2740. MACRO ANALYSIS OF INDIAN ORGANIZED RETAILING

8/7/2019 2740. MACRO ANALYSIS OF INDIAN ORGANIZED RETAILING

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Dissertation Report

On

Macro Analysis of Indian OrganizedRetailing

ByHITESH JAINA0101908007

MBA Class of 2010

Under the Supervision ofMr. YOGESH MEHRA

LecturerDepartment of Finance

In Partial Fulfillment of Award of Master of Business Administration

AMITY BUSINESS SCHOOLAMITY UNIVERSITY UTTAR PRADESH

SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA

2010

DECLARATION

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I, HITESH JAIN, student of Masters of Business Administration from Amity Business

School, Amity University Uttar Pradesh hereby declare that I have completed

Dissertation on MACRO ANALYSIS OF INDIAN ORGANIZED RETAILING as

part of the course requirement.

I further declare that the information presented in this project is true and original to the

best of my knowledge.

Date: 19/03/10 Name : HITESHJAIN

Place: Noida Enroll. No :A0101908007

Program : MBA (G)

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CERTIFICATE

I, Mr. Yogesh Mehra hereby certify that Hitesh Jain, student of Masters of Business

Administration at Amity Business School, Amity University Uttar Pradesh has completed

dissertation on MACRO ANALYSIS OF INDIAN ORGANIZED RETAILING

under my guidance.

Mr. Yogesh Mehra

LecturerDepartment Of Finance

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ACKNOWLEDGEMENT

The successful completion of any project is always the consequence of a number of

people involved. I had the good fortune of working with a wonderful group of people

whose varied experience and advice has been of immense help in the successful

completion of project.

I express my sincere thanks to my guide Mr. Yogesh Mehra, without whom the project

would not be possible. My heartfelt thanks for his unflagging support and invaluable

guidance.

I am grateful to Mr. Sanjay Srivastava the respected ADG, Amity Business School,

Amity University for her support. I express my sincere thanks to all who lent their

support in completion of the project.

HiteshJain

MBA

2008-10

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Chapter 1

Chapter 2

Chapter 3

Chapter 4

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PREFACEWhy we choose the study?

The Retail Sector of India is one of the fastest growing sectors of the Indian Economy.

End of the year 2006 it was estimated to be aroundUS$350 bn and it is expected in 2010

raise to US$400 bn. However the contribution of the organized sector in the above figure

is less than 4%. Hence there is a huge opportunity for it grow that is the reason behind

the organized sector, trying for different stages to increase it market share. Studying this

strategy is adopted by the organized sector would an excellent learning experience for us

as an M.B.A. students hence we have selected to study the organized retail industry of

India as a part of ourManagement Grand Project.

Objective of the study:-

Our objective of the study was to learn the Indian organized retail industry from

various macro point of view.

Research methodology:-

This project is based on the secondary data. we have made the most of finding on our

visit to the different malls. Data is based on disriptive research.

We have also studied and try to give the idea about the future of the India organized

retailing. The analysis part of this report includes the environmental analysis, SWOT

analysis, key success factor, BCG strategic environment matrix, 9-ps and porters five

forces competitive analysis .

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Table of Contents

Sr.No

Topic Page no.

1 Certificate2 Acknowledgement

3 Preface

4 World history of retail 1

5 How retail develops 2

6 History of Indian retailing 6

7 Types of retailing 7

8 Formats of retailing 8

9 World retailing 1310 Current organized Indian retail industry 22

11 Development of Indian organized retail 26

12 Major areas of Indian organized retailing 37

13 Major players of Indian organized retailing 40

4 E-Tailing 50

15 Enviornmental analysis 60

16 Economic analysis 64

17 Technological analysis 6718 Demographic analysis 69

19 SWOT analysis 71

20 Ps of organized retail industry 74

21 Key success factors of retail industry 79

22 Major findings & contribution 81

23 Limitations 82

24 Future of Indian organized retailing 83

25 Conclusion 8626 Bibliography 87

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World History of Retail

Retail comes from the French word retaillier which refers to "cutting off , clip and

divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a

"sale in small quantities" in 1433 (French). Its literal meaning for retailwas to "cut off,

shred, paring".

