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Published by: Ekta Kadav on Dec 14, 2012
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1. Introduction


What is a shopping mall?......................................4 Advantage and disadvantage Brief history Type of shopping malls Components



What are the key factors which is making shopping mall hugely successful? Effect of shopping malls on the small retailers.

3. Methodology…………………… 4. Questionnaire ………………………

13 15

5. Finding………………………………. 17 6. SWOT……………………………… 26 7. Recommendations ………………… 29

8. Conclusion ……………………………35
9. Bibliography ……………..……………………….37

Shopping malls The latest trend in the corporate universe is of the emergence of the shopping malls. Shopping malls are an emerging trend in the global arena. The first thing that comes in our mind about the shopping malls is that it is a big enclosed building housing a variety of shops or products. According to historical evidences shopping malls came into existence in the middle ages, though it was not called so. The concept of departmental stores came up in the 19th century with the Industrial Revolution. Consumers wanted a better shopping experience and this demand gave rise to the emergence of shopping malls in India. Originally the first of the shopping malls was opened in Paris. Then the trend followed in the other metros over the world, and there was a spree of shopping malls coming up at various places. In this age of mass production and mass consumption, the concepts of shopping malls is most modern method of attracting consumers. The concept of shopping was altered completely with the emergence of these shopping malls. Shopping was no longer limited to a mere buying activity - it has become synonymous with splurging time and

money. People simply go about roaming through the shopping mall in order to peep through the window of the shop and often ending up buying something they like. The consumers desire a combination of comfort and suitability which the shopping malls cater to, and so this format of shopping has become so popular all over the world, and especially so in India. The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more crowds to shopping malls, that are considered family hangout zones

Advantages of shopping malls: Increase in the growth of the organized retail sector Monumental increment in economic growth Employment generation by the organized retail sector Good competition means better products & services Disadvantages of shopping malls: The companies with superior resources would muscle out the ones inferior to them. Monopolization of the organized retail sector. .

. the emergence of shopping malls has mostly altered the lifestyle of the consumers. With the growth in income. changing attitudes. The trends to follow in the future: The shopping malls favor a growth in the Indian organized retail sector by10% within 2010 There would be different formats of shopping malls depending on the region. and also the demographic patterns favor the emergence of shopping malls.In India.

and offices. Minnesota which opened its doors in 1956. Washington. The Market Square was located in the expensive Lake Forest suburb and is thought to be one of the first planned shopping centers in the U. The facility was comprised of 28 stores. In 1950. developers are returning to the creation of open-air shopping malls. By1916. The first enclosed shopping mall was South dale Center in Edina. Today. the Northgate Shopping Center was built in Seattle. Two department stores anchored each end of the shopping center. IL. shopping . a shopping mall called The Market Square opened for business in Chicago. Outlet malls.Brief history In the United States. This shopping mall boasted two rows of stores on each side of an open-air section where shoppers could walk. most modern-day developers built enclosed shopping malls in order to create a climate-controlled shopping environment. apartments. Up until the mid 1990s. Shopping malls were built to serve consumers living in areas outside of the cities. people began moving to the suburbs during the 20th century.S.

are often built in an open-air format. .centers featuring name brand retailers selling their products at discounted prices.

Only a few theme/festival centers were listed in heavily urbanized areas. at one time. ft. but appear here because the center may have. such as San Francisco. because of their particular attractiveness or size. Relatively few community centers were chosen. lifestyle center. . Fashion/Specialty Centers Characterized as higher end. Usually two types of anchors. such as a discount department store or large specialty/discount apparel store. you will find only regional centers. Community Centers Characterized as having between 100. the new designation. superregional centers.000 and 250. fashion oriented centers between 80. Finally. and fashion/specialty centers on this Web site.Types of Shopping Malls In general. displays because of their classic-mall type appearance even though they are without a classicmall anchor store.000 sq.000 sq. ft.000 and 350. been considered a regional center.

