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SUBMITTED TO: Mr. Devesh Katiyar
PREPARED BY: Bhanu Prakash Verma M.B.A. - (R.M.) Roll no. - 14 1ST Semester I.M.S. (UNIVERSITY OF LUCKNOW)
No human efforts could mount the ladders of success without being in right direction. I am very grateful to all friends who gave me useful suggestions and encouragement and who imparted impulses of joy. This assignment would not have been possible without the personal interest and guidance given by him.Devesh Katiyar whose effective guidance and valuable time before the assignment development made it feasible and easy for me to carryout.ACKNOWLEDGEMENT ³Unguided efforts and unguided designers are all waste. I would like to express my thanks to my all teachers for providing joint full efforts and support with esteemed guidance. Bhanu Prakash Verma Page | 2 . Last but not least I acknowledge my deep sense of regards and respect to my parents and to my sister specially whose encouragement was the main source of my energy behind the preparation of this assignment.´ I would like to express my heartiest thanks and cordial gratitude to my teacher Mr.
Recent development in rural retailing 6. Global scenario 3. Emerging trends in modern retail formats 9. Introduction to retailing 2. Driving factors of Indian retail market 8. Bibliography PAGE NO. Types of retailers in India 10. Problems earlier faced by retail industry in India 7. 4 5 6 7 8 8 9 10 11 12 14 15 Page | 3 . India¶s top retailers 5. Conclusion 12. Swot analysis of retail industry in India 11.INDEX CONTENTS: 1. Indian scenario 4.
is doing retailing. China on the other hand has attracted several global retailers in recent times. little has remained same over the last decade. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing. On the global Retail stage. Major retailers like Wal-Mart & Carrefour have already entered the Chinese market. It can also be defined as the timely delivery of goods and services demanded by consumers at prices that are competitive and affordable. The Asian economies (excluding Japan) are expected to grow at 6% consistently till 2005-06. which has resulted to the emergence of big retail chains in most metros. Customer taste and preferences are changing leading to radical transformation in lifestyles and spending patterns which in turn is giving rise to new business opportunities. Wal-Mart & Carrefour had sales of US $ 70. Other than Wal-Mart's dominance. The top 200 retailers alone accounts for 30 % of the worldwide demand. non-business use.000 Crore and the sector average growth is showing an upward pattern. telephone. GLOBAL SCENARIO: Retail stores constitute 20% of US GDP & are the 3 rd largest employer segment in USA. or in consumer's home). 00. The global economy has changed. Any organization selling to final consumers ± whether a manufacturer. there's a little about today's environment that looks like the mid-1990s.4 Crore & US $ 160 Crore respectively. mini metros and towns being the next target. wholesaler or retailer. Retailing can be defined as the buying and selling of goods and services.INTRODUCTION TO RETAILING: Retailing includes all activities involved in selling goods or services directly to final consumers for personal. Retail turnover in the EU is approximately Euros 2. The global retail industry has traveled a long way from a small beginning to an industry where the world wide retail sales is valued at $ 7 x 10 5 Crore. Page | 4 . consumer demand has shifted & retailers' operating systems today are infused with far more technology than was the case six years ago. In the year 2003. vending machine or internet) or where they are sold (in store. There is increased sophistication in the shopping pattern of customers. Retail sector employs 7% of the population in China. One of the few similarities with today is that Wal-Mart was ranked the top retailer in the world then & it still holds that distinction. mail. It does not matter how the goods or services are sold (by person. on the street.
