Organized retail is definitely a sunrise sector in India but to say that it is a sunrise sector for entrepreneurship would be wrong. Entrepreneurship is required in those fields in which an individual can go in with small capital and his expertise and go on to create a company which usually yields returns of the order of 10x or more. The ‘natural barriers’ to enter into organized retail are so large that it would not be wise for and an entrepreneur to jump into it and think that he will be able to compete with the likes of Reliance, Bharti, Wal-Mart etc. Also, organized retail is something which tests your operational and logistics skill rather than entrepreneurship abilities. Though organized retail is in practice around the globe for many decades now, it’s only now that it is making an entry into India in a big way. The reasons for this are many. With a booming economy and burgeoning middle class the shopping habits of Indians are changing fast. Malls and multiplexes and making headway into tier II and tier III cities also after mushrooming in the metros. Also the fact that organized retail accounts for only 3% of retail sales in India there’s a huge untapped potential. So much so that every conglomerate wants a piece of the pie. No wonder that every business house from Birlas to Ambanis is busy chalking out their retail plans. Though it will be too early for them to start counting their chickens as the government policy is still hazy and huge amount of expertise is required to run a panIndia retail network. There is scarce managerial talent in retail business and salaries are already skyrocketing. The government is still in process of studying the effect of organized retail on ‘mom-npop’ stores and the economy as a whole. There is huge pressure on government from foreign multinationals to allow FDI in retail. Of course local giants are keen to put their plans in place before foreign players are allowed to move in. The bleak chances of FDI in retail have forced foreign retail giants to look for local partners. Bharti has joined hands with Wal-Mart after failed talks with UK giant Tesco. Shopper’s stop has inked a deal with UK’s Home Retail group to develop Argos retail stores. Bombay Dyeing has tied up with France’s Auchen.Local retailers who already have a huge presence in India include Future Group (former Pantaloons), Subhiksha, Shopper’s Stop, RPG group. While Reliance retail, Tata, Bharti and Aditya Birla group are soon to start rolling out their retail plans.
The most bullish of them all is Reliance with plans to invest Rs. 25,000 crore in its retail venture. With Mukesh Ambani in driving seat there’s little doubt that reliance will change how Indians shop. His plans include selling everything from vegetables to cars under one roof and even deploying cargo planes to make sure that you get fruits and vegetables ‘farm-fresh’. Reliance has already opened 50 ‘Reliance Fresh’ stores with the very first in Hyderabad. Reliance plans to launch 1000 stores by this year end. Reliance Retail will launch its hypermarket, supermarket and specialty formats in April-June quarter this year. Reliance and Bharti also have plans to set up Micro Finance Institutions along with their retail chains. While Bharti will also offer telecom services in its retail stores. As a result of hyper growth plans and rushed hiring, most retail ventures are struggling to keep pace. A massive churn is already taking place in retail space while real estate prices in prime locations are going over the roof. Most retail ventures are going in for mixed strategy when acquiring retail space. Some are just buying the land and then building their stores while others are buying finished commercial space or just renting it. When there is a huge competition in market it’s always a win-win for consumers. They can expect better services from ‘mom-n-pop’ stores and great bargains at their local mall. After all, it’s all about the customers. To keep the prices low the retailers are doing everything from buying cargo planes to sourcing fruits and vegetables directly from farmers. Also the retail stores promise to give the consumers more choices and a better shopping experience. With the economy growing at 10%, nobody is complaining about the money being put in behind these retail ventures. Though, initially there will be a few surprises and a few new lessons learnt the long term story looks promising.
RETAIL IN INDIA
India represents an economic opportunity on a massive scale, both as a global base and as a domestic market. Indian Retail sector consists of small family-owned stores, located in residential areas, with a shop floor of less than 500 square feet. At present the organized sector accounts for only 2 to 4% of the total market although this is expected to rise by 20 to 25% on YOY basis. Retail growth in the coming five years is expected to be stronger than GDP growth, driven by changing lifestyles and by strong income growth, which in turn will be supported by favorable demographic patterns and the extent to which organized retailers succeed in reaching lower down the income scale to reach potential consumers towards the bottom of the consumer pyramid. Growing consumer credit will also help in boosting consumer demand. The structure of retailing will also develop rapidly. Shopping malls are becoming increasingly common in large cities, and announced development plans project at least 150 new shopping malls by 2008. The number of department stores is growing much faster than overall retail, at an annual 24%. Supermarkets have been taking an increasing share of general food and grocery trade over the last 2 decades. However, Distribution continues to improve, but it still remains a major inefficiency. Poor quality of infrastructure, coupled with poor quality of the distribution sector, results in logistics costs that are very high as a proportion of GDP, and inventories, which have to be maintained at an unusually high level. Distribution and marketing is a huge cost in Indian consumer markets. It’s a lot easier to cut manufacturing costs than it is to cut distribution and marketing costs. Also, government has relaxed regulatory controls on foreign direct investment (FDI) considerably in recent years, while retailing currently remains closed to FDI. However, the Indian government has indicated in 2005 that liberalization of direct investment in retailing is under active consideration. It has allowed 51% FDI in “single brand” retail.