massmerchant. ft. a department store).Lifestyle Centers A new designation that has a loose definition. junior department store. ft. . Regional Centers Characterized as having between 400.000 and 800. Usually two or moreanchors. it's a center that does not have an anchor tenant in the classic sense (that is. such as a conventional department store.000 sq. lifestyle centers increasingly have a cinema as a major tenant. Outlet Centers Characterized as manufacturers' outlet centers between 50. discount department store.000 sq. or fashion apparel store. Generally. However.000 and 400. Others have just a small collection of exclusive shops.

or fashion apparel store.ft.Superregional Centers Characterized as having over 800. mass merchant.000sq. Theme/Festival Centers Characterized as tourist-oriented. .000 sq. retail and service centers between 80. Usually three or more anchors. ft. such as a conventional department store. junior department store.000 and 250.

toiletries.cosmetics. jewelry. which is normally a plaza surrounded by the counters of the multiple food vendors . and additionally select other lines of products such as paint. and sporting goods. Department storesusually sell products including apparel. appliances. electronics. photographic equipment. furniture. hardware. toys.Components of shopping mall Food court A shopping mall food court consists of food vendors offering a selection of food. Department stores A department store is a retail establishment which specializes in selling a widerange of products without a single predominant merchandise line. At atypical food court. . food is ordered at one of the vendors and then consumed at a seatingarea.

Discountdepartment stores commonly have central customer checkout areas.Certaindepartment stores are further classified as discount department stores. . Department stores are usually part of a retail chain of manystores situated around a country or several countries. generally in thefront area of the store.

Effect of these shopping malls on the small retailers . What are the key factors which is making shopping mall hugelysuccessful II.OBJECTIVE The purpose of doing the project is to find out: I.

” says Arto Lindblom. light. the competition is amplifying. service variety. color scores and illumination. The atmosphere of shopping center created by sound registration. These factors include attainability. effortless business. a sound and even smells) now act as an advantage infighting for the buyer. . ambience. and factors on which we did not reflect earlier (color.WHAT ARE THE FACTORS THAT IS MAKING SHOPPING MALLHUGELY SUCCESSFUL ? “The success of modern shopping centers relies on a number of critical success factors. Professor of Retail and Channel Management at the Helsinki School of Economics. Honestly speaking. alongside with the professional concept create additional comfort for visitors which influences loyalty of buyers and their desire to pass more time in the shopping center. price. active marketing and cleanliness.

from the owner operated local shops and general stores to the handcart and pavement vendors together form the bulk of this sector. Retail trade.EFFECT OF SHOPPING MALLS ON THE SMALL RETAILERS ? Retail trade contributes around 10-11% of India‟s GDP and currently employs over 4crore people. millions are forced to seek their livelihood in the informal sector. In the absence of any significant growth in organized sector employment in India in the manufacturing or services sector. Within this. Traditional forms of low-cost retail trade. has acted as a refuge source of income for the unemployed. which has been a relatively easy business to enter with low capital and infrastructure needs. unorganized retailing accounts for 97% of the total retail trade. Organized retailing has witnessed considerable growth in India in the last few years and is currently growing at a very fast pace. A recent .

is projected to reach $ 23 billion by 2010.4 billion industry in 2006. This has serious implications for the livelihood of millions of small and unorganized retailers across the country. supermarkets and discount stores are being set up by big business groups besides the ongoing proliferation of shopping malls in the metros and other large cities. A number of large domestic business groups have entered the retail trade sector and are expanding their operations aggressively. Several formats of organized retailing like hypermarkets. estimated as a $ 6. Need to Regulate Organized Retail Large format retailing is controlled and regulated across the world. The share of organized retail in overall retail sales is projected to jump from around 3% currently to around 9-10% in the next three years. The experiences of Western European as well as South East Asian countries are particularly relevant in this .KPMG survey report prepared for the FICCI states that organized retail.

Around 95% of the 12 million shops in India have a floor area of less than 500 square feet.5 lakhs in the number of self-employed retailers in urban India (by current weekly status) between . Regulation in India therefore needs to be more stringent and restrictive. There are broadly three ways in which the adverse impact of the rapid and unbridled expansion of organized retail can be felt:1. The NSSO survey sale ready indicate a significant decline of more than 12. much higher than the European or Asian countries. The impact of the growing market share for organized retailers is being manifested in the falling sales for the unorganized retailers in several places. in terms of displacement of unorganized retailers and loss of livelihoods is enormous. The potential social costs of the growth and consolidation of organized retail. India has the highest shop density in the world with 11 shops per 1000 persons.regard. However. an appropriate regulatory framework for the organized retail sector in India has to be framed keeping in mind the Indian specificities.