Superstore. Super center Discount. Discount. Discount Department. Food Service. Hypermarket.458.153. Food Service. Super market.747. Convenience. Superstore. DIY. Drug.6 Page | 5 . Albertsons 3. Convenience.379.3 5 US Kroger 5. Warehouse. Cash & Carry. Super center.9 7. Superstore. Supermarket.637. Food Service Discount. Superstore. Super market.4 9 10 11 US Germany Germany Costco Aldi Einkauf Rewe 4. Convenience.481. Departmental. Warehouse Discount.0 e 3. Specialty.1 4. Inc.1e 12 France Intermarche 3. Drug Warehouse Discount. mail order. Convenience Department.2e 13 14 15 US US US Sears Safeway. Specialty Department. Specialty.3 3. Cash & Carry.979. Supermarket. DIY. Discount.6 6. Supermarket. Specialty Supermarket Convenience. Supermarket.678.543. Specialty. Convenience.5 7 8 US Netherlands Target Ahold 4.006. Specialty.050. Hypermarket.632.893. Convenience.555. Cash & Carry DIY Hypermarket. Supermarket. Departmental. Hypermarket. Specialty. Supermarket 25.169. Hypermarket.3 4. Cash & Carry. Cash & Carry.6 6. Drug Superstore.2 3. Convenience.1 6 UK Tesco 5. Supermarket Hypermarket. DIY.List of world's top 15 retailers: DT Rank 04 Country of Origin Company name Formats 2003 retail sales (US $ Crore) 1 US Wal-Mart 2 France Carrefour 3 4 US Germany Home Depot Metro Discount.
2 Crore outlets but only 4% of them are larger than 500 sq. It is projected that by the year 2010. Retailing. feet in size. and Bharti group too are at the same stage of retail development. Retail Space is no more a constraint for growth. This is slowly giving way to international formats of retailing. In the year 2004 . The great Indian middle class is estimated to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world. Aditya Birla group. India is on the radar of Global Retailers and Page | 6 . one of the largest sectors in the global economy. NeelKamal. is going through a transition phase in India. It employs almost 7% of the total work force in India and has a contribution of 14% to the national GDP. For a long time. 65% of the Indian population will be in the age group of 10-49 years. India has the largest retail network with 1.INDIAN SCENARIO: Retailing in India is the largest employer after agriculture. Thus India has the highest number of outlets per capita in the world with a widely spread retail network but with the lowest per capita retail space (@ 2 sq. ratio of organized-Unorganized retail was 3:97 which is expected to be 9:91 by 2010. Middle class =150 & lower middle class = 110). It is not just the global players like Wal-Mart. Though with a population of a billion and a middle class of 300 million (upper middle class= 40. KK Modi. the size of Indian organized retail industry was Rs 28000 Crore. USA on the other hand has 9 Lakh outlets catering to more than 13 times the total retail market size of India. organized retailing is still at its infancy in India.ft. which makes the scenario even more attractive. In the year 2004. Tesco and Metro group are eying to capture a pie of this galloping market but also the domestic corporate behemoths like Reliance. especially in the urban areas. which was only 3% of the total retailing market. Let¶s have a look at the evolution process: Indian consumers are rapidly evolving and accepting modern formats overwhelmingly. per person). the corner grocery store was the only choice available to the consumer.
Big Bazaar-Pantaloons: Big Bazaar. 5. Subhiksha is one of the leading super market operators. ITC. Reliance. it is targeting revenue of Rs 8. 6. large Indian corporate groups like Tata. Page | 7 .8 Crore for the year 2002-03. More Retail stores: It is very highly emerging retail store dealing with FMCG goods and apparels and governed by ADITYA BIRLA GROUP.suppliers / brands worldwide are willing to partner with retailers here. Murugappa & Piramal Groups etc and also foreign investors and private equity players are firming up plans to identify investment opportunities in the Indian retail sector.31 crores & by 2010. Raheja. it had revenue of Rs 658. 3. which is uniformly spread across 240 Margin Free franchisees in Kerala. 7.800 Crore. Food World: Food World in India is an alliance between the RPG groups in India with Dairy Farm International of the Jardine Matheson Group. INDIA¶S TOP RETAILERS: 1. In the year 2003-04. Further. for the Rural India. Their turnover was Rs 78. Some of these initiatives include: (Jo Dikhta Hai Wo Hi Bikta Hai). Margin Free: It is a Kerala based discount store. 2. Tamil Nadu and Karnataka. Given the situation we can say that Indian Retailing is at boom. 4. Bombay Dyeing. On one hand there are groups of visionary corporate working constantly to improve upon urban shopping experience and on the other hand some companies are trying to infuse innovative retail experience into the rural Set up. Food Bazaar: Food Bazaar has made the transition from just a grocery retailer to developing emotional bonding with shoppers by providing some value added services to the shoppers. Development of mega malls in India is adding new dimensions to the booming retail sector. a rural mall. a division of Pantaloon Retail (India) Ltd is already India's biggest retailer. Even ITC went one step ahead to revolutionize rural retail by developing µChoupal Sagar¶. There is significant development in retail landscape not only in the metros but also in the smaller cities. Trinethra: It is a supermarket chain that has predominant presence in the southern state of Andhra Pradesh. who largely operates in the southern part of India is expanding to western India.
