Document TMP

A Study on the Impact of Online Grocery and Vegetable E commerce Platforms on Retail Business 2019-2020
EXECUTIVE SUMMARY
Grocery is the largest consumer segment by far; Indians spend more than 50% of their
monthly income on groceries. It’s a must-capture space for all retailers, be it offline or
online. Grocery and the vegetable retiling are a very hyper-local business and the
most needful commodity to any individual. It is the logical next step for e-tailers once
they have set up a strong delivery system and have a strong customer base created.
Grocery retail in India is estimated to be over 60% of the country’s total retail market.
Analysts peg it anywhere between $400 billion to $600 billion at present with the
potential to cross $700 billion by 2022. Online grocery is still in its nascent stages, but
analysts see it as having huge potential. It is estimated to be around $500 million to a
little over $1 billion currently and expected to cross $3 billion to $5 billion or even
much more over the next three to four years but the rate of growth of these e tailers is
quite alarming and has indeed raised tensions in the retail unorganized market.
The real GDP is expected to grow at 8-10 per cent per annum in the next five years.
As a result, the consuming class with annual household incomes above Rs. 90,000 is
expected to rise. Consequently, the retail business in India is estimated to grow at 13
per cent annually from US$ 322 billion in 2006-07 to US$ 590 billion. With all these
increasing awareness, increased spending capacity of consumers, changing lifestyles
of people, emerging new trends of technology it has been the need of the hour to
study as to how the Ecommerce has affected the retail industry and are the retailers
actually aware about the upcoming competition they have to face.
Having an expectancy to learn these keen issues the study was carried out and the
study results show that:-
• Unorganized retailers in the vicinity of organized retailers experienced a
decline in their volume of business and profit in the initial years after the
entry of large organized retailers.
• There is an adverse impact on sales and profit over time.
• Most of the unorganized retailers were still practicing the traditional methods
of buying practices and were unaware about the newer technologies.
Dept. of MBA, CBSMS(Eve), Bangalore 1 MBA, II-year, Marketing

• The rate of closure of unorganized retail shops in gross terms is found to be 4.2
per cent per annum which is much lower than the international rate of closure
of small businesses.
• Given the relatively weak financial state of unorganized retailers, and the
physical space constraints and the extreme competition they are facing have
brought their expansion projects to a complete halt
• There is competitive response from traditional retailers through improved
business practices and technology upgradation.
• A majority of unorganized retailers is keen to stay in the business and compete,
while also wanting the next generation to continue likewise.
• Most unorganized retailers are committed to remaining independent and barely
10 per cent preferred to become franchisees of organized retailers.
• Educational background of the retailers also plays an role in understanding the
market dynamics and there business downfall reasons
• There has been decrease in the overall turnover and profitability margin of the
retailers
• There is still a lot of competition between the retailers and no plans for
collaboration is seen
• Facilities like 30 day return policy has helped the Ecommerce gain the
confidence of the consumers and the same aspect has eventually led to the loss
of loyal consumers also
Impact on Consumers
• Consumers have definitely gained from organized retail on multiple counts.
• Overall consumer spending has increased with the entry of the organized retail.
• While all income groups saved through organized retail purchases, the survey
revealed that lower income consumers saved more. Thus, organized retail is
relatively more beneficial to the less well-off consumers.
• The convenience and after sales services offered by Ecommerce is a major
attraction to the consumers
• Consumers feel there is better pricing and transparency in Ecommerce rather
than the retail sellers

The study in addition to bringing out the current scenario also provides the possible
recommendations that the retailers can adopt in order to secure their future and face
the competition.

CHAPTER 1
INTRODUCTION
A grocer is the seller of our generic needed food items in bulk or in in retail to the
public. A vegetable shop is our local vendor of our much-needed daily vegetables and
both shops are much needed to source our daily needed essentials.
These stores offer a mix of perishable and non –perishables items. These are items
purchases meant for daily use. The items may be packed in different forms such as
boxes, bottles and cans to increase the life of the product. The grocery store take the
form of local vendor sitting on the street with his offering, as small shop, a cart or
may take a form of large store with great amount of products including non-food
items along its regular range. The offering may range of pharmacy, toys, and
electronics as well. These are also called as convenience stores or grocers or just
grocery businesses.
The vegetable store on the other hand provides us the greens we need daily. These
shops may be a small retailer, cart or even a street vendor with a basket of vegetables
or fruits. These vendors procure the products from different places like the local
vegetable market (Hub where producers and wholesaler’s meet) or regulated markets
or even purchase directly from the farmers.
These Grocery stores and the Vegetable store serve as the last mile connectivity
between the producers and the end users or consumers.
In countries such as United States or the West these shops are also referred as
delicatessens. Some stores take larger forms ranging to a larger complex including
several facilities. The big giants such as Tesco, Walmart, Sainsbury, and D Mart etc
work in these large formats. There are some stores which particularly specialize in
certain culture of nationality. These are ethnic markets. The reason for this being large
number of immigrants or increased cultural exports and acceptance of multiple
cuisines. However people don’t wish to restrict to one culture. They look for choices
and hence there is demand for availability of food to not limiting to local grown stuff
but having all less than one roof.

The produce may be kept in any form. The person sitting on ground with his basket of
offering, carrying all in cart on the busy road, Special section in a supermarket,
displayed in aisles in hypermarkets.
Fig.1.1 – Typical Grocery Shop Fig.1.2 – Typical Vegetable

Shop
1.1 THEORETICAL BACK GROUND OF THE STUDY

Early Age’s
A grocer was the one who deals with the trading of spices, sugar and pepper only.
And in addition to these products with the advent of time other goods such as coffee,
tea and cocoa were added to the offerings.
The term grocer came from French word Grossier meaning wholesaler, this term
actually came derived from Medieval Latin grossarius and derived from the term
gross. Gross means a 144 or a quantity of twelve dozen
So a person dealing with bulk purchases was a grocer. Later the trade expanded as
increased numbers of food products were made became available in packaged cans.
Moving from just spices or fruits or vegetable, today’s grocers offer range of stuff
covering meats, dairy products, produce etc. Such goods are collectively called
groceries.
In the west, these grocery stores moved from just trading joints not just restricting to
food stuff but also including covering household items, common daily needed
products, cereals, eatables and other. Facilities to just dry foods, dry beans, canned
foods, vegetables and fruits also.

On the other had the vegetable shops evolved from wagon carts, thelas i.e the
traditional wooden four wheeled cart, which is used to carry vegetables, fruits. The
cart puller buys the commodities from the farmers and carries these to the people
dwelling areas and carries out the sale of the products for a reasonable profit.
Modernization Era
In the west with the advent of modernization the first self-service grocery store was
opened in 1916. Piggly Wiggly was the first store. It was opened in Memphis by
Clarence Saunders. He was the inventor and the entrepreneur. Before his work, the
method of transaction was such that The customer buying the commodity would reach
to the counter or display unit and would ask for food items that he needed or
handover the list of groceries and upon this the grocer would himself or his staff
would take care of collating all the items as requested by the customer but with the
invention of Saunders allowed a much smaller number of clerks to service the
customers. This proved great in 1929 due to issue of Time. The reasons were varied
including neat packaging, increased advertising, certain automatic procedures to
mention some among the varied and huge facilities offered.
Development of Supermarkets:
With the advent of small grocery stores as time passed by a chain of grocery shops
started building together and a single market place where a lot of products of high
quality, specific, unique or differentiated local markets started to develop as super
markets. This progress of super markets started the smaller grocer and vegetable
shops look out for a differentiated strategy and led to worry among the smaller
grocers. The location was crucial: a mix of commercial to residential area closer to
public. The location should be accessible and convenient for its customers and this
was the key strategy banked on by the smaller grocers.
These grocery stores then operated in many different styles. Starting from rural
family-owned operations, retail chains, Wholesale Foods Market, Traders place to
larger chains of supermarkets.
Moving towards trend of increased larger stores having all in all approach and
understanding the capacity and potential of the grocery and vegetable domain striked
the notice of bigger giants have led to transformations in grocery businesses. These
are affecting rational means of shopping in many ways. With greater buying power

these giants or Trans National companies have put increased financial burden on
traditional local grocery stores along with supermarket chains in national markets.
Hypermarket:
A Hypermarket is a mixture of both a superstore plus a departmental store. It is a

superstore with features of both. The hypermarket has the key facility and possibility
to provide an expansive retail facility of offering wide range under one roof. This
includes an array of groceries in lines, vegetables, fruits and great deal of other house
hold daily needed merchandise. Membership based marketing is often used. Customer
satisfaction is the key mantra in an hyper market to hold customers to greater extent.
Electronic trade or E Commerce:
This is a recent which has developed as a type of e commerce. The oldest online
grocery stores exist in the United States named as Peapod. Many other co-exist
including Amazon, Flipkart, Grofers, Big Basket, Snapdeal, etc. These stores key
moto is to provide good food products with on time delivery of products and all other
customer needs at there convenience while ordering online. Several large retailers
have started on similar models to trade including Prime Pantry, Amazon Fresh. Go
Fresh, Relay trade, Yummy.com etc. These stores are very popular in Europe. The
sales from 2012 to 2015 have almost doubled for these markets. The amount was €7.1
billion and shot upto 14 billion Euros thus doubling its outreach and economy
capacity in just a span of 03 years.
Online Market trends in India
The online grocery market had its footsteps in India quite late when compared the far
west though the entry was quite late there was a rapid growth of the market with quite
a high acceleration and at an alarming rate, various e grocery stores include Aaram
shop, Zop Now, MyGrahak.com, Shopveg.in, Farm2 kitchen to name a few. With all
these latest developments now India ranks as the sixth largest grocery market in the
world, India according to the facts where 42 percent of population is still below the
line of poverty. The food market consists of 70 percent of the $470 billion retail trade
of our country out of which the organized percentage is just about 5 to 8 percent while
the remaining is the unorganized market that is run by family stores and local people.

The food and grocery market is growing at a rate of 19 percent annually. Though the
present market share of the online grocery market is less when compared to the
country’s food economy but its percentage of growth every year is the fact that has
striked an alarm in the minds of the larger masses who have been carrying out the
grocery and vegetable business.
Fig. 1.3 – The Evolution of Grocery Store
1.2 IMPORTANCE OF THE TOPIC

Grocery Retail Scenario
The sudden surge in online shopping and customers have accompted to it in a greater
extent and this has been a real cause of concern for millions of retailers who have a
small to medium shop offering a small variety of products which has been the
ultimate source of livelihood. In this study we want to unravel the real ground
scenario and investigate the threat that looms over the various small-scale retailers.
In this study an attempt has been made so that retailers are aware of the upcoming
threats that is expected to loom over their business soon so that they can make
appropriate arrangements to face such critical challenges.
Dynamism stands the base of the current scenario and as a result of that anything that
remains stagnant will be surpassed by others, the smartphone giant Nokia has been a

classic example of this. Now It is time the retailers start thinking deep into these
aspects and come up with better and advanced strategies to face the stiff competition.
Playing against the big players is indeed not an easy one, standing off against such
giants indeed requires an out of the bound solution and unity among the smaller
retailers.
The retail sector in India is one of the very strong pillar of our economy and
contributes to around 22 percent of its GDP. The retail sector estimates to 500 billion
US dollars. It stands as one of the top five retail market markets in the world in
reference to economic value. The Indian market is one of the fastest retail markets
growing in the world with the population of 1.3 billion people.
In the beginning till 2003, the industry was primarily owned and managed by small
stores and shops. In 2010, there were changes. The larger formats and convenience
stores entered the industry. Initially these accounted for around 4 % of the industry
figures and were dominated majority in large urban centres. The sector employs about
40 million Indians that is around 3.3 percent of Indian Population.
In 2011, there were changes in the Foreign Direct investments by the Central
government, the FDIs in the multi brand retail sector were denied. The foreign groups
were forbidden from any ownership in super markets, retail outlets or convenience
stores. The single brand retail was limited with 51 percent ownership and follow a
bureaucratic processes. Later in November, the central government announced other
retail reforms for single brand and multi brand stores. These reforms opened the way
and allowed innovation in the sector. The competition increased and many brands
entered the sector. The major ones included Walmart Carrefour, Tesco, IKEA, Nike
and others.
The reactions were positive along with negatives. By December 2011, there was
increased pressure placed on the reforms and there was need of consensus.
Finally in Jan 2012, the government approved reforms for several single brands and
others. Anyone in the world to innovate in Indian retail market was allowed with
ownership of 100 percent. The restriction was imposed that the single brand retailer
should source 30 percent of the goods and from India. Our government still continues
the right on these reforms for multi brand stores and retailers. Soon after there were
permissions granted. IKEA got permission to invest $1.9 billion in India and set up
twenty-five retail stores.

