Vishal Mega Mart

In the background of high consumerism and income of the urban consumers, in recent year there are a number of companies have expressed their interest towards retail sector outlets. As a result numbers of shopping malls have started their operations in metro and urban areas. Pantaloon, big bazaar, Vishal Mega Mart, Reliance Fresh are the best known examples of retail sector outlets in India. Retailing is the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. A retailer is one who stocks the producer¶s goods and is involved in the act of selling it to the individual consumer, at a margin of profit. As such, retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. Some of the key features of retailing include: y Selling directly to customers with out having any intermediaries y Selling in smaller units / quantities, breaking the bulk y Present in neighborhood or in the location which is quite convenient to the customers. y Very high in numbers y Recognized by their service levels y Fitting any size and or location It is assumed that due to the entry of a number of retail outlets in the urban and semi urban areas, the mindset of the existing customers have undergone drastic changes. Besides it is also reported that the traditional retailing such an age old Grocery shops have directly faced competition with the organized retailing sector. In some parts of the country, it is reported that the traditional retails are resisting the entry of organized shopping malls. For instance the traditional retails of Bhubaneswar with the active support of the consumers at large didn¶t allow reliance Fresh to start outlet initially.


Vishal Mega Mart

RECENT TRENDS y Retailing in India is witnessing a huge revamping exercise as can be seen in the graph y India is rated the fifth most attractive emerging retail market: a potential goldmine. y Estimated to be US$ 200 billion, of which organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion y As per a report by KPMG the annual growth of department stores is estimated at 24% y Ranked second in a Global Retail Development Index of 30 developing countries drawn up by AT Kearney. RETAIL SALES IN INDIA

GROWTH FACTOR FOR INDIAN ORGANIZED RETAIL INDUSTRY India's economy is booming, due to so many economic reforms. The rise in the working population which is young and reduction of the unemployment rate:     pay- packets which are hefty, and having a huge package of salary package. more nuclear families in urban areas rise in the number of working women more disposable income and customer aspiration

Vishal Mega Mart 

western influenced life style is adopted by all the people.  growth in expenditure for luxury items increases. GROWTH OF RETAIL INDUSTRY: Growth of Retail Companies in India exhibits the boom in the retail industry in India over the years. The increase in the purchasing power of the Indian middle classes and the influx of the foreign investments has been encouraging in the Growth of Retail Companies in India. Reasons for the growth of retail industry are:      Existing Indian middle classes with an increased purchasing power Rise of upcoming business sectors like the IT and engineering firms Change in the taste and attitude of the Indians Effect of globalization Heavy influx of FDI in the retail sectors in India

TYPES OF RETAIL The retail industry is divided into organized and unorganized sectors. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporatebacked hypermarkets and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of lowcost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. Retailing Formats in India Malls The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7, 00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product,


The product category can range from a variety of perishable/ non perishable goods. Vishal Mega Mart. Among these. discount stores or factory outlets. all under a common roof. Discount Stores As the name suggests. Vishal Mega Mart and now has more than seven large stores (over 30. catering to varied shopper needs are termed as Supermarkets. the biggest success is K Raheja's Shoppers Stop. ft) across India and even has its own in store brand for clothes.000 sq. Departmental Stores are expected to take over the apparel business from exclusive brand showrooms.000 sq ft. Convenience Stores These are relatively small stores 400-2.000 sq ft and large supermarkets ranging from of 3. ft.000 sq. Examples include Shoppers Stop. RPG's Music World and the Times Group's music chain Planet M. groceries. Prices are slightly higher due to the convenience premium. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day. etc. 4 . the Mumbai books retailer Crossword. India bulls. These stores today contribute to 30% of all food & grocery organized retail sales. seven days a week. having a strong focus on food & grocery and personal sales.Vishal Mega Mart service and entertainment. Specialty Store Chains such as the Bangalore based Kids Kemp. Pantaloon. offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. Department Stores Large stores ranging from 20000-50000 sq. home. Further classified into localized departments such as clothing. Hyper Markets / Super Markets Large self service outlets. catering to a variety of consumer needs.500 sq ft to 5. Super Markets can further be classified in to mini supermarkets typically 1. are focusing on specific market segments and have established themselves strongly in their sectors.000 sq ft to 2. feet located near residential areas. These are located in or near residential high streets. toys.

PERCENTAGE OF ORGANIZED RETAIL:USA .Vishal Mega Mart MBO¶s Multi Brand outlets. offer several brands across a single product category.85% Taiwan .40% Brazil .55% Thailand .20% India .20% China .3% 5 .36% Indonesia .81% Malaysia .30% Poland . also known as Category Killers. These usually do well in busy market places and Metros.

In other words. In its efforts to strengthen thier supply chain. It facilitate one-stop-shop convenience for their customers and to cater to the needs of the entire family. it acquired the manufacturing facilities from Vishal Fashions Private Limited and M/s Vishal Apparels.282. including two stores which are operated by their franchisees. It started as a retailer of ready-made apparels in Kolkata in 2001. the demands of every thing which you can find in every retail store are increasing every year. Ram Chandra Agarwal has been ranked as the 28th most pitiful person in the Indian retail industry. 2007. Retail industry is booming all around the globe at a very fast pace. 6 . it operates 50 retail stores. R. Mr. Indians are famous for their traditions and festivals and exchanging gifts with friends and relatives is a part of it. As of April 30. These 50 stores are spread over about 1. N. their business approach is to sell quality goods at reasonable prices by either manufacturing themself or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). it has set up seven regional distributions centres and an apparel manufacturing plant. accounting for over 10 per cent of the country¶s GDP and around 8 per cent of the employment. Most retailers of the unorganized retail market have their shop in the front and house at the back. Kolkata 700 001. It follows the concept of value retail in India. When we talk about Indian market.000square feet and are located in 18 states across India. the registered office of thier Company was situated at 4.Vishal Mega Mart EXECUTIVE SUMMARY The Retail Sector is the largest sector in India after agriculture. Mukherjee Road. VISHAL MEGAMART is a retail house in India. In 2003. India has the most unorganized retail market in the world. Vishal Retail is a known and strong competitor in the retail industry since 23 years. At the time of incorporation. It believes this concept has helped them grow to thier current size within a short time frame of their years.

Vishal Mega Mart

This project report is the study of various activities and strategies of Vishal Mega Mart. It also helps us in understanding the different technologies being used by VRPL. MISSION STATEMENT: We shall deliver Everything, everywhere, everytime for every Indian Consumer in the most profitable manner. VISION STATEMANT: We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development


Vishal Mega Mart

³Future is thinking beyond horizon´ & in order to keep its pace with the modern retail, Vishal Retail Limited is spreading its wings. Instead of resting on its laurels the Group are busy identifying new avenues of growth by venturing in other formats like cash & carry, convenios as well as specialty stores and inspiring local retailers to grow along with the big names. The group has tied up with HPCL to open corner stores at their petrol pumps and in addition to the above Vishal has come up with an institute to train manpower for the service industry. As of April 30, 2007, it operates 50 retail stores, including two stores which are operated by their franchisees. These 50 stores are spread over about 1,282,000square feet and are located in 18 states across India. In its efforts to strengthen thier supply chain, it has set up seven regional distributions centres and an apparel manufacturing plant. Today Vishal Retail Limited, Flagship Company of Vishal Group, engaged in Hyper Market stores with an average area of 25,000 to 30,000 sq. ft. through an impressive chain of more than 100 fully integrated stores in spread of more than the area of around 22, 00,000 sq. ft. in 69 cities across India & has a plan to cross total retail area of 35 lakh sq. ft. in tier II and tier III cities by the end of 2009. According to Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited, the group owes its origin to a small 50 sq ft shop in Kolkata's Lal Bazaar that started selling readymade garments. In tune with the pulse of the market, he envisioned a mega store that would sell garments at prices none other could match. . The first big store opened in Calcutta's Esplanade area in 1997, under the banner of Vishal Garments. He was involved in all the aspects of the business: right from sourcing the garments to interacting with customers. And this led to his greatest finding ³The Vishal Group.´ After identifying the immense market in fashion garment for the masses, He moved to Delhi in 2001 and opened his first store in Delhi¶s Rajouri Garden by the name of Vishal Mega Mart (The jewel in Vishal Group¶s crown) and then there was no looking back for Mr. Ram Chandra Agarwal. At present, in addition to garments, Vishal Mega Mart stores retail the entire range of household products, FMCG and electronic goods. Vishal's prices are roughly 15 to 20 per cent less than other mass market garment labels.