1999-2000 and2004-05. Further acceleration in the growth of organized retail would eventually result in making business unviable for a large number of unorganized retailers. small-scale retailing still provides livelihood security to around 20 million urban workers and 12 million rural workers. Contract farming. which is the preferred mode of operations as far as the agri .2. credit and technology supplied by the food retailer sand end up being at their mercy in terms of prices for their produce and quality standards. The experience of the farmers of developing countries with the giant food retailers has been particularly bad. The farmers become dependent upon the inputs. In the backdrop of huge unemployment and underemployment persisting in India. Giant organized retailers use their monopoly buying power to squeeze small producers of agricultural as well as manufactured products. particularly in the event of a slowdown in consumption growth and retail sales. Their displacement would further worsen the unemployment scenario.

especially the lower income groups. Land use patterns change drastically. In the backdrop of the crisis being already faced in Indian agriculture. has led to agrarian distress in many places.3. Moreover. often in violation of city plans. the proliferation of large format retailers will only accelerate the undesirable trends of predatory real estate development and unsustainable pressures on urban infrastructure and the environment. The proliferation of large format retail outlets reshapes the urban landscape in myriadways. proliferation of large format retail stores would kill competition. lead to closure of . and the pathetic state of urban infrastructure.business corporations and food retailers are concerned. Rather than enhancing choices for the consumers. uncontrolled diversification in agriculture away from food grains can imperil food security. Given the unplanned and chaotic path of urban development witnessed in India over the past decade and a half. the entry of large retailers with monopsonistic control can aggravate the situation.

input and output markets are not encouraged by the entry of large corporate retailers.neighbourhood markets and make consumers solely dependent upon the organized retailers. Organized retail cannot be allowed to grow in a way. also have to be protected by preventing the emergence of local monopolies/monopsonies. jeopardizing livelihoods in the absence of other employment opportunities. which displaces existing unorganized retailers. This would also increase the propensity to use private vehicles for shopping thus leading to more pollution. It has to be ensured that competition is not stifled and potentially monopolistic practices incredit. undue pressure on urban infrastructure and the environment arising out of the proliferation of large format retailers has to be prevented. . Regulation of the organized retail sector has to address all these areas of concern mentioned above. Moreover. especially farmers. The interests of the small producers.

effortless business. And for finding out the impact of these malls on the small retailers we need to interview some small retailer and know their opinion and position . we also need to interview the customer and ask them about their choice and preferences like what are the thing they like about the shopping malls that includes (variety. we have to also find out the what is the impact of these malls on the small retail shops.METHODOLOGY For finding out various details of our project we have to find the various factors which is making the shopping malls so attractive to the customer. We have to visit various shopping malls and by observation method we have to find out the various factors which is making these malls so attractive to the customer. cleanliness. is it the huge variety attainability. price shopping environment. attainability) etc. active marketing and cleanliness . service variety ambience. service.

In addition. . on most customer satisfaction projects we look to: Define customer service Measure customer expectations Measure customer perceptions Identify gaps between expectations and perceptions Identify priorities for improvement SWOT analysis of retail.

Questionnaire For finding out the objective. Where do they do their regular monthly shopping? . Spencer. 1. city center.while going for shopping? 2. sex and economic class from 5 shopping malls (big bazaar. What according to them are the factors which influence their behavior . 30 customers of different age. a small survey has been done by me. When asked what are the things they liked about shopping malls? 3. south city mall and subiksha) that I have visited based on their response this is what I have found. When asked.

When asked whether they are aware of the condition of the small retailer due to these shopping malls? 5. When people from the young age group were asked where they prefer shopping andwhy.4. this is what we found? .

