DECLARATION

I hereby declare that the project entitled THE INDIAN RETAIL SECTOR submitted for the Degree of Master of Business Administration is my original work and the project has not formed the basis for the award of any degree, diploma, associate ship, fellowship or similar other titles It has not been

submitted to any other uni!ersity or Institution for the award of any degree or diploma.

www studygala"y com

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A&'$()*+D,+M+$-

-he success of my project report was not only with efforts but also with interest, guidance . help offered to me by others It is my duty to acknowledge with gratitude the help rendered to me by each . e!ery indi!idual with whom I interacted during the completion of the project /ist . foremost I wish to e"press my deep debth of gratitude to Mr. Rajat Mendiratta for helping me to carry out my project work

I e"press my gratitude . sincere indeptness to all faculty members of M B A for their !aluable guidance persistent encouragement . inspiration . guidance they ha!e to me Also, not forgetting the college library facilities . computer lab facilities without whose help gathering the rele!ant information would not ha!e been possible *ast but not the least I also pay my sincere thanks for guidance to those persons mentioned abo!e or not who ha!e directly or indirectly helped me into preparation of this reports -hank you all

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#1+/A&+

-he distribution of consumer products begins with the producer and ends at the ultimate consumer Between the producer and the consumer there is a middleman222the retailer, who links the producers and the ultimate consumers 1etailing is defined as a conclusi!e set of acti!ities or steps used to sell a product or a ser!ice to consumers for their personal or family use It is responsible for matching indi!idual demands of the consumer with supplies of all the manufacturers -he word 3retail4 is deri!ed from the /rench work retailer, meaning 3to cut a piece off4 or 3to break bulk4 A retailer is a person, agent, agency, company, or organi5ation which is instrumental in reaching the goods, merchandise, or ser!ices to the ultimate consumer 1etailers perform specific acti!ities such as anticipating customer4s wants, de!eloping assortments of products, ac6uiring market information, and financing A common assumption is that retailing in!ol!es only the sale of products in stores 7owe!er, it also includes the sale of ser!ices like those offered at a restaurant, parlor, or by car rental agencies -he selling need not necessarily take place through a store 1etailing encompasses selling through the mail, the Internet, door2to2door !isits222any channel that could be used to approach the consumer )hen manufacturers like Dell computers sell directly to the consumer, they also perform the retailing function 1etailing has become such an intrinsic part of our e!eryday li!es that it is often taken for granted -he nations that ha!e enjoyed the greatest economic and social progress ha!e been those with a strong retail sector )hy has retailing become such a popular method of conducting business8 -he answer lies in the benefits a !ibrant retailing sector has to offer9an easier access to a !ariety of products, freedom of choice and higher le!els of customer ser!ice

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As we all know, the ease of entry into retail business results in fierce competition and better !alue for customer -o enter retailing is easy and to fail is e!en easier -herefore, in order to sur!i!e in retailing, a firm must do a satisfactory job in its primary role i e , catering to customers 1etailers4 cost and profit !ary depending on their type of operation and major product line -heir profit is usually a small fraction of sales and is generally about ;2%<= 1etail stores of different si5es face distinct challenges and their sales !olume influences business opportunities, merchandise purchase policies, nature or promotion and e"pense control measures (!er the last decade there ha!e been sweeping changes in the general retailing business /or instance, what was once a strictly made2to2order market for clothing has now changed into a ready2to2wear market8 /lipping through a catalogue, picking the right color, si5e, and type of clothing a person wanted to purchase and then waiting to ha!e it sewn and shipped was the standard practice in the earlier days By the turn of the century some retailers set up a storefront where people could browse, while new pieces were being sewn or customi5ed in the back rooms Almost all retail businesses ha!e undergone a similar transition o!er the years

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+?+&@-IA+ B@MMA1C
-his is a project report on the topic -7+ I$DIA$ 1+-AI* B+&-(1 In order to sur!i!e in retailing, a firm must do a satisfactory job in its primary role i e , catering to customers 1etailers4 cost and profit !ary depending on their type of operation and major product line -heir profit is usually a small fraction of sales and is generally about ;2%<= 1etail stores of different si5es face distinct challenges and their sales !olume influences business opportunities, merchandise purchase policies, nature or promotion and e"pense control measures

In the INTRODUCTION, what is retailing, structure of indian retail sector, retailing format in India, e!olution of retailing, Indian scenario of retail industry, retail world wide scenario In the second chapter, the major D minor challenges of retail Industry and how they affect it

Third chapter co!ers the past present and future of the retail industry

Fourth chapter co!ers impact of retail industry in global world

Fi th chapter co!er recent trends in retail sector Si!th chapter include conclusion, bibliography, wibliography

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CERTIFICATE

&ertified that the project is a work done by Mr. NARENDRA SIN"H during the period of his study under my guidance, and that the project has not pre!iously formed the basis for the award of any degree, diploma, associates hip, fellowship or similar other titles and that it is an independent work done by his.

#laceF DateF

$ameF Mrs MA7IMA 1AI

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INDE#

CHA$TER

$ARTICULAR

$A"E NO.

CHA$TER %

INRODUCTION & RETAIL INDUSTR'

8-26

CHA$TER (

MA)OR * MINOR CHALLEN"ES OF INDUSTR'

27-33

CHA$TER +

$AST* $RESENT , FUTURE OF INDUSTR'

34-41

CHA$TER -

IM$ACT OF RETAIL INDUSTR' IN INDIA

42-48

CHA$TER . CHA$TER /

LATEST TRENDS N RETAIL SECTOR A$$ENDI#

49-53 54-57 54-56 57

&onclusion Bibliography )ebliography

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Chapter&%

RETAIL INDUSTR'
-he word I1etailI originates from a /rench2Italian word 1etailer2

someone who cuts off or sheds a small piece from something 1etailing is the set of acti!ities that markets products or ser!ices to final consumers for their own personal or household use It does this by organi5ing their a!ailability on a relati!ely large scale and supplying them to customers on a relati!ely small scale 1etailer is a #erson or Agent or Agency or &ompany or (rgani5ation who is instrumental in reaching the ,oods or Merchandise or Ber!ices to the +nd @ser or @ltimate &onsumer.