The next cycle of change in Indian consumer markets will be the arrival of foreign players in consumer retailing. Although FDI remains highly restricted in retailing, most companies believe that will not be for long. Indian companies know Indian markets better, but foreign players will come in and challenge the locals by sheer cash power, the power to drive down prices. That will be the coming struggle. This report discusses the scenario of organized retail industry in Ludhiana city of Punjab and the opportunities available for companies based on key statistics. I have answered Key questions like:
• • •
What is the market size and scope of the Organized retail industry in Ludhiana? What is the size of organized market segment wise & its growth prospects? Who are the major players of Retail Industry in Ludhiana, their impact on the unorganized retail outlets?
FMCG RETAIL IN INDIA India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million. Around 70 per cent of the total households in India reside in the rural areas, where mostly traditional retail outlets, commonly called kirana stores exist. These are unorganized, operated by single person and runs on the basis of consumer familiarity with the owner. However, recently organized retailing has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. Many semi-urban areas also witnesses entry of such organized retail outlets. Till now, entry of foreign retailers was restricted in Indian retail market because of the ban on Foreign Direct Investment in Indian Retail Sector. But recently, as government has changed its policy and the cabinet has allowed 51 per cent FDI in single-brand retail, the prospects of foreign players entering India became high. India is called a nation of shop keepers and organized retail which has just made an entry has a very small share estimated between 2-4% of total retail in the country. The entry of major retailers in the country has raised passions among the politicians, policy makers and smaller retailers that the presence of bigger organized retailers would lead to the elimination of the smaller shop keepers leading to a large scale problem of unemployment and maybe even social problems.
Organized Retail outlets in india BIGBAZAAR
Big Bazaar is not just another hypermarket. It caters to every need of your family. Where Big Bazaar scores over other stores is its value for money proposition for the Indian customers. At Big Bazaar, you will definitely get the best products at the best prices - that’s what we guarantee. With the ever increasing array of private labels, it has opened the doors into the world of fashion and general merchandise including home furnishings, utensils, crockery, cutlery, sports goods and much more at prices that will surprise you. And this is just the beginning. Big Bazaar plans to add much more to complete your shopping expereince. Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. Headquartered in Mumbai (Bombay), the company operates over 16 million square feet of retail space, has over 1000 stores across 73 cities in India and employs over 30,000 people. The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of seamless destination malls. Some of its other formats include Brand Factory, Blue Sky, aLL, Top 10 and Star and Sitara. The company also operates an online portal,futurebazaar.com. Future Value Retail Limited is a wholly owned subsidiary of Pantaloon Retail (India) Limited. This entity has been created keeping in mind the growth and the current size of the company’s value retail business, led by its format divisions, Big Bazaar and Food Bazaar. The company operates 120 Big Bazaar stores, 170 Food Bazaar stores, among other formats, in over 70 cities across the country, covering an operational retail space of
7 over 6 million square feet. As a focussed entity driving the growth of the group's value retail business, Future Value Retail Limited will continue to deliver more value to its customers, supply partners, stakeholders and communities across the country and shape the growth of modern retail in India.
Subhiksha is India's largest supermarket, pharmacy and telecom chain. Started in 1997 as a single store entity in South Chennai, it is now present nationally with 1000 outlets and spread across more than 90 cities. ICICI Venture Capital has a 24% stake in Subhiksha. Derived from the Sanskrit word, Subhiksham or "giver of all things good", Subhiksha was founded by Mr. R. Subramanian, IIT-Chennai & IIM-A alumni. His vision to deliver consistently better value to Indian consumers, has guided Subhiksha to deliver savings to all consumers on each and every item that they need in their daily lives, 365 days a year, without any compromise on quality of goods purchased. Subhiksha now has the pan Indian presence with stores across Delhi, UP, Punjab, Hariyana, Gujarat, Maharashtra, AP, Karnataka and TN. Today, it is a multi-locational, professionally managed and vibrant organization that is poised to change the lives of millions of Indians, faster than ever before! Lowest Prices & Great Savings Everyday! Subhiksha offers all goods at sharply discounted prices so that consumers can genuinely save in every transaction. Unlike other stores, the low prices at Subhiksha are not limited to a few goods or to a few specific days. Customers can get the same discounted prices on all items, on all days and irrespective of whether they make a small or a big purchase. In fact, the discounts and customer savings at Subhiksha are 4-5 times that offered by other small and big retailers.
