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Organized retailing has become popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. The growth rate of super market sales has been significant in recent years because greater numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and attractive ambience. The organized retail sector presently occupying 5 % and is expected to grow 10% by end of 2010. To trapped the huge opportunities ,a number of large Indian corporate houses like Aditya , Bharti , Reliance ,Pantaloon ,Vishal , Tata's , RPG, Raheja's and Piramals's have already made their foray into this arena. Bharti Retail Limited a wholly owned subsidiary of Bharti Enterprises enter into Indian Retail sector with 2 formats Supermarket & Hypermarket. Bharti Retail continues to invest heavily in increasing their store networks and improving instore offerings. This paper will discuss some of the reasons behind the emerging eminence of retailing in India which brought sea change in consumption pattern. The paper chalks out the marketing strategies adopted by Bharti Retail to tap the untapped Indian Retail market. Key words: Retail, Growth, Organized, Bharti, Economies
Overview of Indian Retail Industry
The retail sector in India is witnessing a huge revamping exercise as traditional markets make a way for new formats such as departmental stores, hypermarkets, supermarkets and specialty
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that is.Kearney.Pantaloon .37 bn ) by 2014. population expansion . income tax. paan/beedi shops. entry of foreign retailers was restricted in Indian retail market because of the ban on Foreign Direct Investment in Indian Retail Sector. etc. India has been ranked 2nd in Global Retail Development Index of 30 developing countries drawn up by A. hand cart and pavement vendors. Bharti Retail Limited a wholly owned subsidiary of Bharti Enterprises enter into Indian Retail sector with 2 formats Supermarket & Hypermarket. etc.85 trn ( US$ 392.64 trn ( US$ 674. for example. These include the corporate backed hypermarkets and retail chains. convenience stores. refers to the traditional formats of low-cost retailing. Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing Positioning. Unorganized retailing. RPG. the local kirana shops. as government has changed its policy and the Page 2 of 10 .stores. Tata's . Reliance . on the other hand. and also the privately owned large retail businesses.63 bn ) in 2011 to 26.a number of large Indian corporate houses like Aditya .T. The Indian retail industry is divided into organized and unorganized sectors. the increasing wealth of individuals and the rapid construction of organized retail infrastructure. those who are registered for sales tax. Organized retailing has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. But recently. The Indian retail sector is highly fragmented with 95 per cent of its business being run by the unorganized retailers like the traditional family run stores and corner stores. The growth rate of super market sales has been significant in recent years because greater numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and attractive ambience. The organized retail is at a very nascent stage though attempts are being made to increase its proportion to 9-10 per cent by the year 2010 bringing in a huge opportunity for prospective new players.Vishal . Raheja's and Piramals's have already made their foray into this arena. Western style malls have begun appearing in metros and second-rung cities which introduced the Indian consumer to a shopping experience like never before. to communicate quality as well as value for money. owner manned general stores. Bharti Retail continues to invest heavily in increasing their store networks and improving in-store offerings. The sector is the largest source of employment after agriculture. Till now.The key factor behind the forecast growth are economy growth . To trapped the huge opportunities . The India Retail Report prepared by BMI forecasts that total retail sales will grow form INR 18. Organized retailing refers to trading activities undertaken by licensed retailers. Bharti .
Page 3 of 10 . • Plastic Revolution Increasing use of credit cards for categories relating to Apparel. Food and Grocery etc.cabinet has allowed 51 per cent FDI in single-brand retail. Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of scale. Opportunities for the Organized Retail Sector in India • Booming Economy India’s booming economy is a major source of opportunity. • Urbanization Increased urbanization has led to higher customer density areas thus enabling retailers to use lesser number of stores to target the same number of customers. Consumer Durable Goods. the prospects of foreign players entering India became high.44. India is the second fastest growing major economy in the world.365/- • Double Incomes Increasing instances of Double Incomes in most families coupled with the rise in spending power • Demography Dynamics Approximately 60 per cent of Indian population below 30 years of age. manufacturers and retailers of consumer goods and services can expect a major boost in consumption • Rise in per Capita income India's huge population has a per capita income of Rs. Indian economy now expected to grow at over 8% and with average salary hikes of about 15%.