When asked. When asked about the strategies they are adopting to fight with the situation? 4. When asked should the government interfere in between and give them protection? . shop owners when asked about the effects on their business when ever there is a shopping mall around the area 2. who according to them are the customers who are still loyal to them 3. 1.After interviewing 10 small retail shop owner from various parts of the city this is what I found.

while going for shopping? Following are the important factors according to them: . what according to them are the factors which influence their behavior .FINDINGS 1.

p r i c e a n d s e r v i c e 29%-variety 20%.2. When asked what are the things they liked about shopping malls? Response in percentage 51%.Shopping environment & cleanliness .

Where do they do their regular monthly shopping? 55%45%0%0% Response in percentage come to the shopping malls go to the small retailer .When asked.

shorten lead times. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems in the retailing industry. . Retailing is a " technology-intensive" industry. They introduced two innovative logistics techniques �cross-docking and EDI (electronic data interchange).SWOT Analysis of retail(shopping malls)… A SWOT analysis of the Indian organized retail industry is presented below: Strength: 1. Successful organized retailers today work closely with their vendors to predict consumer demand. It is technology that will help the organized retailers to score over the unorganized retailers. reduce inventory holding and ultimately save cost.

Since the stand-alone outlets were established long time back. Weakness: 1. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base. a stand-alone store has a ROI (return on investment) of 25-30%. a high street store of retail chain has an average conversion of about 50-60%.2. On the other hand.2. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25%.As a result. in contrast the retail majors are experiencing a ROI of 8-10%. . On an average a super market stocks up to 5000 SKU's against a few hundreds stockedwith an average unorganized retailer. Less Conversion level : Despite high footfalls.

ITC .a. It is estimated to grow at the rate of 25-30% p.reflecting the enormous opportunities possible in the kids and teens retailing segment. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%. While the metros have already been exploited. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by2010 making India one of the largest consumer markets of the world.000 Crore by 2010. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth.00. Percolating down : In India it has been found out that the top 6 cities contribute for66% of total organized retailing.3. and reach INR 1. the focus has now been shifted towards the tier-II cities. India will have over 55 Crore people under the age of 20 . The 'retail boom'.4. 85% of which has so far been concentrated in the metros is beginning to percolate down to these smaller cities and towns. The IMAGES-KSA projections indicate that by 2015. Organized retail is only 3% of the total retailing market in India.Opportunity : 1. 2.

Even now malls are just a place to hang around with family and friends and largely confined to windowshopping. display. . Shopping Culture: Shopping culture has not developed in India as yet. The Godrej group has launched the concept of 'agristores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers. they are parallel to a large supermarket with no or little overheads. prices andturnover. high degree of flexibility in merchandise. If the unorganized retailers are put together. attempting to provide farmers a one-stop destination for all their needs. Threats : 1.launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles.2. Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right quality of tomato for its tomato purees &pastes." Hariyali Bazar"is started by DCM Sriram group which provides farm related inputs & services.

Recommendations Framework for a National Policy on Regulating Organized Retail Small retailers need protection and policy support in order to compete with organized retail. especially in terms of access to institutional credit and know how to upgrade their businesses. Since the operations of organized retailers impact upon various sectors of the economy. which addresses the needs of small retailers. what is required is a more comprehensive policy. However. policy guidelines should be framed . A regulatory framework for organized retail should also be framed. The policy proposes several positive steps to provide security to street vendors considering it as an initiative towards urban poverty alleviation. The Ministry of Housing and Urban Poverty Alleviation has formulated a National Policy for Urban Street Vendors.

namely Commerce. which can be enacted by the State Governments. since regulation of the large format retailers would mainly be in the domain of the states and local bodies. the UPA Government should also abandon the moves to permit FDI in retail trade through the back door. may also be considered for this purpose. The entry of giant . It is more than obvious that this proposed joint venture is nothing but a subterfuge. as in the case of the joint venture between Wal-Mart and Bharti whereby the former proposes to operate in the cash-and-carry segment while the latter in the front-end. In addition. to circumvent the existing policy regime. State Governments have to be consulted and involved in the process of framing policy guidelines. A Central legislation or a Model legislation.involving all the relevant Departments. Agriculture and Urban Development. Moreover. which does not allow FDI in retail.