What started as a humble one store enterprise in 1986 in Kolkata(erstwhile, Calcutta) is today a conglomerate encompassing 91 showrooms in 62 cities / 20 states. India’s first hyper-market has also been opened for the Indian consumer by Vishal. Situated in the national capital Delhi this store boasts of the singe largest collection of goods and commodities sold under one roof in India. The group had a turnover of Rs. 1463.12 million for fiscal 2005, under the dynamic leadership of Mr.Ram Chandra Aggarwal . The group had of turnover Rs 2884.43 million for fiscal 2006 and Rs. 6026.53 million for fiscal 2007 The group’s prime focus is on retailing. The Vishal stores offer affordable family fashion at prices to suit every pocket. The group’s philosophy is integration and towards this end has initiated backward integration in the field of high fashion by setting up a state of the art manufacturing facility to support its retail endeavors. Vishal is one of fastest growing retailing groups in India. Its outlets cater to almost all price ranges. The showrooms have over 70,000 products range which fulfills all your household needs, and can be catered to under one roof. It is covering about 1996592 lac sq. ft. in 18 state across India. Each store gives you international quality goods and prices hard to match. The cost benefits that is derived from the large central purchase of goods and services is passed on to the consumer.
Spencer’s Retail is one of India’s fastest growing retail stores with multiple formats and retailing food, apparel, fashion, electronics, lifestyle products, music and books. Established in 1996, Spencer’s has become a popular destination for shoppers in India with supermarkets, hypermarkets and dailies spread all over India. Operations Spencer’s has retail footage of over 1.3 million square feet and over 350 Spencer’s stores in 50 cities. The company operates through the following formats: Spencer’s Hypermarkets: a fast growing retail network of hypermarkets with large format stores in Mumbai, Gurgaon, Ghaziabad, Lucknow, Ludhiana, Calicut, Hyderabad, Vizag, Vijayawada, Aurangabad Durgapur and Kolkata. Spencer’s Super: one of the largest supermarket chains in the food and grocery segment in India. Spencer’s Daily: small format stores conveniently located with a range of products to meet your daily household needs. Spencer’s Express : food and grocery store next door
“MORE’s mission is to change the way people shop”. Aditya Birla Retail Limited re-brands its Fabmall grocery supermarkets to more. a name reflective of its commitment to offering consumers a more fulfilling retail experience. The re-branding follows the acquisition of the Trinethra Super Retail that includes the retail brands Fabmall, Trinethra and FabCity by Aditya Birla Retail in January 2007. As a result of the integration process, 68 Fabmall stores in Karnataka will be re-branded under the umbrella of more., the retail brand from the Aditya Birla Group. With the underlying objective to enhance the shopping experience for consumers, the new stores will continue to be built around the proposition of quality, affordability and convenience with new in-store merchandise and a whole new retail experience. The more. stores will offer a wide range of product categories including fruits and vegetables, staples, personal care, home care, household general merchandise and dairy products. The acquisition of Trinethra Super Retail has provided Aditya Birla Retail with a strong retail footprint in South India extending to 275 stores and over more than half a million square feet in Andhra Pradesh, Karnataka, Tamil Nadu and Kerala, where it is the leading food and grocery retailer. Currently Aditya Birla Retail has 60 stores in Bangalore, eight stores in Mysore and 10 stores in Mangalore. All Fabmall stores were re-branded to more in January 2007. The more. chain of supermarkets is spread over convenient locations and with layouts that allow ease of navigation. The project display is well-orgranised and facilitates ease of choice. The stores have been designed by Fitch, the leading international retail design firm. Demographic movements in India over the last two decades have made organised retail a necessity. The rapid growth of this industry is confirmation that the idea of orgranised retailing has taken root in India. The industry is today valued at around US$ 320 billion. Within the organised retail sector, food and groceries account for around 14 per cent of the total market with potential to garner an even bigger share of the market. About Aditya Birla Retail Ltd.: Aditya Birla Retail Ltd is the retail arm of the Aditya Birla Group, a US$ 24 billion corporation with a market capital of US$ 31.5 billion and
11 in the league of Fortune 500 companies. In May 2007, Aditya Birla Retail Ltd launched its first store,more. in Pune and currently has 100 stores across the country. With the acquisition of Trinethra Super Retail, the company will increase its retail foothold to 300 plus stores with re-branding of Trinethra and Fabmall stores in South India. 9