All these major reforms by the government paved the way for big players from the
west to invest and concentrate on expanding their business in the ASEAN regions and
targeting the 2nd highly populated country in the World as their key market place to
expand their business operation
This changed the scenario from a calm vetted place to a predatory pricing competitive
place and this upright turn of situation’s strikes a need to study the topic and explore
the future of this business.
Vegetable Retail Scenario
Traditional Indian retailers account for 12 million retail outlets all over India and
more than 40 percent of them sell vegetable and grocery (IBEF, 2008). The retail
outlets consists of commodities comprising grains, pulses, and vegetables. The Indian
food retail business, especially vegetable retailing has witnessed a rapid growth in
India's organized retail sectors. The traditional retailing of vegetables is not very
much organized, amounts to 97% of the total market (Ernst & Young, 2006) but the
main problem with these outlets are that they are highly scattered and are
unorganized.
The intermediaries between the customers and farmers are traditional retailers with
different outlet formats-mom and pop shops, non-permanent shops in the market,
pavement vendors, roadside vendors and push cart vegetable sellers, wholesale
traders, commission agents and auctioneers.
In local markets the farmers individually and voluntarily sell the produce directly to
the end consumers in local markets, regulated and unregulated 'farmer markets', or
they sell to intermediaries—agents and organized retailers.
The unorganized market place is usually located in close proximity to farmers
farmland and the customers accessing the market live in and around locale. While the
farmers selling vegetables or their produce directly to customers account to a very
small fraction by volume. Farmers sell bulk of their produces to agents and middle
men. The agents buy small quantities of produces from farmers and in turn sell these
products to the wholesalers or in an auction to others, where the highest bidder gets to
take the products from the farmer.
The auctioneers are people who enter into buying contract with farmers for whole or
partial quantity of the produce and sell the produce to an agent or a wholesaler,

sometimes the auctioneers in turn sell out the products they have bought in auction to
other wholesalers keeping in some profit margin. The wholesalers buys these products
and trade it out to retailers—both traditional and organised retailers, and to
customers, who buy in large quantity.
The Cart vendors, who buy in intermediate quantitates from the wholesalers at a
wholesale price and sell the products to customers in mobile carts and deliver to
customers at customer's doorsteps selling the products at a retail price thus offering
the convenience of door step purchase of products to the customers.
In the supply of these commodities the wholesalers are vital link. Both the traditional
and organized retailers are dependent on wholesalers with varying proportions and
percentages.
For example, Chennai, the geographical area of the study has a wholesale market
promoted by Chennai Metropolitan Development Authority (CMDA), regulated the
Tamil Nadu state government. The wholesale market in Chennai, Periyar Vegetable
Market at “Koyambedu Wholesale Market Complex (KWMC)” spreads over an area
of 295 acres.
It is located at Koyambedu, the junction of Poonamalee High Road and Nesapakkam
Road which can be accessed easily from all the parts of City of Chennai. In Phase-I,
the Wholesale Market for Perishables was developed with 3,194 shops (CMDA2008).
It is one of the largest markets in Asia for fruits, flowers and vegetables with about
2,500 wholesale shops and involving 10,000 daily-wage labourers.
This market generates about 100MTof organic wastes per day, which is being dumped
into an landfill everyday now. Thus if the wastage alone is in MT from one single
market the volume of goods that are mutually exchanged between the producers and
customer is quite an fact that raises one’s eyebrow and thus the need to explore as to
what is the capacity of the business that lies beneath the vegetable business is indeed
an interesting one and it becomes necessary to study the vegetables retail marketing of
the conventional retailers as well as the modern retailers who made their entry in the
recent past in to Indian market.

1.3 NEED TO STUDY THE TOPIC

Title - “A Study on the impact of Online Grocery and Vegetable E commerce
Platforms on Retail Business”
Food, Shelter and clothing are the 3 basic needs for any human being, among these
three needs food serves to be the most important for survival. Nature has been the key
source of food ever since Man has arrived on earth, however due to increasing
demand for food on account of population explosion there has always been an acute
shortfall of this key resource and an undying demand for it makes it the most sought
product to carry out business upon.
According to KPMG Report on Indian Retail, the overall size of Indian Retail Market
is $534 billion in 2013-14 which has grown to a whooping INR 55 trillion by 2018-19
and is expected to cross the $1.7 trillion by the end of 2020. The current growth rate
of retail industry is around 15% which is higher than the growth rate of Indian GDP.
In retail industry, 92% of the market is the unorganized segment, whereas the
organized market is about 8-10% (i.e. around $60 billion) of the total industry.
Hence there is a huge potential for this industry and having realized this potential the
big players have started venturing into this segment of business, the online grocery
market has started registering healthy growth rate on account of growing urbanization,
changing lifestyle of the consumers and tech-savvy young generation who prefers to
buy products through online.
But with the increased predilection of consumers on branded products, predatory
pricing and attractive marketing strategies adopted by companies, the unorganized
segment is facing a big hit and is on a downfall pathway with the progressive growth
of these big players
Having said all this it becomes the need of hour to study, as to what is the extent of
impact on the retailers, how are they going to face the stiff competition offered and
what lies to their future.
With this backdrop on the necessity for the study, the study attempts to understand the
following areas: -
 The awareness by the retailers on the stiff competition prevailing
 The effect on the profitability of retail store

 The influence of E commerce on consumers and their choice
 The readiness of the retailers to face the future
 The beliefs of the retailers in the customers
 To analyze the changing business pattern to achieve customer satisfaction
This study helps to give a good knowledge on the existing trends of business, explore
the possible resolutions for the betterment, suggest methodologies that the brick and
mortar shops may employ in order to equip themselves for the upcoming future days
and get an insight on the changing Behaviour of the consumers.
1.4 Market Analysis

The growing stiff competition offered against the traditional grocery retailers by the
Indian online grocery market is expected to grow at an accelerated pace over the next few
years.
Netscribes a leading data and insight solution company predicts that this sector to be
valued at INR 1034.13 billion (USD 14.46 billion) by 2023. The alarming rising
investments, record-high smartphone and internet penetration, and continuous innovations
are the key contributors that has been fueling the online grocery market growth in India.
As per the recent studies the main drivers that has been leading to an evasive expansion of
the foothold on the grocery business by the Online grocery market are enumerated as
follows: -
Market drivers
Customer acceptance and high investment
Time-crunched and round the clock working professionals prefer their groceries
delivered to their doorstep rather than visiting the retail outlets in search of their daily
essentials.
Moreover, this savvy and ever-growing group of consumers isn’t shy about spreading
the word among friends and families about the convenience and the comforts of the
online grocery which indeed has a great influence in attracting other traditional buyers
to try out the Online grocery options.

So, while the current market reflects low penetration levels, the future holds high-
growth potential. This trend has triggered some major investments in the past few
years. To put this into perspective, investments in online grocery firms grew by 14
times from USD 41 million in 2017 to USD 587 million in 2018.
Continuous innovation
E-grocery apps offer tremendous convenience and accessibility for shoppers, like the
ability to order from various vendors through a single interface, comparing prices
between multiple vendors, live order tracking, multiple payment options and even
offering pay later options which has indeed striked the eye of the major chunk of the
middle class people who relies completely on there month end emoluments they
receive in the form of salary.
Indian players such as Big Basket, Freshtohome, ZopNow, Grofers, Nature’s Basket,
and Amazon Prime Now have introduced digital wallets and attractive cashbacks
which lures in a greater population of the working cadre of population.
Others have added price comparison options and allow higher levels of customization
at affordable prices. Product recommendations, free shipping, and discount coupons
are other key aspects driving user growth across online grocery shopping platforms.
Internet and smartphone penetration
Nearly half the Indian population resides in internet-deficient areas. However, internet
users are steadily on the rise, hinting at a slow but gradual take-off of this trend
nation-wide. This allows the industry the opportunity to penetrate further to expand to
newer geographies. What’s more encouraging, by 2022, 490.9 million are expected to
own smartphones.
Challenges faced by the Indian online grocery market

Significant expense of client obtaining and expanded wearing down has yielded the
Indian e-staple market becoming massively swarmed and serious. Expanded value
rivalry has offered ascend to more limit chasing clients than any time in recent
memory. These customers promptly switch between stages that offer the most
incentive as far as limits and conveyance charges. Therefore, the market is rapidly
meeting its place of immersion in deals open doors for both the set up and new
contestants.

High operational expense for quality upkeep of transitory products Perishable

merchandise require greater speculation for both capacity and conveyance framework.
The absence of value investigation alternatives before conveyance can prompt
troubled clients; particularly whenever harmed or terminated items are transported.
Additionally, there are extensive transportation charges acquired from vegetable and
organic product obtainment and conveyance. The joined impact of these builds
spending, unfavorably affecting the e-food merchant's primary concern.
An abundance of physical grocery stores

There are about 12 million neighborhood physical supermarkets across the country,
generally favored by Indian families, refering to businessperson commonality as the
standard explanation. These stores flourish because of client vicinity. Nowadays,
many offer free conveyance, credit office, and even lower costs for normal clients.
They lead business utilizing the 'in the nick of time' technique, keeping supply of just
those things which have a popularity.
Key trends brought about by the Indian online grocery market

Forceful methodologies of online staple E-merchants offer customers an extensive
item choice. Definite item data, conveyance customizations, and a bunch of
installment choices are different highlights that structure an aspect of the bundle. It's
nothing unexpected why most clients are anxious to investigate online as a basic food
item buying choice. Understanding this, most e-merchants are forcefully crusading to
increase a sizable wallet portion of target bunches like guardians with little
youngsters, youthful urbanites, educated online customers, and financial plan driven
customers.
Social media marketing for online grocery branding

Like other retail organizations, e-merchants, as well, are understanding the intensity
of being dynamic via online media to build brand mindfulness and review. With
online media being a two-way advertising channel, players are elevating themselves
to procure client dependability, but on the other hand are outfitting it as a source to
reveal new business thoughts and get a beat of the buyer to modify and refine their
contributions.

