised to operate 250 caf's, 400 coffee retail stores and 3000 coffee vending machinesand post a turnover of Rs. 650 crores.

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Recognizing the potential that lay ahead on the horizon, Caf Coffee Day embarked on a

dynamic journey to become a large organized retail caf chain with a distinct brand

identity of its own. Enthused by the success of offering a world-class coffee experience,

CCD also plans to open a chain of 50 cafes overseas in 10 cities of Middle East, Eastern

Europe, Eurasia, Egypt and South East Asia by the end of 2005.

SUBWAY

SUBWAY restaurant was founded in 1965 in

Bridgeport, Conn. It was the brainchild of 17-year

old Fred DeLuca and his family friend Dr. Peter Buck. Currently there are more than

20,000 locations in 71 countries, making it the second largest fast-food franchise in the

world. Approximately 3,500 of these locations are non-traditional units such as

convenience stores, truck stops, colleges/universities, hospitals, military bases, arenas,

shopping malls, and more.

In December 2001, the first Subway restaurant in India was opened in the Saket area of

New Delhi. Due to cultural and religious preferences, some of the ingredients used by

Subway restaurants in India have been changed, but they still have a bahut swaad

(delicious) Subway sandwich made by a Sandwichwala (Sandwich Artist).

The goal is to be the largest fast-food franchise in every market just as we have in the US

and Canada and to have locations in every country of the world. Specifically,

SUBWAY Restaurants plans to open 1000 additional locations in North America each

year through 2005 and projects to have a total of 2,000 international locations

Pizza Hut

Its the largest pizza restaurant company in the world. It has 12,000 outlets in 86 countries

and more than 300,000 employees.

Their history began with one small restaurant and two

young brothers, Dan and Frank Carney. In 1958 they were

struck by inspiration and opened the first Pizza Hut in

Wichita, Kansas, USA.

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When they were setting up, they only had room for 25 seats and the restaurant sign only

had space for nine letters. They wanted Pizza in the name, which left space for just 3

more letters. Because the building looked like a hut Pizza Hut was born.

Retail tourism

Over the past years, shopping has been a significant source of inbound tourism across the

globe, particularly in South-East Asia and the Middle East. The retail tourism promotions

further benefit the overall economy of the host countries, as it aggressively captures the

tourist dollar, enhances shopping center infrastructure and gives desired impetus to the

retail sector.

The present boom in the retail and leisure sector, has paves a success way for the

countrys retail tourism sector. With close to 300 shopping centers being developed and

conceived throughout India, the economy is fast opening up and is all set to welcome the

FDI. If the Indian retail industry develops along projected lines, the countrys economy

would not only gain from certain obvious benefits of developed retail tourism, but would

also enjoy some unique advantages. Functioning on the lines similar to the retail tourism

in Dubai and Singapore, India would witness increased inbound tourist traffic, thereby

boosting domestic tourism and the performance of shopping centers. Also, a developed

retail led tourism effort in India would also promote indigenous brands and products

worldwide. Moreover, with India being the home to numerous traditional crafts, there is a

possibility of these skills receiving a boost with the proliferation of international retail

tourism.

However, to turn this dream of retail tourism in India into a reality, several immediate andcomplementing measures need to be carried out. Firstly, assurance of an active

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Health Retailing

Today when health and personal care have become commodities to be sold and promoted

en masse, a significant rise is being witnessed in entrepreneurship through health

retailing. Health centers are proliferating across India with the common aim of increasing

their client base. Hot niches like weight reduction, weight gain and general fitness are

targeted through concrete retailing strategy and a standardized model.

Organized retail is at a lamentable 2 % in India compared to a whopping 85% in USA,

45% in Thailand, 55 percent in Malaysia and 20 % in China.

Out of total retail market in India, health care occupies a meager 2% of the market share.

Since players dealing with new niches like fitness, personality grooming, weight

reduction and weight gain primarily operate in an organized retail format; their share in

the retail market is abysmally low. However, a sudden spurt in consumer sending will

certainly trigger a growth in this sector.

Health retail in vogue.

The growth in organized retail is largely driven by a young working population with a

average age of 24 years. This class likes spending money not only on its personal

grooming but fitness too. Commenting on the emerging pattern of consumer spending in

this area. New inches like personality grooming and personal care are blooming today as

a result of a growing health consciousness in the society. This trend is becoming a non

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metro, non class and non-sex phenomenon and therefore it can be said that retail is here to

stay and grow.

Market moversAlthough, health retailing has made a humble beginning in India, there are some big

payers in the market too. Prominent names like VLCC, Vandana Luthras Curls and

Curves, Talwakers Fitness Cenre, Ramma Bans, Weight-and-Watch health club, Anjali

Mukerjees Health Total and Dr. Nigams are considered to be precursors in his field. In

the fragmented health centre market, fitness and diet industry are two industries that have

branched out of the weight loss industry.