Reliance Fresh is the retail chain division of Reliance Industries of India which is headed by Mukesh Ambani. Reliance has entered into this segment by openingnew retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. The Reliance Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans to add more stores across different g, and eventually have a pan-India footprint by year 2011. The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian products. Besides, the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs. Reliance Fresh recently (24th Jan, 2007) opened several "Fresh" outlets in Chennai, New Delhi, Hyderabad,Jaipur, Mumbai, Chandigarh, Ludhiana increasing its total store count to 40. Reliance is still testing its retail concepts by controlled entry beginning in the southern states The company is planning on opening new stores with store-size varying from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and vegetables, staples, FMCG products and dairy products. Each store is said to be within a radius of 1-2 km of each other, in relation to the concept of a neighbour store. However, this is only the entry roll-out that the company has planned. Bangalore is said to have 40 stores in all by the end of the year. In a dramatic change due circumstances prevaling in UP, West Bengal and Orissa, It was mentioned recently in News Dailies that, Reliance Retail is moving out stocking. Reliance Retail has decided to minimise its exposure in the fruit and vegetable business and position Reliance Fresh as a pure play super market focusing on categories like food, FMCG, home, consumer durables, IT, wellness and auto accessories, with food accounting for the bulk of the business. The company may not stock fruit and vegetables in some states, Orissa being one of them. Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decided not to compete with local vendors partly
12 due to political reasons, and partly due to its inability to create a robust supply chain. This is quite different from what the firm had originally planned. When the first Reliance Fresh store opened in Hyderabad last October, not only did the company said the store’s main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its “farm-to-fork’’ theory. The idea the company spoke about was to source from farmers and sell directly to the consumer removing middlemen out of the way. Reliance may exit some businesses If the business does not increases by March 2008. Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various formats that Reliance has rolled out. In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of Apple Specialty Stores branded as iStore, starting with Bangalore.
OBJECTIVES OF THE STUDY
1. To find out the effectiveness of Organized FMCG Retail in the Ludhiana city. 2. To study about the future prospects of Organized FMCG Retail in the city . 3. To elicit customers views regarding Organized FMCG Retail . 4. To study satisfaction level of customers about Organized FMCG Retail being provided by Relaince Fresh, More, Spencer’s, Vishal Mega Mart,V Mart, 6Ten,Subhiksha. 5. To study about the changes that customers wants in these Organized FMCG Retail Outlets. 6. To know about the quality, services, product range provided by these Organized FMCG Retail Outlets. 7. To undertake a competitive analysis of all the Organized FMCG Retail Outlets in the city. 8. To suggest improvements to these Organized FMCG Retail Outlets in the city.
This study is based on survey and fact-findings inquiries with the customers purchasing from organized FMCG retail outlets in Ludhiana. It is aimed to collecting all the relevant data and its optimal usage keeping in mind objectives of the research.
Sample Size: Sample size of 50 respondents was taken.The survey was conducted in eastern india only.
Sampling technique: All the respondents were selected on random basis. So far every surveyed entity, the respondents are an essential prerequisite. For broader perspective the customers were contacted directly and by there association.
Research Instrument: A standard questionnaire was prepared for the collection of data from the various respondents. The questionnaire was designed to keep objectives of the study with the aim of collecting important information for the study.
COLLECTION OF DATA: For this research project, data was collected both from
the Primary and Secondary sources.
1. Primary Data:
Students were personally contacted and the data was collected with the help of questionnaire. The questionnaire was so designed so as to contain appropriate no. of questions and to satisfy all the research objectives. The questionnaire contained both; close-ended and open-ended questions. Special care was taken to ensure that questions were simple & sequential.
2. Secondary Data:
The secondary data was collected from catalogues, magazines, records and, websites, related to organized FMCG retail outlets in the city.