When man started to cultivate and harvest the land, he would occasionally find himself

with a surplus of goods. Once the needs of his family and local community were met, he

would attempt to trade his goods for different goods produced elsewhere.

Thus markets were formed. These early efforts to swap goods developed into more

formal gatherings. When a producer who had a surplus could not find another producer

with suitable products to swap, he may have allowed others to owe him goods. Thus early

credit terms would have been developed. This would have led to symbolic

representations of such debts in the form of valuable items (such as gemstones or beads),

and eventually money.

Early Markets

Over time, producers would have seen value in deliberately over-producing in order to

profit from selling these goods. Merchants would also have begun to appear. They would

travel from village to village, purchasing these goods and selling them for a profit. Over

time, both producers and merchants would regularly take their goods to one selling place

in the centre of the community. Thus, regular markets appeared.

The First Shops

Eventually, markets would become permanent fixtures i.e. shops. These shops along with

the logistics required to get the goods to them were, the start of the Retail Trade.

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How Retail Develops

Peddlers and Producers

The Retail Trade is rooted in two groups, the peddlers and producers. Peddlers tended to

be opportunistic in their choice of stock and customer. They would purchase any goods

that they thought they could sell for a profit. Producers were interested in selling goods

that they had produced.

General Store

This division continues to this day with some shops specializing in specific areas,

reflecting their origins as outlets for producers (such as Pacific Concord of Hong Kong),

and others providing a broad mix, known as General Store (such as Casey's in the

Midwest of the U.S.A.).

Although specialist shops are still with us, over time, the general store has increasingly

taken on specialist products. Customers have found this to be more convenient than

having to visit many shops - thus the term Convenience Store has also been applied to

these shops. As the popularity of general stores has grown, so has their size. This

combined with the advent of Self-Service has lead to the Supermarket, or Superstore.

How did retail develop?

When individuals or groups left their community and settled elsewhere, some missed

foodstuffs and other goods that were only available in their birthplace. They arranged for

some of these goods to be sent to them. Others in their newly adopted community

enjoyed these goods and demand grew. Similarly, new settlers discovered goods in their

new surroundings that they dispatched back to their birthplace, and once again, demand

grew. This soon turned into a regular trade. Although such trading routes expanded

mainly through the growth of traveling salesmen and then wholesalers, there were still

instances where individuals purchased goods at long distance for their own use.

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A second reason that distance selling increased was through war. As armies marched

through territories, they laid down communication lines stretching from their home base

to the front. As well as garnering goods from whichever locality they found themselves

in, they would have also taken advantage of the lines of communication to order goods

from home.

RetailChains

Origins of Retail Chains

It is likely that, as markets became more permanent fixtures they evolved into shops.

Although advantageous in many respects, this removed the mobility that a peddler or

traveling merchant may still have enjoyed. For some shopkeepers, it made sense to obtain

extra stock and open up another shop, most probably operated by another family member.

This would recover business from peddlers, create new business and the greater volume

would allow the shopkeeper to strike a better deal with suppliers. Thus the Retail Chain

would have started.

From Family Business to Formal Structure

Although retail chains would have been mostly run by families, as some chains grew,

they would have needed to employ people from outside of their family. This was a

limiting factor as there would have been a limit to the amount of trusted non family

members available to help run the chain. Another, even more definite limiting factor was

the distance the furthest shop would have been from the original shop. The greater the

distance, the more time and effort would have been needed to effectively manage outpost

shops and to service them with goods. There was, therefore, a natural barrier to

expansion. That was the case until transport and communications became faster and more

reliable. When this happened towards the end of the 19th century, chains became much

bigger and more widespread. Many of these businesses became more structured and

formalized, leading to the retail chains that we see today.

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Self Service

Background

Up until the introduction of self-service stores, customers would simply ask the

shopkeeper for their goods. The shopkeeper would price them (weighing them if

necessary), pack them in a bag or other container (often supplied by the customer), tot up

the bill and receive payment. There was a personal one-to-one relationship between

customer and shopkeeper.

