PERSPECTIVE

RETAIL MANAGEMENT IN INDIA
G Ramesh Babu

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A dose of refonns in India have been changed the entire economy of super power house of Asia. India is a sleeping lion in Asia. A lion appearance is enough to control the situation in its environment. Incredible but true, way back in 1700, India was actually the world's largest economy accounting for 22.6% of world income, second only to china. Three hundred years on, it is among the handful at the bottom and just chips in with just around 5% of the world's income. India and china are the locomotives of the global village. They are powerhouses of digital global economy. They pull the economy in the right direction with competing each another. China is a friendly enemy and throwing challenges towards other nations. India and china are the two demographic giants of the planet. Together they count close to 250 crores of inhabitants, representing more than 37% of the world population. They are about to become economic giants and are shaking traditional power relations in the global arena India has the second largest population of able-bodied men and women in the world. The estimated workforce is 46 crores in overall population of about 108 crores. The unemployment present rate is 9 % in India. Market is a reflection of the customer's needs and desires. The customer is king in the market. India and china are the two biggest global markets for all business enterprises. Globalization is a worldwide battle for the commercial enterprises. An expanded international flow ofgoods, capital and labor creates significant opportunities for improving the material welfare of the most disadvantaged people in the poorer countries of the world. Promoting greater global integration by simply eliminating trade barriers and subsidies that discriminate against the products of the poorer countries would significantly reduce poverty. Refonns are not accidental but they are incidental. The wave of refonns yields in different ways to our digital economy. The traditional economy has been changed. Now the digital economy stimulates higher level of gross domestic product and the stock markets crosses 18,000 points of sensex which is a memorable journey in the Indian stock markets. The strong dose of refonns, good
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monsoons, and flow of foreign funds put together to reach the higher levels of sensex. India ranks second in the world in sale of two-wheelers. Car sales are over a million per annum. India is the 6th largest market for colour television sets. 70% of television purchases were from the rural areas during 2001-04(Derek bose, brand Hollywood, 2007 p.155). India is a market consists with huge potential power hold by middle class families. India's middle class family i~ emerging as market dictators because of the new economic policies of the government. It consists of 43 lakhs stock market investors. Its retail banking customers crossed 14 crores. 10 crores of insurance policy holders in India. 31 crores people in India are young people aged 10-24 years as per the Registrar General Reports, 2001. There are more than 13 crores of mobile users in India and adding every month new customers of 6 lakhs. There is a huge potential t9 tap the market in an organized way. In India there are more than 7 crores kirana shops covering with knook and corner places. Marketing is the most important factor in commercial enterprises. The biggest markets can be captured with only a good and strong strategy by the corporate sector. After the opening up of the economy, organized retails fonnats are coming to India. In the developed countries, the retail industry has developed into a full fledged industry with more than three fourths of the total retail trade being handled by the organized sector. Retail management is an adjustment for the globalization policy. The Indian common man could also get international standard of product. The Indian citizen is enjoying goods on par with American citizen. The government should take careful about exploitation of consumers by the multi national companies. The consumer's exploitation can be halted with the help of creation of a high dose of competition in the market. The entry of more players in the market will result in the price levels. The government should create a lot of competition in the market. Creation of competition is only a best tool to

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Lecturer in Commerce, S.S.R.J. College, Kakatiya University, Khammam-507 003 (A.P)