For analysis and interpretations only primary data is used. However for the conclusion and recommendations both primary and the secondary data along with the verbal knowledge and information although obtained from students, though they are outside the parameters of questionnaire were also included. The data collected from these sources was analyzed using various tools like percentage and weight age analysis method is applied throughout the study for the formulation and analysis of tables
INTERPRETATION & ANALYSES
19 Gender wise Distribution of respondents: Gender wise Distribution
38% Male Female 62%
As FMCG organized retail is concerned more with home managers (women) so no. of female respondents are taken more as compared with male respondents. Out of total respondents 62% are female & 38% are male.
Occupation/Profession Of Respondents:
House Wife 8% 6% 2% 6% 30% Teacher Private Job 26% 4% 18% Engg. Govt. Employee Any other Business Doctor
After dividing the respondents on the basis of gender, they are further divided according to their profession. In the profession wise distribution it is found that maximum respondents are housewives, because they are more related with FMCG goods. In this it is found that out of total respondents 30% are housewives, 26% are teachers, 18% belong to business background,4% are doctors,6% are from private job, 2% are engineers, 6% are govt. employees, 8% are from other backgrounds.
Q.1 Are you aware about the Organized FMCG Retail Outlets in Ludhiana?
Awareness About Organized FMCG Outlets
This is the first question which is asked from the respondents in order to check the awareness of organized FMCG retail. In this question I tried to find out how many respondents are aware about organized FMCG retail. In this survey as I include the educated professionals (Through Exit Interview) from different backgrounds, so everyone is aware about organized FMCG Retail. Hence 100% respondents are aware about organized FMCG Retail.
Q2 Which Organized FMCG Retail outlets are you aware about?
Aware Relaince Fresh Vishal Mega Mart Big bazar V Mart Spencer's Subhiksha MORE 100% 100% 100% 70% 82% 100% 70%
Not Awarwe 0% 0% 0% 30% 18% 0% 30%
This question was asked from the respondents to find out the individual awareness of the organized FMCG retail outlets. In this it is found that all the respondents are aware about the Reliance Fresh, Subhiksha & Vishal mega mart, because these are older outlets in the city as compare to another .Also most of the people were not aware about one of the bigger brand i.e. MORE, because it launched recently in the city. The percentage of awareness of different organized FMCG brands is shown in the above table.
23 Q3 Out of these which you have visited?
visited Relaince Fresh Vishal Mega Mart Big bazar V Mart Spencer's Subhiksha MORE 86% 92% 95% 56% 72% 82% 36%
Not visited 14% 8% 05% 44% 28% 18% 64%
In this question I tried to find out that how many respondents visited all the organized retail outlets and which outlet is mostly visited by respondents. In this it was found that almost all the respondents had visited Reliance Fresh, Subhiksha & Vishal Mega Mart. The percentage of respondents visited different retail outlets is shown in the above table.
Q.4 Have you bought any FMCG products from these outlets?
Awareness About Organized FMCG Outlets
This question was asked from the respondents to check that either they purchased from these organized retail outlets or not. As the exit interview was conducted in the starting of the project so all the respondents were the customers of these organized retail outlets.
Q5 Out of these organized FMCG retail outlets where do you generally purchase
Aware Relaince Fresh Vishal Mega Mart Big bazar V Mart Spencer's Subhiksha MORE 78% 86% 90% 14% 66% 72% 28%
Not Awarwe 22% 14% 10% 86% 34% 63% 72%
In this question it was asked from the respondents that from where they generally purchase. In this it is found that most of the respondents purchased from Relaince Fresh, Subhiksha & Vishal Mega Mart because these were the oldest in the market & had made good reputation in the Ludhiana market. In this question it was also found that respondents purchased very less from MORE because it is new in the market. The purchase pattern of respondents explained in the above table.
Q.6 Where were you shopping before buying from these organized FMCG retail outlets?
4% 34% Neighbourhood Karyana store Wholesale Market Store which is convenient Any other
This question was asked to study past purchase behavior of the respondents. In this they were asked that from where were they purchased before buying from these organized FMCG outlets. In this 52% respondents told that initially they purchased from wholesale market,34% respondents told that they purchased from nearer karyana store for their FMCG needs.
27 Q.7 How much of your monthly budget grocery products are you shopping from these organized FMCG retail outlets?
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 0%-20% 20%-40% 40%-60% 60%-80% More than 80% 1 12% 18% 42% 22% 6% 0%-20% 20%-40% 40%-60% 60%-80% More than 80%
This question was asked from the respondents to find out that how much out of their monthly budget were they shopping from these organized FMCG retail outlets. In this it is found that 42% of the respondents spend 40%-60% of their monthly budget. while only 6% respondents spend more than 80% of their monthly budget.