farm implements. seeds. 5. 6. the retailers may go for experimentation to identify the winning format suited to different geographies and segments. Wal-Mart is highly successful in USA but the story is different in Asian countries like China. 22 "Hariyali" Stores have been operational in different states across North India. the rural retail initiative of Godrej Agrovet Ltd operates a chain of 18 stores providing a host of services to farmers and their families and is planning to set up at least 1. PROBLEMS EARLIER FACED BY RETAIL INDUSTRY IN INDIA: The organized retail industry in India had not evolved till the early 1990s. They also have officers who offer free advices to farmers regarding best agriculture practices. HUL's project Shakthi and Mahamaza. Mahindra & Mahindra Subh-Labh stores . It was a sellers market. for the Rural India. tax laws and government regulations all discouraged the growth of organized retailing in India during that period. Lack of trained manpower. Hariyali Kisaan Bazaar has plans to rapidly scale up the operations & create a national footprint covering all the major agricultural markets of the country. For example. and little choice available to customers.RECENT DEVELOPMENT IN RURAL RETAILING: In recent times rural retailing is witnessing explorations by both corporate houses and entrepreneurs as ± ITC¶s µChoupal Sagar¶. with a limited number of brands. Therefore. Escort rural stores Tata Kisan Sansar DSCL Haryali Kisan Bazaar . pesticides. most of grocery retailers are region centric at this point in time. For example. 3.This is the rural initiative taken by Mahindra & Mahindra group to provide complete package of products and services related to firm productivity. Therefore. 4.200 farmers a day. Bharti. Considering the diversity in terms of taste and preferences prevailing in India. Until then. Offering insurance and financial services to farmers is part of the business. It is difficult to fit a successful international format directly and expect a similar performance in India.000 stores 19 across rural India in the next five years. the industry was dominated by the un-organized sector.Hariyali stores keep wide range of product assortments such as fertilizers. So far. Farmer response has been extremely encouraging. 7. Lack of consumer awareness and restrictions over entry of foreign players into the sector also contributed to the delay in the growth of organized retailing. 1. Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL). the taste in south is different from that in north and this brings challenges to the retailers. a rural mall. A centre is attracting 150 . Following Pantaloon's successful venture a host of Indian business giants such as Reliance. Page | 8 . it is important for a retailer to look at local conditions and insights into the local buying behavior before shaping the format choice. 2. Birla and others are now entering into retail sector. The lessons from multinationals expanding to new geographies also point to this. animal feed and irrigation equipment among other agriculture related products. Godrej Adhaar.
2. In January 2006. India's retail boom is manifested in sprawling shopping centers. 3. the 20 million middle class home in rural India equals the number in urban India 4 times and thus have the same purchasing power. 7. 60% of which is under 30 years of age. Pantaloon Retail India is experimenting with several retail formats to cater to a wide Page | 9 . 6. Increasing potential in rural market. Emerging Trends in Modern Retail Formats: The available research findings on retail indicate the following trends in Modern Retail formats: 1) Trial & Error: Now a number of retailers are in a mode of experimentation and trying several formats which are essentially the representation of retailing concepts to fit into the consumer mind space. Hefty pay-packets. Changes in Indian economy: There are fundamental but significant changes underway in our economy. multiplexmalls and huge complexes that offer shopping. In fact. Unlike the urban market. 5. A youthful. Increase in disposable income of consumer: Business communities believe that sizable disposable income in India is concentrated in the urban areas and well off and affluent classes. how to serve that market profitably. 4.DRIVING FACTORS OF INDIAN RETAIL MARKET: 1. such as Nike or Adidas. Increase in expenditure for luxury items. entertainment and food all under one roof. income distribution in India is unequal compared to other Asian economies. there is significant and considerable opportunity for organized retailers in the rural areas as well. This means majority of the population is young and working class with higher purchasing power. Tesco is planning to enter the market through a partnership with Home Care Retail Mart Pvt Ltd and expects to open 50 stores by 2010. Nuclear families in urban areas. Increase in young working population: By 2010 almost half of our citizens will be in the working age group of 20-24 years. Currently the country has a population of over one billion. bred on success will not drive the productivity but also set a spiraling effect on consumption & generation of income. The low median age of population means a higher current consumption rate which augurs well for the retail sector. it is less developed in terms of infrastructural facilities. exuberant generation. the government announced that foreign companies can own up to 51 percent of a single brand retail company. Therefore. This decision would certainly encourage retailers such as Zara5 and Gap6 to enter this market. There is no denying that the rural market holds immense promise for the organized retail but companies ponder over.
