Professional Documents
Culture Documents
RETAILERS
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How do you perceive the development of Shopping malls in Delhi and NCR
Region?
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Healthy Tre nd Unhealthy Trend
What according to you is the purpose of the customers visit to the Shopping
Malls?
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Yes No
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What according to you are the reasons for buying at that particular shopping
mall (Please rank them in order of preference?)
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Rank (1-6) the following factors, which influence the customer purchase decision
at a shopping mall.
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Price Brand
Location of Mall Parking At Outlet/Mall
Appealing Ambience 3-D Column 6
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Do shopping malls have the following advantages?
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Tim e Factor
Discount schem es
Adequate parking space
Individual sections for all categories
Good shopping experience in better place w ith convenience and variety.
Organized shops w ith international ambience &air condition all-around.
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Do you think that organized retail will provide many opportunities both to existing
players as well as new entrants?
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YES NO
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Self Motivation
5% 7%
7% Advertisements
Promotional
Activities
81%
Friends &
Relatives
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RESEARCH FINDINGS
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Findings in Sahara Mall: -
Consumers in Sahara mall were mostly in the age group among 25- 35 and 35
and above. In consumers, the numbers of Homemakers and Services and
professionals were in the maximum numbers. Consumer visits the mall generally
once in a week and twice in a month. Consumers come to the mall for the
households shopping, eating and purchase for the apparels. Consumers are
influenced by the Discounting schemes.The annual house holds income between
2 – 10 lakhs.
Consumer Buying Behavior In Sahara Mall: -
1. Consumers in mall come for the house holds shopping.
2. Consumers which come to the mall are mostly homemakers and of
service class.
3. According to them Sahara Mall is the best for the middle class.
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Findings in MGF Plaza: -
In MGF Plaza the consumers were in the age group of 25-35 yrs and 35 above
mostly.
Consumers were homemakers, businesspersons and professionals. They come
for the mall for homefunishing items and electronics items. They spend in the
shopping mall more then Rs. 2500 and above. Consumers in mall were brand
oriented only for purchase of these above mentioned products.
Consumer Buying Behavior in MGF Plaza: -
1. Consumers come for the purchase of branded electronic items and
home furnishing items.
2. Consumers in the mall were the only serious buyers and they don’t
come for the entertainment.
3. Consumers spend the money more than Rs. 2500
Consumer Brand Perception: -
1. The MGF Arcus brand attracts consumers in the mall.
2. Consumers also come there due to the Branded shops like Electrolux,
Philps and LG electronics.
3. As a brand in shopping malls, consumers said that Plaza is best for all
necessary home items like electronics and furniture.
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Research findings of 745 consumer’s analysis
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CONCLUSION
The organized retail in India is expected to cross INR 1000 billion mark by 2010
and around INR 200 billion investments are in the pipeline. The size of the
organized retailing market stood at Rs. 280 billion in 2004, thereby, making up a
mere 3% of the total retailing market. Moving forward, organized retailing is
projected to grow at the rate of 25%-30% p.a. and is estimated to reach an
astounding INR 1000 billion by 2010. Further, its contribution to total retailing
sales is likely to rise to 9% by the end of the decade. Currently the fashion sector
in India commands a lion's share in the country's organised retail pie. This is in
line with the retail evolution in other parts of the world, where fashion led the
retail development in the early stages of evolution and was followed by other
categories like Food & Grocery, Durables, etc. The last few years have seen
rapid transformation in many areas and setting scalable and profitable retail
models across categories. Indian consumers are rapidly evolving and accepting
modern formats overwhelmingly. Retail Space is no more a constraint for growth.
India is on the radar of Global Retailers and suppliers / brands world-wide are
willing to partner with retailers here. Further, large Indian corporate groups like
Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa & Piramal Groups etc
and also foreign investors and private equity players are firming up plans to
identify investment opportunities in the Indian retail sector. The quantum of
investments is likely to sky-rocket as the inherent attractiveness of the segment
lures more and more investors to earn large profits. Investments into the sector
are estimated at INR 20 – 25 billion in the next 2-3 years, and over INR 200
billion by end of 2010.