The First Self-Service Store

This all changed in 1915 when Albert Gerrard opened the Groceteria in Los Angeles, the

first documented self-service store. This was soon followed a year later by the Piggly

Wiggly self-service store, founded by Clarence Saunders in Tennessee in the U.S.

Efficiency & Growth

These entrepreneurs noticed that their staff had to spend a great deal of time taking

grocery orders from customers. The groceries were stacked on shelves allowing

customers to walk around and browse, collecting their shopping in a basket that was

supplied. The shopkeeper would only need to tot up the final bill at the end of the process

and transfer the goods from the basket to the customer and receive payment.

This new type of shopping was more efficient and many customers preferred it. Although

personal service stores remain to this day, this new concept started a rapid growth of self-

service stores in the United States. Other countries were slow to take up the idea, but

there has been a steady rise in the global amount of self-service stores ever since.

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Dcor

The way a retail outlet looks will usually inform customers and potential customers about

the type of store and type of products it sells.

Design

A store that sells high class goods will usually have high class dcor. By contrast, a store

that sells basic goods may have basic dcor. Retailers will typically want their stores to

be different from their competitors. This distinction allows the store to offer a shopping

"experience". A store offering distinct dcor can score points over their competitors. This

dimension is important as it reduces the burden on product versus product and priceversus price competition

Frequency of Redecoration

Stores that sell fashion goods will often change their dcor regularly to reflect the

changing nature of their products. For some well established stores, their dcor may be

synonymous with their business and their product offer. Such stores may seldom change

their dcor or only change it in minor ways.

Lighting

Food stores are usually well lit. This re-enforces an impression of hygiene and honesty. It

also allows customers to read labels and signs, some of which may be legally required.

The lighting in clothes and some specialist goods stores may vary across the store,

according to the products being lit. Such lighting may range from soft, or even dull, to

bright and occasionally colored.

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History of Indian Retail

The Indian Retailing sector has been largely unorganized in the post independence

period, to the most part untouched by corporate business principles. It was only in 1980s

when the economy started to be opened, the situation began to change. Companies like

Bombay Dyeing, Raymond and Grasim from the textiles sector were the first ones from

the corporate world to step into the retailing by opening their own outlets. Titan's is

another successful story of a corporate creating a great retailing concept, by establishing a

series of elegant watch showrooms across the country.

The post liberalization era witnessed new wave of entrants in the sector with large

conglomerates like Tatas, Reliance the RPG Group, Rahejas and the Piramals investing in

the sector. Various other behemoths of the Indian corporate sector like the Birlas, the

Hero Group and Reliance have expressed their intention of joining the Indian retail foray.

When countries grow, more people buy more things. More products become available.

They need more shelf space. The result: a retail revolution. That's what's happening in

India today. A new generation of retail outlets is emerging, which will change the

landscape of the country's cities.The revolution is fuelled by huge sums of money being

poured into real estate, modern logistics, and the creation of new retail brands.

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Types of Retailing

Three basic parts of retailing

There are three major types of retailing.

The first is the market, a physical location where buyers and sellers converge.

Usually this is done on town squares, sidewalks or designated streets and may

involve the construction of temporary structures (market stalls).

The second form is shop or store trading. Some shops use counter-service,

where goods are out of reach of buyers, and must be obtained from the seller. This

type of retail is common for small expensive items (e.g. jewelry) and controlled

items like medicine and liquor. Self-service, where goods may be handled and

examined prior to purchase, has become more common since the Twentieth

Century.

A third form of retail is virtual retail, where products are ordered via mail,

telephone or online without having been examined physically but instead in a

catalogue, on television or on a website. Sometimes this kind of retailing

replicates existing retail types such as online shops or virtual marketplaces such as

E-Bay.

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Formats of retailing

Department stores

These large stores retail primarily non-food items such as apparel, footwear, accessories,

cosmetics and household products. They stock multiple brands across product categories,

though some of them focus on their own store label (on the lines of Marks & Spencers

and St. Michael).