The ‘Easyday’ neighbourhood stores are located in Delhi. Uttar Pradesh. weekly and monthly shopping needs of consumers. Convenience Store 7. bakery. Discount Stores 4. mobile phones. The company’s neighbourhood format stores operate under the "Easyday" brand and the compact hypermarket format under the “Easyday market” brand. Malls 2. Department Stores 5. MBO’s 8. meat. soft toys & CDIT. fish. chilled frozen foods and FMCG products. general merchandise & a basic range of apparels. . Page 4 of 10 . Hypermarts / Supermarkets 6. office stationeries. 93 small-sized neighborhood stores under the Easyday brand operated across the country. consumer electronics & electrical products. home decor and needs. The Hypermarket “Easyday market” . “Easyday market” also has a strong emphasis on general merchandise.Conveniently located in neighbourhoods. Besides a large range of products across fruits & vegetables. it cater to the daily. Currently. home care. groceries. Specialty Stores 3. E-trailer Marketing Strategies adopted by Bharti Retail Limited Bharti Retail Limited is a wholly owned subsidiary of Bharti Enterprises. The product offerings include a wide range of fresh fruits & vegetables. Currently. Punjab. processed foods. books . chicken. groceries. garments and fashion accessories including trendy fashion wear such as George (international brand) and Astitva (Indian ethnic wear) . personal care. "Easyday" . Bharti Retail operates a chain of multiple format stores. Six mid-sized compact hypermarket stores under the "Easyday Market" is operating in Punjab.is a one stop shopping destination for the entire family .Retailing formats in India 1. Haryana. Rajasthan and National Capital Region. Uttarakhand and Rajasthan.
000 square feet and sells a wide range of fresh. Jalandhar and Kota. Currently. Bharti will invest $2-2. processed foods and beverages. they sourcing real estate. office supplies and other general merchandise items. A typical cash-and-carry store stands between 50.5 billion to build a pan-India footprint with approximately 10 million square feet of retail experience across all cities in India by 2015. with a joint partnership in the agriculture company FieldFresh. Zirakpur.Recently the company has become more involved in the food economic sectors. clothing. pan-India. frozen and chilled foods.000 and 100. The Company operates Cash & Carry stores under the Best Price Modern Wholesale brand. dry groceries. Bharti Wal-Mart . is a joint venture between Bharti Enterprises and DMPL India Ltd.). The retailer recently appointed former Hypercity CEO Andrew Levermore as its chief operating officer to spearhead operations. Bharti Walmart is a business-to-business joint venture between Bharti Enterprises and Walmart for wholesale cash & carry and back-end supply chain management operations in India to serve small retailers. FieldFresh Foods Pvt. fruits and vegetables. (a subsidiary of Del Monte Pacific Ltd. Which are available at competitive wholesale prices. as part of its plans to become a national retailer.000 people over the next three years. Ltd. FieldFresh Foods Pvt. Bharti Retail plans to roll out stores in South India soon. Ltd.000 – 7. The JV is expected to open 10 to 15 wholesale cash-and-carry facilities and employ approximately 6. institutions and farmers. manufacturers. The company produces markets and distributes farm fresh products.They had already signed three-four properties in the southern states and was looking at booking spaces for around 50 stores by the year end. Bharti Retail has announced plans to increase the number of retail stores to about 125 Easyday and 13 Easyday Market stores by end of the 2010 and in support of this plan. The retailer is also scouting for properties and Western and Central India to open stores and is holding talks with Page 5 of 10 . aims to become one of the most trusted provider of premium quality fresh farm products. hotel and restaurant supplies. allowing retailers and business owners to lower their cost of operations. The JV launched its first B2B Best Price Modern Wholesale cash-and-carry store in Amritsar in May 2009. Best Price Modern Wholesale stores are present in Amritsar. The company offers fresh fruits & vegetables and processed foods & beverages in the domestic as well as international markets including Europe and the Middle East. Bharti Enterprises and Wal-Mart have a 50:50 wholesale venture. personal and home care.
The chain has hired a dozen persons to scout and book the properties. home deliveries. characterized by a very small number of players trying to create a new paradigm. Competition from unorganized sector is another challenge facing the organized retail industry in India. feasibility. etc. supply chain. product development and research are becoming very critical for the success of the organizations. logistics. 4. Areas such as technology. Page 6 of 10 . has negligible real estate and labor costs and little or no taxes to pay. To become a flourishing industry. 2. The organized retail sector in India is still at a developmental stage. enterprise management tools (ERP) for efficient management.property developers in this regard. Shortage of manpower exists even at the lower levels. Technology is one of the major challenges faced by organized retailers. All of these would lead to the recruitment of highly professional people who specialize in these fields.000. and with the entry of big giants there is a struggle amongst them to retain this talent. logistics. the availability. It is a low cost structure. and adoption of technology. Customer centric retailers worldwide are increasingly banking on technology to gain an advantage in the marketplace. The scope of technology is wider that all this and can be used for other functions like understanding customer preference using RFID. currently has an employee strength of over 11. The talent base is limited. distribution. specifically. Bharti Retail Limited. It has become more customers friendly by offering credit. It adds a personal touch to shopping that organized retailers may find impossible to emulate. billing & payment. Technology is already being widely used for a host of activities including theft prevention. mostly owner-operated. This has resulted in big salary hikes at the level of upper and middle management and thereby eroding the profit margin of the business. Availability of skilled workforce. 3. the Indian retail sector has to attract leading Indian and foreign players to make substantial investments. keeping track of customers using CRM packages. Challenges faced by Organized Retail Sector in India 1. marketing.