Counter medicines like multivitamins, healthy oils and gels have a lot of scope to grow.Therefore many players are also going for the low fat, low carbohydrate food market.

A comparative analysis would aptly show as to where they stand vis--vis each other

indicating the kind of service and product range they offer.

Most health retailers share common traits like defined sales territories, outstanding

customer service, innovative and protected products and have almost done away with

middlemen. They have also introduced a range of private label products to capitalize on

an already existing customer base. Most of them have also initiated a concrete retail

strategy in place fro smart entrepreneurship.

Retail Strategy

Studying consumer behavior and chalking out a retail strategy accordingly is the basic

modus operandi in use. While VLCC focuses on a common retail identity programTalwarkars concentrates on providing high end solutions through world class equipment

and premium services. The very raison detre for offering individualized care is defeated

if health services are retailed. Dr. Nigams positioning strategy is changing from the clinic

to mall format. It is all set to open a chain of slim restaurants and 100 retail counters

across different malls in India. These counters will deal with weight loss meals, packages,

machines and equipments where personal consultation and products will be offered.

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The overall size of the retail market in India is projected to grow at the rate of 36.05% by

the year 2008, out of which the organized sector in retail marketing is expected to

increase from 5000 crore to 160000 crore. According to a study conducted by The

Associated Chambers of Commerce and Industry (Assocham), India. The study also

points out that franchising will emerge as a poplar mode of retailing and will lead to

proliferation in brands with foreign and Indian companies, acquiring strong brand equity

for their products. This proliferation would definitely reflect in health retail. Also, with

foreign direct investment (FDI) poised to come into retailing, technical know-how,

availability of free money in the market and increase in quality benchmarks will boost

health retail. As is rightly observed, new entrants will find ample room in this market for

growth and expansion with this niche is yet to reach saturation point

Overview of major retailers in India

ENTERTAINMENT

FUN REPUBLIC:

What is FUN REPUBLIC?

Fun Republic is the name of the Young Adult Entertainment

Entertainment Centers coming all across India. It is a destination to an integrated

entertainment complex, where one can have fun in many a ways - movies, food or

shopping.

Fun Republic redefines fun. It's a place where young adults and families can experience

entertainment like they've never experienced before. Every Fun Republic provides variety

of choices for each age-group to thoroughly enjoy their visit to the center.

The Goal

The idea is to brand and standardize the entire leisure package so that when one can walk

into any Fun Republic in any part of the country, and know what to expect and more

importantly, be assured of a quality service and facilities.

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The aim is to harness technological developments, which play a crucial role in the leisure

industry, partly by increasing the sophistication & intensity of the leisure experience, and

partly by making the leisure experience available to a wider market.

What's in it for us?

Each Fun Republic Family Entertainment Center encompasses a gamut of entertainment

related activities. Some of the facilities that feature are:

Cinema

Shopping

Books and Music Store

Restaurants

Food Court

Cinema Snack Counter

Games

Fun Republic is currently operational in Ahmedabad, Chandigarh and Mumbai.

FAME ADLABS:

Inaugurated in April 2002, Fame Adlabs is spread over 50,000 sq ft of area and has since

strived to bring in the highest quality of entertainment to Mumbais film going audiences.

The Fame Experience gives us:

1. Pin-drop acoustics with contemporary dcor

2. State-of-the-art projection technology3. Computerized ticketing, in line with International norms of cinema ticketing

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4. The largest concessions area in the city with a 5000 sq. ft. lobby

5. On a regular basis, soups, sandwiches, samosas, rolls and pop corns are served.

Specialty chaat counter on the premise satiates the desi taste buds as well

6. Weekend specialty food counters serve delicacies that are a blend of Indian and

Western snacks and mini-meals

7. Discounts at various restaurants with unique promotional offers are constantly made

available

The theatre screens a vide variety of films ranging from Bollywood Blockbusters,

Hollywood Hits, Indian Art Movies, Indian Regional Language Movies and the best of

International Film Festivals. On an average the multiplex provides a choice of over 10

movies per day.

INOX:

Inox Leisure Limited is the diversification venture of the Inox group into entertainment

and is a wholly owned subsidiary of Gujarat Flurochemicals Ltd. The other companies in

the Inox Group are Inox Leasing and Finance Limited, Inox Air Products, and Gujarat

Fluorochemicals Ltd. The combined turnover of the INOX Group is approximately

Rs.750 crores.

Inox Leisure Ltd. has committed itself to managing or constructing approximately 15

complexes across India. Inox Leisure's mission is to be the leader in t

retailing - a study

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