Corporate entities should not be allowed to operate retail outlets below the specified minimum floor area . Any retail outlet with floor area over an appropriate minimum floor area should require prior license from local authorities (city corporations or municipalities). have already been discussed above. The UPA Government should take a categorical position on this issue.MNCs like the Wal-Mart. besides accelerating manifolds the already rapid growth of organized retail. Not allowing MNCs to operate in the retail sector should be the starting point of the national policy on retail. Carrefour etc. Some suggestions are made below which seek to address those issues: A Licensing System for Organized Retail A system of licensing should be introduced for organized retail. which need to be addressed in the regulatory framework for organized retail. would also sabotage any attempt by the Government to regulate the sector in order to protect the interests of the small retailers and farmers. TESCO. The issues.

The system should be devised in a manner so that there is transparency in the process of granting licenses in order to prevent corrupt practices. not more than X number of large format retail stores of Y format . hypermarkets. supermarkets. like discount stores. based on floor area.The authority to grant licenses should be the urban local bodies. A process of open bids for granting licenses may be considered. i. A dedicate committee/board/department should be set up by the urban local bodies. there should be separate sets of regulations for each format.e. Considering the multiplicity of formats of organized retail. shopping malls etc based on floor area. with representation from street vendors and small retailer associations. which should be empowered to grant licenses to organized retailers. Licenses for each format should be given on the basis of a population criterion. Slabs should be set for the different retail formats.

In case a license is granted for a large format retailer within an existing commercial area. However. The allotment of space to small retailers in such cases should be done by the license issuing authority. . There should be appropriate caps both on the total number of large format retail outlets that are being granted licenses in particular areas as well as on the maximum floor area for a retail outlet. The criteria may vary between states and cities depending upon the nature of the retail sector and needs of consumers. it should only be on the basis of an agreement to share a substantial proportion of its floor area with small retailers at concessional rent. Retail outlets above a certain floor area should not be allowed to operate with in existing commercial zones/areas.per Z population. before granting license for a large format retail outlet. a commonality should exist in terms of assessing the employment impact by the local authorities in a scientific as well as democratic manner.

There should be guidelines to prevent predatory pricing and below-cost sales by organized retailers. For this it is important to restrict the number of retail outlets that a single private entity can open in a city. Penal provisions. including withdrawal of licenses. Under no circumstances should a national level monopoly be allowed to develop in the retail sector. which attract large numbers of customers should have adequate parking space and should ideally be located outside city limits. should be laid down for violation of the terms and conditions of licenses by organized retailers. Government‟s Role in Preventing Private Monopolies.Giant retail outlets like hypermarkets. A mechanism should be set up where complaints against predatory pricing can be registered by small . Environmental Impact assessment should also be mandatory for giant retail outlets whose floor area exceeds a specified limit. state as well as region. A single large format retailer should not be allowed to capture a large market share.

The Competition Commission in India is not suitably equipped to handle such issues.retailers. In order to prevent the development of big private monopolies in retail trade. both at the Central as well as State levels. With a few exceptions. . A dedicated mechanism is required for this purpose. Consolidation of several Government marketing agencies in order to create a few big public sector retail chains should be seriously considered. These marketing agencies should be revived and encouraged to grow and compete with private large format retailers. Panchayati Raj Institutions (PRIs) should be involved in the administration of cold storages and procurement centres. it is also important for the Government to ensure its presence in the market. which can also invest in developing modern supply chain infrastructure. owing to various factors. these agencies have been experiencing decay. Several Government marketing agencies exist.

Tax incentives should not be provided. financial assistance or cheap credit for unorganized retailers to improve and upgrade their operations. either by the Central or State Governments. Partnerships between existing Government marketing agencies and cooperatives can also be considered. Safeguarding Farmers‟ Interests . for the setting up of procurement/distribution centres or “rural business hubs” by private players. especially in food retail where synergies exist. New retail cooperatives should also be promoted. The State Governments or urban local bodies should levy a cess on the VAT on all goods sold by large format retail outlets (including those in the public sector)in order to create a level playing field between the organized and unorganized retailers. Neither should tax breaks be provided to private players for contract farming.Encouragement should be provided to the existing retail chains in the cooperative sector. Revenues generated from the cess can be used to create a dedicated fund to provide infrastructure support.