56

JIMS 8M, January-March, 2008

the omnipresent middleman compounds this problem. 40% in Thailand and 20% in china. there are over 200 retail mall projects under construction or under active planning stage spanning over 25 cities. As per their agreement. The annual revenues of Walmart were 258 billion dollars or 2% of US gross domestic product.000 crores of segments of the market are organized. since it is the hot bed of retail consumption with a high annual household consumption expenditure of Rs. Walmart is the largest retail company in the world and the largest employer in the United States. India's first true shopping mall complete with food courts. logistics and transportation technology.9511 crores. Finally the impression was that large foreign companies were poised to invest in large shopping centers as the Indian market is now reputed to be the fastest growing retail market in the world. dated 4-10-07. (Williams 2004) A. The Indian retail trade has been seen to be the fastest growing in the world. The government assured that the JIMS 8M. BHARATI will run the front end of the business and Wal-Mart the supply chain. concerns have. variety and a single point source of purchase.com The announcement that foreign retailers are planning to enter the Indian market has caused concern that small traders will be adversely affected. The share of organized retailing is less than I % in India.115. There are numerous estimates of the size of the retail sector in India.67 on dated 29-Nov-2010 Members Copy. It also makes sales at reduced levels to competitors. recreation facilities. The foreign multinational companies are having financial muscle and technical empiricism and experience of the customer behaviors. 000 crores in retail via super markets and hypermarkets and presently has 16 more stores in Pune 7 stores in Mumbai. Retail trade in India is backward looking as it is grossly undercapit alised as per the report of Technop pack. As per some estimates. Downloaded From IP . The report in media indicated that a tie-up between Walmart and Bharati Enterprises has been made and this venture is significant in the Indian retail management market. 20. (Sridhar 2007). Crisil estimates that the size of the retail market was Rs. Furthermore. retail sales are predicted to rise more rapidly than consumer expenditure during 2003-08.suppress the consumer exploitation by the multination companies. The growth forecast in real retail sales during 2003-08 is 8.1 % for consumer expenditure. compared to 80% in USA. an overwhelming proportion of the Rs. According to Euro Monitor International.248. the bulk of them use less than three workers.6 billion dollars in 4. (Techno Pack2006). It can dictate terms to suppliers. January-March. 00. India was now part of the global economy and that the economy was riding on the back of middle class consumption. and large car parking space called "Cross Roads" was inaugurated in 1999 in Mumbai.C. On the other hand the productive business model ofWal-Mart has received much praise.IndianJournals. It plans to invest 5.500 towns across India. Even among retail enterprises that employ hired workers.3% per year compared with 7. India has been called a nation of shopkeepers due to the existence of a large number of enterprises in the country which totaled over 12 million in 2003. It offers everyday low prices to consumers. In supply chain system.l 0 trillion in 2006. The existing supply chain in India for most goods is woefully inefficient. Not for Commercial Sale local traders will not be impacted. been expressed that through vertical integration from plough to place producers will be squeezed into ever lower margins. efficient supply line.73. For selling every day for lower prices exposed a wide publicity to the store in US. The Wal--Mart company pays lower levels of salaries to its employees.Nelson estimates the size of the Indian retail market to be 250 billion dollars and adds that only 23% of 23 major cities have modem cities. The modernization of retail sector will be reflected in the rapid rise in sales of supermarkets.000 crores Indian retail market constitutes the unorganized sector.000 stores in 1. department stores and hyper markets. and built around obsolete warehousing. it adopted radio frequency identification system of goods in transit. In addition. According to a survey by at Kearney. and market research will determine the survival of the business. 4. given the convenience they offer such as shopping ambience. A V Birla has announced investment ofRs. The entry of foreign retailers in India will entirely change the life style of Indian consumers and markets will be expanded exponentially. The government argues that regulatory reform will enable gains www. This is because of the growing affluent and upper middle class and their preference for shopping at new types of retail stores.8. The success of Wal-Mart is adoption of high technology and computerized systems in their business transactions. As per this report Delhi is to be retailer's paradise. About 78% of these are small family business utilizing only household labor. 2008 57 . But there are several criticisms also explored about the behavior of the organization. (Reddy 2005). Reliance industry was also made collaboration with Britain's Tesco and France's Carfefour. As per the report of financial express. The deployment of foreign collaboration stores indicates that economies of scale. According to various research organizations reports indicate retail management has large purchasing potential in different ways. In fact only rs.