1etail is IndiaJs largest industry It accounts for o!er %< per cent of the IndiaJs ,D# and around eight per cent of the employment 1etail sector is one of IndiaJs fastest growing sectors with a E per cent compounded annual growth rate IndiaJs huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets Dri!en by changing lifestyles, strong income growth and fa!orable demographic patterns, Indian retail is e"pected to grow 0E per cent annually It is e"pected that retail in India could be worth @BK %HE20<< billion by 0<%G +merging markets such as India and &hina are the final frontier for retail taking the focus away from saturated )estern markets Bince 0<<%, >; global

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retailers entered ;< new markets, but at the same time, %H retailers left markets in 0<<E -he Indian retail industry in !alued at about K:<< billion and is e"pected to grow to K>0H billion in 0<%< and KG:H billion in 0<%E (nly three percent of Indian retail is organi5ed 1etailers of multiple brands can operate through a franchise or a cash2and2carry wholesale model -he Indian retail en!ironment has attained K 0%<bn 6uiche, witnessing a strong de!elopment pace of fi!e percent per year as per latest sur!ey by #rice )aterhouse &oopers As per the estimation 0<< malls, presenting additional E<mn s6 ft of retail space will be ready in ne"t two years +"isting retail space in %G< malls is nearly :0mn s6 ft

%.% Indian Retai0 Mar1et -he analysts foresee bright future of the retail sector A huge number of shopping malls, nearly %<<, ha!e come up in the recent past, generating 0<mn s6 ft retail space, e"tending more space of about %0mn s6 ft to it $early G<

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malls are on the !erge of completion and may be operational by the end of current financial year A forecasted number of nearly 0<< malls, in a mo!e to make additional E<mn s6 ft of retail space, will be completed within the ne"t two2years India retail industry is e"panding itself most aggressi!ely, as a result a great demand for real estate is being created Indian retailers preferred means of e"pansion is to e"pand to other regions and to increase the number of their outlets in a city It is e"pected that by 0<%<, India may ha!e G<< new shopping centers In the Indian retailing industry, food is the most dominating sector and is growing at a rate of ;= annually -he branded food industry is trying to enter the India retail industry and con!ert Indian consumers to branded food Bince at present G<= of the Indian grocery basket consists of non2 branded items -he global retail giants like )al2Mart, ,ap, -esco, Aersace, '2 MartDB+A1B, &arrefour, MA1A, /&@', /endi, $+?-, Mother &are, l'+A, -russardi, D'$C and Debenhams ha!e made plans to march in the Indian market +B#1I-, ,@+BB, &hanel, Mango and many other global marked their presence in India by implementing licensing and franchisee agreements -he global retailers on the line of control, awaiting the green signal from ,o!t to enter Indian retail market 7owe!er, the current scenario has encouraged Indian players to speed up retail e"pansion and fresh retail !entures

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&ompanies like Bhoppers Btop, -rent, 1eliance, *ifestyle, #antaloons -anish6, &rossroads, AkbarallysJ and -anish6 already ha!e planned to in!est o!er 1s E,<<<cr -rent is on the edge to take both its brands JBtar India Ba5aarJ and J)estsideJ to new cities, meanwhile BhoppersJ Btop has recently geared up for e"pansion of present ones and to add %% new stores including two hypermarkets Also, #antaloon has planned to add eight JBig Ba5aarJ malls within the ne"t G to L months After partition, 1eliance Industries *td N1I*O is substantially getting ready to enter in field of retailing 1I* is poised to emerge as the single largest player in this sector (n the other hand, -osco4s, )al2Marts or Bafeway does ultimately enter in the country Bo finally, BhoppersJ Btops, )estside, #antaloons and )est sides in coming years ha!e will face stiff competition

%.( Map o Inco2e C0asses

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STRUCTURE OF RETAIL INDUSTR'

-he retail industry continued in India in the form of 'iranas till %;L<

Boon, following the moderni5ation of the retail sector in India, many companies started pouring in the retail industry in India like Bombay Dyeing, ,rasim etc As has been mentioned earlier the retail sector in India can be widely split into the organi5ed and the unorgani5ed sector

Or3ani4ed Retai0 Sector

After E< years of unorgani5ed retailing and fragmented 'iranas stores,

the Indian retail industry has finally begun to mo!e towards moderni5ation, Bystemati5ation and consolidation -oday, moderni5ation is the catch phrase and the key to understanding retail in the ne"t decade -raditionally retailers

2006-07

%.+ Or3ani4ed Retai0 Mar1et 7a!e had locali5ed operations -his locali5ed nature of the industry is &hanging as retailers face lower growth rates and threatened profitability in

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home Markets $ew geographies help them sustain top line growth in Addition to enabling global sourcing and encasing on global ad!antages of getting the best products at optimum prices -here has been a boom in retail trade in India owing to a gradual increase in the disposable incomes of the middle class households, as a result of good performance of I-, Ber!ice and Infrastructure sectors More and more players are entering the retail business in India to introduce new formats like malls, supermarkets, discount stores, department stores and e!en changing the traditional looks of bookstores, chemist shops, and furnishing stores Or3ani4ed retai0 or2ats pre5a0ent 30o6a007 Super2ar1etsF Belf2ser!ice ><<<20<<<< s6 ft stores with shopping carts typically focused on regular groceries, household goods and personal care

H7per2ar1etsF 7uge stores o!er ><<<< s6 ft situated outside the town with ample parking space aimed for bulk purchases stocking electronics, furniture and clothing &arrefour is the global major in this format

Mass 2erchandisersF *arge destination stores that sell e!erything at competiti!e prices -hey ha!e cross2country chain operations with centrali5ed sourcing and a hub2and2spoke distribution Makro and BamJs &lub are leading players in this format

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DiscountersF Aimed at bargain buyers offering less choice but deep discount on bulk sourcing deals through controlled in!entory Aldi is the world leader in this format

Con5enience StoresF Bmall stor es located at con!enient points like petrol stations working

round the clock

%.% "ro8th o Retai0 Industr7

Unor3ani4ed Retai0 Sector

-he unorgani5ed retail sector basically includes the local 'iranas, hand

cart, the !endors on the pa!ement etc -his sector constitutes about ;L= of the total retail trade As H<= of the employment is generated in Agriculture sector, hence this form of retailing is widely seen in those areas and of course to some parts of the urban -here is a lot of hue and cry in the sector for opening of sector for direct in!estment from the foreign players, but go!ernment can not neglect the interests of small players (ne of main reason of not opening this sector to /DI is it may shrink the employment in the unorgani5ed sector and e"pand that in the organi5ed

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RETAILIN" FORMATS IN INDIA

Ma00s9 -he largest form of organi5ed retailing today *ocated mainly in metro cities, in pro"imity to urban outskirts 1anges from G<,<<< s6 ft to H,<<,<<< s6 ft and abo!e -hey lend an ideal shopping e"perience with an amalgamation of product, ser!ice and entertainment, all under a common roof +"amples include Bhoppers Btop, #yramid, and #antaloon Specia0t7 Stores9 &hains such as the Bangalore based 'ids 'emp, the Mumbai books retailer &rossword, 1#,Js Music )orld and the -imes ,roupJs music chain #lanet M, are focusing on specific market segments and ha!e established themsel!es strongly in their sectors Discount Stores9 As the name suggests, discount stores or factory outlets, offer discounts on the M1# through selling in bulk reaching economies of scale or e"cess stock left o!er at the season -he product category can range from a !ariety of perishableD non perishable goods

Depart2ent Stores9
Departmental Btores are e"pected to take o!er the apparel business from e"clusi!e brand showrooms Among these, the biggest success is ' 1ahejaJs Bhoppers Btop, which started in Mumbai and now has more than se!en large stores No!er :<,<<< s6 ftO across India and e!en has its own in store brand for clothes called Btop