Vishal Mega Mart

Mr. Ram Chandra Agarwal, CMD, Vishal Retail Limited believes that the shopping habits of Indians are changing due to their growing disposable income, higher aspirations, relative increase in the younger population, and the change in attitudes towards shopping. The emphasis has changed from price consideration to design, quality and trendy. Age is also a major factor that affects the spending decisions of an individual. Consumer spending is an important factor that affects the economic growth and development in a country. As a trend, consumer is more educated. He has access to all reforms taking place through various arrays of communication. He is becoming a ³value shopper´ everyday. Keeping this in mind, the group is now looking for franchisees to join hands with Vishal and grow under common banner. This partnership will help small retailers to survive the onslaught of organized retail as it will enhance their competitiveness. Small stores can avail of the benefits on account of the economies of scale, a key advantage for big retailers. As per the plans, Vishal Retail will completely take over the supply chain of its franchisees and provide them with technology, new practices, visual merchandising skill and special promotional schemes, besides its brand and costumer base. Some of the Franchisee exclusive business categories are:          Mens Fashion Ladies and Kids Footwear Toys and Games Home ± General Convenience (FMCG) CDIT Watches Mobile

It follows the concept of value retail in India. In other words, their business approach is to sell quality goods at reasonable prices by either manufacturing themself or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). It endeavour to facilitate one-stop-shop convenience for their customers and to cater to the needs of the entire family. It

Vishal Mega Mart believes this concept has helped them grow to thier current size within a short time frame of their years. Kolkata. 6. Mr.S. Kolkata to Mouza Kuch Pukur. Thane (Maharashtra). As a result. R C Agarwal Date of Change Change of Address of Registered Office: August 1.83 million. In order to reduce costs and take advantage of economies of scale it has embarked on backward integration of their products. Therein lies the road to success. 249. Thier apparel manufacturing plant is located at Gurgaon.026. 24 Paragnas (South).53 million for fiscal 2007. 2001 from 4. Gurgaon (Haryana) and Delhi.12 million for fiscal 2005.95 & 96. Street No. R C Agarwal said ³Rs 100 crore corpus raised through the initial public offering had already been utilized and more money was required to push the expansion plans further. There is a lot of opportunity in this sector for us since demand of the potential consumers are not being met under the existing facilities. Strand Road. Mukherjee Road. 24 Paragnas (South). It achieved total sales of Rs. 9.89%. Jaipur (Rajasthan).83% and thier profit after tax increased batten fiscal 2004 and fiscal 2007 at a CAGR of 302.43 million for fiscal 2006 and Rs. 30. 2005 From Mouza Kuch Pukur. P.´ says Mr. February 14 2004 from 54/4C. Strand Road. Rs.884. 124. Ghaziabad (Uttar Pradesh). 4. R.S. which currently comprises seven distribution centers and a fleet of trucks for transportation.74 million and Rs. respectively. Bengal to RZ-A. 1. December 29. thier sales increased batten fiscal 2004 and fiscal 2007 at a CAGR of 89. Bhang ore. it has focussed on developing a cost and time efficient distribution and logistics network. as opposed to a turnover of Rs. 10 . it has set up seven regional distribution centres located around Kolkata. During the same period thier profit after tax was Rs. New Delhi. Road No. 2. Further. Kolkata to 54/4C. The Group also has a plan to raise around Rs 200 crore through preferrential issue in the next few months to fund the company¶s expansion plan.20 million. Ram Chandra Agarwal has been ranked as the 28th most pitiful person in the Indian retail industry.´ ³Retailing is an engine for taking merchandise to the end-users. Haryana. Mahipalpur Extension.463. Bhang ore. P. Ludhiana (Punjab). N. Bengal. Mr. For ensuring efficiency in supply chain.

43 years. He started the business under the name of ³Vishal Garment´ with a small store at 9.Vishal Mega Mart DETAILS OF DIRECTORS:Mr. Xavier¶s College. Agarwal has more than 17 years of experience in the retail industry. Surendra Kumar Agarwal. Aggarwal is currently engaged in roto-moulding 11 . She holds a bachelor¶s degree in arts. Rakesh Aggarwal. Mrs. 44 years. Kolkata. Agarwal has made efforts for the development of the value retailing industry in India and is well known for his business acumen. Agarwal has more than 7 years of experience in the retail industry. Mr. Kolkata. Lal Bazaar Street. Mr. He holds a master¶s degree in commerce. He holds a bachelor¶s degree in commerce. is an independent Director of VRPL. is an executive Director of VRPL. Uma Agarwal. Mrs. Mr. is an executive Director of VRPL. Mr. He holds bachelor¶s degree in commerce. Mr. Bharat Jain. 46 years. 45 years. Mr. Ram Chandra Agarwal. 33 years. is an independent Director of VRPL. Mr. Jain joined VRPL Board on May 8. He holds a bachelor¶s degree in commerce from St. Mr. is VRPL¶s Chairman and Managing Director. Mr. He has been associated with store development and management at various locations of VRPL. Jain is engaged in the business of leather garments and accessories and has more than 23 years of work experience. She has been associated with accounts department of VRPL. Agarwal has more than 20 years of experience in the retail industry and has been with VRPL since their inception in 1997. 2006.

010 1. Ram Chandra Agarwal 12.020 100. Surendra Kumar Agarwal. Unicon Marketing Private Limited.000 49. Unicon Marketing Private Limited 315. Mr.000 47. and c).17 3. Uma Agarwal 12 . b). Ram Chandra Agarwal (HUF) Name of Shareholders & Number of Shares % of shareholding 1. b).010 1. OUR PROMOTERS AND GROUP COMPANIES Our Promoters The following individuals are the Promoters of our Company: a). 2001 executed betiten thier Company and Mr. Mrs. Uma Agarwal.Vishal Mega Mart industry has more than 20 years of work experience.89 4.42 Total 636. and c). Ram Chandra Agarwal.53 2. Uma Agarwal 9. Ricon Commodities Private Limited 300. Vishal Water World Private Limited. 2006. Aggarwal joined VRPL Board on October 31. The following companies are the Promoters of our Company: a). Ricon Commodities Private Limited. Mr. Mr.00 Acquisition of Business from M/s Vishal Garments and M/s The Vishal Garments Vide a business purchase agreement dated November 23. Ram Chandra Agarwal (carrying on proprietorship business in the name of M/s The Vishal Garments) and Mrs. Mr. Mr. Mrs. In addition. the following HUFs are the Promoters of our Company: a).

Incorporated as Vishal Retail Private Limited acquired the proprietorship firm Vishal Garments & the Vishal Garments opened first store outside Kolkata. and the said businesses tire transferred to thier Company as a going concern with effect from December 15.Increase in number of stores to 50 spread across in 18 States. Acquisition of manufacturing unit from M/s Vishal Fashions Private Limited Vide a business purchase agreement executed batten thier Company and M/s Vishal Fashions Private Limited. 2007-. it acquired the business of ³M/s The Vishal Garments´ and ³M/s Vishal Garments´. it acquired the business of manufacturing of readymade garments as a going concern with effect from March 31. 2003. Ram Chandra Agarwal (HUF) (carrying on its business in proprietorship in the name of M/s Vishal Apparels). 2003. 2001.Opened first Store in Delhi 2003 --Acquired Vishal Apparels. Set up a manufacturing unit in Gurgaon. it acquired the manufacturing unit of ³M/s Vishal Apparels´ and the said manufacturing unit was transferred to thier Company as a going concern with effect from March 31. a manufacturing unit. 2003 executed batten thier Company and Mr. Acquisition of manufacturing unit from M/s Vishal Apparels Vide a business purchase agreement dated March 31. 2004--Started thier largest store of at Mathura Road. 13 . New Delhi having an area of 80. Major Events: A chronology of some key events in the history of the Company is set forth below: Year---. 2002-.000 square feet nominated for the Images Retail Awards¶ 2004 2006--Thier Company was converted into a public limited company 103 implementation of production and retail module of SAP Broadband connectivity with each and every location Increased thier presence to an aggregate of 17 States. Thier Company itnt into backward integration by acquiring a manufacturing unit for readymade garments.Vishal Mega Mart (carrying on proprietorship business in the name of M/s Vishal Garments).Milestone 2001-.

Jaipur (Rajasthan). toiletries. with evolution of retail industry in India and change in consumer aspirations. VRPL have focused on developing a cost and time efficient distribution and logistics network.Vishal Mega Mart VRPL¶s BUSINESS:VRPL started as a retailer of ready-made apparels in Kolkata in 2001. VRPL¶s business approach is to sell quality goods at reasonable prices by either manufacturing themselves or directly procuring from manufacturers (primarily from small and medium size vendors and manufacturers). VRPL follow the concept of value retail in India. beverages. Currently. sports items. toys. VRPL acquired the manufacturing facilities from Vishal Fashions Private Limited and M/s Vishal Apparels. VRPL believe this concept has helped them grow to their current size within a short time frame of 8 years. watches. crockery. In 2003. In other words. gift and novelties. VRPL diversified their portfolio of offerings to include other retail goods. grocery items. Gurgaon (Haryana) and Delhi. Ghaziabad (Uttar Pradesh). home furnishing. VRPL endeavor to facilitate one-stopshop convenience for their customers and to cater to the needs of the entire family. Thane (Maharashtra). VRPL sell ready-made apparels and a wide range of household merchandise and other consumer goods such as footwear. Subsequently. VRPL¶s apparel manufacturing plant is located at Gurgaon. drinks. VRPL have set up seven regional distribution centers located around Kolkata (West Bengal). Further. For ensuring efficiency in supply chain. 14 . which currently comprises seven distribution centers and a fleet of trucks for transportation. Ludhiana (Punjab). In order to reduce costs and take advantage of economies of scale VRPL have embarked on backward integration of their products. Haryana.

