Retailing in India: The Impact of Hypermarkets

Group 6Anuja Hurgat 12020841069

Lourdes Soares 12020841023

Advait Bhobe 12020841116

Kartik Athavale 12020841077

Sudarshan Iyer 12020841105

Prabhjit Singh Pahwa 12020841086

Naman Agarwal 12020841031

Anant Maheshwari 12020841119

Global Retail Development Index

Organised Retail Penetration

Hypermarkets in India• Auchan• Big Bazaar• D-Mart• HyperCity• Lulu Hypermarket• Metro Cash and Carry• More Megastore• Reliance Mart• Shoprite Hyper• Spencer's Hyper• Star Bazaar• Vishal Megamart• V Mart

The Indian Retail Outlook• In India, growth declined in 2012 as well. Yet unlike in Brazil, India’s central bank

has remained focused on inflation, even at the cost of delaying economic recovery.

• Much to the chagrin of the government and many businesses, the central bank has kept the benchmark interest rate relatively high, awaiting a drop in inflation.

• Meanwhile, the economy suffered in 2012 from the impact of a global slowdown as well as the effect of weak business confidence.

• To restore confidence and set the stage for faster growth in the future, the government proposed a series of major reforms aimed at boosting productivity.

• Among these was liberalisation of foreign investment in retailing. As of this writing, it is not clear whether the government will be successful in implementing its reform agenda. Elections must take place no later than 2014, and they may help to clarify the direction of policy.

Q.1 How might a hypermarket located in India appeal to consumers and orient them to

shopping in larger stores?

• The trick lies in Differentiating themselves from local kirana stores.• If a hyper-market is offering same products, a customer will

obviously prefer kirana store over the hyper-market because of the convenience and long years of service.

• Making shopping an experience should be the differentiating factor. • This can be done by:

Understanding the consumption basket of a

consumer in an area

Introducing new products in the hyper-market along-with the

old ones

Having products catering to latest fads

and fashions

Sales people helping and assisting customers at every step of buying

process

Promotions and discounts aligned with Holidays and Festivals

Work with EDLP pricing for commodities and High-Low for apparel

etc.

Introduction of a credit policy

Q.2 Is the Indian Govt.’s willingness to spend $500 bn to improve infrastructure good news for

International Retailers? Why or why not?

• The Indian Government’s willingness to spend $500 bn to improve infrastructure is certainly good news for International RetailersA good infrastructure helps stores to decrease their costs and improve profits in the following way:

Helps reduce wastages of

perishable goods like milk and vegetables.

Can save real estate cost by opening stores on the

outskirts of a town.

Helps reduce transportation

costs.

Low inventory carrying costs because of low

uncertainties.

Will help provide healthy competition from home

grown retail stores.

IT infrastructure will help make market

forecasting and trend analysis more efficient.

Low Implied Demand Uncertainty (IDU) will result in an Efficient

Supply Chain.

Q.3 Identify the main changes that mark Indian consumers. How can international retailers learn

more about India’s youthful demographic?

The following changes have taken place in the Indian consumer demographic:

More than half of India’s current population is younger than 25

years

Due to the jobs created by IT and services boom, young consumers

have more disposable income

Due to the ever growing education scenario, students are also rising as a very prominent

consumer class

Nuclear working families have less time to shop

Points for International Retailers:

Study trends of migration of Persons of Indian Origin.

Understand changing demographics in rural and

urban areas due to urbanisation of towns and up-

gradation of villages.

Study penetration of retail product organisations in

various markets.Study indigenous competition.

Create models that include best practices of kirana stores

that appeal to the Indian consumer, like convenience.