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 H7per 2arts*Super2ar1ets9 *arge self ser!ice outlets, catering to !aried shopper needs are termed as Bupermarkets -hese are located in or near residential high streets -hese stores today contribute to :<= of all food . grocery organi5ed retail sales Buper Markets can further be classified in to mini supermarkets typically %,<<< s6 ft to 0,<<< s6 ft and large supermarkets ranging from of :,E<< s6 ft to E,<<< s6 ft ha!ing a strong focus on food . grocery and personal sales Con5enience Stores9 -hese are relati!ely small stores ><<20,<<< s6 feet located near residential areas -hey stock a limited range of high2turno!er con!enience products and are usually open for e"tended periods during the day, se!en days a week #rices are slightly higher due to the con!enience premium Mo6:s 9 Multi Brand outlets, also known as &ategory 'illers, offer se!eral brands across a single product category -hese usually do well in busy market places and Metros

%.- "ro8in3 For2at in India

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RETAILIN" MA$ IN INDIA

%.. Retai0in3 Map

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 RETAILIN"

E;OLUTION OF
1etailing, one of the largest sectors in the global economy, is going

through a transition phase in India /or a long time, the corner grocery store was the only choice a!ailable to the consumer, especially in the urban areas -his is slowly gi!ing way to international formats of retailing -he traditional food and grocery segment has seen the emergence of supermarketsDgrocery chains, con!enience stores and fast2food chains

-he traditional grocers, by introducing self2ser!ice formats as well as !alue2added ser!ices such as credit and home deli!ery, ha!e tried to redefine themsel!es 7owe!er, the boom in retailing has been confined primarily to the urban markets in the country +!en there, large chunks are yet to feel the impact of organi5ed retailing -here are two primary reasons for this /irst, the modern retailer is yet to feel the saturationJ effect in the urban market and has, therefore, probably not looked at the other markets as seriously Becond, the modern retailing trend, despite its cost2effecti!eness, has come to be identified with lifestyles

In order to appeal to all classes of the society, retail stores would ha!e to identify with different lifestyles In a sense, this trend is already !isible with the emergence of stores with an essentially P!alue for moneyJ image -he

attracti!eness of the other stores actually appeals to the e"isting affluent class as

)ell as those who aspire to be part of this class 7ence, one can assume that the retailing re!olution is emerging along the lines of the economic e!olution of society

It was only in the year 0<<< that the economists put a figure to itF 1s ><<,<<< crore which is e"pected de!elop to around 1s %./ )ourne7 o Or3ani4ed Retai0

L<<,<<< crore by the year

0<<E Q an annual increase of 0< per cent 1etailing in India is unorgani5ed with poor supply chain management perspecti!e According to a recent sur!ey by some of the retail consulting bodies, an o!erwhelming proportion of the 1s ><<,<<< crore retail markets are @$(1,A$IB+D In fact, only a 1s 0<,<<< crore segment of the market is organi5ed As much as ;G per cent of the E million2plus outlets are smaller than E<< s6uare feet area -his means that India per capita retailing space is about 0 s6uare feet in comparison to %G s6uare feet in the @nited Btates lowest in the world IndiaJs per capita retailing space is thus the

INDIAN SCENARIO OF RETAIL INDUSTR'

-he present !alue of the Indian retail market is estimated by the India

1etail 1eport to be around 1s %0,<<,<<< croreNK0H< billionO and the annual growth rate is E H percent 1etail market for food and grocery with a worth of 1s H,>:,;<< crore is the largest of the different types of retail industries present in India /urthermore around %E million retail outlets help India win the crown of ha!ing the highest retail outlet density in the world -he contribution of retail sector to ,D# has been manifested belowF Countr7 India @BA &hina Bra5il Retai0 Sector:s share in "D$ <in => %< %< L G

%.( Continuation to "D$

As can be clearly seen, retailing in India is superior to those of its contenders 1etail sector is a sunrise industry in India and the prospect for growth is simply huge -here are many factors that ha!e stimulated the rise of the shopping centers and multiple"2malls in a jiffy Bome of them can be listed as followsF

%. Rise in the purchasin3 po8er o Indians 2 the rise in the per capita income in the last few years has been magnificent -his has led to the generation of insatiable wants of the upper and middle class -he demand of new as well as second hand durables has risen throughout the country thus pro!iding the incenti!e for taking up retailing (. Fa5ora60e to ar2ers& retailing has helped in remo!ing the middlemen and has thus enhanced the remuneration to farmers -his is a new re!olution in the agricultural sector in India and will go a long way in amending the condition of agriculture, a major concern among policy makers + Use o credit& a typical Indian is most con!ersant with using credit cards than carrying money -his is led to shift of the consumer base towards supermarkets and make the payments in the form of credit

> Co2 orta60e At2osphere& a !isit to a retail store appears to be more soothing for the generation2C #eople and kids prefer to shop in an air conditioned -he retail industry is the second largest employer in India It currently employs about H percent of the total labor force in India Finance Minister $. Chida26ara2:s recent state2ent ?sa0aries ou3ht not to 6e 0e3is0ated@ is a welcome mo!e as most of the organi5ed retail is in pri!ate hands (nly > G= of the total retail trade is into organi5ed sector It generates about 1s EE,<<< crore NK%0 > billionO -he major and minor players desperately need to work hard in this direction so that ne"t time the figures look more decent -he go!ernment must also make an attempt to ameliorate the situation

as political instability and infrastructure namely power and roads are the major roadblocks in the path of smooth functioning of the market

$RESENT INDIAN SCENARIO

R @norgani5ed marketF 1s EL:,<<< cores R (rgani5ed marketF 1s E, <<< cores R E? growth in organi5ed retailing between 0<<<20<<E R (!er >,<<< new modern (utlets in the last : years R (!er E,<<<,<<< s6 ft of mall space under de!elopment R the top : modern retailers control o!er HE<,<<< s6 ft of retail space R (!er ><<,<<< shoppers walk through their doors e!ery week R >H global fortune companies . 0E of AsiaJs top 0<< companies are retailers R Biggest player in India is #antaloon 1etail India *imited R ,rowth in organi5ed retailing on par with e"pectations and projections of the last E CearsF on course to touch 1s :E,<<< corers N@BK H BillionO or more by 0<<E2<G

%.A Tota0 Retai0 Sa0es (BBA

RETAIL 9 CORLDCIDE SCENARIO

China& the total sales from retail market in &hina reached @BKHEE billion in
0<<E 7owe!er organi5ed retailing in &hina accounts for only 0<= of it Also the fragmentation of &hinaJs retail market is so high that top %<< retailers make up for only %< E= of the total market -he registered sales of department stores grew by 0E H= and that of con!enience stores grew by :G E= in 0<<E -he &hinese retail market is e"pected to reach new highs as the population of strong middle class is e"pected to double by 0<0< and mergers and ac6uisitions among retailers are: going in great guns -he )-( restrictions are also e"pected to ha!e a fa!orable impact on its retail sector 'ey #layers Analy5ed -his section co!ers the key facts about players currently operating in the &hina retail industry including Bhanghai Bailian ,roup, Beijing ,ome +lectric, &arrefour, )al2Mart Btores, )uhan Mhongbai ,roup, and &hina #aradise +lectronics 1etail