Shoppers' Stop is the first one to open a department store in the early 1990s and currently operates 19 stores in 10 different cities in India . On the other hand online retailers like amazon. Depot (books & music) and E Zone (Consumer electronics).The store strongly focuses on lifestyle retailing and mainly divides into five departments such as apparel. who purchase on bulk and look out for substantial discounts and offers. gift ideas and other services.com have to maintain their warehouse to stock products and take the responsibility of delivering products to the buyer. But there is scope for such kind of format. excellent terms and assured supply when items are scarce.S. the number of department stores is less as compared to other retail formats such as supermarkets and discount stores. they developed another new format in the form of Wholesale Club to sell a segment of consumers. Some of the new formats are Fashion Station (popular fashion). Consumers who are interested to purchase on bulk can take benefit from this format.com and walmart. accessories. 5) e-Retailing: The importance of internet retailing is growing all over the world. due to abundance of cheap land and the dominant car culture. They provide virtual shopping space to the vendors. In India this kind of retail stores are not prevalent at this point of time. 4) Category Killer: A New Concept imported from U. Similarly the Land mark group also operates multiple formats such as hypermarket (Max). It attracts more than 12 million shoppers every year with a conversion rate of 38 per cent. Shoe mart and Funcity8 etc. In India. Page | 10 . 2) Emergence of Wholesale Clubs: Since retailers are trying to segment the market with the help of formats. Generally such kind of retailers uses a self service approach. In India. Mega-Mart is one sort of category killer which sells apparel products. They use their buying power to negotiate low prices.: The category killer concept originated in the U. category specialist can be able to ³kill¶ that specific category of merchandize for other retailers. Category Killer is a kind of discount specialty store that offers less variety but deep assortment of merchandise. The new format is going to be a kind of wholesale club which is likely to be located close to Food Bazaar. 3) Efficient Buying: Increasing Importance of Supermarkets & Discount Stores: Such a format provides the greatest selection of any general merchandize and very often serves as the anchor store in shopping mall or shopping centre. departmental store (Lifestyle). Blue Sky (fashion accessories). home décor. most of the brick and mortar stores are entering into online retailing as they have physical infrastructure and they can use that to capture additional consumer wallet.segment of consumers in the market.com are providing a platform to vendors to sell their products online and they do not take the responsibility of delivering the product to buyer. Shopper¶s Stop is getting stronger and stronger year after year. So.S. Collection i (home furnishings). By offering a deep assortment in a category at comparative low prices. Some internet retailers such as e Bay and rediff. aLL (fashion apparel for plus-size individuals).
Amway 2. home furnishings. 1.000 square feet and combine supermarket.Types of retailers: There are three types of retailers in retail industry of India. Discount Store: Standard merchandise sold at lower prices with lower margins and higher volumes. I. Direct Selling: It deals with door-to-door or at home sale parties i. True discount stores regularly sell merchandise at lower prices and offer mostly national brands. Supermarkets: Relatively large. discount & warehouse retailing principles. book stores etc. Hyper stores/markets: Hypermarkets range between 80. the limited. low-margin. large & small appliances.apparel stores. Bulk display & minimum handling by store personnel with discounts offered to customers who are willing to carry heavy appliances and furniture out of the store. Non Store retailer 3. Retail Organization 1. open long hours. A clothing store would be a single line store. Example > Eureka Forbes. it involves one-to-one or one-to-many selling.000 square feet of selling space traditionally aimed at meeting consumers' total needs for routinely purchased food and non food items. 2. clothing items and many other items. Non store retailer: 1. Convenience Stores: Relatively small store located near residential area.000 and 220. The Body Shop.e. laundry & household maintenance products. seven days a week and carrying a limited line of high-turnover convenience products at slightly higher prices. Store retailer 2. IV. VI. high volume. low-cost. Automatic Vending: Example > ATM Page | 11 . Departmental Store: Several product lines-typically clothing. V. Averages 35. Example: Landmark book store.with each line operated as a separate department managed by specialist buyers or merchandisers. Specialty Store: Narrow product line with deep assortment as. men's clothing store would be limited line store & men's custom-shirt store would be a super specialty store. household goods. III. II. Store Retailer: There are 6 types of store retailer from assortment point of view. self-service operation designed to serve total needs for food. Product assortment goes beyond routinely purchased goods & includes furniture.