Several local department store chains have opened shop in India in the past five years.

The larger chains of department stores (Namely Reliance fresh, Pantaloons, Shoppers

Stop, Westside, and Lifestyle) have presence in the metros and mini metros.

Supermarkets

A supermarket is a store which is more of a large self-service grocery store selling

groceries and dairy products and household goods that are consumed regularly. These

stores are often part of a chain that owns or controls (sometimes by franchise) other

supermarkets located in the same or other towns; increasing the opportunities for

economies of scale. These stores offer convenience of shopping by making available a

large variety of products at one place. Some of the well known supermarket chain

includes Food Bazaar, Nilgiris, Food World, Apna Bazaar, Trinethra etc.

Hypermarkets/Discount stores

A hypermarket is a store which combines a supermarket and a department store. The

result is a retail facility which carries an enormous range of products under one roof,including full lines of fresh groceries and apparel. It is a large format store that aims at

retail consolidation by being a single point contact between the brand owners and

customers. They are planned, constructed, and executed in a manner that a consumer can

ideally satisfy all of their routine weekly shopping needs in one trip to the hypermarket..

Big Bazaar, Spencers, Star India Bazaar are examples of hypermarket formats.

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Seamless Mall

Seamless mall is a format which is relatively new in India. In this format, various brands

operate their retail areas without any wall between them, providing a seamless shopping

experience. This makes it possible for shoppers to compare brands with ease while they

shop Central is an example of a seamless mall.

Specialty stores

Specialty stores as the name suggests are stores that specializes in a particular offering. A

specialty store carries a deep assortment within a narrow line of goods. Furniture stores,

florists, sporting-goods stores, and bookstores are all specialty stores. Examples ofspecialty stores in India would include Planet Sports, aLL, Vijay Sales, Planet M, Music

world, Crossword etc.

Clothing and Accessory Store

Clothing and accessory stores sell apparel for all members of the family, as well as

luggage, leather goods, lingerie, jewellery, uniforms, and bridal gowns. Clothing and

accessory stores are often staffed with knowledgeable salespersons who can help in the

selection of sizes, styles, and accessories

Distance Retailing

Rather than visiting a store to make a purchase, a customer may order products from a

remote location. This may be done by mail, telephone, internet/email or other digital

device such as interactive television and even from a refrigerator. Retailers that practice

distance retailing may also have physical stores, such as Wal-Mart.

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Door-to-Door Retailing

This kind of retailing is as old as retailing itself and is still very common, although less so

in recent times. A door-to-door salesperson may be self-employed or employed by a

company and will usually specialize in a particular product group, often household items.

Although it is common for them to visit houses, they may also sell to businesses.

Party and Event Retailing

This is usually a form of franchising where the retailer invites people from the locality to

a common location. The event or the party will be a mix of socializing and retailing,

usually themed around the products on offer. Most commonly, the retailer will be afranchisee to a wider organization. Although party and event selling can involve a variety

of goods, it is very common that cosmetics, small household goods, clothing and sex-aids

are sold.

Single Independent Non-Franchised Store

A single independent store may be run an individual, but is more typically run by a

family. They may be general stores, catering to a limited geographical range or may sell

specialized products to a wider area.

Street Market

The tradition of selling from market stalls goes back to the early days of retailing where

traders could gather in one area to sell their wares. Street markets, or open-air markets,

are common around the world and are particularly popular in temperate or warm

climates.

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Van Retailing

This is a cross between door-to-door sales and store sales. The retailer will typically keep

1 days stock in their van and visit an area where they will service regular customers.

They may occasionally visit an area that they do not usually go to in order to attract new

customers. Van sales are common in rural areas and in less developed economies. There

are two types of van sales. One is where the van is parked in a common area and is

visited by customers; ices and snacks are often sold this way. The other type of van sales

is, in effect, the same as door-to-door selling.

Warehouse Club

Warehouse club stores and super centers sell a mix of products (and services) in fixed

quantities at low prices. These stores typically include an assortment of food items, often

sold in bulk, along with an array of household and automotive goods, clothing, and

services that may vary over time.