Digital dashboards in physical stores

Reflecting the highlights offered by online shopping for food stages, some huge
physical markets have begun to offer clients item information and stock subtleties
immediately, utilizing keen gadgets like tablets and iPads. Through such advanced
framework, both the store staff and end-purchasers would now be able to see definite
item data and refreshed stock numbers.
Dynamic pricing
With the appearance of online staple retailers and value examination applications,
enormous scope physical firms are utilizing progressed explanatory abilities to expand
item costs for the duration of the day. It empowers stores to rival their online partners,
along these lines, expanding odds of arriving at the head of online query items for
'value examination'. Constant valuing strategies are likewise being utilized by
disconnected food merchants to push deals during moderate development hours.
The retail area in India is one of the solid mainstay of our economy and adds to
around 22 percent of its GDP. The retail area appraisals to 500 billion US dollars. It
remains as one of the main five retail market markets in the world regarding monetary
worth. The Indian market is one of the quickest retail advertises developing on the
planet with the number of inhabitants in 1.3 billion individuals.
In the first place till 2003, the business was principally possessed and overseen by
little stores and shops. In 2010, there were changes. The bigger organizations and
comfort stores entered the business. At first these represented around 4 % of the
business figures and were commanded greater part in enormous urban focuses.
The division utilizes around 40 million Indians that is around 3.3 percent of Indian
Populace.
In 2011, there were changes in the Foreign Direct speculations by the Central
government, the FDIs in the multi brand retail division were denied. The unfamiliar
bunches were illegal from any proprietorship in stores, retail outlets or
accommodation stores. The single brand retail was restricted with 51 percent
proprietorship and follow a bureaucratic cycles. Later in November, the focal
government declared other retail changes for single brand and multi brand stores.
These changes opened the way and permitted development in the part. The rivalry

expanded and numerous brands entered the part. The significant ones included
Walmart , Carrefour, Tesco, IKEA, Nike and others. The responses were positive
alongside negatives. By December 2011, there was expanded weight put on the
changes and there was need of agreement. At last in Jan 2012, the administration
endorsed changes for a few single brands also, others. Anybody on the planet to
advance in Indian retail market was permitted with responsibility for percent. The
limitation was forced that the single brand retailer should source 30 percent of the
merchandise and from India. Our government despite everything proceeds with the
privilege on these changes for multi brand stores and retailers. Not long after there
were authorizations allowed. IKEA got consent to put $1.9 billion in India and set up
25 retail locations.
Later in September 2012, our governing body declared the kickoff of Foreign Direct
Investments in multi-brand retail. Anyway this was exposed to endorsements on
singular states. This choice was invited by hardly any financial specialists what's
more, the business sectors. Anyway there were fight too. Towards the finish of
December 2012, 51 percent of FDI was permitted in multi brand retail in India. It was
concurred that the choices will be state based and not general for all. This implies that
a few states will permit these ventures where as others won't. Composed type of
retailing implies the exchanging exercises embraced by the retailers who are
authorized and those which are enlisted to cover for deals charge, annual expense or
some other installments. These incorporate corporate sponsored hyper markets,
exclusive huge retailers and retail chains. Retailing in disorderly area incorporates the
conventional organizations of retailers. These are low costs designs. This incorporates
neighborhood corner stores, general stores, accommodation stores, merchants and so
on. These are seen in a large portion of the provincial regions and towns. In terms of
rates these composed retail part represents only 4 percent of the business sectors.
In India greater part of shopping happens in open business sectors, for example, staple
shops also, stores. The common purchasing conduct incorporates demand put outside
the shop, shop individual or deals staff giving cap is mentioned to. At some point the
list is given over to the individual who later supplies or conveys to the buyer's house.
Brands or quality depend on judgment of the merchants. In the event that one brand is
not accessible, buyer may acknowledge the other one. The suggestion of dealer
assumes a pivotal job. The items are estimated or subjective technique or generally as

MRPs. There is uncommon arrangement about costs between retailer and the
customer. For the most part they don't analyze the name and no such educated choice
is made.
In India both the parts including sorted out and disorderly area utilizes around 40
million Indians. This comes to around 3.3 percent of Indian populace. These retail
shops are little in nature. These part in India has around 11 outlets roughly for each
1000 individuals. A large number of these disorderly areas in Indian are controlled by
relatives. Less quality control is there. The staff preparing is no to poor. There is no
preparation for wellbeing or cleanliness. The items are obtained from chain of
middlemen's, an increase is charged as the item moves starting with one individual
then onto the next.
Till 1990s, a few guidelines forestalled development of business and development in
Retail Sector in India. Retails needed to hold fast to a few guidelines counting
billboard licenses alongside against storing measures before opening ways to some
other. Duties were required on moving the products from one state to another and
furthermore inside the states. Makers needed to do through the brokers, who to more
noteworthy degree had restraining infrastructures. The foundation offices were poor
alongside misfortunes of in excess of 30 percent. In 1991, different market changes
were presented in retail. During the period between 200 to 2010, clients started to
encounter quality, decisions, accommodation and offices due to composed retail
industry.
In 1997, FDI was permitted. The programmed consent was allowed in 2006 and the
endorsements were additionally loose. During the period 2000 to 2010, the Indian
retail segment pulled in around $1.8 billion in unfamiliar venture straightforwardly.
This spoken to an exceptionally little 1.5 percent of complete progression of interest
in India. There were 94 proposition somewhere in the range of 2006 and 2010, out of
which 57 were endorsed and likewise executed. As per the all out populace of 1.2
billon individuals, this was moderately a modest number. It was said that solitary
brand retailers were to restrict their proprietorship to Indian outlets to Fifty One
percent, rather than hundred percent proprietorship permitted by unfamiliar
organizations in multi-brand retail nearness and furthermore single brand.
The development in India in retail exchange was restricted. The decay of food gather
was most noteworthy on the planet. The explanation being restricted incorporated
virus chains and other foundation offices. The independent cold stockpiles in India

was restricted to 5386 in numbers, and having absolute limit of 23.6 million tons.
Dominant part of rate roughly to 80 percent was utilized for potatoes. The left
finished framework potential is short of what one percent of the yearly homestead
yield of India's aggregate.
This was dominant part deficient during top reap seasons. Furthermore, horribly
insufficient during top collect seasons. The outcome was around 30% misfortunes in
transient agrarian yield in India consistently. Until 2010, go-betweens and agents in
India have overwhelmed the worth chain. Because of a few quantities of go-betweens
associated with the cycle, different standards were put and cost needed
straightforwardness and correlations. Each level included its own net revenue, the
effect was that the ranchers just got 33% of the complete cost paid by the end buyer in
India. This high overall revenues by agents' and conventional retail shops restricted
the development in this part and further forestalled advancement in Indian Retail
Industry. For a considerable length of time there were conversations and discussions
on the danger and cutoff points required of permitting FDIs in the division. A few
financial analysts contended to eliminate limitations on composed retail and
prescribed to open up ways to the opposition. The contentions introduced
incorporated the way that by permitting adaptability in monetary changes in all the
divisions and expansion of further progression, the financial development will
quicken in this division and this will truly have a beneficial outcome in the life of
India's least fortunate.
In report introduced in 2007, it was discovered that the expanding quantities of work
power in India are moving towards the administrations part regarding work decisions.
The explanation being low remuneration got by the conventional agribusiness and
assembling parts. The sloppy retail part developed at the pace of 6 percent when
composed part developed at the pace of 35 percent every year. The distinction being
extremely gigantic and the reasons were obvious.
The Retail Sector in India is at present is a phase of reflection. Since 2008, there are
changes of speculations. A measure of US$ 25 billion is intended to be put by
numerous Indian and MNCs in the coming five years. As indicated by the realities
introduced by India Brand Equity Foundation, the area is esteemed at about
US$395.96 billion. The sorted out retail division is relied upon to develop to around
16 to 18 percent of all out retail market. As far as figures, around US$65–75 billion in
coming five years.

As far as positioning, India has topped (GRDI) The Global Retail Development File
for the third continuous years. It has kept up its situation in the venture segment to
rank as first in quite a while of fascination. The financial development rate was 8
percent for the year 2007. Comparable were expectations for year 2008.
This huge development in the retail business made a colossal interest seriously home.
Reports introduced in 2011, demonstrated the realities that the Indian Retail Market is
creating the deals of around $470 million every year. This is from composed retail
including markets, chain stores and activities in shopping centers. The opening of
retail industry is allowed to advertise rivalry now. This as per a few financial experts
shows that there will be quick development rate in retail segment of Indian Economy.
It is assessed that a 25 percent development rate by 2021. Till 2021, the area is
required to develop at the pace of 25 % assessing to around $250 billion a year. This
income equivalents to income share from Japan for the world's 250 biggest retailers.
The forecasts by many economists stated that the Indian retail sector will nearly
double in its economic figures in terms of value. The expansion will be around $ 400
billion by 2020. These projections are equivalent to retail trade of France at present.
Comparisons of Indian Retail sector with other nations:
Country Modern percentage as per data
collected in 2011
Country Percentage
India 7
China 20
Thailand 40
United States of America 85
Table 1.1 – Country Wise Modernization percentage

It's basic to contrast the Indian Retail division and different countries. It gives the idea
that there is development of 7 rate yet anyway not exceptionally serious as to different
countries. A few variables are liable for the equivalent.
The Indian market has expanded complexities. This is because of expansive
geographic spread and separated purchaser conduct. This inclination differs by each
area and subsequently requires a requirement for restriction. This is additionally
wanted indeed, even with a geological locale. The outlet per individual that is 7 for
every thousand is most noteworthy. Notwithstanding, the Indian retail space is most

reduced on the planet with retail thickness of per capita at 2 sq. ft. Around 1.8 million
of families have a yearly salary of over _ 4.5 million in India.
The composed retail segment has a 8 percent share according to reports of 2012. The
Indian market presents enormous chances. This is because of huge quantities of
populace and expanding buying power. The difficulties are huge. Around 90 percent
of exchange is directed through free nearby stores. A few difficulties incorporate
geologically spread populace, complex dissemination arrange, little ticket sizes, little
utilization of Information and Technology frameworks, shortcomings of broad
communications and presence of copy items and differed decisions.
The quantity of merger and acquisitions expanded hugely in the Indian retail market.
As per PWC it was assessed that the multi retail market will develop to around $220
billion by 2020. It was additionally expressed that cutting-edge retailing has a 5%
piece of the pie in India. It is additionally expected to develop at the pace of 15 to 20
percent for each year. There are a few retail configurations and shopping centers
organizations in India.
A few measurements of the retail outlets are as follows: -
Indian Retailers Market Reach in 2011 and further information