Stocks in the retail sector are also becoming increasingly attractive from an
investor's point of view. Successful development of value based concepts as well
as development of retail space in smaller cities and towns shall drive the
organized retail into the next levels of cities. Retailers have responded to this
phenomenon by introducing contemporary retail formats such as hypermarkets
and supermarkets in the new pockets of growth. Prominent ‘tier-II' cities and
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towns, which are witnessing a pick-up in activity, include Surat, Lucknow, Dehra
Dun, Vijaywada, Bhopal, Indore, Vadodara, Coimbatore, Nasik, Bhubaneswar,
Varanasi and Ludhiana among others.
On the supply side, mall development activity in the small towns is also picking
up at a rapid pace, thereby, creating quality space for retailers to fulfill their
aggressive expansion plans. Thus, the ‘retail boom', 85% of which has so far
been concentrated in the metros is beginning to percolate down to smaller cities
and towns. The contribution of these tier-II cities to total organized retailing sales
is expected to grow to 20-25%.
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these players are already in the range of INR 10-20 billion per year, with reported
plans to step up to INR 100-150 billion within the next 3-4 years.
The food and personal care retail market in India is currently valued at about 10
billion US dollars and is expected to grow by 5-7% year on year according to
reports by A.T.Kearney. The average Indian family spends about 31% of its
income on food and this is expected to grow to about 36% in the near future. This
scenario obviously has led a number of players to think about opening up retail
chains that cater to food and personal care. Even Walmart and other global
players are thinking of making a foray into the Indian market.
For a long period of time the debate has been whether the large retail players
would be able to dislodge today’s “Mom and Pop” stores which currently service
the food and personal care need of Indians.
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The Mom and Pop stores have distinct advantages over the other players in
terms of low overheads and avoidance of sales tax. The introduction of VAT in
the Indian market would nullify the tax advantage to a certain extent but there is
another innate advantage that these stores enjoy. Various studies conducted by
institutes such as the Department of Economics, University of Connecticut, have
shown that the most important factor for a retail store is distance. The “Mom and
Pop” stores being the nearest to the consumers’ home have therefore remained
as the first choice for food and personal care. Critics argue that with the
emerging socio-economic trends in India such as the phenomenon of increase in
women joining the work force, brand consciousness, faster nuclearization of
families and a fast-paced life would lead to Mom and Pop stores being dislodged
by bigger stores.
Another factor of importance here is technology. Critics argue that the bigger
stores would be able to bring in better efficiencies and therefore would be able to
provide better variety and lower prices. The fact however remains that the high
real estate cost and other existing inefficiencies in the Indian market do not allow
for cost efficiencies. Such efficiencies can only come if the entire market
structure from the supplier to the end consumer becomes integrated into one.
Even if the retailers have the right integrating technology it mitigates cost
inefficiencies only to a certain extent as the vendor and transporters still operate
inefficiently.
Analysts have compared the socio-economic changes in India to the ones that
occurred in the US and they argue that the way malls and big retailers became a
common phenomenon in the US the same would happen in India. The fact
however remains that while the socio-economic changes have taken time to
trickle down the technological changes especially in terms of internet etc. have
been faster, which therefore may lead to a totally new scenario in India.
While it is correct that a large population of India does not have Internet access
etc. but at the same time it is also true that the socio-economic changes we
talked about have also only come about largely in the middle and upper class.
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Therefore a scenario might emerge where India bypasses the stage of big
retailers in the food and personal care segment. The socio-economic changes
would take time. It might be possible that the technological changes take place
faster than the sociological changes and if that happens then the market could be
served directly through the net and through e-tailing. The changing face of the
food and personal care market has negated the need of a consumer to actually
be there physically. All items including pulses etc. are packed and therefore do
not require physical inspection. Even vegetables and dairy items are coming in
packs therefore there is no question of checking these items physically.