28 Q.8 Out of the total shopping specify %age expenditure in the following categories at Organized FMCG retail outlets? A) Food Products
6% 24% 0-%15% 15%-30% 30%-45% 45%-60% 60%-75%
More than 75%
This question was asked from the respondents to find out that out of their total budget in food products, how much they spent to purchase food products from the organized retail outlets. In this it is found that 26% of the respondents spent 15%-30% on the food products, while only 6% respondents spent more than 75% to purchase food products from these organized retail outlets.
29 B) Confectionery
8% 10% 22% 0%-15% 15%-30% 30%-45% 20% 45%-60% 16% 60%-75% More than75% 24%
This question was asked from the respondents to find out that out of their total budget in confectionery, how much they spent to purchase confectionery from the organized retail outlets. In this it is found that 24% of the respondents spent 30%-45% on confectionery, while only 8% respondents spent more than 75% to purchase confectionery from these organized retail outlets.
14% 0%-15% 15%-30% 30%-45% 45%-60% 60%-75% More than75%
This question was asked from the respondents to find out that out of their total budget in detergents, how much they spent to purchase detergents from the organized retail outlets. In this it is found that 28% of the respondents spent 45%-60% on confectionery, while only 6% respondents spent more than 75% to purchase detergents from these organized retail outlets.
D) Vegetables &Fruits
0% -15% 22% 15% -30% 30% -45% 45% -60% 60% -75% M ore than75%
This question was asked from the respondents to find out that out of their total budget in vegetables & fruits, how much they spent to purchase fruits & vegetables from the organized retail outlets. In this it is found that 28% of the respondents spent 45%-60% on confectionery, while only 12% respondents spent 60%-75% to purchase Fruits & detergents from these organized retail outlets.
E) Soaps & Sanitary Products:
4% 24% 0%-15% 15%-30% 30%-45% 45%-60% 60%-75% More than75%
This question was asked from the respondents to find out that out of their total budget in Soaps & sanitary products, how much %age they spent to purchase sanitary products from the organized retail outlets. In this it is found that 24% of the respondents spent 45%-60% on confectionery, while only 4% respondents spent more than 75% to purchase sanitary products from these organized retail outlets.
Q.9What is your average one time purchase at FMCG retail outlets in rupees?
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Below10 00 10001500 15002000 More than 2000 1 16% 44% 26% 14% Below1000 1000-1500 1500-2000 More than 2000
This question was asked to the respondents in order to find out their average one time purchase at the organized retail outlets. In this 44% of the respondents told that they purchase between 1000-1500 Rs. At one time.26% of the respondents told that they spent 1500-2000 at one time purchase at organized retail outlets.14% said that they spent more than 2000 at one purchase, while 16% said that they purchase below INR1000 on an average purchase at organized retail outlets.
34 Q.10 How many time do you visit the organized FMCG retail outlets in a month?
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Once 2-3 times 3-4 times more than 5 times 1 14% 46% 32% 8% 3-4 times more than 5 times Once 2-3 times
In this question I tried to find out the frequency of respondents to visit the organized retail outlets in a month. In this question most of the respondents visit the organized retail outlets 2-4 times in a month. The exact %age is shown in the above table.
35 Q.11 Do you think by shopping at organized FMCG Retail outlets your monthly Expenditure: 1. Increased 2.Remain same 3.Decreased
40% 35% 30% 25% 20% 15% 10% 5% 0% Reduced Remain same Increase d 1 28% 34% 38% Reduced Remain same Increased
In this question the respondents were asked that by purchasing from organized retail outlets their monthly expenditures increased, decreased or remain same. In this 38% of the respondents replied that their total expenditure increased by purchasing from the organized retail outlets.34% of the respondents replied that their expenditure remain same. While remaining 28% said that their expenditure were reduced by purchasing from organized retail outlets.
36 Q.12 What are your reasons for purchasing from these organized FMCG retail outlets?
Reasonable Price 12% 8% 14% 4% 26% Display Of Products Discounts&Pro motional Schemes 18% Good Enviournment Time Saving 18% Product Range
When the respondents were asked to specify the reasons which influence them to purchase from these organized FMCG retail outlets, then 26% of the respondents told that they purchased due to product range.18% purchased due to reasonable price,18% due to good quality, 14% purchased from organized retail outlets because it save time,12% liked the discounts & promotional schemes, 8% prefer the display of the products & remaining
4% liked the enviournment of the organized retail outlets.
Q.13 Are you satisfied with the quality of goods offered by the organized FMCG Retail outlets from where you generally purchase?