65 stores and 21 factory outlets in 35 cities, 2 million square feet
Pantaloon Retail
Space.
Shoppers Stop 51 stores in 23 cities, 3.2 million square feet space.
200 stores in 45 cities, 1 million square feet space.
Spencer’s Retail
708 mart and supermarkets, 20 wholesale stores in 15 cities.
508 fashion and lifestyle _ 1206 crore (US$180 million) per
Reliance Retail
month Sales in 2013
15 lifestyle stores, 8 home centers
93 stores in 3 cities, one of the three largest supermarkets
Lifestyle Retail
retailer in India by sales - 916 crore (US$140 million) per month
as per the sales data in 2013.
Tata Trent 59 Westside mall stores, 13 hypermarkets.
Birla More 575 stores wide the nation.
74 Easy day stores, further plans to add 10 million square feet
Bharti Retail
by the year 2017.
Table 1.2 – Measurement of popular retail outlets in India
Realities on Challenges looked at in the segment: As per reports introduced by
McKinsey it was seen that the retail profitability in India is exceptionally low when

contrasted with its universal partners. A model would be that the Indian work
profitability in retail division is simply 16 % when contrasted with United States in
2020. In food retailing India's work profitability is only 5% when contrasted with
Brazil's which remains at 14%. In nonfood retailing India's work efficiency is at 8%
when contrasted with Poland's which remains at 25%. The absolute retail work in
India including sorted out what's more, sloppy segment represents complete 6
percent-the greater part of this is principally composed area. The extension of retail
part like other rising economies for instance the Unites States. This would make of
more than 55 million occupations in India. The greatest test lies is preparing and
advancement for this segment to improve profitability. With the consent to open retail
industry to worldwide rivalry, the retail segment will truly confront difficulties. This
has the potential to change the foundation as well as retailing scenes. The articles in
Wall Street Journal asserts this further interests in India in retail area will make
around 10 million positions further, in excess of 60 percent in coordinations as it
were. Regardless of out of complete 8000 towns and urban areas in India, the
extension is just in 53 urban communities. Occurrence revealed in Tamil Nadu on 19
Feb 2013 merits referencing. There was serious extent of opposition towards MNCs
passage in retail part in Chennai. The specialists set hold in type of seal on the
stockroom which was spread around 7 sections of land against the retail monster:
Walmart. In Rajasthan in February 2014, the legislature took choice to turn around
FDI in retail segment. The explanation being to help household retail business and
backing neighborhood improvements contrasted with universal retail. This will help
in making the business openings and comprehend the issues of joblessness. In 11
January 2012, the endorsement was conceded to permit increment FDIs. The reason
being expanded rivalry and chances of development in single retail brand. This will
additionally draw in speculators in both the practical territories: showcasing and
activities. The sourcing of merchandise inside was expanded in India because of
expanded admittance to worldwide advancements and organizations. It was too
declared that solitary brand retailers can be permitted with more prominent than 51
percent unfamiliar proprietorships however they have to source least of 30% of the
estimation of items from little scope organizations. This choice was acknowledged by
not many and yet not increased in value by not many organizations. For instance
IKEA, declared to defer its choice to open new stores in India. The explanation being
the prerequisite to source 30 percent of their supplies from neighborhood stores and

organizations. This was a requirement concerning interest in India and might defer to
source material. Nature of items was again an issue. It was additionally hard to create
flexibly chain arrange also. The choice of development moved to China and Russia,
the explanation being nonexistence of such changes in these nations. There are a few
effects of these unfamiliar monsters going into one nation and moving to another. The
free stores may close, this will prompt critical occupation misfortunes. For instance
Walmart selects not many individuals on US. With its venture into different business
sectors, for example, India, scarcely any thousand individuals may get utilized and yet
a great many people will lose their positions. Presently, these activity misfortunes will
be the ones who are independent ventures and don't have assets to contend the
enormous monsters. Walmart is productive to oversee flexibly chain, this prompts
secure the products, legitimately from the provider. The impact will be further end of
the delegate that is the mediator. This will squeeze providers to lessen the costs so as
to have steady income. Shoppers will get advantage because of discounted costs
because of dumping of products. The opposition will be disposed of and will prompt
Walmart having restraining infrastructure. Comparable impact was seen soda pops
brand, which are essentially dispensed with because of section of Pepsi and Coca
Cola.
The retailers and this middle man existing in the retail business play out an incredible
job in supporting and building up our nearby economy. These private companies
ordinarily purchase products and enterprises from neighborhood. They uphold in
production of riches and redistribution. The impact of huge and productive retailers
might be positive in short run, yet in since quite a while ago run they don't uphold
nearby economy much. The work is performed by the Indians yet the benefit goes to
outsiders. It might happen like the instance of East India Company, that is may enter
as a dealer and further assume control over India strategically.
Indian government has a contention here and confronting extreme predicament. The
case is made that advanced retail exchange will prompt formation of work openings,
around 4 million. Anyway this may a bit much remain constant. At a worldwide level,
Walmart has around 9000 stores and has made of around 2.1 million representatives.
There are counter claims made to this. The supporter of the development of Big
Retailers guarantees that the sorted out retail will require laborers. This can be upheld
with the way that Walmart utilizes 1.4 million of individuals in the Joins States of
America, from the absolute populace of 300 million. Presently in the event that of

India the with the number of inhabitants in roughly 1200 million, the staffing
requirements should be kept at a similar level. Walmart plans to make open doors for
5.6 million Indian populaces. Walmart possesses a 6.5 percent of portion of all out
retail exchange United States. With the estimates accessible, the expected positions
made will be more than 85 million. Not just this, numerous different positions will be
additionally made during the time spent structure of retail locations, foundation
counting streets, foundation offices, cold stockpiling places, B2B, programming
industry, electronic turns of events, and other retail supporting organizations. The
positive side is that these retail changes will prompt gigantic turns of events and help
Indian economy.
The impact can be clarified from advancements in China. It's discovered that in
China, the work in both retail and discount exchange has expanded from 4% in 1992
to about 7% in 2001. This development is after China changed its retail exchange to
unfamiliar organizations and energized development. Regarding numbers, 26 million
positions were made inside a time of nine years. Aside from these advancements,
there was colossal development in customary little scope retailers, which additionally
experience development at the pace of 30 percent over time of five years. Indian
economy has restricted excess spending plans and enormous capital that is trillions of
dollars are expected to build up our framework offices required for developing
populace. The administration is as of now confronting spending deficiencies and right
now interest in clinics, streets, lodging, schools and so on is by all accounts
troublesome. It appears to be exceptionally hard for Indian Government or Indian
speculators to finance these improvements. It is required that we take help of Global
supports accessible. Unfamiliar Direct Investment is fundamental. Not just cash,
information structure also, cooperative energies are required. There is need of
worldwide mix. Worldwide acknowledgment also, FDIs can possibly profit Indian
market.
This worldwide mix can open business sectors for Indian ranchers and other makers.
A model would be that Walmart figures to acquire $1 billion of products and ventures
from nearby populace consistently from the Indian retail industry.
The majority of these retail organizations have been working for over 30 years in
different nations. Organizations including Metro, Target, Tesco, Carrefour, Walmart

and so on have been working for more than 350 worldwide organizations. The deals
traverse one billion dollars. Still they don't have their syndications. This
consummation has in certainty assisted with keeping the costs in charge. For instance
Canada, the swelling rates is low. Value expansion is in these nations is been five to
multiple times lower than swelling in India. The current purchaser cost swelling in
Europe and the United States is under 2%, contrasted with India's twofold digit
swelling. This conversation has another point of view also. It would be wrong to
contrast Twenty First century with Eighteen century. The conditions have changed.
We have vote based system now, which wasn't there at that point. Worldwide
mindfulness and media have changed. A case of this can be seen as to China: Having
populace of more than 57 millions square feet of retail space is overseen, possessed
and constrained by unfamiliar players. A huge number of Chinese residents are been
utilized in these organizations. Still China is getting a charge out of regard from all
the worldwide forces. Nations for example, Malaysia, Thailand, Indonesia, and
Taiwan consistently have acknowledged and upheld these unfamiliar organizations.
They approach these impetuses of new innovation and decrease of cost. This can be
adopted as strategy in our nation also. Instead of detaching and working alone, India
also can profit by incorporating with the world. It can be seen that with FDI of 52
percent limit in these multi brand retailers, half of the benefits stays in our nation.
This benefit will be exposed to charges and further influence Indian spending
shortages. In China, FDI financing took around five to ten years to expand its
benefits. Retailers must investigate benefits by making values. Enactments have been
planned, to expand limitations to the strategies previously opening the entryways.
This sets cap for the piece of the overall industry, decent variety and development.
States can acquaint techniques and guidelines with change the law to move in favor of
more vulnerable segments of Indian areas. There is acceptable measure of wastage of
food in the travel, failures and capacity issues. The state run stockrooms are lacking.
On the off chance that, sorted out retail organizations enter Indian Sector. From
appearance in Indian market, Walmart presented Direct Farm Project in Punjab. This
will permit 110 ranchers, to interface with Bharti Walmart so as to lessen wastage and
carry new produce to Indian Consumers legitimately. It is seen that a large number of
these sloppy areas utilize laborers and make them work for broadened hours with
restricted installments. Additionally numerous kids are utilized. On the off chance that
this part gets controlled, these abuses will decrease furthermore, formal strategy will

be utilized. In United States, because of this sort of advancement, retailer Whole

Foods developed quickly to yearly incomes of $9 billion. This was conceivable
because of working intimately with ranchers, worry about the earth and focusing on
client delightment. There have been a few conversations on this issue. These changes
are not new also, exist since long. Conversation paper was coursed in 2010 and
further 2011. The remarks from a few areas of social orders including ranchers
affiliation, buyer discussions, industry bodies, brokers' affiliations and a few financial
experts were examined in detail. The agreement was gotten from different fragments
of Indian Society and was supportive of retail changes. The gatherings with
contradicting see isn't effective with any thought or techniques on how the issue of
food expansion, waste, security, stockpiling can be tended to. The techniques to
improve the salary of needy individuals and took care of the hungry is as yet not
made. In the reports introduced by Global Insights, it was seen that advanced retailer's
entrance will prompt age of business legitimately and by implication. Walmart helped
in formation of around 6300 million extra positions. It is said that in India, with urban
populace of in excess of 400 million, it might help in making 12 million extra
positions. This will make chances to win. The investigation upheld that business
openings will be made, yet in addition it will assist with controlling value swellings.
A few social and political unrests are likewise connected to this choice, aside from
monetary points of view. For instance: Uma Bharti (a senior chief of BharatiyaJanata
Party) said that she will burn down the first Walmart store as before long as it opens
in India. Simultaneously one pioneer utilized online media tweeting about the evil
impacts of Walmart in different nations. There was a BANDH that is legitimate
conclusion of all different organizations that was called up by ideological groups in
restriction of these retail changes. Inside competition and separated conclusions
appeared on this day. Numerous stores were shut, at the time others were open as
would be expected for the duration of the day. It was bizarre to see that greater part of
Kirana stores and little shops stayed open as would be expected overlooking the
BANDH, yet the wholesalers had a closure to little the little retailers. Individuals gave
off an impression of being separated. Nonetheless, guarantee made by Traders Union
said that merchants the nation over partook completely in the strike and are against
the enormous sorted out retailers. With respect to customer overview directed, in dish
Indian Survey directed across ten significant urban communities, it was seen that
Ninety percent of purchasers were of sentiment that FDI will lessen the costs and will

increment the decisions to the purchasers. Dominant part of ranchers 78% were of
positive assessment too. They concurred that due to multi retail locations, they will
have the option to show signs of improvement costs for their produce. The dealers
that is 75 percent were additionally in favor.
Street Vendors in India
According to the Ministry of Housing and Urban Poverty Alleviation, following facts
an be noted:
There are ten million street vendors in India. Out of these 10 million street vendors in
India,
 Mumbai accounts for 250,000.
 Delhi comprises of around 450,000.
 Kolkata comprises of more than 150,000.
 Ahmedabad comprises of around 100,000.
Majority of these people involved are either immigrants or laid-off workers. These
people work for about average of ten to twelve hours a day. After so much hours of
working, they remain impoverished and highly stressed. In the past, these street
vendors were governed by license permit raj as per Indian Bureaucracy.
The License Permit Raj ended for most retailing businesses in 1990s, but it still
continues in trade. There is quite a presence of illegal framework in this industry. In
Mumbai, there is inappropriate license ceiling in most cities. Mumbai has a ceiling of
14000 licenses, however many more vendors exist illegally. These vendors hawk their
goods illegally. This makes the environment more prone to bribery and culture of
corruption.
There is culture of extortion, which makes them more prone to bribery and prey in
hands of local police and municipal authorities. They become victim of harassment;
pose heavy fines and threat from people in power. Bills have also been passed aiming
to provide social security and livelihood rights to street vendors. This has origins from
The Street Vendors Policy introduced in 2004.
This was later revised as the National Policy on Urban Street Vendors in 2009. In
2009, itself a bill titled Model Street Vendors was circulated by Ministry of Housing
and urban Poverty Alleviation. This was for all states and union territories of
government for creation of state legislation and policies. The issue with the same was
that it had no legal framework and bindings; therefore very government made any

progress in this regard and peruse this further. In 2010, as per the instructions of
Supreme Court of India, street vending was recognized as a source of livelihood and
directed the ministry to work on a central legislation and framework. A draft of the
same wad unveiled to the public on November 11. 2011. The main issue of the draft
was to protect the interests of legitimate street vendors from harassment by police and
civic authorities. It aimed to demarcate the vending zones on the basis of traditional
natural boundaries. It aimed to further provide proper representation of vendors and
women’s in decision making. It also designed policies for effective grievance of
issues settlement and resolved disputes through proper mechanisms. This bill was
drafted by the National Advisory Council, in the position of Sonia Gandhi and
approved by the Union Cabinet. The approval was made on August 17, 2012. Once
the approval was taken, it was further introduced in the Lower House of Parliament of
India on 6th September, 2012 by SeliaKumari, the Union Minister of Housing and
Urban Poverty Alleviation. This bill was finally passed in the Lok Sabha on 6th
September 2013 and the Rajya Sabha on 19th February 2014.
A short note on the vegetable market food mileage scenario