)apan& total annual sales for the Sapanese retail industry for 0<<: amounted
to S#C %::,0H: billion Sapan had % 0 million retail establishments in Sune 0<<> and there were >0,H:L specialty superstores -he year 0<<0 to 0<<> the annual sales per store increased by : L= -he growth was mainly dri!en by the grocery superstores but the number of superstores speciali5ing in clothes gradually came down -he organi5ed retail sector in Sapan couldnJt perform at its full efficiency because of collapse of the Jbubble economyJ in the early ;<s

Spain2 Bpain +nergy Industry Bpain energy consumption is estimated to ha!e

reached %GE Million -ons of (il +6ui!alent in 0<<G /ossil fuels are the major sources for energy in Bpain especially (il N>; E=O . $atural ,as N%; ;=O )ith the Bpanish objecti!e of energy security . di!ersity, and clean energy sources, renewable sources are e"pected to grow at rapid pace 'ey /indings T Bpain is a net energy importer, with imports accounting for ;;= of its total annual oil and natural gas consumption and E<= of its coal consumption key players in Bpain energy such as ,as $atural ,roup, &+#B ,roup, 1epsol C#/, +ndesa B A and ,amesa

%.+ Cor0d Trade Or3ani4ation

United State& 1etail is the

second2largest industry in the @ B by number of businesses and number of employees 1etail sales in the @ B Ntotal retail sales %.D US Retai0in3 For2at

include the categories of gasoline, automobiles, and food ser!iceO were up about : L= in 0<<H, to K> >; trillion N#lunkett 1esearch estimateO -he 0<<H growth was dri!en partly by higher gasoline costs as well as by deep price discounting during the &hristmas season by mass merchandisers and year2long discounting by automobile dealers

Era4i0& +merging as one of the worldJs largest retail markets -he sales in the
industry ha!e been growing strongly since 0<<: and are e"pected to continue at this momentum only o!er the ne"t few years as constantly declining inflation rate allows for continued e"pansion of real incomes Nincreasing demand for non durable consumer goodsO and credit conditions ease Nsustaining demand for durable goodsO A process of consolidation of the retail industry has been underway but o!erall, the market remains relati!ely fragmented, indicating substantial scope for the larger players to grow their market share in future -he top fi!e supermarket chains account for appro"imately ><= of total sales All the market !alues ha!e been con!erted to @BK at May 0<<H e"change rate where, % Bra5il 1eal NB1*O U @BK < >;> NAppro"O

%.F $enetration o Retai0

OE)ECTI;ES , ROLE OF RETAIL INDUSTR'

1etail is clearly the sector that is poised to show the highest growth in

the ne"t fi!e years -he sector is set for a re!olution, as both the present players and new entrants are gearing up to e"plore the market -his sector contributes %<= of IndiaJs ,D# and the current growth rate is L E= -he present si5e of the organi5ed retailing sector is appro"imately := and is e"pected to grow to 0E2 :<= by the year 0<%< -here are about :<< new malls, %E<< supermarkets and :0E departmental stores currently under construction Many players are coming up with huge in!estments, due to which the present %0 million mom2and2pop shops and 'iranas stores fear losing their business Most predictions say that the sector might reach to @BK ><<2G<< billion by the year 0<%<

-he retail sector has played a phenomenal role throughout the world in
increasing producti!ity of consumer goods and ser!ices It is the second largest industry in the @nited Btates of America in terms of numbers of employees and establishments )al2Mart, the largest retailer in the @nited Btates is also the largest employer in the @nited Btates with annual sales o!er K 0L> Billion -here is no denying the fact that most of the de!eloped economies are !ery much relying on their retail sector as a locomoti!e of growth Analysts, &+(s, and others are using consumer spending and consumer confidence data
originating from the retail sector as an indicator to gauge the status of the economy

Chapter&(

CHALLEN"ES OF RETAIL INDUSTR'

-he big challenge for the Indian retailing industry is the heterogeneity of the market It is up to us retailers to e!ol!e with consumers, predict where and what they will spend on, be there and take the highest share of their wallet and use this last leg of the economic chain to build India At #anta2loon, through our deli!ery formats, we touch E0= of the customer4s wallet My !ision is to capture where this new, young and emergent India is going to spend and capture as close to %<<= of their shopping Bo far, modern2format

retail has scaled up its presence in the metros and a few cities 7owe!er, the future will see tier2II and, maybe, e!en tier2III cities attract more retail outlets &onsumer mindset and beha!ior is changing in these cities A growing base of affluent, upwardly mobile consumers ha!e similar needs and desires as their urban counterparts and they are looking for instant gratification )ith satellite tele!ision, internet and mobile communication a!ailable in smaller cities, people are increasingly e"posed to how the 3)est4 %.%B Cha00en3es in Retai0 Mar1et

li!es -ier2II and tier2III cities present an enormous growth potential o!er the ne"t
fi!e years and are the future of modern retail in India

MA)OR CHALLEN"ES
%. A2a03a2ation or Con usion& According to -A-A Btrategic Management ,roup, India has a high density retail structure of % retail outlet per ;< people and is the ;th largest retail market in the world But the structure of the retail industry in India is in utter jumble -he parallel operation of con!enience stores, supermarkets, hypermarkets and specialty stores in the economy is bewildering According to the J)heel of 1etailing -heoryJ, certain loopholes in one of the forms of marketing can get communicated to other forms also

(. Chat to se002 Another bemusement is the category of items to be offered According to researches, >% percent of total consumption e"penditure goes to the segment of food and groceries and it accounts for HH percent of total retail sales Bo it is ob!ious that this is the most preferred section of retailers But unfortunately the foible taste bias for Jwet marketJ Ni e fresh food a!ailable through hawkersO has marred this prospect also -herefore supply chain management, storage of fresh perishable foods and persuading the customers that the food is ine"pensi!e despite being fresh are genuine challenges to the newcomers Di!ersifying the product base to consumer products such as readymade garments, furniture4s, mobiles and computers can mitigate the losses, if any from food marketing and also broaden the reach to consumers

+. Nosta03ia& Indian shopping habits are no different #eople tend to attach 6ualities like honesty, fair price, good beha!ior etc to shopkeepers with whom they ha!e been dealing right from childhood -hey find no reason to go to a distant megaspore without any genuine reason -his problem is difficult to deal with as it demands a change in long2formed mindset (rgani5ed retail outlets can o!ercome this problem by employing eligible local peoples who can interact in !ernacular language and win the confidence of people

-. In or2ation Techno0o372 -his is a major problem and India must act fast if it wishes to create a smooth field for organi5ed retailing Digiti5ation of ser!ices will make transfer of goods easy and an impro!ement in supply chain management will definitely play a significant role in attracting more consumers and less consumer grie!ances Besides, it will generate easier payments option for customer and easier money mo!ement for the &+(s of these highly di!ersified malls