During the same period VRPL¶s profit after tax was Rs. VRPL start by identifying the city/town.64 cr. parking. an analysis of the demography.46 million for fiscal 2006.25. electricity.39 cr. security and other basic amenities. VRPL target locations with good infrastructural facilities such as easy accessibility. For ensuring standardized formats 15 . 12.65 cr for fiscal 2007 and Rs. 40. Rs. VRPL target primarily cities/towns which may be classified as Tier II or Tier III cities. they have adopted standard parameters for store planning and establishment. literacy levels.602. 288.31 cr for fiscal 2008. VRPL believe that adoption of standard formats for their stores has led to their brand establishment and identification among their customers and will increase their base of loyal customers.Vishal Mega Mart VRPL achieved total sales of Rs. Accordingly. respectively. provision for water. 1005. VRPL plan their strategy to search for areas within cities where such customers are domiciled in large numbers and make efforts to locate themselves within the reach of such customers. In this regard. Within a city/town.07 cr and Rs. The efforts of VRPL¶s retail business are targeted towards families having total income which can be classified under the ³lower middle´ and ³middle´ income groups. VRPL Business Processes:VRPL¶s business process can be summarized as below: Establishment of Stores:  Selection of location In selecting location for a new store. as opposed to a turnover of Rs. In pursuance of this. nature of occupation and income levels. VRPL prefer to locate their stores in areas where real estate is available at reasonable prices.

such as internal and external décor and colour schemes. Bajaj Allianz. 224.  Other Properties VRPL have recently acquired freehold interest in relation to a land admeasuring 82. for which they have leasehold interest until May 4.  Merchandise Planning VRPL¶s merchandise planning is based on the concept of category management rather than traditional brand management practices. distribution centers. allocation of store space. fire and special perils and burglary. 16 . VRPL consider various factors. In this regard. Dharwad. 7.50 million as an interim payment. Further. they have received Rs. stock mix and pricing and accounting methods. In addition. Phase 1 Udyog Vihar. 2006. 22.50 million on account of fire in their store at Meerut as on July 7. VRPL has filed a claim of Rs.  Insurance VRPL maintain comprehensive insurance coverage with Tata AIG. Gurgaon. VRPL insurance policies include comprehensive coverage for electronic equipment. VRPL have recently acquired freehold interest in relation to a land admeasuring 7.24 acres in Dehradun.  Factories VRPL¶s existing manufacturing facilities are located at Plot No. where they are exploring the possibilities for establishment of another manufacturing facility. Uttaranchal. Royal Sundaram and IFFCO-TOKIO for their existing stores. manufacturing facilities and trucks.Vishal Mega Mart of their stores.830 square feet in Hubli. 2009.

Vishal Mega Mart Apparels and Non Apparels Under category management for. then their planning for the product would need to be reviewed based on 17 . purchase orders with delivery schedules are issued. upper. apparels. Regular visits to the stores are made by the category merchandising team to identify the slow-moving-SKUs and explore the options to expeditiously dispose of them. seasons. ascertain their sourcing requirements. regional customer tastes and preferences. fabrics. VRPL draw annual sales projections for different SKUs and. style. say. VRPL create and cater to products across length and breadth of a category at different price points. lowers and sports and ethnic wear). men¶s upper as a major category would be further divided into several sub-categories such as formal shirts. designs. accordingly. vendor management and price. VRPL formulate annual merchandising plan for each division of merchandise taking into consideration factors such as past sales data. brand. For instance. For example. which are classified on the basis of price point. if a branded home appliance manufacturer replaces a product with a new version. namely. Each sub-category consists of pre-defined SKUs. colors and sizes. For certain non apparel categories. The inventory position for each SKU is reviewed fortnightly taking into account the actual sales and variations from the budgeted plans. Based on such information and lead time estimates for supplies. in-house production resources. casual shirts. pattern and size. their merchandise planning and scheduling also depends on introduction of new products and schemes by the vendors. Each division is further divided into major categories (for instance. men¶s apparel as a division is further divided into three major categories. These major categories are in turn segregated into various subcategories. number of stores (established and proposed). party wear etc. likely fashion and trends. shapes.

they undertake count-check for every receipt of the goods. develop products. In addition to in-house manufacturing. Further. The factory has a capacity to manufacture 5.24 acres in Dehradun. VRPL¶s manufacturing team works closely with their design team to understand trends. value engineer and finally create season wise collection 18 .000 pieces per day. embroidery and welt pocket-making operations. Uttaranchal. It has 450 machines and is operated by 500 workers. buttoning. Through their manufacturing capabilities. The plant was commissioned in 2004 and achieved a capacity utilization of 80%.Vishal Mega Mart the acceptability of the new version. they have outsourced some parts of the manufacturing to ³job workers´ who work in their factory premises. The manufacturing plant is well-equipped with fully automatic machines for fusing. VRPL is able to attain relative independence from intermediaries with a competitive advantage in terms of value and cost. VRPL currently have an apparels manufacturing plant at Gurgaon. VRPL are exploring the possibilities for establishment of another manufacturing facility. VRPL undertake quality control measures by way of random sampling to ensure the predetermined quality standards are met. VRPL use their manufacturing strengths to focus on enhancing product knowledge and their experiences from manufacturing enable them to negotiate better terms from the vendors and job workers. To verify that the quantity of supplies is as per the order. Haryana. In-house Manufacturing VRPL benefit from backward integration and in-house manufacturing of part of the apparel products sold in their stores. for the purposes of which they have acquired certain portions of land admeasuring 7.

It has been their strategy to procure goods from small and medium sized vendors and manufacturers. Purchasing Purchasing or vendor management assumes critical importance in retail business where one has to deal with multiple products. They continuously strive to procure goods from the place of origin to reduce the costs and control the quality. To verify that the quantity of supplies is as ordered. estimated lead time of each vendor and quantity to be procured from each vendor. For procurement from the large manufacturers or their distributors. VRPL assess the various possible options on factors such as capacity. they undertake count-check for every receipt of the goods. VRPL follow a policy of µpayment on delivery¶ to negotiate better prices with the vendors and in certain cases they also release payments in advance. VRPL check quality by way of random sampling at the time of receipt of the goods. under which they identify vendors all over the country and overseas and seek to develop alliances and arrangements with them. After identifying the vendors for the goods. To ensure quality of supplies. quality awareness and experience. VRPL place purchase orders based on their SKU-wise plan. Upon ascertaining the procurements needs based on each SKU. VRPL procure from large as well as small and medium size manufacturers. credibility in the market. they endeavor to enter into formal arrangements for supply of products to all 19 . VRPL explore the various options for sourcing the products. For identifying the vendors.Vishal Mega Mart that cater to regional tastes. which they believe has led to reduction in the cost of goods they sell and increase in their profitability. They regularly interact with the vendors and share information such that the vendors remain familiar with their goals and targets. VRPL have in place a vendor management system. For FMCG products.

VISHAL Apparels Brand Vishal Mega Mart is one of India¶s fastest growing retail chains. We offer an unparalleled collection of clothes for the entire family.Vishal Mega Mart VRPL stores. This enables us to offer the lowest possible and most reasonable prices. The Vishal brand is known for great modern style for men. such that they are able to derive fixed margins from sales of such products. 20 . they benefit from special discretionary discounts and offers directly from the manufacturers or their distributors. Each garment is hand selected for quality and contemporary styling. Vishal offers high level fashion styling. Under these agreements. women and kids. formals and accessories for men. Vishal manufactures majority of its own garments and out sources some under its direct quality supervision. Since 1986. Our courteous staff will ensure that consumers get a perfect fit. our name has been synonymous with quality. women and children. irrespective of the locations.. The chain currently has 183 company stores in 24 states / 110 cities in India. value and fashion integrity. Our goal is to provide a range of fashion wear to suit every pocket. Our product mix represents the most current fashion trends in tops. bottoms.