Therefore if the technological changes are faster, then India might move into e-
tailing for the food and personal care market without having any major retailer in
this segment.
This could be true also for other products where physical presence is not
required and where the goods are standardized commodities.
So the next time someone tells you that he or she is very excited about Wal*mart
coming to India, think about the race of changes.
With new shopping-malls having become operational in many cities across India,
it is interesting to observe how the shopping-behaviour of consumers in the
vicinity of these malls has changed and thereby draw some lessons that could be
of some use to the developers of hundreds of new malls that are currently under
planning or construction across India.
It is still not too long ago that the operators of a particular new shopping-mall at
Mumbai had to contemplate restricting entries of visitors by imposing conditions
that such entry was limited to those having mobile phones or credit cards a.k.a.,
the income tax department's one in six criterion for filing a tax return.
Delhi and Gurgaon saw some of the initial mall developers become parking lot
operators as well by charging exorbitant parking fees from all visitors. Rentals,
rather than going down with more malls coming up, started moving up even as
the quality of services within the malls started deteriorating. In this context,
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therefore, it is somewhat surprising that questions are already being asked, albeit
in whispers, whether shopping-malls can survive and operate profitably in India.
Many tenants lament about the low percentage of conversions from those who
walk through the portals of these malls, and casual observers routinely find
shopping-bags missing in the hands of the supposed shoppers visiting these
malls as an indicator that the initial euphoria about shopping in the malls is
already on the wane and that consumers are reverting to their traditional
shopping-destinations.
There are some myths and some realities about these observations. It is, indeed,
true that many Indian retailer tenants in the shopping-malls have now become
familiar with terms such as footfalls, conversions, average transaction value, and
repeat customers.
However, it is also true that for many of these tenants, it has been their first
expansion beyond their traditional high street locations and hence, they have
expectations born more out of hype than by any real experience.
For instance, I would like to speculate that daily or weekend footfalls in traditional
shopping high streets of India such as South Extension and Karol Bagh in Delhi,
Linking Road in Mumbai, Commercial Street or Brigade Road in Bangalore, or for
that matter, T Nagar or Anna Nagar in Chennai would easily exceed the more
carefully estimated (or measured) footfalls in any of the malls in the country.
Similarly, if one were to carefully observe the ratio of visitors having "shopping-
bags" in their hands in these high streets versus those in the new malls, it is not
going to be very different. As far as individual retailers' performance is
concerned, even in the traditional markets some established retailers do
extraordinarily well while many other shops see a change of "shop boards" very
frequently.
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cases a single roof. Local retailer tenants who move into a new mall for the first
time should not expect any customer loyalty being built up overnight.
Secondly, with most mall developers having blindly opted for a questionable
winning formula of shopping, entertainment (read Multiplex) and food (read
MacDonald's/Pizza Hut as the main draws), it is no surprise to find many mall
visitors having no shopping-bags since they have been enticed to visit only for
watching a movie and/or having a burger or a pizza or even a cup of coffee. The
situation pertaining to shopping, for instance, would be no different in locations
such as Saket or Vasant Vihar in Delhi, which are better known for their movie
theatres and eating options. What is the lesson for mall developers and for the
prospective tenants? For the developers, the critical lesson is to invest some
quality effort in understanding the shopping-needs of customers in their targeted
"catchment" areas and then build a carefully planned portfolio of retail options
that can meet the needs of these targeted customers.
In many instances, customers would only need shopping and eating options
rather than a multiplex as well. The developers also have to understand that their
retailer tenants have to earn a profit and hence the rentals have to be aligned to
what the retail business can bear (usually 5-8 per cent of gross revenues). Mall
developers also have to create distinctive identities for their specific malls, much
like the identities that have developed over time for major shopping-high streets
in various cities in the country.