MINOR CHALLEN"ES
%. Hu2an resource crunch2 the concern for insufficient manpower in the industry has been in news for the last few months -his fear is somehow unfounded -he retail industry according to recent reports is growing at a rate

of %<< percent 'ishore BiyaniJs /uture ,roup i e the Big Ba5aar chain of retail outlet alone pro!ides employment to more than %L,<<< people and is planning to e"pand its employment base to :>,<<< by Sune 0<<L If we add to this the foray by mega players like 1eliance and Bharti2)almart then the fear can surely turn into a misperception 1etailing mainly deals with hard2selling of space, trade of stocks and building of relationships Bince most of the openings are for front line shop people, a graduation will suffice $owadays many institutes also pro!ide post27B& and post2graduate retail2specific courses

(. Hindrances ro2 3o5ern2ent2 Bome political parties want the go!ernment to amend laws and impro!e curbs so that the mega players canJt openly decimate the unorgani5ed retail sector -his is a conclusion based on a myopic outlook and must be amended for a long term strategy -he fear is baseless because of the reasons mentioned abo!e -he mega stores will no doubt pro!ide employment to the less educated masses Also taking business away especially from small food !endors is more easily said than done Instead the limiting mo!e will send wrong signals to the in!estors and will ward off in!estments when the states need it most Allowing E% percent retail /DI in single brand retailing is a welcome mo!e in this direction It is e"pected that the go!ernment will create further opportunities for the organi5ed retail to

come up as home grown in!estment is always sweeter than foreign in!estment

OTHER CHALLEN"ESF
N%O *(&A-I($F

I1ight #lace, 1ight choiceI *ocation is the most important ingredient for any business that relies on customers, and is typically the prime consideration in a customers store choice *ocations decisions are harder to change because retailers ha!e to either make sustainable in!estments to buy and de!elop real estate or commit to long term lease with de!elopers )hen formulating decision about where to locate, the retailer must refer to the strategic planF R In!estigate alternati!e trading areas R Determine the type of desirable store location R +!aluate alternati!e specific store sites 0O M+1&7A$DIB+F

-he primary goal of the most retailers is to sell the right kind of merchandise and nothing is more

central to the strategic thrust of the retailing firm Merchandising consists of acti!ities in!ol!ed in ac6uiring particular goods and ser!ices and making them a!ailable at a place, time and 6uantity that enable the retailer to reach its goals

%.%% Retai0 Cha00en3e

Merchandising is perhaps, the most important function for any retail organi5ation, as it decides what finally goes on shelf of the store

:O

#1I&I$,F

#ricing is a crucial strategic !ariable due to its direct relationship with a firmJs goal and its interaction with other retailing elements -he importance of pricing decisions is growing because todayJs customers are looking for good !alue when they buy merchandise and ser!ices #rice is the easiest and 6uickest !ariable to change

>O I&onsumer the prime mo!erI

-A1,+- A@DI+$&+F

I&onsumer #ullI, howe!er, seems to be the most important dri!ing factor behind the sustenance of the industry -he purchasing power of the customers has increased to a great e"tent, with the influencing the retail industry to a great e"tent, a !ariety of other factors also seem to fuel the retailing boom

EO

B&A*+ (/ (#+1A-I($BF

Bcale of operations includes all the supply chain acti!ities, which are carried out in the business It is one of the challenges that the Indian retailers are facing -he cost of business operations is !ery high in India

 SOME $UELISHED ISSUE OF RETAIL INDUSTR'

-he retail industry is e"pected to grow into a @BD >0H billion industry by 0<%<2 FICCI

India4s retail industry, which is in the middle of rapid growth, has already scripted success stories fit to be the subject of a Bollywood film2 Eusiness

Standard

-he impact of organi5ed retailers that ha!e seen swarming of malls lately, on the mom2n2pop stores in 0< Indian cities2 Indian Counci0 o

Research in Internationa0 Econo2ic Re0ations <ICRIER>

Modern 1etailing &omprehensi!e policy !ital2 The Hindu

1etail boom triggers ancillary industry growth2 The Ti2es o India

Chapter&+

$AST* $RESENT* FUTURE OF RETAIL INDUSTR'

Before the decade of eighties, India with hundreds of towns and cities

was a nation stri!ing for de!elopment -he e!olution was being witnessed at !arious le!els and the people of India were learning to play different roles as businessmen and consumers 1etail2which literally means to put on the market, is a !ery important aspect of e!ery city )ithout a well organi5ed retail industry we would not ha!e our necessities and lu"uries fulfilled Be it our daily groceries or fashion accessories and e!erything in between, retail industry brings us the blissful e"perience of shopping -hough organi5ed retailing industry began much earlier in the de!eloped nations, India had not acti!ely participated 7owe!er with its !ast e"panse and young population, India in the 0%st century emerges as a highly potential retail market -he journey of retailing in India has been ri!eting and the future promises further growth 7ere is a complete picture deciphering the past, present and future trends of Indian 1etail Market It is widely accepted that the retail industry has undergone a drastic change in last fi!e years and there is yet more to come *et us compare the

image of Indian retailing in 0<<>2<E to that of its status in 0<<H2<L in the following tableF

Magnification of the Indian 1etail Industry

'ardstic1 Situation in B-&B. Situation in BA&BD Aalue of retail sales 1s %<,0<,<<< crore 1s %0,<<,<<< crore Annual growth rate E= E H= Aalue of organi5ed market 1s :E,<<< crore 1s EE,<<< crore Bhare of organi5ed market in the : >= > G= sector /orecasts Nafter E yearsO about (!er 1s %,<<,<<< si5e of organi5ed retail market /orecasts about growth rate of organi5ed retail market %.- Co2parison o Retai0 Industr7 crore Around :<=

1s 0,<<,<<< crore

Around ><=

-he abo!e table clearly shows that the retail market as well as the mindset re6uired for it has e"perienced a thorough re!isal in the last three years -his is just the beginning and Indians are sanguine that the sector will see rosy days in the future -his confidence has helped India ac6uire the $o % position among :< most attracti!e retailing destinations in the world according to the ,lobal 1etail De!elopment Inde" of 0<<E Nby A- 'earney, IndiaO Among emerging markets, India holds the second position after &hina in the list of most fa!ored retail destinations