Retail Organization: It mainly falls into 4 major categories. As a result. Example: Dell Computers 3. a high street store of retail chain has an average conversion of about 50-60%. Trained human resource for retail is another big challenge. Page | 12 . 1. Less Conversion level: Despite high footfalls. Consumer Co-operative: Example > Apna Bazar 4. Café Coffee day. It is technology that will help the organized retailers to score over the unorganized retailers. Weakness 1. Westside 2. This has resulted in big salary hikes at the level of upper and middle management and thereby eroding the profit margin of the business. SWOT ANALYSIS: A SWOT analysis of the Indian organized retail industry is presented below: Strength: Retailing is a ³technology-intensive" industry. Corporate chains: Example > Pantaloons. Retail offers tremendous for the growth of Indian economy. Franchise Organization: Example > Monginis. On the other hand. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. in contrast the retail majors are experiencing a ROI of 8-10%. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25%.com 4. television direct response marketing and electronic shopping. the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. Retail Co-operative: Example > Amul. The talent base is limited and with the entry of big giants there is a cat fight among them to retain this talent. Direct marketing: It involves direct response marketing. Khadi Gram Yudog 3. 2. shorten lead times.3. catalog marketing. The different forms of direct marketing are: Direct mail. Buying services: Is a store less retailer serving a specific clientele-usually employees of large organizations-who are entitled to buy from a list of retailers who have agreed to give them discounts in return for membership. so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base. telemarketing. Since the stand-alone outlets were established long time back. Samavaika. a stand-alone store has a ROI (return on investment) of 25-30%. reduce inventory holding and ultimately save cost. Example > Amazon. Successful organized retailers today work closely with their vendors to predict consumer demand.
00. 4. 3. and reach INR 1. Page | 13 . display. high degree of flexibility in merchandise.a. Organized retail is only 3% of the total retailing market in India. they are parallel to a large supermarket with no or little overheads. It is estimated to grow at the rate of 25-30% p. 2. If the unorganized retailers are put together. Shopping Culture: Shopping culture has not developed in India as yet.Opportunity 1. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth. Even now malls are just a place to hang around with family and friends and largely confined to window-shopping. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010 making India one of the largest consumer markets of the world. Threat 1 . 2 . There is a great potential that retail may offer employment opportunities to millions living in small town and cities and in the process distributing the benefits of economic boom and resulting in equitable growth.000 Crore by 2010. prices and turnover.
So ultimately it can be said that for a retailer understanding the customers is just like climbing the Greased Pole. Therefore there is a big and reliable opportunity for youngsters to have a better future and to prove their integrity.´ -. few Kirana store owners find no competition because they understand what their customers want. But big challenges are always good motivators and motivation is the key to success. The concept and strategy of retailing is now touching to every area of business and corporate. Studies show that upgraded Kirana stores are growing at the same rate as organized retailers. the Indian retail industry is still at its infancy.Albert Einstein Page | 14 . But with the huge potentiality existing in the Indian market. ³If at first the Idea is not absurd. But retailing in India is entirely different from western countries for that matter even from Asian counterparts. it can be said that though the global retail industry has reached its maturity.CONCLUSION To conclude. In some cases. whether it is general merchandising or insurance or banking and finance or any consumer service provider company. then there is no hope for it. individuality and commitment as the retail industry of India is the biggest booming industry in India. it is expected to grow in leaps and bounds in the near future.
htm www.com Books: Marketing Management .com/retail_industry.Ramaswamy & Namakumari Page | 15 .BIBLIOGRAPHY Websites: www.iloveindia.indianmba.
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