Its views on the role oflocal people in applying their local knowledge and skills in action are therefore myopic. advertising. Gorr and Mahajan 1982. Not for Commercial Sale www. Branded products. Retail Management is basically depends upon 6 important Downloaded From IP . mall is generally refer to large shopping areas while the term arcade is more often used. Malls may be seen as sealed enclaves that reveal the continuum of middle class consumers and their involvement in shopping and recreation insulated from the unsavory streets of the city (Sandercock 1997: 311). but they indirectly affect where the category is purchased. According to Berman and Evans (1995). music. The paradigm is indifferent to the localness of the appropriate institutions which should be induced to meet market need. The shopping malls also face several criticisms in western countries. Shopping malls are becoming more popular as one stop shops. They provide respite from the heat and cold and they provide possible spaces for dissatisfied elements of the community. Several researches had been conducted globally to find out the consumer behavior at malls. 2008 Members Copy. Kumar and Leone(1988) and Walters) 1991) find a significant impact of promotions on store switching traffic. Kothari (1993) has called the growing amnesia towards poverty and the poor in liberalizing India. The buyer of the branded product automatically knows the quality of goods. Achabal. It is generally all consumers on the earth desires goods with high quality at lower prices. Blaike (2000: 1043) argues that" the neo liberal paradigm is highly totalizing and universalizing. (Holmes 2001). The recent studies of shopping malls as managed entertainment centers characterize them as virtual realities with little reference to the immediate environment. Retail developments along with gated communities. January-March. often covered or between closely spaced buildings(Sandiekci and Holt 1996). ladies. They are Price. The behavior of the consumer towards shopping malls is another important area for survival of the business.67 on dated 29-Nov-2010 elements. The behavior of the sales personnel is another important and influencing factor in determining the business transactions. or an exclusively pedestrian street. Local knowledge is sidelined and reduced both theoretically and practically to market information on the technical choices available. needs no introduction about the quality. children etc. They are internally self referential and consumer movements within them are disorientated in relation to the outside world. sports. The overseas experience of mall development is that they are usually constructed to form a predictable controlled environment which acts to keep deviant behavior on the outside and to form a "consumerist form of citizenship" inside (Christophersons). explore. The malls are providing reputed high quality branded products to the consumers. Kohli (1989) argues that the Indian middle class supported trade liberalism as they were attracted by the concrete benefits of tax reduction and greater access to consumer goods. Time spent browsing etc. The consumer is most important and influencing person to the commercial enterprise. and the local appropriateness of these choices to their environment and individual and household endowments. In north America and Australia.for customers through the reform of supply chain management. and Services and other convenience services. showing that consumJIMS 8M.115. attraction and friendliness towards others.IndianJournals. redeveloped market places and casinos have changed the face of the western countries as public or civic spaces have been replaced with private space owned by developers(Voyce 2006: 275).. Bucklin and Latta in (1992) show that retail promotions in anyone category do no directly influence a consumer's store choice decision. The store environment includes color. to refer to a narrow pedestrian only street. Quality of Merchandise. crowding.e. instead referring by implication to other such spaces around the world. work or affiliate. merchandising assortment) and pricing strategies. Jain and Dick (1996) highlighted the difference between consumer's perceptions of price levels in various stores and reality. The shopping malls can further divided as specialty stores which are meant for exclusively for young men. Richardson. most often retailers are categorized by their product strategy (i.248. returning. spending money. (Mehrabian and Russell 1974). Assortment of merchandise. It is unlikely that consumers would keep track of weekly promotions on a multitude of categories in all the stores in their neighborhood. one of the criticisms of malls is that they lead to the replacement of the traditional main street and its subsequent decline (Lowe 2000: Baker 2006: Guy 2006).73. Sales Personnel. They are attractive places as they are destinations that replace the old civic meeting places of earlier times. especially in Britain. The large quantity of purchases directly from manufacturer will provide a chance for getting goods at lower prices for the consumers. Mall is a place where a collection of shops all adjoins a pedestrian. The holding of title of the property is the most important and influencing factor in establishment of shopping malls.. that allows shoppers to walk without interference from vehicle traffic (Blochet at 1994). Behavior in malls is described as a willingness or desire to stay. the store' environment is one of the important factors to attract the consumers.com 58 . In these malls all kinds of goods will be available under one roof. shopping enjoyment.