60% 50% 40% 30% 20% 10% 0% Highly Satisfied Satisfied Neutral Dissatisfi ed Highly Dissatisfi ed
Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied
1 28% 54% 10% 8% 0%
In this question the respondents were asked that are they satisfied with the quality of the goods offered by these organized retail outlets. In this it is found that most of the respondents were satisfied with the quality of the goods. In this 54% of the respondents replied that they are satisfied with the quality, 28% were highly satisfied,10% neutral, & 8% are dissatisfied with the quality provided by organized by FMCG retail outlets.
Q14 Are you satisfied with the range offered by organized FMCG retail outlets from where you generally purchase?
2% 14% 0% 36%
Highly Satisfied Satisfied Neutral Dissatisfied
This question is asked from the respondents in order to find out that what kind of range are they offer as well as to check either customers are satisfied or dissatisfied with the range of products offered by organized retail outlet. In this question it was found that 48% of the respondents are highly satisfied with the range offered and only 2% respondents were there who were not satisfied with the range of products offered.
Q.15 What do you think the service provided by these organized FMCG outlets in comparison to other stores are:
Highly Satisfied 6% 10% 0% 32% Satisfied Neutral Dissatisfied Highly Dissatisfied
When respondents were asked to give feedback on the basis of service provided by the organized retail outlets then it was found that most of the respondents were satisfied. In this 52% of the respondents were highly satisfied while only 6% of the respondents were dissatisfied from the services provided by these retail outlets.
Q.16 What are the problems you faced when you shop from these organized FMCG Retail Outlets?
2%4% 34% 54% 6%
Range is not complete Green grocery is not fresh Home delivery is not provided Do not grant credit Insufficient billing counters
This question was asked from the respondents in order to found the problems which they had faced while purchasing from the organized retail outlets. In this maximum number of respondents said that they faced the problems at billing counters due to long queues.In this 54% of the respondents told that billing counters are insufficient while 34% said that they need free home delivery, 6% need goods on credit, 4% told that sometimes vegetables were not fresh while remaining 2% said that the range is not complete.
Q.17 In future will you spend more at organized FMCG retail outlets?
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Definitely No No Can't Say Yes Definitely Yes 1 4% 16% 34% 34% 12% Definitely No No Can't Say Yes Definitely Yes
This question is asked from the respondents to find out that in future will they spend more at organized retail outlets. In this 34% of the respondents told that they will spend more at organized more at organized retail outlets, 34% were not sure about it,12% said definitely purchase more from organized retail outlets. Only 16% of the respondents said that they don’t want to spend more at organized retail outlets.
Q.18 Do you think the market share of unorganized retail will: 1. Definitely Increase 2. Increase 3. Remain Same 4. Decrease 5. Definitely
Definitely Increase Increase 15% Remain Same Decrease
This question was asked from the respondents in order to check their perception about unorganized retail outlets in the city. They were asked that what they think market share of unorganized retail outlets in the city will fall down or will increase. In this most of the respondents replied that market share of unorganized retail will definitely decrease. In this 47% of the respondents said that market share of unorganized share will decrease while 22% said that it will increase and 15% said that it will remain same. Only 16% of the respondents said that it may increase.
FINDINGS & SUGGESTIONS
1. In this study it is found that the customers prefer to purchase from Organized FMCG retail outlets as compare to unorganized retail outlets. 2. During the study it come to know that customers spend 40%-50% of their monthly budget at organized FMCGretail outlets. 3. In this study it is found that organized FMCG retail outlets provide better quality, product range AS compare to unorganized retail outlets. 4. In this study it is observed that in future the market share of unorganized retail will reduce, because Customers shifting from unorganized retail outlets toorganized retail outlets. 5. During study it is observed that these organized retail outlets attracting the middle & upper class customers, the lower class person still prefer to purchase from the local karyana stores. 6. In this study it is also found that organized FMCG retail outlets lacks in the segment of Green Grocery as compare to un organized sector(street hawkers).
1. The organized retail outlets should improve the quality of Vegetables & fruits they provide to customers. 2. The organized FMCG retail outlets should provide the free home delivery facility. 3. The organized FMCG retail outlets should increase the no. of billing counters in their outlets. 4. The organized FMCG retail outlets should also provide the credit facility to the lower class customers so that they can increase their market share. 5. The organized FMCG retail outlets should also provide the mobile van facility in the areas which are far away from the stores.
