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ORGANIZED & UNORGANIZED FORMATS
Retail industry in India is largely Unorganized & predominantly consists of small, independent, ownermanaged shops. There are around 5 million retail outlets in India. According to a survey by AT Kearney, an overwhelming proportion of Rs. 400,000 crore retail market is unorganized & only Rs. 20,000 crore segment of market is organized.
Modern retail formats are showing healthy growth as several retail chains have established a base in metropolitan cities. .ORGANIZED FORMATS Organized Retailing in India represents a small fraction of total retail markets. Space & rentals are providing to be biggest constraints to development of large formats in metropolitan cities since retailers are aiming at prime locations.228.7 billion. In 2001. 11. Rising incomes has led to an increased demand for better quality products while lack of time has led a demand for convenience & services. Organized retail trade in India was worth Rs. especially in south India & are spreading all over India at a rapid pace.
ORGANIZED FORMATS Demand for frozen. ready-to-cook. Organized retail sector can be divided into two segments: In-store retailers & non-store retailers. . instant. McKinsey report predicts that FDI will help retail businesses to grow to US$ 460-470 billion by 2010. located & designed to attract a high volume of walk-incustomers. There is also a strong trend in favour of one-stop shops like supermarkets & department stores. ready-to-eat food has been on rise. Non-store retailers reach out to customers at their homes or offices. especially in metropolitan & large cities in India. In-store retailers operate in fixed point-of-sale locations.
Include independent stores that are typical of unorganized retail sector across product categories. In terms of professional management & efficiency of integration with value chain.UNORGANIZED FORMATS Traditional retail formats have long been part of retail landscape of India. . There are predominately two types of traditional retail formats namely: Kirana & independent stores Co-operative & government-owned stores. traditional retail formats are better classified under unorganized retail sector.
. co-operative movement was strengthened after independence.UNORGANIZED FORMATS Independent & Kirana stores Independent & kirana stores have emerged with spread & density of population. accompanied by emergence of trading class in India. co-operative & government – owned stores Result of co-operative movement that can be traced to the pre-independence period. They are traced to generation of surplus in agriculture that needed to be sold to obtain other essential commodities by the producer. yet it was largely successful in western India.
DIFFERENT RETAIL FORMATS .
results in a high degree of competition. A majority of retail business in India are sole proprietorships and partnerships. requires low investment and little technical knowledge. a convenient location and close customer contact. Independent Retailer operates one outlet and offers personalized service. . Most independent retailers fail because of the ease of entry. poor management skills and inadequate resources. can be owned by a sole proprietor. partners or a corporation.CHARACTERISTICS OF EACH FORMAT Form of Ownership A retail business like any other type of business.
standardization and elaborate control. .systems. Retail Franchising Is a contractual arrangement between a “franchiser” & a “franchisee” . Franchise agreement gives the franchiser much discretion in controlling the operations of small retailers. specialization. purchasing and decision making are centralized. royalties & a share of the profits. Chains often rely on. the franchiser offers assistance & very often supplies as well. In exchange for fees.CHARACTERISTICS OF EACH FORMAT Retail Chain involves common ownership of multiple units.
They share purchases. shopping facilities. that have combined their financial resources & their expertise in order to effectively control their wholesaling needs. The individual retailers retain their independence. advertising planning & other functions. storage. but agree on broad common policies. Amul is a typical example of a cooperative in India. .CHARACTERISTICS OF EACH FORMAT Cooperatives A retail cooperative is a group of independent retailers.
food oriented store with long operating house and a limited number of items. bakery. books. service. Super markets diversified store sells a range of food & non food items. jams. which is an integrated combination of hours. chocolates & candy etc. advertising. CD’s etc. for fill in items such as bread. location. milk.CHARACTERISTICS OF EACH FORMAT Store Strategy Mix classified by retail store strategy mix. pickles. Consumers use a convenience store. Convenience Store generally a well situated. . film developing. some apparel items. carries small house hold appliances. & prices etc. eggs. assortment.
Pizza Hut and Nirula’s for food services. such as Audio equipment. Tanishq for jewellery and McDonalds. Beauty & Health Care. Large format apparel department stores include Pantaloon. Specialty Stores Concentrates on the sale of a single line of products or services. Jewellery. Music World for audio needs. Others in this category are: Shoppers Stop & Westside.CHARACTERISTICS OF EACH FORMAT Department Stores usually sells a general line of apparel for the family. household linens. . etc. Successful specialty stores in India include. home furnishings and appliances. Ebony & Pyramid.
(PRIL) through its hypermarket “Big Bazar”. ability to buy merchandise not available in local stores. & presence of unskilled retail sales persons who can not provide information to help shoppers make buying decisions . Pantaloon Retail India Ltd. increasing number of women workers. generally has an ambience which attracts family as whole. offers products at prices which are 25% – 30% lower than the market price.CHARACTERISTICS OF EACH FORMAT Hyper Markets special kind of combination store which integrates an economy super market with a discount department store. Non Store Retailing do not go to a store to buy& is growing very fast. reasons are.