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Their work is not done just when the mall has been commissioned! As for the
would-be retailer tenants, it is important to realise that merely moving into a mall
does not guarantee business for them. They have to work as hard to draw
consumers to their own stores once the latter have entered the mall, and then
have the right value proposition for them to get converted into customers, and
then become repeat customers.
The final, obvious, conclusion is that mall developers have to invest in getting a
better understanding about the retail business, while retailers have to get a better
understanding about the dynamics of operating at a new location.
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2. Survey among the 265 consumers regarding the consumer buying
behavior and consumer brand perception in Sahara mall depicts that
consumers come for the purchasing of households and shopping in the
pantaloons. Consumers are mainly in the age group of 25 – 35 yrs and
more then 35 yrs. Big Bazaar is the main attraction among the consumers.
RECOMMENDATIONS
1. For the Metropolitan Mall: - This is a complete mall for family , fun and
entertainment. So it is advised to increase the numbers of consumers in
the mall. Open some more food joints in the mall and start some indoor
games like snooker for good time pass in the mall. Start disco for youths
and do more promotional activities for young generation like fashion
shows etc.
2. For the Sahara Mall: - It is not like a shopping mall. It is just like a Big
Bazaar store especially for the middle class and place mostly for the
consumers in the age group of 35 and above. So promote other stores
also in shopping mall. Make it a complete shopping mall. Open some
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places like PVR, Waves, Adlabs etc. in the mall for movies and
entertainment by which it can also attract the young generation. Make
some proper sitting arrangements for the customers especially for the old
age customers.
3. For the MGF Plaza: - This is a complete place for the home furnishing
items and necessary electronic items. So open some more branded stores
for these items.It can be used as a place for the property fairs and
homefurnishing items fair.
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REFERENCES
BOOKS
MAGAZINE
JOURNAL
WEBSITES
• www.google.com
• www.businessworld.com
• www.saharaindia.com
• www.mgfindia.com
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ANNEXURES
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QUESTIONNAIRE FOR CUSTOMERS
(a) Daily
(b) Once in a week
(c) Twice in a week
(d) Any other
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Question 4: Please rate the purpose of your visit to the Shopping Malls?(1
Being most the most important and 6 being least important)
Purpose 1 2 3 4 5 6
Food and Beverages
Music and Entertainment
Life style products
Latest Fashion and
Clothing
Choosing gifts
Consumer Durable
Question 5: Please rate the following Shopping Malls, which you prefer the
most?
Question 6: Please specify the reasons for the preference on the scale of 1
to 7 (1 being the most important and 7 being the least important)
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Factors Sahara Metropolitan MGF Plaza
Mall Mall
Good Eating Place
Good Place for Family Shopping
Branded Shops
Sales and Promotional Activities
Services and Facilities
Fun and Entertainment
Self Motivation
Better Bargaining
Friends and Relatives
Exposure to New Trends and
Fashion
Emotional Satisfaction
Advertisements
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QUESTIONNAIRE FOR RETAILERS
Q.1 Do you agree that there is trend towards organised retail in India?
Yes No
Q.3 How o you perceive the development of Shopping malls in Delhi and
NCR Region?
Healthy Trend Unhealthy Trend
26
Q.4 What according to you is the purpose of the customers visit to the
Shopping Malls?
Purpose Yes No
Food and Beverages
Music and Entertainment
Life style products
Latest Fashion and Clothing
Choosing gifts
Consumer Durable
Q.5 What according to you are the reasons for buying at that particular
shopping mall (Please rank them in order of preference?)
Good ambience
Good bargain
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Q.6 Rank (1-6) the following factors, which influence the customer
purchase decision at a shopping mall.
Price
Brand
Location of Mall
Outlet/Mall
Appealing fragrance
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Q.9 Do you think that organized retail will provide many opportunities both
to existing players as well as new entrants?
Yes No
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