The survival is the most important factor. They note that atmosphere can affect consumer's perceptions of the economic and psychological costs of shopping in a store and find that pleasing physical design lowers both economic and psychological costs while music lowers the latter. to Britain's B&Q in do it yourself. to Germany's media mart in electro domestics.ft.248. processed foods. Only 14% of the sample of small shops and hawkers has so far been able to respond to the competitive threat of the malls with the institution of fresh sales promotion initiative (Anuradha Kalhan. Local knowledge is the most important and influencing factor in survival of the business. Ho and Tang (1998) found that location no longer explains most of the variance in store choice decisions. European companies showed an even higher level of concern about JIMS 8M. the distance is about 15 kms for stores that are 10. and layout. fill in trips are very unlikely to be made to distant or inconvenient locations. shoes. Manufacturer of consumer goods have had little choice in recent years but to adapt to the rapid growth of hyper store retailers.5 kms from for hypermarkets with a floor area of 40.73. The establishment of shopping mall location is more important because the world wide experience exposes much realty. a hypermarket is normally built about 3. P. The important constituents in the retail management is food. Jan. 2007). Similarly in Thailand. Rather. Hawkers have been selling goods at lower prices because they have no overheads in selling goods.ers may use non-price related cues like service offerings and quality levels to form their price perceptions. ultimately threatening 50% of them with closure or a major decline in business.000 square feet or more in area. Stores that push the limits of scale and selection have remade their markets from France's decathlon in sporting goods. Downloaded From IP . The entry into retail market is not an easy task. garments. In Indonesia. furnishings. employee availability and friendliness. The survey explored several facts about retail management. Bell. Store atmosphere mediates consumer perceptions of other dimensions of store image. Retail management is not only India but also throughout the world they exist.5 km away from housing estates or a city centre. Small shops sales 59 . That is not to say however. The business transactions in the malls depend upon local requirements. It is based upon the nature of trip. not so much intrinsically rewarding products. Entry into business and retention of customer is also influencing factor. jeweler and watches.115. and store brands are threatening established producers of durable goods according to Bain and company Ericschw AIm. fruits and vegetables. www. 2008 Members Copy. consumer durables and IT furniture. it is 2. footwear. Hawkers had been harassed by mall agents. Not for Commercial Sale Monroe and Lee (1999) developed a product price saliency framework to examine how consumers from an overall store price image. electronic and electrical goods in these retail outlets. ambient features like music and smell. For instance. Jean-Pierre Felenbok and Ashis Singh. beverage and tobacco account for 65% of the total business followed by personal care products at 5% and apparels at 7% . A small sample survey of the impact of malls on small and hawkers in Mumbai points to a decline in sales of groceries.No.28. Indian Management. Large scale retailing is changing the way suppliers work. Geographical location is another important and influencing factor in successful ofretail management. As per the survey reports of Bain and company "indicating that two thirds of companies believe a strong competitive cost position is more important than it once was in order to achieve growth targets. The following table 1 indicates about various projects being implementing in India in retail management. January-March. India is a country with many traditions and culture and different tastes. small basket. Winning with the Big Boxpetailers.com Several studies have been conducted to study the impact of shopping malls on small shops and street vendors. Impact of Shopping Malls on Small Shops and Hawkers Grewal (2003) provides a good review of this research and categories the elements of in store atmosphere into physical features like design. store choice decisions seem to be consistent with a model where consumers optimize their total shopping costs. Schlosser (1998) argues that since store atmosphere has a social identity appeal pleasing atmosphere in the store should influence perceptions of socially communicative products in the store. the so-called big box chains. Consumers store choice may be based on different factors.000 sq. and social features like type of clientele.2007.IndianJournals. effort to access the store location being one component of their fixed cost of shopping. lighting.67 on dated 29-Nov-2010 achieving competItIve cost and pncmg than North American firms an indication that executives expect the European market place to become more prices competitive in the future. medical care and recreation are the next most sought after items according to a study by Technopak. that location is unimportant. For ex: in Malaysia.