When selling vegetables, the vegetables have to reach the users at the minimum
possible time, otherwise it becomes waste. The food mileage of vegetables causes
considerable impact on the vegetable due to its perishable nature. The term 'Food
Miles' or ' Food Kilometres' refers to the distance the food travels from the location
where it is grown or processed to the location where it is consumed, or in other words,
the distance food travels from farm to plate. Food miles do not refer to the input
material, effort, efficiency or energy of the crop yield. Food miles are a way of
attempting to measure how far food has travelled to reach consumer. That includes the
journey from farm to processor, then from processor to retailer and finally from
retailer to consumer. Studies estimate that processed food in the United States travels
over 2080 kilometres (1300 miles), and fresh produce travels over 2400 kilometres
(1500 miles), before being consumed (Holly Hill, 2008). In UK, 20 percent of food
(by weight) moves more than 200 kilometres (Garnett, 2003).
The food mileage impact is realised by players in the vegetable supply chain, from
farmers to customers. “Food Mileage” is an indicator that evaluates impact on
economic, social and ecological system and it associates the quality food availability,
foods wastage and disposal. 'Food miles' is a factor to understand inefficiency of food

supply chain. In economical or business perspective, every food mile is costly. The
transportation cost is directly propositional to the food miles. Every mile addition in
transport is addition in the cost of the goods and the customer pays for it. The more
the vegetables travel in miles, the less fresh they become. This means customers pay
for vegetables, which have less initial nutritional value. Alternatively, to retain
freshness, conditioning is required while transporting. Conditioned transport again
adds cost to goods.When the food travels less; the money is reinvested closer to the
farm land community and more financial contribution is provided to local economy.
“Plant dollar close to home and watch community grow” (Food Routes Network,
2008). Local farmers who sell directly to consumers receive a larger share of the
profit for their food. The local family farmers spend their money with local merchants
and build a stronger local economy. The social impact of higher mileage food is the
food that comes in from abroad. The different food safety standard is more vulnerable
to unsafe food. Vegetables with less mileage are fresh, preserve original taste, retain
initial ingredients and more palatable. Less food miles create more sense of closeness
and trust. Ecologically, 'food mileage' is a convenient indicator of sustainability and
sustainable development; wherein less food miles indicate more sustainability.
Reducing food miles is reduction of emissions. Shorter distance travel leads to
reduced usage of fossil fuels and thus, conservation. Minimum food travel signifies
minimum pollution, environmental degradation and global warming.
The food mileage is the Weighted Average Source Distance (WASD) (Pirog and
Benjamin, 2003). The formula for the WASD is:
Business leaders have adopted food miles as a model for understanding efficiency in a
food supply chain. Ecologists consider food miles as indicators of sustainability and
different segments of people and different agencies perceive food miles differently.
There is a need felt to study the food mileage for vegetables in India with current
infrastructure and market condition.
Chapter 2: REVIEW OF LITERATURE

2.1 Review of Literature
The literature review analyses the various literature to explore the impact of
Ecommerce on the retail industry and in particular the Grocery and vegetable
retailers. The past and the present study about the impact on retail business is
discussed here.
According to AmitSaha (2015) in his study “The impact of online shopping upon
retail trade business” highlighted the impact of increasing trend of online shopping
over the various fixed shop retailers. Retailers comprise of a large section of the
population and a larger population is dependent upon these retailers. But the advent of
e-stores with their attractive incentives and wide varieties has slapped on their face
the fear of uncertainty and helplessness and the unravels the effect on the profitability
of the various concerns due to increasing trend for online shopping.
6Wresearch (2020) a premier business research and consulting firm in their research
on “Indian Online Grocery Market (2016-2022)” studies the Indian online grocery
market forecast by types, regions and cities (Tier I, II and III).
The report provides unbiased and detailed analysis of the on-going trends,
opportunities/ high growth areas, market drivers, which would help the stakeholders
to decide and align their market strategies according to the current and future market
dynamics.
Paulrajan Rajkumar and Fatima Jacob (2018) in their study entitled “Business Model
of Vegetable retailers in India” aims to report the finding from the study on business
models of vegetable retailers, in both unorganized and organized retailing. Entry of
organized retail in India in vegetable marketing has impacted the whole spectrum of
supply chain practices. This research is exploratory and includes research instruments
like interviews and survey through questionnaire with players in the vegetable supply
chain. Measuring food miles is a simplistic concept relating to the distance food
travels as a measure of its impact on business. And the study measures the food miles
in the retail vegetable markets of Chennai.
KPMG (2014) a limited liability partnership consulting firm elucidated on the topic
“Indian Retail – The next growth Story” wherein it describes the Indian retail market

scenario, how large international Retailers are contemplating to invest in India to

leverage this strong demand potential of the world's fifth largest consumer market the
worlds. currently a host of large retail Chains are undergoing market assessment
studies to set up their operations in India. irrespective of the prevailing teething issues
related to regulatory and operating environment in the coming years Indian retail is
likely to evolve as a mature and larger market
Eunju ko, Doris H. Kincade (1997) in their study on “The impact of quick response
technologies on retail store attributes” describes how a quick response in catering to
the needs of the customer can have a positive impact on the customer perception
about the retailer. The study also highlighted that in a competitive business
environment, retailers can obtain profit by strategic planning and delivering consumer
satisfaction. Quick response (QR) is a new business strategy to maximize consumer
satisfaction by implementing new technologies (e.g. barcoding, scanner). And the
study aimed to identify the use of quick response technologies (QRT) and to identify
store attributes that are improved by QRT
Kathleen Seiders, Constantine Simonides, Douglas J Tigert (2000) made an profound

research on the topic “The impact of supercenters on traditional food retailers in four
markets” here the study aims to understand the impact of supercenters on traditional
food retailers in four markets, including two small cities (Victoria, Texas; Gainesville,
Georgia) and two large cities (Columbus, Ohio; Omaha, Nebraska). Consumer
surveys were conducted in order to assess the effects of the entry of Meijer, Wal‐
Mart, Kmart, and Target supercenters. The results depicted that supercenters can gain
from 15 to 20 percent of primary shoppers and an even greater proportion of
secondary shoppers. Furthermore, the supercenter primary shoppers, and especially
those of Wal‐Mart and Meijer, identified low price and assortment more often as the
reason for store choice. In comparison, traditional supermarket primary shoppers were
less willing to trade off locational convenience or, in some cases, quality and
assortment. Wal‐Mart is predicted to continue to rapidly gain share at the expense of
competitors who do not differentiate themselves in some significant way.
Menal Dahiya (2017) in his study on the topic “Study on E-Commerce and it’s
Impacts on Market and Retailers in India” the author makes an exploratory research

on different markets and retailers and impacts of ecommerce on them. The research
brings out that e-commerce has bad impact on offline retailers because customers
buys on low price from online shops due to which they also have to lower their price
and does not get any profit, retailers cannot maintain a large stock like online shops
have stores because it will cost a huge loss to them. They have to spend more money
in offline advertisements to attract customers. While at the same time the author also
depicts the limitations faced by the E commerce vendors as website cost, to create and
maintain a website a lot of money is required; infrastructure cost, to fulfill the orders
online retailers have to maintain a large stock in a big warehouse which costs a lot;
security and fraud, due to popularity of online shops criminal elements are also
attracted to them who can hack the personal information and can misuse them;
customer trust, it is difficult for customers to trust a new brand without looking,
touching and face-to face interaction.
A. Gunasekaran, Hussain Bux Marri, M.D. Nebhwani (2002) in their study on the
topic “E-commerce and Its Impact on Operations Management” explains about
Electronic commerce (EC) and how it has been the most promising application of
information technology witnessed in recent years. Ecommerce has been
revolutionizing supply-chain management and has enormous potential for
manufacturing, retail and service operations. The author attempts to define e-
commerce and examine major EC elements that link organizational systems. The
application of EC in manufacturing, retailing and service operations is examined, and
a framework for describing EC components and their role in different areas of an
organization is proposed in this research study.
2.2 Magazine Articles

A key magazine Business Today reports its exploration on the retail grocery under an
article “Virtual Grocer” as: -
With a large customer base and increasing penetration of Internet connectivity (partly
through smartphones) and growing popularity of online shopping, some entrepreneurs
have seen the potential in creating e-stores for groceries. If you understand the retail
market, a bit of creative thinking and excellent customer service can help you build a
great business. AaramShop.com, EkStop.com, BigBasket.com, AtMyDoorSteps.com,
MyGrahak.com, ZopNow.com, Omart.in, LocalBanya.com, RationHut.com and
SeaToHome.com are some of the online stores retailing groceries. Most of the
existing retailers offer their service in metros and major urban center’s.
"The spending on grocery and daily essentials is the largest and most consistent share
of the wallet for any household. However, it is still out of the ambit of online
shopping and, therefore, represents a huge opportunity," says Vijay Singh, chief
executive and managing director of AaramShop.com, a network of neighborhood
retailers based in New Delhi. AaramShop.com currently operates in 30 Indian cities
with more than 3,000 partner retailers.
Fig 2.1 – Volume of Keywords related to

Shopping and groceries in India
Gauging Competition

Many e-groceries have come up, but the segment is far from saturated. Most of such
ventures are catering to a few metros and many cities are yet to have such e-stores.
The potential market size also ensures that there would be room for multiple players,
even within cities. Though big retailers are yet to enter the segment, there is some
competition from local grocery stores that provide home-delivery services. However,
smart logistics and vendor tie-ups can help e-stores gain customer favor by offering
hem a price advantage. Local grocery stores can also be turned into business partners,
as done by AaramShop.com. It has roped in local stores to procure the groceries to be
delivered, while focusing on creating the technology platform and the online
interface.
"We have created a hybrid model. When a consumer shops on AaramShop.com, she
gets to choose a retailer in her neighborhood that she wants to order from. The order
goes to the retailer, who delivers the order and collects cash on delivery. This ensures
that the order moves from the web to the consumers' doorstep within 45 minutes,
without the need to re-invent the supply chain and with no additional costs," says
Singh.
Thus, the article describes the market has a long way yet to reach its saturation point
and this is now the key time for the retailers to partner with online intermediaries like
the aaramShop.com working on an hybrid model in order to face the stiff competition
offered by the bigger players. As the saying goes “United we Stand Divided we fall”
turns out to be the apt sutra now wherein all the retailers can partner together with an
online venture working on a hybridized model thus having a win-win situation and
this also helps the retailers to participate in the online arena and secure their future
days.