$ast G Retai0 Industr7 in India

Before the decade of eighties, India with hundreds of towns and cities was a nation stri!ing for de!elopment -he e!olution was being witnessed at !arious le!els and the people of the nation were learning to play different roles as businessmen and consumers -he foundation for a strong economy were being laid, youth were beckoning new awareness in all spheres And this brought in an opportunity for retail industry to flourish /irst in the metros and major cities later to impact sub urban and rural market as well 1etailing in India at this stage was completely unorgani5ed and it thri!ed as separate entities operated by small and medium entrepreneurs in their own territories -here was lack of international e"posure and only a few Indian companies e"plored the retail platform on a larger scale /rom o!erseas only companies like *e!iJs, #epe, Marks and Bpencer etc had entered targeting upper middle and rich classes of Indians 7owe!er as more than E< = population was formed by lower and lower middle class people, the market was not completely captured -his was later reali5ed by brands like Big Ba5aar and #antaloons who made their products and ser!ices accessible to all classes of people and today the success of these brands pro!es the potential of Indian retail market A great shift that ushered in the Indian 1etail 1e!olution was the eruption of Malls across all regional markets $ow at its peak, the mall culture

actually brought in the organi5ed format for 1etailing in India which was absent earlier -o your surprise there was not a single mall in India a decade before and just a few years ago only a handful of them were stri!ing, today there are more than E< malls across different cities and 0 years from now around E<< malls are predicted to come up

$resent G Retai0 Industr7 in India

At present the 1etail industry in India is accelerating -hough India is still not at an e6ual pace with other Asian counterparts, Indian is geared to become a major player in the 1etail Market -he fact that most of the de!eloped nations are saturated and the de!eloping ones still not prepared, India secures a great position in the international market Also with a highly di!erse demography, India pro!ides immense scope for companies brining in different products targeting different consumers According to the ,lobal 1etail De!elopment Inde", India is positioned as the foremost destination for 1etail in!estment and business de!elopment -he factor that is presently playing a significant role here is the fact that a large section of Indian population is in the age group of 0<2:> with a considerably high purchasing powerV this has caused the increase in the demand in the urban market resulting in consistent growth in the 1etail business And though the metros and other tier % cities continue to sustain 1etail growth, the bu55 has now shifted from these great cities to lesser known ones

As the spending power is no longer limited to metros, e!ery tier 0 city in the country has good market for almost e!ery product or ser!ice Due to this, tier 0 cities like &handigarh, &oimbatore, #une, 'olkatta, Ahmedabad, Baroda, 7yderabad, &ochin, $agpur, Indore, -ri!andrum etc pro!ide a good platform for a brand to enter Indian market 7owe!er there are a few precautions for e!ery brand that e"plores Indian market As Indian consumers are !ery curious and ha!e a broad perspecti!e, they respond well to a new product or concept and there are !ery fair chances of a brand sur!i!ing well, but e!ery Indian consumer be it an urbanite or a small town dweller needs a feeling of !alue for money Although labeled as tight fisted, Indian consumers are great spenders once they reali5e that they are getting !alue for their money Also new product Dser!ice concepts from the western world are better adopted first by the urban Indians, the smaller markets respond well to the need based retailing rather than lu"ury concepts As the Indian retailing is getting more and more organi5ed !arious retail formats are emerging to capture the potential of the market R Mega Malls R Multiple"es R *arge and small supermarkets R 7ypermarkets R Departmental stores are a few formats which flourishing in the both big and small regional markets

As the major cities ha!e made the present retail scenario pleasant, the future of the Indian 1etailing industry lies in the rural regions &atering to these consumers will bring tremendous business to brands from e!ery sector 7owe!er as the market e"pands companies entering India will ha!e to be more cautious with their strategic plans

Future G Retai0 Industr7 in India

According to a study the si5e of the Indian 1etail market is currently estimated at 1s H<> crores which accounts for a meager : = of the total retail market As the market becomes more and more organi5ed the Indian retail industry will gain greater worth -he 1etail sector in the small towns and cities will increase by E< to G< = pertaining to easy and ine"pensi!e a!ailability of land and demand among consumers ,rowth in India 1eal estate sector is also complementing the 1etail sector and thus it becomes a strong feature for the future trend (!er a period of ne"t > years there will be a retail space demand of >< million s6 ft 7owe!er with growing real estate sector space constraint will not be there to meet this demand -he growth in the retail sector is also caused by the de!elopment of retail specific properties like malls and multiple"es According to a report, from the year 0<<: to 0<<L the retail sales are growing at a rate of L := per annum )ith this the organi5ed retail which

currently has only := of the total market share will ac6uire %E20< = of the market share by the year 0<%< /actors that are playing a role in fuelling the bright future of the Indian 1etail are as followsF -he income of an a!erage Indian is increasing and thus there is a proportional increase in the purchasing power -he infrastructure is impro!ing greatly in all regions is benefiting the market Indian economy and its policies are also becoming more and more liberal making way for a wide range of companies to enter Indian market Indian population has learnt to become a good consumer and all national and international brands are benefiting with this new awareness Another great factor is the internet re!olution, which is allowing foreign brands to understand Indian consumers and influence them before entering the market Due to the reach of media in the remotest of the markets, consumers are now aware of the global products and it helps brands to build themsel!es faster in a new region 7owe!er despite these factors contributing to the growth of Indian retail Industry, there are a few challenges that the industry faces which need to be dealt with in order to reali5e the complete scope of growth in Indian market

/oreign direct in!estment is not allowed in retail sector, which can be a concern for many brands But /ranchise agreements circum!ent this problem Along with this regulations and local laws and real estate purchase restrictions bring up challenges And with ,ood #lanning, -imely Implementation and a media campaign that touches Indian consumers any brand can go far ahead in the Indian 1etail 1e!olution

IM#A&- (/ 1+-AI* I$D@B-1C I$ I$DIA Chapter&(rgani5ed retailing is spreading and making its presence felt in different

parts of the &ountry -he trend in grocery retailing howe!er, has been slightly different with a ,rowth concentration in the Bouth -hough there was traditional family owned retail &hains in Bouth India such as $ilgiri4s as early as %;<E, the retail re!olution happened )ith the 1#, group starting the /ood world chain of food retail outlets in Bouth India )ith focus on &hennai, 7yderabad and Bangalore markets, preliminarily -he +"periment has reaped rich di!idends and the group is now foraying into other -erritories as well as (wing to the success of /ood world model of 1#, group, se!eral new models such as -rinethra, Bubhiksha, Margin /ree and others ha!e made their foray into this sector albeit at regional le!els -oday the food retail sector in India is about 1upees -en *akh &rores N@BD 0<< billionsO of which the organi5ed food retail segment is about % per cent and increasing at a pace of o!er 0<= year to year -o be successful in food retailing in India essentially means to draw away shoppers from, the roadside hawkers and 'iranas stores to supermarkets -his transition can be achie!ed to some e"tent through pricing, so the success of a food retailer depends on how best he understands and s6uee5es his supply chain -he other major factor is that of &on!enience shopping which the supermarket has the edge o!er the traditional'iranas Btores (n an a!erage a

supermarket stocks up to E<<< B'@4s against few hundreds stocked at an a!erage 'iranas stores

-hough with e"cellent potential, India poses a comple" situation for a retailer, as this is a &ountry where each Btate is a mini2&ountry by itself -he demography4s of a region Aary 6uite distinctly from others In order to appeal to all classes of the society, retail Btores would ha!e to identify with different lifestyles 7ence we may find more of 1egional players and it would take enormously long time before nation wide successful 1etail chains emerge -his is the main reason as to why the successful retail chains in the &ountries today operate at regional segments only and are not aiming at nation wide #resence, at least for the time being