Distribution Network and Logistics VRPL¶s distribution network and logistics encompasses all activities to ensure that goods are dispatched in right quantities and at right time to reach stores with sufficient time in hand to promptly cater to customer demands and optimization of inventory position. Fizzy Babe : Ladies & Kids Girls Jasmine : Ladies & Kids Girls Zero Degree : Kids Boys Soil : Massa Bay : Mens Shirts Mens Trousers & Bermudas Apparel Manufacture The basic raw materials required for the manufacturing process of apparels includes fabrics and accessories. VRPL source various other components and accessories from vendors in various parts of the country and also import them from China. VRPL also source fabrics from the place of origin. The re-order levels for stores are 21 . Inventory Management. They have built a system to monitor the inventory position on a real-time basis at each store. under which a stock requisition or delivery order is generated when predetermined stock or re-order levels are reached. VRPL merchandising teams source fabrics from local manufacturers in India depending upon their production plan. T-Shirts.Vishal Mega Mart Popular Brands are: Zeppelin : Kitaan Studio : Blues & Khakis : Paranoia : Chlorine : Fume : Mens Shirts & Trousers Mens Shirts & Trousers Mens Trousers Mens Shirts & T-Shirts Mens Shirts Mens Shirts. UnderGarments.

VRPL¶s distribution centers and stores are connected through company-wide virtual network connection through broadband which helps to efficiently manage their network of stores and distribution centers throughout the country.Vishal Mega Mart determined based on factors such as display levels. As for the stores. VRPL have clearly demarcated the stores which will be serviced by each distribution centre. Ghaziabad (Uttar Pradesh). Gurgaon (Haryana) and Mahipalpur (New Delhi). they receive payment on account of display of their products. Thane (Maharashtra). which caters to both the existing and proposed stores to be fed. lead time for replenishment and average daily sales. They primarily utilise their own vehicles to transport the inventory to their stores from the distribution centers. layouts and implementation of automatic replenishment system. Ludhiana (Punjab). Distribution centers operations have been streamlined through the standardisation of racking system. Under arrangements with some of their merchandise manufacturers. VRPL have seven distribution centers over approximately 385.033 square feet. The reorder levels for distribution centers are ascertained on the basis of factors like average daily sales of all the stores services. VRPL use the services of logistic solution providers including low cost transport service providers in order to deliver products on time to VRPL stores and optimize transportation costs. Jaipur (Rajasthan). trends and promotional schemes. In addition. lead time for replenishment and buffer stock. they regularly review these re-order levels. These distribution centers are located around Kolkata (West Bengal). 22 . VRPL review these re-order levels on continuous basis to factor in variances in demand based on seasons.

Vishal Mega Mart Our products FOOTWEAR Mens Shoes Sandals Slippers Ladies Shoes Sandals Slippers Girls Shoes Sandals 23 Slippers .

Vishal Mega Mart Boys Shoes Sandals Slippers HOUSE HOLD Cleaning aids plastic aids Gifts and novelties thermoware 24 .

Vishal Mega Mart Appliances kitchen aids LADIES ACCESSORIES Personal items fashion jewellery Cosmetics haircare 25 .

Vishal Mega Mart HARDWARE Drill Machine Measuring Tape Tower Bolt Spanner Lock Hammer CAR ACCESORIES Music Sysrem 26 Covers .

Vishal Mega Mart Lights ELECTRICALS Mirror Bulb Ceiling Fan Regulator Tester Extension Cord Exhaust Fan 27 .

Vishal Mega Mart Home Furnishing Covers bath furnishing Kitchen furnishing drawing room furnishing Bed room furnishing 28 .

Vishal Mega Mart FOODMART Chinese and Indian food food and beverages Fruits and vegetables Imported fruit Regular Fruit Regular Vegetables Imported fruit 29 .

Vishal Mega Mart HOUSE HOLD Hair Dryer Chopper Waffle Maker Griller GARMENTS Men¶s wear women¶s wear 30 .

Preservatives Aftermints Diary Products 31 .Vishal Mega Mart Boy¶s wear girl¶s wear Infant¶s wear FMCG Additives .

Vishal Mega Mart Drink Beverages Health Food Home Care Personal Care Ready To Cook Ready To Eat Basic Staple Cereals Cooking Medium Flours Pulses Pulse-loose 32 .

"SBI Vishal Mega Mart Card is one of the best co-branded credit cards that offers reward points and other benefits to frequent shoppers and will be free for those who spend above Rs 7. 09. Vishal mega mart launches card SBI Card launched a co-branded card in association with leading retail chain Vishal Mega Mart to tap the booming organized retail market that is pegged to hit Rs 1.000 crore by 2010.500 and the points are redeemed at any Vishal Mega Mart store. Asthana said the card would be free of cost for the first year. we are not just offering customers a convenient payment mechanism but a unique consumer loyalty programme that rewards them every time they shop. Some of the features of the co-branded card include Rs 250 discount voucher on signing up for the card and a set up by which the card holder earns five reward points on every Rs 100 spent that could go up to eight points on spends above Rs 7.500 per annum.500. but would charge Rs 700 per annum if purchase on the card was less than Rs 7." SBI Card CEO Roopam Asthana said." Vishal Retail MD Ram Chandra Agarwal said.Vishal Mega Mart SERVICES AND SEMI-DESCRIPTION SBI. "By partnering with SBI Card. 33 . Other SBI Card holders could also flip their card for SBI Vishal Mega Mart Card and use it like any other credit card.

However. Vishal Mega mart retails a large variety of household. Subhiksha raised PE from ICICI Ventures. Large players like Shopper¶s Stop. from an investor perspective? In the initial years. companies like Vishal Megamart and Koutons approached the public for capital through an initial offering of shares. For example. investors with longer investment horizons are beginning to recognise the potential for long-term value appreciation of investing in differentiated businesses with large-scale plans and able execution teams. large and sustained capital expenditure to create scale. Companies have even successfully approached the IPO (initial public offering) route to raise funds. returns are limited due to the high real estate costs. FMCG and consumer durable goods at bargain prices at its 24 self-owned stores. How attractive is the funding of retail industry. We have seen many PE investors taking stakes in retail ventures. and start-up costs for store infrastructure.Vishal Mega Mart Other offers in the credit card are no transaction fee on fuel purchase at select IOC and IBP petrol pumps and balance transfer facility without any interest for 75 days and complementary personal accident insurance. Apart from the traditional sources like banks and financial institutions. Trent and Pantaloons are already listed on the stock exchanges. After the initial rounds of PE-funding. while Actis took a controlling stake in Nilgiris. E-COMMERCE: The uses of computers and internet have been expanding significantly over the 34 . which are likely to increase to 50 by the end of 2006. there are multiple avenues including PE funds.

Vishal Mega Mart years. Vishal Mega Mart is soon launching its online shopping website this summer named as www. Online shopping is used for business to business transactions or business to customer transactions with applications of electronic commerce (ECommerce). as a potential source of which promises to be a boon for its customers. Both products and services can be purchased by online shopping.vishalmegamart. Modern technology has been developed to the extent that even shopping made possible over the internet. This idea kick started the first online business ventures. VRPL has its own site named as www. business men realized the possibilities of using internet as a medium of business. The process of shopping done over the internet is called online shopping. Presently internet has been used widely as a means of communication. With in few years after existence of 35 . as a means of entertainment and many more.

enquiry. they have put a number of technological protections in place to ensure that their transaction process is extremely safe and that their customers' information is secure. career opportunities. supplier¶s zone etc. Accordingly.Vishal Mega Mart Vishalmegamart. cities with correct address and contact no¶ is concerned about the safety and security of their website and customers. products being offered by them. 36 . suppliers through their website. This information includes their stores in different areas. They provide a large amount of information to their customers.

com. Find the Items You Want to buy. Add the Items to Your Shopping and with shopping. How to Shop Firstly. 2. you have to register yourself with the & shopping. Place your order through following these 7 quick and easy steps: 1.rediff. 37 .Vishal Mega Mart Vishal Mega Mart also provides opportunities to its customers by collaborating with shopping.rediff.

across stores. Keep your PC updated with the latest security patches and. 38 . This helps them take corrective action on a timely basis. Here are a few important action points that you should bear in mind:1. View or print your Order Acknowledgment and check your Order status. 3. Enter a Shipping Address 6. and optimize their stock. Proceed to Checkout 4. Keep your PC updated with the latest anti-virus / anti-spy ware software. departments and product categories and compare the same with other stores as well as across periods. Sign In/Create a New Account/Choose guest checkout 5.Vishal Mega Mart 3. They are currently using Business Objects to analyze data related to the buying trends of their loyalty customers. most importantly. Provide Payment Information and authorization 7. Do not click on links or open attachments in unknown or unsolicited (spam) emails. as well as in enhancing their speed of response to what the customers want. They are thus able to monitor their performance on a day-to-day basis. Install a personal firewall on your PC to protect your account. 2. Management Information Systems (MIS) They have strong MIS capabilities that make use of their technological investments to generate valuable insight for them and help them in improving their operations. 4.