CRUX OF THE STUDY
The crux of the study is that most of the customers prefer to purchase from organized FMCG retail outlets as compare to unorganized FMCG outlets. Also its found that most of the respondents are satisfied with the quality , price and product range of the goods provided by organized retail outlets. In this study it is found that customers want to spend more at organized retail outlets in comparison to other local Karyana stores. During the study its also found that customers were happy from the services provided by organized FMCG outlets. This study also revealed that customer prefer the organized FMCG retailing over unorganized FMCG retailing, due to which the organized FMCG retiling become a threat to the local karyana stores & street hawkers.
LIMITATIONS OF THE STUDY
LIMITATIONS OF THE STUDY No study is complete by itself, however good it may be, and every study has some limitations. The limitations of this study can be summarized below: 1. Due to the constraints of time, the study was confined to Ludhiana city. 2. The sample was taken on the basis of convenience; therefore the shortcomings of the convenience sampling may also be present in this study. 3. The sample size chosen for the purpose was only indicative and not exhaustive owing to time constraints. 4. There were some inherent limitations as far as collection of data is concerned. The respondents replied may be biased in favor of their centers.
51 NAME: _______________________________________ CONTACT NO.: _______________________________ GENDER: Male Female
PROFESSION/OCCUPATION :HouseWife Private job Business Engg. Doctor Govt. employee Teacher Any other
1) Are you aware about the organized Retail Outlets in Ludhiana? Yes No
2) Which organized FMCG Retail outlets are you aware about ? Subhiksha 6Ten Spencer’s Reliance Fresh Vishal Mega Mart More V Mart
3) Out of these which you have visited? Subhiksha 6Ten Spencer’s 4) Have you bought any FMCG product from these outlets? Yes No Reliance Fresh Vishal Mega Mart More V Mart
5) Out of these organized FMCG Retail Outlets where do you generally purchase from ? Subhiksha 6Ten Spencer’s 6) Where were you shopping before buying from these organized FMCG Retail Outlets Neighborhood Karyana Store Store which is convenient to you Wholesale Mkt. Any Other Reliance Fresh Vishal Mega Mart More V Mart
7) How much of your monthly budget grocery products are you shopping from these Organized FMCG Retail Outlet ? 10-20% 40-50% More than 70% 8) Out of the total shopping specify %age expenditure in the following categories at organized FMCG retail outlets?
0%-15% Food Products Confectionery Detergents Vegetables & fruits Soaps &Sanitary products 15%-30% 30%-45% 45%-60% 60%-75% 75%-100%
9) What’s your average one time purchase at FMCG Retail Outlets in Rupees ? Below 1000 1,500-2000 1,000-1500 2,000-2500
10) How many time do you visit the organized FMCG Retail Outlets in a month ? Once 2-3 times 3-5 times more than 5 times
11) Do you think by shopping at organized FMCG Retail Outlets your monthly expenditure: Reduced Remain Same Increased
12) What are your reasons for purchasing from these organized FMCG Retail Outlets ? (mark only 3) Better Quality Good environment Reasonable price Time Saving Product range Display of products
Discounts and Promotional schemes 13) Are you satisfied with the quality of goods offered by the organized FMCG Retail Outlets ? Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied
14) Are you satisfied with the range offered by organized FMCG Retail Outlets from where you purchase ? Highly Satisfied Satisfied Neutral Dissatisfied Highly Dissatisfied
15) What do you think the service provided by these organized FMCG outlets in comparison to other stores are: Excellent Good Average Poor Very Poor
16) What are the problems you face when you shop from these organized FMCG retail
54 outlets? (specify) Range is not complete Home delivery is not provided Insufficient Billing Counters 17) In future will you spend more at organized FMCG retail outlets ? Definitely Yes Probably Yes Can’t Say Probably Not Definitely No Vegetables/Fruits are not fresh Do not grant credit
18) Do you think the market share of unorganized retail will: Definitely increase Increase Remain same Decrease Definitely decrease
19) What kind of improvements required in these organized FMCG retail outlets, please Mention: 1) _________________________________________________________________ _ 2) _________________________________________________________________ _ 3) _________________________________________________________________ _ THANKS A LOT FOR VALUABLE INFORMATION
WEBSITES: www.imagesretailing.com www.reportbuyer.com www.reportbuyers.com www.thirdeyesite.in www.subhiksha.com www.google.com www.futurebazar.com
BOOKS: C R Kothari Research Methodology
PUBLISHED CATALOUGES OF DIFFERENT ORGANIZED FMCG RETAIL OUTLETS IN LUDHIANA.