In the organi5ed retail industry, the gestation periods are long, institutional funding is Difficult, and there is none or little ,o!ernment support But the belief among top 1etailer chains in the country is that the industry will see large in!estments coming once -he current ban on foreign direct in!estment is lifted But that could be two2three years Away /ood and grocery retailing is a tough business in India with margins being !ery *ow and consumers not dissatisfied with e"isting shops where they buy /or e"ample, the ne"t2door grocery shopkeeper is smart and deli!ers good customer ser!ice, though not !alue

As of now, while &hennai has about fi!e organi5ed food and grocery retail chains, other big cities such as Delhi, Bangalore, and Mumbai a!erage only two2three such chains Almost all food retail players ha!e been region2

specific as far as geographical presence is concerned in the country -o illustrate with e"amples, the 1#, ,roupJs /ood )orld, $ilgiri4s, Margin /ree, ,iant, AarkeyJs and Bubhiksha, all of which are more or less spread in the Bouthern regionV Babka Ba5aar has a presence only in and around DelhiV names such as 7aiko and 1adhakrishna /ood2land are Mumbai2centricV while Adani is Ahmedabad2centric Industry topography in India is such that spreading presence across cities is a tough call As pointed out by many e"perts, organi5ed food and grocery retailing chains going national re6uires significant in!estments 1etailing within this sector is not just about the front2end, but in!ol!es comple" supply chain and logistics issues as well

-he trend and mindset of the present retailer chains in India can be best understood by studying /ood2)orld as an e"ample, which came in first in the food and grocery retailing sector -he chain has no plans to !enture beyond the Bouthern region just yet &urrent plans are to focus on the Bouthern markets and achie!e saturation -he intention is that by 0<<E, they could look at the other regions Bubhiksha, a &hennai based discount chain, too wants to be the principal store of purchase for at least >< per cent of all consumers li!ing

within E<<2HE< meters of the store, that is, within walking distance -his makes the point !ery clear that the strategy among most e"isting retail chains of !arious formats is to completely saturate the markets where they are already established players and then mo!e on to !irtually untouched areas where the challenge of sourcing resources and e"tending their supply chain model to best suit the si5e and e"panse of the market would be a challenging task

Meanwhile, the 1#, group plans to take its new formats such as ,iant 7ypermarkets national o!er the ne"t three years ,rocery is a large component of this format, but not the only one -o elaborate on the hurdles of going pan2 Indian, fundamentally, the way a basic grocery retailing model works is that the high set2up costs in terms of setting up buyingD distribution infrastructure is gradually amorti5ed o!er a larger number of stores -he back2end costs without distribution centre costs, or what in retail jargon is called retail administration costs, should stabili5e at around 0 E per cent to : per cent of sales

-here are many problems face by 1etail industry in Indian Market -hey are followingF2 The or2at does not suit rura0 IndiaF )hile the format suits the urban areas, it does not suit the rural areas in a country like India -oday, in Indian, organi5ed retailing is confined to class A cities, the 0: largest cities About L0 per cent of organi5ed retailing comes form the top si" cities and another %0 percent from the ne"t four -hus, the top %< cities account for ;> per cent of all organi5ed retailing in India -he scattered location of consumers has been the main deterrent to the rapid spread of the idea in the rural areas $urchasin3 patterns not 5er7 conduci5eF +!en in urban centers, the

purchasing patterns of the Indian consumers differ form those of westerners )hereas in the west, the purchases are spread better o!er the month, in India #urchases are by and large made in the first week of the month -heirs perhaps has a correlation to patterns of payment of wagesV #urchasing patterns differ also because of the difference in the eating habits of people InadeHuate 3ro8th o 6randsF Inade6uate growth of brands is another factor, In India, branding was almost not2e"istent in con!enience products until recentlyV this has naturally inhibited retailing through sophisticated chains Bupply chain problemsF As suppliers are not properly organi5ed in the country, replenishment of stock poses problems for large chains Bource de!elopment also poses special problems

Eein3 a2i07 6usinessesI retai0in3 enterprises ha5e 0i2itation in e!pansionJ Cet another reason for the slow pick up of mega retailing idea in India is that all along retail enterprises ha!e been family concerns And, family businesses usually ha!e a limitation in e"pansion, E!a2p0e o ;i5e1KsV -he Ai!ek4s N/ormerly Ai!ek4s . &o O of &hennai, is an e"ample /or the past se!eral years, it remained rather small because of its family character During the three decades from %;GE to %;;E, it had just three showrooms It was a family concern and remained for a long time, a single store outfit, managed by the father and assisted by his three sons (nce the father grew old, the sons started managing the business, and because there were three sons engaged in the business, the enterprise went in for three showrooms In recent years, howe!er, it has emerged as a major chain, as it has shed its family business character, now it is actually the largest consumer durable chain in the country It has big sales !olumes and multiple locations Rea0 estate pro60e2sV 1eal estate is an integral re6uirement of large scale chain store operation (ne needs a large number of stores in each city to achie!e optimum scale Also, big chains ha!e to operate in se!eral cities 1eal estate thus becomes crucial -hat is why groups that ha!e been in real estate and hotel businesses are more comfortable in branching off into retailing /ro other firms, real estate de!elopment are a problemV they don not command property in prime locations

(ther *imitation of 1etail Industry

-he organi5ed retail industry in India is faced with stiff competition from the unorgani5ed sector -here is a shortage of 6uality real estate and infrastructure re6uirements in our country (pposition to /oreign Direct In!estment from small traders affects retail industry affects the industry Bhortage of retail space in central and downtown locations also hinders the growth of retail industry #resence of strong #ro2tenancy laws makes it difficult to e!ict tenants and this is posing problems becoming comple" time $on residents are not allowed to own property e"cept they are of Indian origin Inade6uacies in infrastructure such as lack of high 6uality road networks, power shortages and insufficient storage spaces /or settling property disputes, it consumes lot of *and2use con!ersion is time consuming and A !ery high stamp duty on transfer of property

 @BK%:<

-he retail industry loses to the tune of @BK%0< to million e!ery year

in frauds ,thefts and employee pilferage, shop lifting, !endor frauds or inacc urate super!ision despite using standard and modern security features

Chapter&.