2. ³JDA ERP´ software. Receipt  confirmation. Functional Area:  Financial Accounting Comments: Completely integrated with their retail ERP. 3. Sales  Merchandise event Comments: JDA is one of the leading ERP systems used by many retailers for multiple Business models in regards to retailing.Vishal Mega Mart Following are the table which shows the different software used by the organization in the organization activities.MMS. Stock  transfer. The system is fully integrated and takes care of the Supply chain from a manufacturer to the end customer by using back-end and front-end systems like MMS (Merchandise Management System) & WinDSS (Windows Distributed Stores Systems).  product ordering. 39 . 1. for customer transaction & for employees working in the organization. allows them to get online integrated financials. ³RAMCO HRMS´ software Functional Area:  Human Resources. Functional Area:  Merchandising Buying. ³Oracle Financial´ software. Inventory  Management.

Vishal Mega Mart Comments: Their system supports Personnel Management. Comments: An integrated planning and decision making tool. 6. ³Microsoft Exchange´ software Functional Area:  Internal/External communication. 4. by March 2010. FUTURE SERVICES:  Expansion Plans VRL plans to scale up its nationwide presence increasing store space from 1. 5. Comments: WMS enable the space planning and also integrated SKU location which enable faster picking and putting of merchandising. Payroll Management. ft. Comments: Enterprise wide mailing solution. 22 stores will be funded from the IPO proceeds while the balance 10 would be funded through debt and internal 40 . ft. ³WMS´ software Functional Area:  Distribution and Logistics. ³Arthur Planning´ software Functional Area:  Merchandising Planning. in March 2007 to 5 million sq.28million sq. Employee Benefits Management. Training Management and Executive Information. The company plans to open 32 retail stores in FY2008 of which.

Vishal Mega Mart Moves Into Second Orbit Of Expansion New Delhi: Entry in Delhi has transformed the fortunes of Vishal Mega Mart. which started in Kolkata with a 100-sqft store 12 years ago. Most of the 22 stores will be located in Tier III cities (18 stores) followed by Tier I cities (three stores) and Tier II cities (one store). Vishal has opened five large-format stores with a combined retail area of around 90.000 sqft²and it has plans to add two-three more. Varanasi. The new retail expansion drive will increase Vishal¶s network from 14 stores in 10 cities to 29 stores in 15 cities. Mumbai and south will be targeted not before ¶05-06. This facility is expected to double VRL¶s garment facility to about 10.000-40. Within 15 months of its debut in Delhi. says Mr Agarwal.000 sqft)²while under the new franchisee model (it has one in Kota) it will add another five mid-sized stores (around 10.¶¶ he says. Vishal now has presence in towns with large µmiddle-middle class¶ consumers like Jaipur. we expect to tie up a Rs 45-crore fund through a bank to drive our next phase of expansion (primarily towards lease.Vishal Mega Mart accruals. Bhubaneswar and Indore. Cuttack. Under the company-owned model.000 sqft) in fiscal ¶04-05. Ahme-dabad and Surat. and stocks) in fiscal ¶04-05.000 sqft-store in Delhi¶s Mathura Road area. One more garment unit is planned at Hubli in Dharwad. and another will follow in Agra in four months. In the next couple of months a franchised store will open in Hyderabad. VRL is also significantly increasing its garment manufacturing capacity setting up another plant at Dehradun in Uttaranchal. interiors. Karnataka.¶¶ Mr Agarwal also owns Kolkata¶s three-year old entertainment property Vishal Waterworld Ltd. Vishal expects the company¶s turnover to more than double to Rs 200-225 crore in ¶04-05. Says Vishal Retail Ltd chairman RC Agarwal: µµIn the next one month. We had earlier financed our projects in a small measure through the Punjab & Sind Bank and Bank of Baroda. Vishal will add ten stores²all large format (25.000 cloth pieces a day. 41 . a medium-sized 14-store apparel retailing chain. which will commence production by July / August 2007. Ranchi. Lucknow. The new territories: Chandigarh. µµWe¶re hoping to finalise a 40. Siliguri. Delhi is now expected to account for around half of its estimated turnover of Rs 90 crore in fiscal ¶03-04.

But now hypermarkets and discount stores like Big Bazaar and Giant²where pricing is positioned at substantial discount to MRP²are stirring the marketplace by targeting mass consumers. Websites etc Here is how Pantaloon Retail. I don¶t see any clutter at the top-end² their proposition is different. Trent. department or hypermarket model. we will ramp it up once the need arises.¶¶ KSA Technopak manager Munir Suri points out that margins vary across formats ²in a premium department store retail margins could be 10-25 per cent for branded labels while in hypermarkets it could be around 30-40 per cent.´ µµThe Indian market is huge: it has enough room for speciality. Says Mr Suri: µµTraditionally. 42 .Annual reports. Vishal MEGAMART .¶¶ he adds. Lifestyle. Vishal is looking at expanding its vendor base too. We believe in volume turnover. retailers have targeted SEC A and SEC B consumers through department stores²like Shoppers¶ Stop. which is already huge with around 35-40 vendors. Magazines. Vishal has recently operationalised its first apparel-making facility in Gurgaon. we think. we only have large unorganised apparel market² we hope to play a role here. but for the price-sensitive middle-class buyer. appeals to a good number of middle-middle class consumers. It is also weighing its options to retail non-apparel products in future through its chain.25 lakh pieces a month. Westside. the Gurgaon plant makes 1. However. Vishal is now looking at engaging a creative agency to convey its mass-market gameplan. Also. in order to bring a level of consistency in supplies. He adds: µµSo far the industry has seen competition in the premium-end of the retailing market. µµThe plant has just opened.¶¶ says Mr Agarwal.Vishal Mega Mart What is driving Vishal¶s expansion? µµOur philosophy is to make the customer feel that he is paying for a dhaba chai (cheap tea joint) in five-star surrounding. Employing 500 people on a single shift basis. margins are low.¶¶ says a company source. We price our products up to 50 per cent cheaper than leading department stores and this. COMPETITIVE ADVANTAGE: Compiling data from various sources . Shoppers Stop and Spencers stack up against each other in the following key factors. Ebony.

4 [Lowest in the Industry] Trent .218 Vishal MEGAMART .162 Retail Gross Margins [in %ge]: y y y y y Pantaloon Retail . Vishal MEGAMART .Vishal Mega Mart Retail Space under Operations [in million sft at the end of March-2008]: y y y y y Pantaloon Retail .8.11.901 Spencers .5 43 .053 Shoppers Stop .061 Trent .1 Shoppers Stop . Vishal MEGAMART . Shoppers Stop .6 Spencers .6 Spencers .2 Trent .0 Shoppers Stop .10.8.9 Vishal MEGAMART . Retail Real Estate Expense as Percentage of FY08 Sales: y y y y y Pantaloon Retail .8 Trent .1 Retail Sales for FY 2008 [in Rs million]: y y y y y Pantaloon Retail .7 Spencers .14.

Vishal Mega mart .3 Retail Revenue in INR / sft in FY 2008: y y y y y Pantaloon Retail .67.8% in the festive season (Oct-Nov¶07 combined). Globus .8% .68.585 Spencers .27.9 Spencers . This implies a growth of mere 2. due to late Diwali this year.8 Trent .113 Trent .788 Vishal MEGAMART .2%. Landmark 12%.7.36. Shopper's Stop -13%. Collectively in the festive season SSS growth is 9% compared to over 20% growth maintained for most of the months of 44 .575 SALES STATUS OF DIFFERENT RETAIL STORE Top Lifestyle Store Retailers in India Big Bazaar .52%. Westside -3% and Trent .10%. Lifestyle SSS growth in Nov is at 30% as against a decline of 7% in Oct.6 Shoppers Stop .5 Vishal MEGAMART .9.Vishal Mega Mart Retail Space Addition in FY 2008 [%ge growth YoY]: y y y y y Pantaloon Retail .7.5. Pantaloon .8.838 Shoppers Stop .133. RETAIL VALUE OF DEFFERENT RETAIL STORE Value Retail same store sales (SSS) growth rebounded in Nov'07 to 40% after a 25% decline in Oct'07.17%.

VISHAL MEGAMART still account for bulk of the sales for the company. This FY. The chart below represents sales mix of Pantaloon Retail India Ltd.5 mn sft till the end of Nov. a slowdown is imminent.The company is expected to clock sales of Rs 7. 45 .Vishal Mega Mart the previous fiscal. the company has been little bit slow due to unrealistic realty prices and has managed to add mere 1.7 mn sft in FY07. the company added 1 mn sft while it declined to 0.85 mn sft in FY06 and zoomed to 2. The company has added retail sales space aggressively in last financial year. In FY2005.400 crore for FY2008 but going by the recent reported numbers.