Other examples are private insurance companies. Eureka Forbes vacuum cleaners and water filters. CHARACTERISTICS OF EACH FORMAT Telesales/Telephone Retailing involves contact between the prospect and the retailer over the phone. and credit companies etc. . Examples of in home retailing include. In Home Retailing sales transaction takes place in a home setting – including door-door selling. large number of mobile phone service providers use this method. gives the sales person an opportunity to demonstrate products in a very personal manner.
” Telebrands is a classic example of direct response retailing. MLM companies like Oriflame is also an catalogue retailing. radio & television offering an address or telephone number so that consumers can write or call to place an order. which includes ordering instructions and customer orders by mail. induce the customer to make an immediate and direct response to the advertisement to “order now. advantages include lover operating costs. . Catalog Retailing offers the merchandise in a catalogue. newspapers. lower rents. smaller sales staff and absence of shop lifting. CHARACTERISTICS OF EACH FORMAT Direct Response Retailing advertise products/ services in magazines.
rapid diffusion of internet access & usage.com. ATM’s dispensing cash at odd hours represent this form. over the internet. CHARACTERISTICS OF EACH FORMAT . are some of the many e-tailers operating today. Electronic Retailing/E-Tailing retailers communicate with customers and offer products and services for sale. & perceived low cost of entry has stimulated creation of thousands of entrepreneurial electronic retailing ventures during last 10 years or so. Amazon. machines dispense products which enable customers to buy after closing hours. E-bay .etc. Automatic Vending sold directly to customers/buyers from machines.
manufacturers are identifying. . While multinational retail chains are looking for new markets. redefining. globalization and consumer preferences. or evolving new retail formats. The existing retail houses are also gearing up to face the emerging competition from the organized sector and the changing outlook of the consumers.Emerging trends in Retail Formats Retail industry is continuously going through changes on account of liberalization. Retailers are too fast adjusting to the changing consumer preferences.
discount clubs (Subhiksha). . Big Bazaar). most of traditional eating joints in India such as Haldiram.Emerging trends in Retail Formats Consumers are not only looking for the core products or functional benefits from the retailers but also the nonfunctional benefits. which need to be compatible with their lifestyles. category killers (Home Depot. Tanishq) have all developed a successful retail models. For ex. & speciality retailers (Time Zone. Mass merchandisers (Wal-Mart. Vishal chain). Bikaner and Sagar Ratna have revised their product offerings & atmospherics on lines of multinational chains to compete with them & to serve changed expectations of consumers.
Organized retailing of mobile handset and accessories is expected to reach close to Rs. Rural market is projected to dominate the retail industry landscape in India by 2012 with total market share of above 50%. will lead the organized retailing in India. Organized retail market in India is expected to reach US$ 50 Billion mark by 2011. Number of shopping malls is expected to increase at a CAGR of more than 18. Apparel. 5000 Crore by 2010. along with food and grocery.Emerging trends in Retail Formats Small independent stores is a very common retail formats they are also undertaking large scale renovations to appeal and attract their target consumer segments. .9% from 2007 to 2015.
Emerging trends in Retail Formats .
With demographic changes like rising disposable incomes & rapidly expanding middle class. but are yet to achieve success or reach break even. International players are looking for alternative avenues to enter the Indian markets. Due to FDI restrictions.MNC's role in organized retail formats India has been ranked as the most attractive nation for retail investment among 30 emerging markets by USbased global management consulting firm A T Kearney. Indian retail sector is at an inflexion point where growth in consumption & growth of organized retailing are taking it towards higher growth. Market liberalization & an increasingly confident consumer population have attracted bigger Indian & multinational operations to make investments. .
Tesco and Carrefour to enter India. . All these factors have tempted the foreign firms such as Walmart. Timing is most important source of competitive advantage for global & regional retailers in globalization race.MNC's role in organized retail formats Indian consumption pattern & preference have undergone vast changes over years allowing foreign retailers to play. India has youngest population in the world. Knowing when to enter retail markets is key to success. with large population between 20-34 age groups in urban regions boosting demand.
poor infrastructure. Carrefour. Global retailers are continuing expansion plans as Indian consumers grow increasingly wealthy. Tesco & Casino would take advantage of more favourable FDI rules that are likely in India & enter country through partnerships with local retailers. bureaucratic hurdles & high cost of real estate are some of the challenges that overseas retailers may have to tackle in country.MNC's role in organized retail formats Global retailers such as Walmart. brand-conscience and familiar with global retail formats. High taxes. . India has become the most attractive destination for retail investment for the fourth time in five years.
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