Emergence of Multiple Formats

The organized retailing has called for different things being sold at different formats

differently. Many formats are coming up for the customer to differentiate as shop as he

/she wants. Hypermarket (Hypercity, Big bazaar, Shoprite), the largest format in Indian

retail so far is a one stop shop for the modern Indian shopper where you can get every

thing that may desire, from food grocery to clothing to sports goods to books to stationery

and what not!

format Size in sq.ft.Hyper Market 50,000 sq ft

Super Market 5000+ sq ftConvenience store 3000+ sq ft

It is a 50,000 sq ft 20000- 30000 SKU (Stock keeping Unit) of paradise for a shopper.

Then there are supermarkets like food world, a subdued version of a hypermarket. They

have 5000+ sq ft of space and house around 10000 SKUs.

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Convenience stores are further subdued version of a supermarket where grocery is pre

dominantly being sold in a 3000+ sq ft of space. Then there are discount stores which

stress on giving more stuff at less price e.g. Subhiksha. Departmental Stores like

Shoppers Stop, Trent and West Side are also coming up. Specialty Stores like Bata have

expansion plans for the future. Cash n Carry formats such as METRO is also fast

emerging in the sector

World retailing

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Rank of the countries

India Tops Annual List of Most Attractive Countries for International Retail Expansion,

as Increasingly Saturated Chinese Market Continues to Decline

Vietnam ranks third, behind Russia, as Asia becomes most attractive region; Middle

Eastern retail sales soar, according to A.T. Kearneys Global Retail Development Index

A.T. Kearneys Global Retail Development Index ranks 10 emerging countries on the

urgency for retailers to enter the country.

2009 A.T. Kearney Global Retail Development Index

Overview of world retail market

Retailing is the world's largest private industry exceeding US $7 trillion and 47 of the

global Fortune 500 companies and 25 of Asia's Top 200 companies happen to be

retailers. The organized sector is generating about 18 percent shareholder returns on the

Rank Country Region Countr

y Risk

25%

Market

Attractivene

ss

25%

Market

saturatio

n

30%

Time

pressur

e

20%

GRD

I

Scor

e1 India Asia 67 42 80 74 92

2 Russia Eastern

Europe

62 52 53 90 89

3 China Asia 75 46 46 84 86

4 Vietnam Asia 57 34 76 59 74

5 Ukraine Eastern

Europe

41 43 44 88 69

6 Chile Americ

a

80 51 42 43 69

7 Latvia Eastern

Europe

77 32 21 86 68

8 Malaysia Asia 70 44 46 54 68

9 Mexico Americ

a

83 58 33 33 64

10 Saudi A. Mid.Ea

st

65 40 66 35 64

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global plane, thereby outperforming sectors like banking and insurance. Nations that

have enjoyed the greatest economic and social progress have been those with a strong

and organized retail sector. In most western countries the retail sector enjoys the status

of a full fledged industry and the organized players account more than three-fourths of

the total retail trade. Large retailers such as Wal-Mart of US ($256 Billion), Carrefour of

France ($87 Billion), Ahold of Netherlands ($68 Billion), Metro Group of Germany ($65

Billion), Kroger of US ($53 Billion), and Tesco of UK ($50 Billion) now dominate the

global retail market and trends indicate towards a consolidation in the retail sector. The

top 30 retailers currently account for about 19 percent of the global retail sales.

The study also found Asia has overtaken Eastern Europe as the dominant region for

global retail expansion, with 40 percent of the top 20 markets, vs. 35 percent for EasternEurope. Powering Asias charge are Vietnam, which raised five places in the 2006

rankings, to third place, and Asian Tigers such as Thailand, South Korea and Malaysia,

all of which are in the top 15.

After ranking first in 2003 and 2004, Russia slipped to second place behind India in

2005 and remained there in 2006. Russia remains attractive, with a $180 million retail

market that grew 19 percent in 2005. But with many retailers entering the market and

regional players expanding beyond Moscow and St. Petersburg, the Russian window of

opportunity is beginning to close.