Handing over farmland to food retailers for contract farming should not be permitted. Farmers should be encouraged to form groups or cooperatives in order to enter into contracts collectively with corporate rather than entering into individual contracts. Contract farming should be regulated and monitored by the Government to protect the interests of farmers. It should be ensured that the farmers are not denied the opportunity of selling their produce over and above the quantity specified in the contract to other . even if there is a failure in meeting contract commitments. need to be regulated carefully by State authorities and PRIs. It is also important to ensure that monoculture is avoided. all by one private player. Supply of inputs like seeds need to be monitored by the Government. Rules for contract farming should ensure that there is no possibility of farmers being alienated from their land. The processes of credit provision linked to input supplies and subsequent purchase of the crop.

providing extension services. disbursing credit and undertaking procurement. Several State Governments have amended their APMC Acts in accordance with the Model APMC Act framed by the Central Government. The scope of activities of the Government agencies would depend on the scale of operations.agencies ata price higher than what is specified in the contract. That model Act itself needs to be changed incorporating the suggestions made above. The Government should reserve the right to intervene in such contracts in situations when they are found to be operating to the detriment of farmers‟ interests. . They may range from a single information centre for Government services to various Government agencies supplying inputs.5. Farmers also need to be protected from arbitrary refusal by the contracting parties to buy their produce on grounds of „poor quality‟. State Governments should also be persuaded to do thesame. Large procurement centres created by corporate retailers should compulsorily have separate space for Government agencies.

should be closely monitored by the PRIs and the Government. . There is an urgent need to strengthen and expand the public procurement machinery into more areas and provide it with the required flexibility to ensure adequate procurement at remunerative prices. Private procurement of food grains.It has to be ensured that a single corporate retailer does not monopolize procurement operations in a district or area. The Central Government should also provide adequate funds required for the purpose. wherever it takes place. It is therefore absolutely critical that both public procurement agencies and cooperatives are given support. Private procurement of food grains by large players who can manipulate the market should be discouraged. incentives and freedom to compete with the corporate retailers. The experience of the last two years shows how the free hand given to corporate players has led to shortfalls in public procurement necessitating wheat imports. This would require special initiatives from the State Governments to reinvigorate the Government agencies.

there should be rules for public disclosure of stock holding levels. To prevent cornering of stocks by private players with the associated potential for speculation. Public agencies should be empowered to purchase food grains from the private holders at pre-specified prices if their stocks exceed a specified level .Food retailers or other agribusiness companies should not be allowed to corner and hoard food grains stocks under any circumstances.

CONCLUSION After looking at the above data we have come to a conclusion that presently there is atend of considerable increase of shopping malls in all the metro cities . 4. Items from food to clothing. Various options to the customer for choosing brand and variety. grocery to electronics are available under one roof. upper middle class people are coming for shopping because of the following reasons: 1. small towns and alarge section of middle class . Compitive price with seasonal discount various gift scheme. Better environment and improved customer service. 2. . 3. Ample scope of promoting sales and enhance brand image. 5. Customers convenience for shopping.

especially the farmers and these mall shop owners of groceries and other house hold goods are affected as considerable number of customers are shopping these items from shopping malls instead of normal market. shop owners and farmers are facing acute financial problem as their business transactions are reducing sharply.6. Scope of employment at local area for various segment. small business man. and the profit margin is slopping towards the shopping mall . Loosing employment by the employee of small shop owners. many of them who were dependent on the small shop for their living are facing the heat On one hand where the shopping malls are slowly capturing the market due their superior power and size for which they are able to attract more and more customers towards them. on the other hand due to growing trend of shopping mall . Considering mash rooming of shopping mall. Availability of parking space for their car 7.

. vegetables and some other glossary product) from shopping mall.To encounter the situation it is required to impose rule or preferably ban by the concerned authority to restrain sales of some particular items (fruit. This will give the small shop owner and the farmers some protection against the giant shopping malls. so that they can get back to their normal state.

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