2.3 REVIEW OF RESEARCH GAP
In the last decade, global investors have been perceivably driven by market centric
factors over efficiency centric factors while choosing investment destination Many
Large international retailers are continuously increasing their presence in new
countries, particularly in emerging markets due to their high growth potential. The
focus of retailers is on building a portfolio of countries with different levels of risk, at
different stages of maturity, and with distinct consumer profiles to balance short-term
and long-term opportunities. Despite certain inherent challenges the Indian retailing
landscape is very dynamic and India’s twin growth engine economic liberalization
and demographic profile set it apart from other nations and presents a convincing
business case for global retailers seeking to enter the market.
The research gap could in the following study is to discover on the following aspects
of grocery and vegetable retail market as to How an particular metro city or Tier two
city grocery and vegetable retailers are facing a stiff competition with the advent of
the bigger giants in their domain of business.
How has these new entrants disturbed the retail market, the impact on the turnover
and the profitability margin of the retailers is an aspect which indeed is to be studied.
The research tries to unravel where is the market or business trend moving towards
have the retailers tried to come up with solutions to face this competition or leave the
competitive arena is also as keen aspect to be studied.
With the new lifestyle people getting adapted to and the increasing comforts offered
by E commerce platforms- wherein everything is available at the flick of a button has
hugely impacted the shopping trends of the people which has indeed posed a threat to
the retailers and can the retailers also afford to offer such facilities is subject quite
questionable and answers are to be seeked.
What is the awareness about all these upcoming developments, what have the market
share engulfing giants devised structured methodology to conquer the market and the
retailer’s ability to counteract these are all the aspects which must be unraveled and
studied now in order to secure the future of these retailer’s? Hence all these aspects
make it quite important to study the subject matter.

CHAPTER 3: RESEARCH METHODOLOGY

3.1 INTRODUCTION
This study aims to report the effects of E commerce on retail stores, understand if the
retailers are prepared to fight back against this stiff competition and if yes, how do
they plan to do it? and if No, what will be their future.
The study also reports the methodologies that the retailers must adopt in order to
survive and in what ways the Government can ensure that there is a healthy ecosystem
built in order to safeguard the interest of both, the retailers and industrialists.
The study covers different aspects of retail grocery and vegetable stores. An
Empirical study will be conducted by a structured Questionnaire, which will be used
to carry out the survey targeting the Bangalore Retailers. Primary Data will be
collected from these retailers and used as an input for drawing statistical conclusions.
3.2 STATEMENT OF PROBLEM
The Grocery and vegetable market contribute to be a major share of the Indian
business segment, nearly 92% of this market is the unorganized sector and this means
there is a huge population making a living upon the profits earned through this
business.
Lately with the relaxation on the government FDI norms allowing for an 100% FDI
for any single brand paved the way for E-commerce sites like Amazon, Flipkart, Big
Basket, Grofers etc to venture into the Indian grocery business.
According to the KPMG report, it is expected that by 2020, around 650 million
customers will be online and ecommerce market will grow to $45-50 billion.
The major growth drivers for this are:-
• Increase in Income Levels of individuals by 70%
• 100 Million youth entering the market
• Increasing nuclear families
• 35% Indians living in urban centers

• Increase in demand for wider variety, convenience and better prices.
With this rapid growth of E commerce, the unorganized sector / retail businessmen
are facing a stiff competition, their profit margins have reduced, their market share is
reducing at an alarming rate and their survival stands at risk
The dissertation titled “ A study on the Impact of Online Grocery and Vegetable E
commerce Platforms on Retail Business in Bengaluru” is conducted to measure the
awareness of the competition by Ecommerce on retailers, the impact of Ecommerce
on the profitability, turnover of the retailers and the how Ecommerce has impacted the
volume of customers visiting the retailers for shopping their daily needs.
3.3 NEED OF THE STUDY

Food, Shelter and clothing are the 3 basic needs for any human being, among these
three needs food serves to be the most important for survival. Nature has been the key
source of food ever since Man has arrived on earth, however due to increasing
demand for food on account of population explosion there has always been an acute
shortfall of this key resource and an undying demand for it makes it the most sought
product to carry out business upon.
According to KPMG Report on Indian Retail, the overall size of Indian Retail Market
is $534 billion in 2013-14 which has grown to a whooping INR 55 trillion by 2018-19
and is expected to cross the $1.7 trillion by the end of 2020. The current growth rate
of retail industry is around 15% which is higher than the growth rate of Indian GDP.
In retail industry, 92% of the market is the unorganized segment, whereas the
organized market is about 8-10% (i.e. around $60 billion) of the total industry.
Hence there is a huge potential for this industry and having realized this potential the
big players have started venturing into this segment of business, the online grocery
market has started registering healthy growth rate on account of growing urbanization,
changing lifestyle of the consumers and tech-savvy young generation who prefers to
buy products through online.
But with the increased predilection of consumers on branded products, predatory

pricing and attractive marketing strategies adopted by companies, the unorganized
segment is facing a big hit and is on a downfall pathway with the progressive growth
of these big players

Having said all this it becomes the need of hour to study, as to what is the extent of
impact on the retailers, how are they going to face the stiff competition offered and
what lies to their future.
3.4 SCOPE OF THE STUDY
The Study will be conducted in Bangalore, on retail grocery and vegetable stores only
(Individual Retailers/Local supermarkets and hypermarkets). Completion of the
project could help the retailers understand the future threats and help them to realize
the strategic changes that they must inculcate now to equip themselves for the future.
Also, the study helps to understand the current market scenario and the problems
faced by the retailers due to the stiff competition posed by the E commerce platforms
The study helps the retailers realize the need, to retain the existing customer base,
create new customer base and the importance of service quality.
3.5: OBJECTIVES OF THE STUDY
 To find out the existing effect of E commerce on retail stores (Restricting to

groceries and vegetable stores.
 To study the impact of Ecommerce on the Retailers
 Recommendations that retailers can adopt to face the E commerce
3.6 HYPOTHESIS FORMULATION
 H1: There is no significant Impact of Ecommerce on Grocery and Vegetable

retail business
 H2: There is a significant impact on the business of Grocery and Vegetable
retail business by Ecommerce

3.7 RESEARCH DESIGN
Research design is related to the selection of concerned techniques (well in advance)

regarding the collection of the data and analysis of the data by keeping in mind the
two main factors of the research i.e. objection of the research and adequacy of the
time, a Descriptive survey exploratory method was adopted for carrying out the data
collection and research analysis.
3.7.1 SAMPLING DESIGN
Sample design refers to the method that is used to build a sample from a universe. To
collect the primary data a convenience sampling method has been used . Convenience
sampling procedure was used for selecting respondents.
3.7.1.1 POPULATION AND SAMPLE SIZE
Convenience sampling technique has been used and questionnaires has been used to
collect information from local dwelling Grocery and vegetable retailers. A total of 50
retailers were consulted to collect responses for the questionnaire.
3.7.2 STUDY PERIOD
The Survey was planned to be carried out over a stretched duration of 2 months but
due to the restrictions passed on by the government on account of COVID 19 a global
pandemic outbreak the survey was limited to a short duration of 3 weeks considering
the academic deadlines as an added constraint.
3.7.3 PRIMARY DATA
The primary source of data collection will be through a structured questionnaire which
was used to conduct a manual door to door survey. Thus in the study primary data is
collected by: -
 Gathering of raw data collected at the source i.e. the retail outlets
 It could be further analyzed into two segments; qualitative research and
quantitative data collection methods.

Qualitative Research Method
The qualitative research methods of data collection does not involve the collection
of data that involves numbers or a need to be deduced through a mathematical
calculation, rather it is based on the non-quantifiable elements like the feeling or
emotion of the researcher. An example of such a method is an open-ended
questionnaire.
Quantitative Method
Quantitative methods are presented in numbers and require a mathematical

calculation to deduce. An example would be the use of a questionnaire with close-
ended questions to arrive at figures to be calculated mathematically. Also,
methods of correlation and regression, mean, mode and median.
Tools: Face to Face interviews

 Structured Interviews
 Unstructured Interviews
 Questionnaires
 Observation
3.7.4 SECONDARY DATA
The secondary source includes Annual reports, study carried out by different research
establishments, online articles, reports, case studies, Journals and magazines
3.7.5 TOOLS AND TECHNIQUES
TOOLS FOR COLLECTING PRIMARY DATA
INTERVIEW METHOD
A Questionnaire of 15 Questions was prepared for which appropriate options were

made available for respondents to select from. The questionnaire responses were
collected in the form of door to door manual survey and this data of responses were
converted into an electronic format for ease of analysis and representation.
The demographic part of questionnaire was designed to collect the general

information about respondents age, gender, education

A major segment of the retailers belonging to the unorganized market their literacy on
computers and other gadgets were a limitation which posed a difficulty in collecting
the data through Google forms or other electronic medium hence had to resort to the
older tradition of collecting the information through a manual survey.
OBSERVATION
The lack of computer or other electronic gadgets literacy in the retailers posed a
difficulty usage of these medium for collecting data in addition to this the widespread
outbreak of COVID 19 pandemic posed to limit the survey to a population of 50
retailers.
3.7.6 LIMITATION OF THE STUDY

 Survey is limited to Bangalore region only.
 The study does not consider the financial soundness of the retailer
 Besides that, the detailed study has been conducted taking on 50 retail stores
based upon convenient sampling.
 Data pertaining to the study has been collected for a period of 2 years only
 Due to the outbreak of COVID 19 the survey was limited to a population
count of 50 only
 Time being limiting factor the survey is conducted for a very short span of
time only.
 The survey clubs the Reponses of both the vegetable and grocery retailers to
draw conclusions due to limitation of the responses in order to draw better
conclusions and understand the opinions of the masses

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION
Data analysis refers to examining what has been collected in survey or experiment
and making deductions and inferences. Furthermore, data analysis is computation of
certain measures along with searching for patterns of relationship that exist among
data-groups. Whereas, data processing consists of a number of closely related
operations: editing, classification, coding, and tabulation.
All completed questionnaires/schedules thoroughly checked for completeness,

accuracy and uniformity. The raw data obtained from field was prepared for analysis
by populating the same in MS Excel for ease of analysis and computations
The analysis is based on quantitative data to be collected and some extent the
qualitative information from questionnaires.
The One Sample T Test
T Test determines whether the sample mean is statistically different from a known or
hypothesized population mean. The One Sample t Test is a parametric test.
This test is also known as:
 Single Sample t Test
The variable used in this test is known as:
 Test variable
The test statistic for a One Sample t Test is denoted t, which is calculated using the
following formula:
Where

The calculated t value is then compared to the critical t value from the t distribution

table with degrees of freedom df = n - 1 and chosen confidence level. If the
calculated t value > critical t value, then we reject the null hypothesis and accept the
alternate hypothesis.
Or if the Significance value or the p value is less than the α value 0.05 i.e p<0.05 we
reject the null hypotheses and accept the alternate hypotheses
Cronbach’s alpha tests is being done to see if the raw data collected from the survey
are reliable.
These questions measure latent variables—hidden or unobservable variables like: a

persons awareness, openness to reveal about their financial status too. These are very
difficult to measure in real life. Cronbach’s alpha will tell you if the test you have
designed is accurately measuring the variable of interest.
Percentage analysis to determine the generalized population sentiments on

Ecommerce impact are made. Some of the tests were carried out in MS Excel while
some were carried out in SPSS (Statistical Package for Social Science) software tool.
4.1 TARGETED RESPONDENTS
 The local dwelling Grocery and vegetable retail shops restricting to Bangalore region
 The cart pullers, Thela walas and street vendors of vegetables and other greens

4.2 DEMOGRAPHIC ANALYSIS OF RESPONDENTS
Interpretation:
From the above chart, it is interpreted that 78% of the respondents Males
And 22% of the respondents are Female
Interpretation:
From the above chart, it is interpreted that 44% of the respondents are in the age of 20-30
years, 44% of the respondents are 30-40 years of age, 14% of the respondents 40-50 years
aged and none of the respondents are aged above 50 years.