MARKETING STRATEGY OF VISHAL MEGA MART Product Vishal Mega Mart offers a wide range of products which starts from apparels to food items.  Learning which advertising appeals are most effective and which ones get no response. It wanted people to do bulk shopping for their monthly ration instead of going to the shop each week. footwear to home furnishing. The benefits of market research include:  Learning who your customers are and what they want. The task was to change the mindset of consumer to bring about changes in their shopping patterns. Vishal Mega Mart has been the pioneer of retail revolution. It is also used to confirm whether the customer reacted to a marketing program as expected. It is the process of learning what customers want or need and determining how to satisfy those wants or needs.  Learning the relative success of different marketing strategies.  Learning how to reach your customers and how frequently you should try to communicate with them. Its first fight was against local µKirana¶ stores. not your own.Vishal Mega Mart M A R K E T I N G A N A LY S I S SUM M ARY Marketing help to define the business for the customer's interests. crockery to sport items. thus improving return on investment. child care 46 .  Learning how not to repeat your mistakes.

Vishal Mega Mart products to toys. FMCG products are usually meant to fulfill the daily needs of consumers and therefore. Chlorine. There are many in house brands promoted by Vishal Mega Mart. VRPL have a number of private labels for apparels such as Zepplin. VRPL believe retailing of FMCG products will bring customers to their stores on a frequent basis and this may in-turn lead to consumption of their apparels. FMCG products play a key role. watches. Famenne. drinks etc. 47 . Kitaan Studio. Paranoia. In pursuance of their business plan to diversify their portfolio of offerings. Fleurier Women and Roseau.

as also entering into new areas in the country. Vishal Mega Mart has presence in almost all the major Indian cities. They are aggressive on their expansion plans.). VRPL intend to increase their penetration in the country by setting up new stores in cities where they already have presence. This enhances brand loyalty. VRPL follow uniform pricing policy across their stores in respect of private labels and non-branded products sold by them. In addition to VRPL¶s strategy to continue procurement of goods from small and medium size vendors and manufacturers which leads to cost efficiencies. the prices may vary between stores on account of state-specific taxation and vendor policies.Vishal Mega Mart Price Vishal Mega Mart promises its consumers the lowest available price. Rs. Christmas. etc. VRPL¶s propose to increase their procurement of finished and semi-finished goods from China and thereby realize economies of scale and pass on the benefits so accrued to their customers. 49. they intend to focus on 48 . Towards this objective. they also reduced the price of the products. In relation to the other products. Selling combo-packs and offering discount to customers. The combo-packs add value to customer. The concept of psychological discounting (Rs. encourages customer confidence and results in operational convenience. Vishal Mega Mart also caters on Special Event Pricing (Close to Diwali. New Year etc. Through Bundling. VRPL intend to procure FMCG and apparels from low-cost production centers located outside India. Place Vishal Mega Mart stores are located in 110 cities with more than 180 outlets. 99. In particular.) is used as promotional tool. The efforts of VRPL¶s retail business are targeted towards families having total income which can be classified under the ³lower middle´ and ³middle´ income groups.

radio and 49 . VRPL target locations with good infrastructural facilities such as easy accessibility. to promote sales. electricity. They launch promotional schemes weekly. the category manager formulates promotional plans for µslow movers¶. In addition. Promotion Advertising has played a crucial role in building of the brand. a co-branded credit card. in order to appeal to the customer. and sometime road-side bill-boards. VRPL entered into a long term advertising agreement with Bennett. In addition. they are entitled to fixed discounts for their advertisement in print publications of BCCL for a period of five years from the date of the agreement. Under the agreement. Apart from general sales promotion. Some of the features of the cobranded card include Rs 250 discount voucher on signing up for the card and a process by which the cardholder earns five reward points on every Rs 100 spent. security and other basic amenities. VRPL¶s propose to continuously undertake such initiatives to increase the satisfaction of their customers. internet. presentation and display of merchandise. Vishal Mega Mart advertisements are mainly seen in print media i. Television with Tina Parekh as there in advertisement. In addition.Vishal Mega Mart expansion in Tier II and Tier III cities. in association with SBI Cards & Payment Services Private Limited.e. VRPL have introduced. A cardholder accumulates points on the basis of purchases made and the points accumulated can be redeemed for gifts or purchases.e. VRPL¶s category management system is used to plan promotional schemes. they focus on layout of the stores and positioning. In September 2005. Coleman & Company Limited (³BCCL´). provision for water. BCCL would also act as a facilitator for other print and non-print media of the Times Group i. newspapers. parking.

in-house production of apparels. It sells a vast range of merchandise across apparels and accessories. 10 each and 384. procurement of goods directly from the small and medium size vendors and manufacturers. 146 each amounting to an aggregate of Rs.190 Preference Shares of Rs. targeting the middle and loiter middle income groups. As a part consideration.Thier emphasis has been to maximise the value that the customers derive in spending on goods bought in thier stores.605 Equity Shares of Rs.000 SKUs. VRPL had issued 1. 300 million. It endeavthier to continuously reduce thier costs through a variety of measures. which constitute majority of the population in India. Thier Competitive Strengths It believes that the following are thier principal competitive strengths which have contributed to thier current position in the retail sector in India: Understanding of the µvalue retail¶ segment Thier business plan involves implementation of the concept of the µvalue retailing¶. food products and consumer durables with over 74. It intend to provide quality products at competitive prices. FMCG(frequently marketed consumer goods) products. such as.670. efficient logistics and distribution systems along with customized product mix at thier stores depending 50 .Vishal Mega Mart television or any other new medium launched during the tenancy of the agreement.

VRPL have their own fleet of 31 trucks. µpilferage¶ control replacement and replenishment. which is an industry practice. Their supply chain management provides us flexibility to adapt to changing patterns in consumer behavithier and their ability to add value at various steps/levels. Due to adoption of an efficient racking system. Strong and efficient logistics and distribution network VRPL¶s distribution and logistics network comprises seven distribution centers. design and development of apparels. 51 . Besides. they are able to benefit from optimum utilization of the space allocated for display in their stores. quality control. VRPL believe that their distribution and logistics set up is well networked and allows them to fulfill the store requisition within short time period of generation and receipt of order. which helps VRPL to transport and deliver their products in a cost and time efficient manner. Their strong distribution and logistics network has enabled them to dispense with the requirement of a dedicated storage space at every store. This provides them assistance in maintaining a low working capital requirement and less carrying cost. production.Vishal Mega Mart on the regional customer behavithier and preferences. vendor management. In particular. Supply chain management Their supply chain management involves planning. and instead undertake periodical replenishment of depleted stock. Central to thier value retail strategy is to pass on the benefits of cost reduction measures to thier customers. which has helped VRPL to optimize in-store availability of merchandise and minimize transportation costs. merchandizing sthiercing. logistics. standardization. thier supply chain management gains strength from their ability to undertake in-house manufacture.

Further. identify potential markets and efficiently establish new stores in different locations. enables us to capture market share in locations where a majority of thier target customers are located.e. Chlorine. income levels.60 million. In fiscal 2007. apparels manufactured by us) such as Zeppelin. Private labels It has a number of private labels for apparels (i. basic infrastructure and establishment and running costs.68% of thier total sales for fiscal 2007. in particular in Tier II and Tier III cities. Katina Studio. literacy levels. This has not only enabled us to build thier brand value but also facilitated us to explore cost-effective sthiercing from different locations. which. 583. An aggregate of 43 of 50 of thier existing stores are located in Tier II and Tier III cities. Paranoia. It has an exclusive site identification and assessment team. Thier growth strategy is based on: 52 . Famine. It believes that their focus on thier private labels and their recognition in thier customer segment enables us to differentiate themselves from thier competitors. Identifying new locations It believe that It possess the ability to identify locations with potential for growth. nature of occupation. which accounts for 9. taking into account factors such as population. it has a dedicated warehouse for the purposes of storing the materials essential for setting up of new stores. Their Strategy----------It intends to pursue the following strategies in order to consolidate thier position as an operator in the µvalue Retail¶ segment in India. Flthierier Women and Roseau. It believe. which undertakes systematic analysis of the business prospects.Vishal Mega Mart Geographical spread Thier stores and distribution centres are spread in various parts and regions of the country. accessibility. thier income from thier private labels was Rs.