roads with less traffic. proper connectivity etc. Page 7 of 10 . Profits increase by decreasing the rate at which customers defect. 8. transportation and processing facilities. ports). Delivering the right goods to the right place at the right time is main task of distribution. People increasingly want more and more for less. levels of customer satisfaction etc. such as quality and value of core offering. it was proved in a report how a company could almost double its profits. shoplifting. cold storage systems. proper warehouses. The concept of product quality and service delivery which were earlier not very engraved in the consumer psyche are now very much demanded and delivered for in the new age format of organized product retailing in the Indian consumer goods market. traffic. The infrastructure for easy transportation of goods is not adequate in the country. By retaining just 5% more of its customers. 7. The lack of proper infrastructure and distribution channels in the country results in inefficient processes. There is a tremendous amount of wastage and value loss of agricultural products due to lack of storage. The causes of retail shrinkage are mainly employee theft. Understanding customers in terms of customer behavior and loyalty. airports and railway stations capable of handling large consignments on a daily basis. administrative errors and vendor fraud. 6. Retail shrinkage is the difference in the value of stock as per the books and the actual stock available in the shop. airport. Distribution is an integral part of any retail organization. refrigeration. Infrastructure in retail refers to proper pliable roads. A number of factors play a part in influencing the loyalty and the commitment of customers. Retail majors are under serious pressure to improve their supply chain systems and distribution channels and reach the levels of quality and service desired by customers. Globalization has brought about a change in the Indian consumerism psyche with the consumer becoming more aware of his/her value of money strength and their economic purchasing power becoming more evident than in the previous generations. railways.5. Losses due to lack of infrastructure (roads. Inefficient distribution channels.
a huge amount of private investment goes into ensuring power backups. lifts etc. which Indian retail markets offer to the Page 8 of 10 . As more and more organized retail outlets are dotting the Indian topography. 12. customer retention strategies. selling.9. In fact. maintenance. This makes it very difficult for organized retail to grow. security. 11. billing systems. escalators. Organized retailers in India cannot concentrate on their core competency alone like in many developed countries. rentals. comfort facilities such as air-conditioning. air conditioning. 10. cold storing. Players in the organized sector have big expenses to meet. High costs for the organized sector arises from: higher labour costs. looking at the opportunities and challenges. discounts etc are the order of the day. Organized retail outlets use very large volumes of electricity for a variety of applications from lighting. Conclusion Thus. taxes etc. This is a very huge challenge. It is now quite evident between organized retailers as well. As a result of insufficient and inefficient power supply. social security to employees. retailing in an organized retail outlet would be lifeless if power is not available. much bigger premises. and yet have to keep prices low enough to be able to compete with the traditional sector. They will need to manage everything from supply chain. The present scenario of the industry is focused on forward buying of retail real estate in order to reap balance sheet advantages later in the business cycle. trend analyzing etc. logistics. high quality real estate. higher electricity tariffs. competition is no more restricted between organized and unorganized retailing. home delivery of goods. merchandizing. stocking. offers. back-up power supply. Another problem is confirming with regulations restricting real estate purchase and cumbersome local laws. sourcing. The single-largest factor hampering retailers in India is the cost of quality real estate. Loyalty programs. the increasing cost of real estate has become a concern for retailers who operate on very low margins. As location is the king in retail.
Kearney. The retail industry in India is currently growing at a great pace and is expected to go up to US$ 833 billion by the year 2013.cms 9. Tata McGraw Company Ltd. It has been ranked 2nd in Global Retail Development Index of 30 developing countries drawn up by A.htm 6. hill Publishing Page 9 of 10 . 4.org/article/30465/BMI-India-Retail-Report-Q1-2011---new-marketreport-published.html#bhartiretail 5. Retail Management: A Strategic Approach. Berman.indiaretailing. and Evans. http://www.marketers and the manufacturers.articleshub. http://business. With the flow of FDI. (2003). “India Most Attractive Retail Destination in the World. A.html 7. 9th Edition Prentice Hall Publ. The Retailing Book: Principles and Applications. 19th March 2008 3. B. Bibliography 1. competition is no more restricted between organized and unorganized retailing. M. It is now quite evident between organized retailers as well. http://www. http://bharti. (2008). As more and more organized retail outlets are dotting the Indian topography. “Retailing Management”.com/slide-show/2010/oct/08/slide-show-1-nations-with-highest-percapita-income. Freathy. retail sector will have to see a many changes in the coming years.business-standard. Prentice Hall & Weitz. http://economictimes. it can be said that the future is very promising for those who can understand the dynamics of the markets and make use of them to their best advantage. Chadha. 2.com/our-companies/bhartiretail. http://www.indiatimes.aspx?topic=1&Id=4616 Levy.com/india/news/bharti-retail-to-enter-south-soon-looks-at-westtoo/395657 8. (2003). Government of India has also opened the door for the retailing giants to enter into the markets.S.com/news/economy/policy/group-firm-tag-if-affiliate-stakeabove-26/articleshow/6951668.T.” The Economic Times.com/news. P. Many foreign investors are also showing keen interest to enter into the Indian market.rediff. J.R. India is being seen as a potential goldmine. (Fifth Edition). A.
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