S. Kunmar. Any interruption in factories like lockout. will show adversely effect on shopping malls. Lowe. 50. Williams. They buy goods directly from factories in case of consumer goods and food components are directly procured from the farmers without any middle men. Vol. M. shoe shops and electrical retailers. The daily needs goods are always Members Copy. closure of mills. the small shops have retrenched their staff due to low sales of turnover. July 20. The family owned shops never go for retrench but their sales had been affected with low turnover. Municipal authorities have fought battles to evict them. L. However in this competition. vol. Sridhar. July 12..com. B. pp2063. no. Majority of the hawkers were experiencing a fall in sales. Downloaded From IP . M.S.73. J. no. The number of hawkers in Mumbai is estimated at 2. India today. Not for Commercial Sale www.were declined marginally. vo1. p. January 12. Market is a reflection of consumer desires and dreams. (2000) Development post anti and populist: Environment and Planning.000 (Government of India 2004). C. Voyce. Mall promoters have joined the conflict to evict hawkers and revamp their precincts. springer. Lubell (1991) found that hawkers are at the bottom of retail pyramid on the streets. January-March. street trading is one of the points of entry of migrants into the working life of the city: it is also one of the traditional supplementary activities of the families of the working poor. courier services. S.9 no. no. Therefore any disturbance in income of suburban people is greatly show impact on shopping malls. Kohli. D. (1998) Malling society: mall consumption practices and the future of public sp ace.42. the economic times. Sandikci. But the number of hawkers had been increased even though the corporation stopped issuing licenses. Baker. L.B. www. (2006) Planning for Retail Development Taylor and Francis London. The customer will decide the future of retail management where the multinationals entering the unknown tastes of Indian customers. Unbranded garment shops.115. (1997) From main street to fortress just policy. Hence the organized retail management will change the agriculture sector also. vo1. P.37. R. oxford pp.3 pp 305-28. & Vose. (2001) Virtual globalisation an introduction in D holmes. all seem to have suffered. photocopying.248. G. readily available and handy for customers. Some shops have been reported that sales had been increased due to availability of goods where the malls failed to provide them. (2005) Wal-mart assault: India may be forced to open its retail sector.37 no. A war between malls and small shops and another war between shopping malls exist in the market. (2006) "Shopping malls inAustralia: the end of public space and the rise of consumerist Citizenship" sociology. The agriculture sector can also be brought under organized markets. I pp 27-34. (2005) Brand equity. hawkers and small shops.journal ofretailing pp 11-15. Holmes. Small retailers no longer remain the basic sources for the monthly sopping basket.2. K. Sandercock. Blaike.pp 261-274 Reddy. D.(2003) The effects ofwait expectations and store atmosphere evaluations on Patronage intentions in service Intensive retail stores. Grewal. The main drawback of the malls is not providing stationery. 17. Blackwell. Baker. 1-64. Therefore there is no chance of close down of small stores exists.B. particularly for women.3 pp269-87.IndianJournals. However the emerging of shopping malls will bring good cheerful movements to the farmers. The research further exposes that the malls are opening in mass areas of city of population. June 2) Impact of malls on small shops and hawkers. O. A war has been started between shopping malls and street vendors. A. (2007) Wall mart walks in frontline. and mobile phone and computer accessories.67 on dated 29-Nov-2010 commanding demand for the livelihood of the population. but with little success. References Anuradha. economic and political weekly. (2007. the consumer will ultimately get benefit in the form of low price with high quality goods.409-427. the needy merchandise may be bought from the nearby their residence.32. Therefore localization factors greatly influence the survival of malls business. virtual spaces tourist spaces Routledge London. (1994) the fortress city in an amin (ed) post fordism. (3460) Guy. (2000) Britain's regional shopping centres new urban reforms? Urban studies vo1. world development. strike. The salary earners will buy goods at monthly basis at malls and at the end of the month.answer.6 ppl 033-50. (1989) The Politics of Economic liberalisation in India.com 60 JIMS 8M. but walmart for the first time will face real communist in India. 2005. (2004) & holt D. 2008 . (2004) The strategic implications ofwal-mart's Rfid mandate directions magazine. Christopherson. V. (2006) Dynamic trip Modelling from shopping centres to the internet. D. With the establishment of shopping malls. Newyork. They are future of all urban spaces globally.

2008 61 .115. BLUE SKY Plans Strength Vast local retailing experience Challenges Keeping up brand loyalty 1. CAEBRJOIDESI CAFE PANTALOON. Leisure store Strong online Presence Expansion into other major Cities at prime Locations.67 on dated 29-Nov-2010 Sprucing up customer Base. BIGBAZAR FOOD BAZAR FASHION STATION. Bcities next On the list Plans to set Up range of different Store formats Experimenting with newer products 5. opening More outlets Introducing New retail Formats LANDMARK LANDMARK www. Jan. out sourcing products at cheaper prices 3.No Retailer K. CARREFOURJ TESCO MULTI FORMAT RETAILERS Still open their cards Successful worldwide operations Sources: Beyond Retail Hype.248. BHARATI WALMART FILED FRESH Pan Indian operations expected 8. P. FUTURE GROUP 3300 by Vast customer experience 2010 Expanding customer base. ADlTYBIRLA MADURA GARMENTS BIRLA SUN LIFE IDEA PLANET F ASmON TROUSER TOWN EASY BILL Delhi operations started 9. R. An 1m Report Indian Management. TATA GROUP TRENT 21 Already established Members Copy. RAHEJA Brands SHOPPERS STOP. INORBIT MALL. Downloaded From IP . CROSSWORD.IndianJournals.73. Not for Commercial Sale 4. RELIANCE RELIANCE FRESH 7. HYPERCITY. No. 2007 JIMS 8M. January-March.Table I S.G. HERO GROUP Announcing foray Into retail Strong background in serval manufacturing Sectors and sound fin Ncial base 10. 12. SPENCER'S MUSIC WORLD Successful formats diversified prescience Strong back end nationwide fuel retailing platform Bharati local expertise Wal-Mart technology Extensive local experience 6. -310 70 100 2.P.com Pioneered the Concept of Family centric Multiproduct.

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