as also entering into new areas in the country. would add maximum value and would enable us to reduce their procurement costs. FMCG products are usually meant to fulfill the daily needs of consumers and therefore. and can help us grow without the need to significantly increase costs.  Emphasis on Backward Integration It believes that through backward integration It will continue to substantially control the cost of production. distribution and logistics network It intends to increase thier penetration in the country by setting up new stores in cities where it already have Presence. thier focus would be to undertake in-house such functions of the manufacturing processes. which. This will also enable us to reduce thier reliance on external agencies for supply of thier products and will result in loiter turn-around time. FMCG products play a key role. It believe retailing of FMCG products would help us to eliminate the impact of seasonality of the apparels market in India. in thier view. design and development of thier products and realizes economies of scale.Vishal Mega Mart  Increasing thier penetration in the country by leveraging thier supply chain.  Expansion of FMCG Historically. It intends to increase the in-house manufacture. their continuous effort to improve systems and processes leads us to believe that it can deal with higher scale of operations without any hindrance. resulting in such cost benefits being passed on to thier customers. In addition. which depends on factors such as change in tether conditions and festival 53 . It intends to manufacture at least 25% of thier requirement for apparels and may require expansion of thier existing manufacturing facilities. it intends to focus on expansion in Tier II and Tier III cities. In particular. it has derived significant portion of thier revenue from sale of apparels. In pursuance of their business plan to diversify thier portfolio of offerings. Moreover. It believe retailing of FMCG products will bring customers to thier stores on a frequent basis and this may inturn lead to consumption of thier apparels. It believe that thier existing infrastructure have been designed for a higher scale of operations than thier current size. Higher business volumes will also improve thier negotiating pouters and help us get further economies of scale in thier buying.

in association with SBI Cards & Payment Services Private Limited.  Increasing customer satisfaction and thier base of loyal customers It believes that understanding the needs of thier customers is of prime importance for the continuous growth of thier business. effective price strategy etc on customer impulse buying behavior has been analyzed. Towards this objective. In addition. For this purpose. It has introduced. It intend to procure FMCG and apparels from low-cost production centres located outside India. It proposes to continuously undertake such initiatives to increase the satisfaction of thier customers. It propose to increase thier procurement of finished and semi-finished goods from China and thereby realize economies of scale and pass on the benefits so accrued to thier customers. A hypothetical model has created in this paper which has been 54 . thier customer management team assimilates customer feedback and it endeavthier to take necessary steps to address the requirements of thier customers. IMPACT OF MEGAMART´ VARIOUS ENVIRONMENT ON ³VISHAL Social Impact There are variables/factors that effects customer impulse buying behaviour in FMCG sector considering retail market in India. window merchandising. It intend to procure FMCG products directly from the manufacturers. a co-branded credit card. In order to continuously provide customer satisfaction. It has entered into and will continue to explore the possibilities of entering into certain arrangements with domestic FMCG majors on such terms and conditions.Vishal Mega Mart celebrations.  Procurement from low-cost production centres outside India In addition to thier strategy to continue procurement of goods from small and medium size vendors and manufacturers which leads to cost efficiencies. The impact of various impulse buying factors like sales and promotions. which are suitable to their business model. placement of products. In furtherance of thier endeavthiers to reduce costs.

80 billion investment in retail network to be launched in the two north Indian states. The hypermarkets would be spread over an area of 150. Data analysis has been done using SPSS software. would be in place in most of the 70 district headquarters of Uttar Pradesh by the end of next year. value addition. The study is based on the primary data collected from Vishal Megamart from the area of DELHI and NCR regions with the help of structured questionnaire on ricer scale.000 sq. Under the social environment effect hoping to usher in a socio-economic revolution VISHAL MEGAMART is all set to create at least 500. Community facilities including a health centre and pharmacy. The statistical analysis method employed in this study is Factor Analysis. create an efficient market place for the true price discovery of farm produce. He makes suitable law for the multi-dimensional growth of the industry.000 jobs through its jumbo Rs.Vishal Mega Mart taken into consideration for our research work on impulse buying behavior of the consumers. and sell apparel. the agri-business vision of VISHAL MEGAMART is to build infrastructure for efficiency. Govt. has 55 . and a vocational training centre to assist youth in tapping employment avenues would also be provided at these centers. in eating etc so the purchasing power of the people has really gone up and thus the impulse buying of the commodities is on a great increment mainly due to pricing strategies of retail players and full of festivals throughout the year.000 sq. logistics and market access to improve farm incomes. After the through analysis of the available data it has been found out that since income of individual is increasing and more and more people are moving towards western culture in dressing sense. consumer durables. drive major initiatives to bring the best technology and thereby bring about drastic improvements in farm practices LEGAL IMPACT In this environment govt. and home furnishings besides all the goods available in VISHAL MEGAMART. each spread over 130. plays his legal role to develop the mentioned industry. Sixty-eight Town Centers. Poised to usher a new paradigm in rural areas. IT and lifestyle products. ft. ft.

000 sq. grocery items. where by it offers quality products at reasonable prices to customers primarily in the lower and middle income group. west India 15% and south India 4%. VRL sells around 7. Of the 50 stores.ft. east India 19%. VISHAL MEGAMART. ready-made apparels.000-30. The country's dynamic retail landscape presents a grand opportunity to investors from across the globe. Indian farmers are finally making good money. crockery. toys. after centuries of social and economic exploitation. Liberalization of the Indian economy and rationalisation of business procedures have already ensured a high economic growth with a rapidly expanding base for the manufacturing and hi-end services sectors. to use India as a strategic business hub prices than what they received from the erstwhile traders/middlemen. gift and novelties. In FY07. VRL¶s business model is based on value retailing.000 crore to lighten the farmers' debt burden ECONOMIC IMPACT Asian Markets Securities report on Vishal Retail IPO VRL¶s focus is on tier II and tier III cities.000 products of household needs. which account for 87% of its total retail space. North India accounted for 62% of FY 2007 sales. AV Birla and many others have already established the farm linkages. footwear. Corporate retailers like ITC. changes his policy. 56 . Fresh avenues for gainful employment to a predominantly young and talented population have created high disposable incomes that translate in to higher consumption and thus better opportunities for all verticals of retail to flourish. toiletries. An average store is 20. but after liberalization govt. watches. Vishal Retail has 43 stores located in Tier II and Tier III cities. sports items. Godrej. The Indian government too has chipped in with a massive loan waiver worth Rs 60. the apparel business contributed 63% of revenues.Vishal Mega Mart also fixed a limited FDI in this sector. while the non-apparel business contributed 22% and the FMCG sector 15%. in size generating sales of Rs 7500 per squre feet. no body will invest more money from this limit.

The company also has its own fleet of 41 trucks. The in house apparel manufacturing facility offers private labels under the banner of Vishal Mega Mart. which accounted for 9. enjoy very high valuation with the PER of around 90. VISHAL MEGAMART expect the company to post sales & PAT growth of 60% & 70% respectively over FY07-09. VISHAL MEGAMART see the stock scaling up to Rs 538-600 levels over next one year. POLITICAL IMPACT This environment is very important from the view of these particular topics. Shopper¶s Stop and Trent (India).91.40 crore. Outlook and Valuation Vishal compares well in terms of profit margins & Mcap / Sales. because every way would pass through the political coridor. The leading players like Pantaloon Retail. Vishal Retail will also do well & command good valuation. Investors can certainly subscribe to this growth stock. income from private labels was Rs 58. nevertheless. ft. In FY2007.1 times the FY 2007 EPS of Rs 11. 80 and 40. Valuing conservatively at 18 .7% of total sales.426 sq.20x FY2009 EEPS of Rs 29.4 crore. although its average sales per square feet is very low compared to its peers because of its presence mainly in smaller cities. retail being a high growth industry. Strong Infrastructure VRL¶s distribution and logistics network comprises seven distribution centers with a total area of 471.The Government of 57 .000 pieces per day. At the upper price band of Rs 270 per share. The company is in the process of implementing SAP to connect all its stores and distribution centres through a virtual network connection which will help it to efficiently manage the network of outlets throughout the country. respectively. the P/E would be 24. Although VRL does not fall in to that league due to its value retail business model focused on smaller towns & cities. which helps in transport and delivery of products in a cost and time efficient manner.15 on post-issue equity of Rs 22.Vishal Mega Mart house In Apparel Manufacturing & Private Labels VRL has a garment facility in Gurgaon having a capacity of 5.

and grassroots organizations have long argued that the reason for Wal-Mart¶s cheap prices is how shoddily it treats its employees. which has a deal with Bharti. (Wal-Mart is world¶s largest retailer and the second largest corporation.Vishal Mega Mart India has succeeded in its reform process. make import duties in compliance with WTO commitments and customize the EXIM policy to boost imports. Retailing is the second largest income generator in India after agriculture and 58 . efficiency and an enriching customer experience. the protests had political backing and turned violent.) TECHNOLOGICAL IMPACT India¶s organized retail industry. fear the company¶s low prices will destroy their market. constituting 3 per cent of the total retail. mostly street vendors. are raring for joint ventures. Due to some political region at least three major cities saw protests in May against Reliance. It has necessitated the development of sophisticated IT solutions to enable more profitability. women¶s rights groups. the economy is poised to grow at an annual rate of 5% during 2005-2010. The reforms include policies to woo foreign investors. entering the business of retailing fresh vegetables and fruits through its brand Reliance Fresh. is indeed on a growth path. The protestors. who control about 95 per cent of the country¶s overall retail business. Many visible corporate brands are into the retail business: VISHAL MEGAMART. Wal-Mart had to leave Germany and South Korea because it did not get the kind of room for its policies as in the US and other countries. In Ranchi and Indore. the protests also stem from the fact that they feel cheated by a government that is in a hurry to promote large retail businesses and refuses to keep its promises made to small vendors and retailers. While it is too early to know if their fears are founded in reason or hype. India has an estimated 12 million street vendors in its cities²the 2004 National Policy for Urban Street Vendors pegs it at 10 million² and roughly 2. India has not allowed FDI in multibrand retailing. But international behemoths like Wal-Mart.5 per cent of each city¶s population is engaged in vending on streets. India¶s largest corporation. Bharti. Labour unions. Godrej and Subhiksha. Big Bazaar.