LATEST TRENDS IN RETAIL SECTOR

-oday, retail in India is huge, close to K0<< billion, of which organi5ed retail accounts for just KG billion -his K0<< billion should become K:<< billion in the ne"t fi!e to si" years -his is a time when organi5ed retailing is just getting into full steam and the opportunity is huge (rgani5ed retail in India is e"pected to grow at ><= for the ne"t fi!e years, thanks to the nascent stage of modern retail and the 3malling4 of India

It is e"pected that by 0<%G modern retail industry in India will be worth @BK %HE2 0<< billion India retail industry is one of the fastest growing industries with re!enue e"pected in 0<<H to amount @BK :0< billion and is increasing at a rate of E= yearly A further increase of H2L= is e"pected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption It has further been predicted that the retailing industry in India will amount to @BK 0% E billion by 0<%< from the current si5e of @BK H E billion -he retail sector would generate

employment for more than 0 E million people by the year 0<%<, says an analysis by Ma Foi Mana3e2ent Consu0tants Ltd. And A '#M, report says that the organi5ed retail would grow at a higher rate than ,D# in the ne"t fi!e years

Recent Trends , Chan3es

1etailing in India is witnessing a huge re!amping e"ercise as can be seen in
the graph

India is rated the fifth most attracti!e emerging retail marketF a potential
goldmine

Multiple dri!ers leading to a consumption boomF /a!orable demographics ,rowth in income Increasing population of women 1aising aspirations F Aalue added goods sales

+.% Retai0 Ana07sis (rgani5ed retailing in India has been largely an urban phenomenon with
affluent classes and growing number of double2income households

 1ural markets emerging as a huge opportunity for retailers reflected in the

share of the rural market across most categories of consumption

&ompanies using their own web portal or tie2sups with hori5ontal players
like 1ediff com and Indiatimes com to offer products on the web

Spencer:s is also planning to set up E<< more stores by Sune 0<<L with an
in!estment of nearly @BK %0E L; million

DLF plans to in!est @BK > <0 billion o!er four years to de!elop about 0<
large shopping malls across the country

Israe0i 2a00

de5e0oper #la5a &enter $A plans to in!est @BK % 0E billion o!er the ne"t fi!e2se!en years to

+.( Retai0 Mar1et

Bi5e

set up E< malls in India

Re0iance Retai0 is going ahead with plans worth an in!estment of @BK : HH

billion for setting up 0<E stores

I- is a tool that has been used by retailers ranging from Ama5on com to
eBay to radically change buying beha!ior across the globe

E!peri2entation 8ith or2ats9 1etailing in India is still e!ol!ing and the

sector is witnessing a series of e"periments across the country with new

formats being tested out +" Wuasi2mall, sub2urban discount stores, &ash and carry etc

Unor3ani4ed retai0in3 is 3ettin3 or3ani4ed9 -o meet the challenges of

organi5ed retailing such as large cineple"es, and malls, which are backed by the corporate house such as JAnsa0sJ and J#A13 the unorgani5ed sector is getting organi5ed 0E stores in Delhi under the banner of #ro!ision mart are joining hands to combine monthly buying Bombay Ba5aar and +2food mart formed which are aggregations of 'iranas

E2er3ence o discount stores9 -hey are e"pected to spearhead the

organi5ed retailing re!olution Btores trying to emulate the model of )al2 Mart +" Big Ba5aar, Bombay Ba5aar, 1#,s

+.+ Retai0 Se32ents

Latest Ne8s o Retai0 Mar1et in India

Israeli ,iants +nter Indian 1etail Bector
Israeli mall giants, owners of retail2linked realty assets across the world, are buying into India4s money minting retail sector -el A!i!2based mall giant ,a5it ,lobe has tied up with one of the 7D/& funds to pump in K%E< million into de!eloping assets, including supermarket anchored retail play Big Bhopping ,roup, of Israel4s biggies has teamed up with *ehman Brothers 1eal +state #ri!ate e6uity to set up 3open malls4 in tier I and tier II cities Israeli tycoons and families, which raked in money from core real estate de!elopments in the @B, ha!e turned their attention to retail assets from Bao #aulo to Macedonia, as mall ownership and management pro!ides attracti!e 0<= plus annualised returns in de!eloping markets Billionair e&haim 'at5man, at the helm of ,a5it ,lobe, is no e"ception as he went on ac6uiring shopping centers from market to market

@s 1etail Major 'roger #lans +ntry into Indian 1eal +state

-he KGG2billion @B based grocery giant, 'roger is all set to enter into 1eal +state India According to reports, the company representati!es ha!e already met :2> prominent real estate companies of India for joint !entures Bome prominent sources said that 'roger is primarily interested in jointly de!eloping new /DI2compliant commercial projects or buying into e"isting

ones Interestingly, America $o : general retailer behind )al2Mart and -he 7ome Depot runs all its nearly 0,E<< supermarket stores in the @B

1eliance 1etail plans to turn Adani outlets into specialty Btores

1eliance 1etail will be changing the format of its recently purchased Adani 1etail stores into specialty stores for jewelry, medicines, eyeglasses, home furnishings, telecom and consumer electrical stores -he company has also taken in some of the e"ecuti!es onto its own team According to a senior e"ecuti!e, the stores cannot be con!erted to 1eliance /resh stores as they are too small, ranging from 0,<<<2:,<<< s6 ft, while most 1eliance /resh stores are around >,<<< s6 ft in si5e

#antaloon 1etail pulls out from ,ini . Sony

#antaloon 1etail India *td N#1I*O has officially pulled out of ,ini . Sony, a children4s wear brand and one of the first brands that 'ishore Biyani, MD of #antaloon had in!ested in Bources report that while the financial arrangement with ,ini . Sony will continue, it will break off all operational ties #antaloon had in!ested in the company with the thought that it would dri!e business on its own but unfortunately, it has not been able to work in a cohesi!e manner with #antaloon and become dependant on it @ltimately #antaloon had to e!en depute top management, including the &/( to take care of its functioning

CONCLUSION

Chapter&/

/or a start, these retailers need to in!est much more in capturing more specific market Intelligence as well as almost real2time customer purchase beha!ior information -he retailers also need to make substantial in!estment in understandingDac6uiring some ad!anced e"pertise in de!eloping more accurate and scientific demand forecasting models 1e2engineering of product sourcing philosophies2aligned more towards collaborati!e planning and replenishment should then be ne"t on their agenda -he message, therefore for the e"isting small and medium independent retailers is to closely e"amine what changes are taking place in their immediate !icinity, and analy5e )hether their current market offers a potential rede!elopment of the area into a more modern multi2 option destination If it does, and most commercial areas in India do ha!e this potential, it would be !ery useful to form a consortium of other such small retailers in that !icinity and take a pro2acti!e approach to pool in resources and impro!e the o!erall infrastructure -he ne"t effort should be to encourage retailers to make some in!estments in impro!ing the interiors of their respecti!e establishments to make shopping an enjoyable e"perience for the customer As the retail marketplace changes shape and competition increases, the potential for impro!ing retail producti!ity and cutting costs is likely to

decrease -herefore, it will become important for retailers to secure a distincti!e position in the marketplace based on !alue, relationships or e"perience /inally, it is important to note that these strategies are not strictly independent of each otherV !alue is function of not just price, 6uality and ser!ice but can also be enhanced by #ersonali5ation and offering a memorable e"perience In fact, building relationships with customers can by itself increase the 6uality of o!erall customer e"perience and thus the percei!ed !alue But most

importantly for winning in this intensely competiti!e marketplace, it is critical to understand the target customerJs definition of !alue and make an offer, which not only delights the customers but also is also difficult for competitors to replicate

+.. Retai0 Touches Econo27

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