Interpretation:
From the above chart, it can be interpreted that 56% of the respondents are having an
educational qualification of Graduation, 38% of the respondents are non graduates but
still have some educational background while 6% of the respondents have no educational
background at all.
Interpretation:
From the above chart we infer that of all the data collected the number of retailers
continuing business as there family business were 25 in number (50%) and the remaining
25 respondents had newly established there venture (50%)

Interpretation:
From the above chart we can infer that nearly 57% of the store were grocery store and the
remaining 43% of the stores were Vegetable stores, thus the number of grocery store were
having an upper hand

4.3 GRAPHICAL ANALYSIS OF RESPONSES
Interpretation:
From the above chart we can infer that nearly 60% of the retailers accept that there has
been a dip in there business with the advent of hypermarkets like Bigbazaar, Metro,etc
Interpretation:
From the above chart we can deduce that 18% of respondents completely accept that there
has dip in there business while the next 32% of the respondents also acknowledge that
there business has started following a downfall path while. 20% are still having a neutral
feeling about Ecommerce and 30% disagree that Ecommerce can have any effect in their
business

Interpretation:
The Above chart depicts that a sum of 78% (38%+40%) of the respondents believe that
large number of malls that have been established have caused an downfall of there
business and 20% deny the statement and a mere 2% of the respondents have an neutral
opinion
Interpretation:
This chart of respondent’s opinion show that 78% (30%+48%) of the respondents feel
that the customers visiting there store compare the prices with online prices before
purchasing any commodity while 22% of the respondents believe that customers do not
have such an attitude while buying products

Interpretation:
This chart of respondent’s opinion show that 50% of the respondents feel that the
customers visiting there store prefer to be given discounts.
30% of the retailers think that the consumers do not ask for special discounts and 20% of
the respondents depict that customers neither ask nor they don’t ask while purchasing
from the retailers.
The retailers are at an alarming rate increasing their discounts in order to stand with
the online stores who woes the customers with unbelievable discounts. Although the
retailers cannot compete with the online stores in terms of discount, but it has to lower
its prices to a relative extent to survive the market.
Interpretation:
This chart shows that the 30% of the retailers are now keeping in more variety of products
to please the customers, 20% of the retailers disagree that there has been any increase in
the variety of stocks and 50% of the respondents have a neutral opinion.

Online stores maintain a wide variety of stocks and retailers fail in this context to the
e-stores by a wide margin but most of the retailers as found by the survey is not
inclined to compete with the online stores in this regard. The defeat is accepted.
Retailers cannot maintain a large stock as that might have a negative impact of unsold
stock at the end of the year which in turn might bring in huge loses to the concern.
Interpretation:
76% (66%+10%) of the respondents allege that the customers visiting their store prefer to
hand pick the products and select what they prefer to buy and this increases the customer
satisfaction while 22% of the respondents disagree to this and mere 2% have neutral
opinion on this.
Interpretation:
80% of the respondents acknowledge that there is an sharp drop in the number of
customers visiting their stores due to the advent of Ecommerce while 10% still believe

that that there has been no drop in the customers visiting them while 10% of the
respondents are not able to asses the volume of customers visiting them
Interpretation:
80% of the respondents acknowledge that providing features like home delivery, book on
phone, such options help them face off the competition and a 20% of the respondents feel
that adding in new features will have no effect at all.
Interpretation:
70% of the Respondents have an neutral opinion on the volume customers doing window
shopping, while 20% accept that there has been in increase in such type of customers
while 10% deny that there is no such Behaviour of the customers seen.

There has been a trend in recent years for customers to browse the products in a physical
store and buy it from an online store at a reduced price. Retailers now have more
prospective customers than actual ones.
Interpretation:
60% (48%+12%) of the respondents have an opinion that their average turnover has got
reduced from the past three years track record. 20% have an opinon that there turnover
has neither increased or decreased and 20% of the respondents feel that there turnover has
increased lately. Retailers over a period of three years under study has noticed a
considerable decline in their turnover as compared to years back. Some has reported if not
decline but stagnancy in their growth which is a warning signal for the enterprise
Interpretation:
52% (42%+10%) of the respondents have reduced their profit margins when compared to
their previous profit margins to face the stiff competition prevailing and continue in the

race, while 38% acknowledge that they have kept there margins same and an 10% of the
respondents on the converse have increased there profit margin in the recent years.
Online shops have brought in a price war in the market and the main sufferers of this
price war are the retailers. In order to survive, most of these retailers too has made an
attempt to lower their prices but considering their high cost of operation these retailers
has to sacrifice on their margin.
Interpretation:
58% (48%+10%) of the customers feel that advertisement cannot bring any increase in
their business, while 30% of the respondents feel that advertisement can bring in a
positive change to their business. 12% remain neutral unaware about advertisement
methodologies.
These results show that many retailers are yet to understand the capabilities of
advertisement and implement them in order bring in a positive mark in their business.
Ecommerce has hugely banked on advertisements, marketing to reach their fullest
potential and the retailers are yet to realize this, but the limited financial capabilities of
the retailers hinder them to invest more into advertisement.

Interpretation:
62% of the retailers are still resorting to their old traditional methods of purchasing,
32% of the retailers have adapted to both the platforms and utilizing the best method
suitable for them, while only a mere 6% of them find buying through technology
platforms have been more beneficial to them than the traditional buying practices
Interpretation:
76% of the respondents are not willing to invest into technology-based advertising
techniques either due to lack of awareness or due to huge financial investments. And a
remaining 24% of the respondents have no opinion made on these maethods.
Retailers must increase there awareness about these methods and start utilizing them
Afterall it has now been an era of digitalization and the tech savvy people can only be
lured in by following these techniques.

4.4 DESCRIPTIVE STATISTICS

Sl. Descriptive Statistics
No. Mi Mea Standard
Key Questions considered N Max
n n Deviation
Drop in Business due to E
1
commerce 50 2 5 3.38 1.093
Customers compare rates while
2
buying 50 2 5 3.86 1.077
Drop in number of Customers
3
visiting stores 50 2 5 3.88 0.816
4 Change in Profit margin 50 1 4 2.48 0.806
Advertising can fetch more
5
customers 50 1 4 2.62 1.018
Table 4.1: Descriptive Statistics
4.5 CROSS TABULATION
4.5.1 Education V/s Drop in Business due to E commerce
Education v/s Drop in business due to E commerce

E commerce has led to a drop-in
Total
business
1 3 5
Graduate 7 9 12 28
Non-Graduate 7 0 12 19
Illiterate 1 1 1 3
50
Table 4.2: Education v/s Drop in business due to
E Commerce
Interpretation: - These Results depict that the learned such as the graduate and the
non-graduate are strongly aware that their business is on the path of downfall with the
advent of E commerce

4.5.2 Age V/s Drop in Business due to E commerce
Age*Drop in business due to E commerce

E commerce has led to a drop-in
business Total
Age Group 1 3 5
20-30 9 4 9 22
30-40 5 5 11 21
40-50 1 1 5 7
Above 50 0 0 0 0
50
Table 4.3: Age v/s Drop in business due to E Commerce
Interpretation: - These Results clearly show that the young and the pretty experience
retailers can understand the reasons for the downfall better than the X generation of
retailers. They understand that the downfall of their business is mainly because of the
strong oppression by the E commerce giants, Thus there exists a positive correlation
between the age and the realization of the existing competition by the new tech giants
4.6 CORRELATION ANALYSIS
4.6.1 “Education v/s Advertising can fetch more customers”
Correlations
Education – Adv. can bring
Graduate (1) more Customers
Education – Graduate (1) Pearson Correlation 1 .012
Sig. (2-tailed) .936
N 50 50
Adv. can bring more Pearson Correlation .012 1
customers Sig. (2-tailed) .936
N 50 50
Interpretation: - Thus, there exists a positive correlation between education of the

retailers and their knowledge about the fact that advertising can bring in more
customers but the correlation value is just 0.012 (1.2%) Thus awareness of using
advertisement as potential tool for improving business is yet be made.

4.7 ONE SAMPLE T TEST
One Sample Statistics

Std.
Key Questions Mea Standard
N Min Max Error
considered n Deviation
Mean
1
commerce 50 2 5 3.38 1.093 0.155
Customers compare rates
2
while buying 50 2 5 3.86 1.077 0.152
Drop in number of
3
Customers visiting stores 50 2 5 3.88 0.816 0.115
4 Change in Profit margin 50 1 4 2.48 0.806 0.114
Advertising can fetch
5
more customers 50 1 4 2.62 1.018 0.144
Table 4.4: One Sample T statistics
Test Value = 0
95% Confidence
interval of the
Difference
Mea
Key Questions considered t df Sig. (p) n Lower Upper
Diff.
commerce 21.638 49 0.000 3.38 3.0661 3.6939
Customers compare rates
while buying 25.083 49 0.000 3.86 3.5507 4.1693
Drop in number of
Customers visiting stores 33.291 49 0.000 3.88 3.6458 4.1142
Change in Profit margin 21.539 49 0.000 2.48 2.2486 2.7114
Advertising can fetch more
customers 18.022 49 0.000 2.62 2.3279 2.9121
Table 4.5: One Sample T statistics Results
Hypothesis:
H1: There is no significant Impact of Ecommerce on Grocery and Vegetable retail
business
H2: There is a significant impact on the business of Grocery and Vegetable retail
business by Ecommerce

Interpretation:
From the One sample T statistics results we understand that for
Degrees of freedom = N-1
Where,
N=Number of Samples
Thus df = 50-1 = 49 for a probability value (α) of 0.05 from the T table we find that
tcritical value is 1.6766.
And from all the statements in the One Sample T statistics results table we find that
tcalculated > tcritical
Thus we reject the Null hypothesis and consider the alternate hypothesis H1 saying
There is a significant impact on the business of Grocery and Vegetable retail business
by Ecommerce
Thus based on all of the above analysis we may accept the alternate hypothesis and
conclude that the commerce has indeed pushed the retail business on a downfall path
and since the Ecommerce is still in its nascent stage

5. SUMMARY OF FINDINGS AND RECOMMENDATIONS
5.1 SUMMARY OF FINDINGS
Based on the study conducted on the topic “A Study on the Impact of Online Grocery
and Vegetable E commerce Platforms on Retail Business in Bengaluru” - An
Empirical Analysis, the following findings are summarized.
a) Demographic Analysis
The Major respondents were Male respondents from an age group of 20-30,
graduated, running a retail grocery business and 50% of the respondents were
carrying out business as a family venture business while the other 50% had newly
entered into their respective business.
b) Descriptive Statistics
1) A major portion of the customer agree that their business has hit a downfall path
due to the E commerce business
2) Customers compare prices with online prices before making an purchase
3) There is steep drop in the number of customers visiting their store.
4) The Profit margin of the Retailers are being reduced to fight the competition
offered by Ecommerce
5) Retailers feel that advertisement cannot fetch more customers or improve their
Business
c) Cross Tabulation
1) A major portion of the educated retailers understand the competition in the market
prevailing and understand that Ecommerce is posing a threat to their business,
while the retailers having no educational background lack to understand and
foresee the competition that would be offered in the near future.
2) Retailers of a young age i.e the generation belonging to Y generation are able to
grasp the E commerce business strategies, they are more tech savvy and realize
the effects of E commerce better than the retailers belonging to the X generation.