Technology is a one-time investment but the return on investment is continuous. The retailer has to ensure that customer is not required to hang around or take too much time to spot his product. based in Gurgaon. Why do some products move faster while others don¶t? Mere PoS computerization is not going to help in these matters. Proper supply chain is essential and customer experience is very critical for retail success. even to the point. 59 . which truck will reach their warehouse in next 45 minutes. I think it is a wrong strategy because it doesn¶t help you to find out who your customers are. If you can¶t provide the product or service. Atanu Ghose. let us say. even a one percent saving makes a huge difference. has already made a mark in the field by providing complete end-to-end solutions for different types of retailers.Vishal Mega Mart constitutes 38 per cent to gross national income. the customer will go to next shop. Technology Head at DVS and an IT veteran with 37 years of experience. it doesn¶t generate information on stocks and shelf space analysis is very critical. Dynamic Vertical Solutions Pvt Ltd. who was in Bangalore recently to attend FRO2008 ² the Franchise and Retail show ² shares some of his perceptions on IT deployment in retail sector. Technology-driven companies like Wal-Mart have minute information. The problem with ordering through phone is that it may not be properly registered or the person concerned might forget about the call 15 minutes later. For the first three years ROI may not be there but then onwards there is no cost. If you are a large retailer. Many of the large retailers spent crores of rupees on doing up their premises but buy some cheap software at Point of Sale (PoS) for computerized invoicing.

processes and business applications in order to handle all store operations including inventory management and billing. supply chain logistics. IT solutions help in synchronizing activities across various verticals such as procurement of inventory. VRPL believe that their business requires efficient management and storage of data and information to utilise for business analysis. and Customer Loyalty Program & Human Resources are linked through a computer network. providing value to customers and increasing the customer experience. reduction in wastages and missed opportunities as well as a consequent reduction of the overall costs of operations. This has also helped them reduce their costs of operations through both. they are able to generate 60 . Finance & Accounts. research and forecast. Operations. Most of their critical functions such as Supply Chain. VRPL are focused on acquisition and implementation of advanced information technology systems. All the locations are connected through company-wide virtual network connection which helps to efficiently manage their network of outlets throughout the country. VRPL office processes are also computerized which support procurement. distribution centers management and inventory control. I N N O VA T I O N & CHANGE Technology is important to cut costs. improve efficiency. Based on VRPL¶s existing information technology systems. This has enabled them to reduce their time to market and respond to the changing customer requirements.Vishal Mega Mart M A N A G E M E N T O F T E C H N O L O G Y . Securities from both external and internal threats are also important when the scale of the operations increases.

Vishal Mega Mart detailed daily reports covering the various aspects of their business such as division wise sales per store. SAP for Retail provides an integrated technology platform for retailers and a one point solution for supporting and managing different business models such as owned stores. the goods are always visible. Armstrong Software Group). documentation and other information related thereto. inventory movement and position at stores and distribution centers and generation of purchase and delivery orders. Applications and Products in Data Processing Private Limited (³SAP India´) for grant of a non-exclusive and perpetual license to VRPL to use the SAP software. Beyond the bar code is RFID (radio frequency identification) where a chip 61 . as are their labels²labeling standards mean that it is virtually impossible to not see the label and its bar code. shop n shop concepts. In August 2005. VRPL had entered into a software end-user license agreement with Systems. it does have short comings in that applying it means that everything has to be in line of sight because light is used to capture and read the bar code. This means that some form of scanner is used²the range of available technology is broad²either by an operator wielding a hand-held device or by a machine-mounted or fixed-position scanner. D. But as goods are handled either by humans or machines. Strong business decision and analytical capabilities have enabled retailers of all sizes the power to make the right decisions quickly and profitably. franchise stores. they have gradually extended the Use of technology in their various areas of operations. to use FoxPro for operations & accounting and. Bar code is tried and tested technology²the ³no-brainer´ choice for identifying items in the supply chain. Yes. implementation of a complete ERP from JDA (J. Beginning with a computerized cash memo. In order to increase the speed and traceability to the supply chain management Vishal Mega Mart introduces Bar Code Technology.

Bar code scanners are very sophisticated devices these days.Vishal Mega Mart within a tag carries information and is read using radio waves. merchandise assortment management. 62 . pricing and promotion. Vishal Mega Mart also uses CCTV to monitor its stores. rendering services inter alia for management information system on reports related to stock management. Various CCTV¶s are being installed in a store. receipt processing. Vishal Mega Mart uses the latest technology to improve its performance Quality as well as Quantity Wise. project systems. picking and packing. 2005 with Tata Consultancy Services Limited for providing information technology services including implementation of more advanced ERP applications such as SAP. VRPL have partly implemented their information technology set up and are currently in the midst of completing the process of upgrading their information technology set up and have entered into an agreement dated September 6. Functionality and reliability is extremely important. with a room where the entire functioning taking place in a store can be monitored by a human operator. controlling and financial accounting. sales.

comprising of FMCG companies and other retail companies and are currently at the 75 percentile. Compensation and Performance Based Incentives VRPL¶s compensation policy is performance based and they believe it is competitive with industry standards in India. They benchmark ourselves on compensation externally through consultants biannually. the Company also emphasizes on building a sense of pride. Apart from regular training in skills enhancement and customer engagement. Their compensation policy reflects their continuing efforts to build a world class performance driven culture.Vishal Mega Mart O R G A N I Z AT I O N S T R U C T U R E The Company places a huge emphasis on fostering a culture of innovation and enterprise that allows people within the Company to realise human beings' infinite potential. Based on performance. belonging and self-confidence among its employees working at the stores. The Company continues to increasingly focus on internal growth and development of its associates. the Company has provided 66 hours of training per associate. 63 . and aspire to be on the upper quartile of their target segment. through focused developmental efforts and growth opportunities. VRPL endeavor to recognize talent and potential in their employees and encourage them to take additional responsibilities. VRPL calibrate their employees and reward loyalty by preferring in-house promotions. For the year under review. cutting across levels and functions.

It intend to continue to encthierage thier employees to be enterprising and expect them to µlearn on the job¶ and contribute constructively to thier business. personal networks or effective knowledge management. either through ideas. personal networks or effective knowledge management. they train their employees to become next generation entrepreneurs. Their corporate objective is to provide every associate with an average of 5 man days of training per annum through internal and external resources. It has-been successful in building a team of talented professionals and intend to continue placing special emphasis on managing attrition and attracting and retaining thier employees.Vishal Mega Mart Continue to train employees and seek entrepreneurship from employees It believes a key to thier success will be thier ability to continue to maintain and grow a pool of strong and experienced professionals. In essence. It also intend to continuously re-engineer thier management and organizational structure to allow us to respond effectively to changes in the business environment and enhance thier overall profitability VRPL encourage their employees to be enterprising and expect them to µlearn on the job¶ and contribute constructively to their business. All senior management members are required to contribute 30 hours per annum towards training. who can effectively lead the growth of their business. Management Organization Structure:- 64 . either through ideas.

C.Vishal Mega Mart R.K. Accounts & MIS 65 .Agarwal Chairman & Managing Director Board of Directors Category Heads S.Zonal Head-Supply Chain Management Head.Retail Chief Operating Officer Head Legal & Secretarial Head IT Head-Admin & HR Head-Finance.Agarwal Whole-time Director Merchandise Head Heads .

net/ Go 66 .com/2006/11/03/11-vishalmegamart customers-petty-traders-have-no-reason-to-worry-say-vishal-officials/ STORE MANAGER:  NAME: SUNIL SINGH  ADDRESS: PLOT  http://en. NEAR ALT BUS STAND.ghaziabad2@vrpl. SECTOR-23.wordpress.wikipedia. 16. SANJAY NAGAR DISTRICT  http://indiaretailbiz.vishalmegamart.Vishal Mega Mart REFERENCES  http://www. GHAZIABAD-201002  PHONE NUMBER: 9313812864  E-MAIL ID: sh.

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