d) Correlation Analysis
Advertisement has always been a key tool for improving business, advertisement
helps any business in fighting competition, expansion of market.
However, many of the retailer’s lack awareness about these facts and feel that
advertisement can be of no help to their business and is only a financial burden
and do not show willingness to spend money in advertising. Only a small
percentage of the retailers realize the true potential advertisement
e) One Sample T Test
The One sample T test conducted on the responses depicted that in all the 5 major
variables chosen for analysis had its
tcalculated > tcritical
and thus, rejecting the null hypothesis and accepting the alternate hypothesis stating
There is a significant impact on the business of Grocery and Vegetable retail business
by Ecommerce
5.2 RECOMMENDATIONS:
Retailers must change their attitude towards the market. Today its is a consumer
market and as a result the priority is the consumer satisfaction. The firm must be in
the good books of the consumer. Better quality products, fair price and friendly after-
sale services are the basic areas in which the business must concentrate to a
remarkable extent. Additional services should be provided to the consumers to woe
them and build upon a loyalty which in turn would ensure a stable sale in the years to
come.
Additional Features Like: -
1) Collaborate among themselves and make a consortium to have an unified
pricing among all the retailers
2) Collaborate with all the retailers, develop a network and partner with online
technology partners like Aaramshop,etc thus allowing the customers to go app
based online shopping
3) Have a sound network and partnership built between the retailers so as to have
a quick response by diverting the orders to retailers nearest to the customer
location.

4) A unified profit margin must be maintained to avoid internal conflicts and

self-competition among the retailers
5) Advertising must be used as an effective tool to have a strong presence in the
market.
6) Retails Business regulation policies to have a fair competitive business
between the Retailers and Ecommerce platforms is to be established by the
government and restrictions upon FDI to be initiated for the well being of the
locals.
7) App Based Shopping
8) Attractive Cashbacks
9) Home deliveries
10) Pay later Options offering for regular customer to improve customer loyalty
towards the retailers

CHAPTER 6: CONCLUSION
The face of retail has changed. The advent of technology in recent period being the
primary reason for it.
Today, retailing means going into shopping centers, going online and going mobile.
In all these, small retailers miss out somewhere. But the nearby store is always the
most important concern for all reason and seasons.
It needs to revive not just survive. The retail stores needs to simply uplift its pattern of
business and face the competitive world with a more positive outlook. E-stores and
retail stores both must survive, none at the cost of the other. It’s not just about the
livelihood it gives to the thousands of people but also the convenience and the
steadfastness of a fixed retail store.
Thus, I would like to conclude by saying the Retailers must partner among themselves
and start adapting to the changing technology trends to cater to the needs of the
customer and realize that customer satisfaction is now the main agenda. Thus,
catering to the customer comforts so as to maintain customer loyalty is the best way to
keep the customers intact.
The next big tool is to have mutual collaboration between the retailers and offer a
better price, quality and service that the Ecommerce platforms have been offering.
Marketing and Advertising is an important and primary tool for a successful business
and from the study it is seen that nearly 50% of the population ignore advertising and
do not understand the potential of it, Awareness about the uses and potential of
advertising must be realized by the retailers thus the retailers must make use of the
various channels of advertisement to keep themselves present in the market
competition.
Providing additional features as per the recommendations listed above are things that
the retailers must adopt not just to survive but also to revamp in a positive way and
secure their future.

CHAPTER 7: BIBLIOGRAPHY AND REFERENCES
 Berman , & Evans. (2004). Retail Management.
 Indian Brand and Equity Foundation (IBEF). (October 2008). Retail Industry.
www.ibef.org.
 Kothari, C. R. (2010). Research Methodologies Methods and Techniques.
 Liang T P, & Huang J S. (1998). An Empirical Study on Consumer acceptance of Products

in Electronic Markets: A Transaction cost model.
 Rajkumar Paulrajan. (March 2010). Business Models of Vegetable Retailers in India. India.
 Richard Dobbs, Yougang Chen, Gordon Orr, James Man. (2013). China’s e-tail revolution:
Online shopping as a catalyst for growth. McKinsey & Co,.
 Sengupta, Anirban. (2008). Emergence of modern Indian retail: an historical perspective.

International Journal of Retail&Distribution Management 36(9), 2008, 689-700.
 Tripathi, P. C. (2007). Research Methodology in Social Sciences.
 Zhou L , Dai L, & Zhang D. (2007). Online Shopping Acceptance Model – A Critical Survey
of Consumer Factors in Online Shopping. Journal of Electronic Commerce Research, Vol.
8, No. 1:41-62,.
 www.Kpmg.com
 https://www.emerald.com/insight/content/doi/10.1108/02632770710729700/full/html
 https://www.6wresearch.com/industry-report/india-online-grocery-market-players-
share-forecast-industry-analysis

ANNEXURE -1: QUESTIONNAIRE
Dear Participant:
I am Adarsh S, a Post graduate student at Canara Bank School of Management

studies, Central College, Bengaluru Central University. I am examining ''A Study on
the Impact of Online Grocery and Vegetable Ecommerce Platforms on Retail
Business” – An Empirical Analysis, for my final project. I am inviting you to
participate in this research study by completing the followed survey questionnaire.
There are no risks associated with participating in this study and all of the response in
the survey will be recorded anonymously. The information collected hereby for this
study may benefit the grocery and vegetable retail businesses in helping them
understand the impact of Ecommerce on their business.
Demographic Data
1. Name: ____________________________
2. Gender
 Male
 Female
3. Age
 20-30
 30-40
 40-50
 Above 50
4. Education Background
 Illiterate
 Non-Graduate
 Graduate

5. Nature of Business
 New Venture
 Family Venture
6. Type of Business
 Grocery Store
 Vegetable Store
Survey Questionnaire
1. Medium scale players like Big Bazaar, Metro, Reliance Fresh have led to drop in
your business?
 Completely Disagree
 Disagree
 Neutral
 Agree
 Completely Agree
2. Big Players in E commerce like Grofers, Reliance Jio Mart, Amazon, Big basket
who has started your business online has led to a drop in your business?
 Disagree
 Neutral
 Agree
3. The Mall culture has led to the loss of your customers.

 Disagree
 Neutral
 Agree

4. Do you think customers compare rates with online prices before purchasing?
 Disagree
 Neutral
 Agree
5. Due to Ecommerce offers do customers ask for offers and discounts while
purchasing?
 Disagree
 Neutral
 Agree
6. Have you been keeping more variety of stocks in recent times because of the
competition?
 Disagree
 Neutral
 Agree
7. Allowing customers to pick and choose product makes them more satisfied
while shopping.
 Disagree
 Neutral
 Agree

8. What do you think about the following statement - “The Number of customers
visiting my store has got reduced compared to the number of customers visiting
2 years before"?
 Disagree
 Neutral
 Agree
9. Providing new features like Homedelivery, App Shopping, will help in facing
the stiff competition?
 Disagree
 Neutral
 Agree
10. Has there been an increase in the number of window shoppers nowadays?
 Disagree
 Neutral
 Agree
11. How has your annual average turnover (Business transaction) changed
compared to the last three years?
 Increased Exponentially
 Increased
 Remains same
 Decreased

12. How has your profit margin changed over the past three years?
 Increased Exponentially
 Increased
 Remains same
 Decreased
13. What do you think about the following statement "Advertising can help me fetch
more customers”?
 Disagree
 Neutral
 Agree
14. Will you invest in advertising, Digital marketing, Apps, etc in the future for
increasing your business?
 Yes I will definitely invest
 I will Remain Same
 No I will not invest
15. Where have you been purchasing your products from?

 APMC Yards/Local Market/Local Wholesalers
 Technology Platforms like Udaan,etc
 Both the Platforms


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A Study on the Impact of Online Grocery and Vegetable E commerce Platforms on Retail Business 2019-2020

Dept. of MBA, CBSMS(Eve), Bangalore 1 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 2 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 3 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 4 MBA, II-year, Marketing

Fig.1.1 – Typical Grocery Shop Fig.1.2 – Typical Vegetable

1.1 THEORETICAL BACK GROUND OF THE STUDY

Dept. of MBA, CBSMS(Eve), Bangalore 5 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 6 MBA, II-year, Marketing

A Hypermarket is a mixture of both a superstore plus a departmental store. It is a

Electronic trade or E Commerce:

Online Market trends in India

Dept. of MBA, CBSMS(Eve), Bangalore 7 MBA, II-year, Marketing

Fig. 1.3 – The Evolution of Grocery Store

1.2 IMPORTANCE OF THE TOPIC

Dept. of MBA, CBSMS(Eve), Bangalore 8 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 9 MBA, II-year, Marketing

Vegetable Retail Scenario

Dept. of MBA, CBSMS(Eve), Bangalore 10 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 11 MBA, II-year, Marketing

1.3 NEED TO STUDY THE TOPIC

 The awareness by the retailers on the stiff competition prevailing

 The effect on the profitability of retail store

Dept. of MBA, CBSMS(Eve), Bangalore 12 MBA, II-year, Marketing

 The influence of E commerce on consumers and their choice

 The readiness of the retailers to face the future

 The beliefs of the retailers in the customers

 To analyze the changing business pattern to achieve customer satisfaction

1.4 Market Analysis

Dept. of MBA, CBSMS(Eve), Bangalore 13 MBA, II-year, Marketing

Challenges faced by the Indian online grocery market

Dept. of MBA, CBSMS(Eve), Bangalore 14 MBA, II-year, Marketing

High operational expense for quality upkeep of transitory products Perishable

An abundance of physical grocery stores

Key trends brought about by the Indian online grocery market

Social media marketing for online grocery branding

Dept. of MBA, CBSMS(Eve), Bangalore 15 MBA, II-year, Marketing

Digital dashboards in physical stores

Dept. of MBA, CBSMS(Eve), Bangalore 16 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 17 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 18 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 19 MBA, II-year, Marketing

Table 1.1 – Country Wise Modernization percentage

Dept. of MBA, CBSMS(Eve), Bangalore 20 MBA, II-year, Marketing

Indian Retailers Market Reach in 2011 and further information

Dept. of MBA, CBSMS(Eve), Bangalore 21 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 22 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 23 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 24 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 25 MBA, II-year, Marketing

be utilized. In United States, because of this sort of advancement, retailer Whole

Dept. of MBA, CBSMS(Eve), Bangalore 26 MBA, II-year, Marketing

Dept. of MBA, CBSMS(Eve), Bangalore 27 MBA, II-year, Marketing

A short note on the vegetable market food mileage scenario

Dept. of MBA, CBSMS(Eve), Bangalore 28 MBA, II-year, Marketing

Chapter 2: REVIEW OF LITERATURE

Dept. of MBA, CBSMS(Eve), Bangalore 29 MBA, II-year, Marketing

2.1 Review of Literature

Dept. of MBA, CBSMS(Eve), Bangalore 30 MBA, II-year, Marketing

scenario, how large international Retailers are contemplating to invest in India to

Kathleen Seiders, Constantine Simonides, Douglas J Tigert (2000) made an profound

Dept. of MBA, CBSMS(Eve), Bangalore 31 MBA, II-year, Marketing

2.2 Magazine Articles