The Indian retail market is gradually but surely opening up, while Chinas market

becomes increasingly saturated, said Mike Moriarty, a vice president in A.T. Kearneys

Consumer Industries and Retail Practice and leader of the Global Retail Development

Index study. Similarly, Asia has dislodged Eastern Europe as the most attractive region.

The learning is that timing is the most important source of competitive advantage for

global and regional retailers in the globalization race. Knowing when to enter emerging

retail markets is the key to success.

Neighboring Vietnam, ranked third, enjoys one of Asias fastest growing economies,

with GDP growth of 7.5 percent and a population of 84 million people who spent 16

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percent more on consumer goods in 2005 than in 2004. Modern retail sales grew by 20

percent last year.

Vietnam today is similar to India five years ago, said Moriarty. It combines strong

economic growth with a highly fragmented retail market comprised largely of mom and

pop: shops. Ninety percent of Vietnams retail outlets are neighborhood stores run by

local businesses.

As in India, the biggest hurdles to entering Vietnams retail market are FDI regulations,

high import taxes and difficulties obtaining licenses to open more stores.

In a reversal of the past few years, Asian countries dominate this year's Index and

outrank those from Eastern Europe. Asian countries hold 40 percent of the top 20 GRDI

markets, while Eastern European countries hold 35 percent. Just last year, Asia

accounted for 30 percent while Eastern Europe captured 55 percent. This shift is not a

surprise. Asia has always been the largest region of emerging markets: It represents 26

percent of global GDP and 32 percent of global retail sales. Its annual retail sales grew at

a healthy rate of 7 percent in 2005. More important, modern retailers have tapped into

just 28 percent of the region, compared with 42 percent of the markets in Eastern

Europe.

Among the worlds fastest growing retail markets currently is the Middle East, led by

the United Arab Emirates and Saudi Arabia. Modern retail sales grew 38 percent in the

region from 2001 to 2005, second only to Central and Eastern Europes growth rates and

far ahead of other Asian markets, Latin America, Western Europe or the U.S.

Underscoring the opportunity for retailers, consumer spending has grown at a compound

annual rate of 10 percent since 2000 in the UAE, Saudi Arabia and Kuwait. While many

Modern retail globalization is accelerating, with more than 89 new markets entered by

more than 49 new retailers since 2001. But speed to market alone doesnt equal success:

19 markets were exited in 2006 and many retailers still struggle to achieve profitability

in emerging markets in less than five years, if ever.

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On a regional level, Asia reclaimed the lead position from the maturing markets of

Eastern Europe. As part of Asia, the Middle East posted the highest retail sales growth

globally, led by United Arab Emirates and Saudi Arabia. The Mediterranean held steady

with mixed results, while Latin America recovered from its economic crises and enjoyed

a strong return on the Index. Finally, Africa remains outside the game, but that is not

stopping retailers from entering this populous region. Figure 2 maps out the relative

market attractiveness of all countries on the Index. A closer look at each region follows:

Relative Market Attractiveness of all Major Countries

Asia Reclaims the Lead

In a reversal of the past few years, Asian countries dominate this year's Index and

outrank those from Eastern Europe (see figure 3). Asian countries hold 40 percent of

the top 20 GRDI markets, while Eastern European countries hold 35 percent. Just last

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year, Asia accounted for 30 percent while Eastern Europe captured 55 percent. This

shift is not a surprise. Asia has always been the largest region of emerging markets: It

represents 26 percent of global GDP and 32 percent of global retail sales. Its annual

retail sales grew at a healthy rate of 7 percent in 2005. More important, modern

retailers have tapped into just 28 percent of the region, compared with 42 percent of the

markets in Eastern Europe.

Countries on the radar screen & to consider, by region 2003-07

The leading Asia markets are also getting hotter: India topped the 2006 Index and

Vietnam moved up five places to reach 3rd place. Three other Asian tigersThailand,

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South Korea and Malaysiaalso made it to the top 15. The following snapshots

provide insight into key markets:

China as a competitor of the world

China loses ground

Although China slipped one spot to number 5 on the Index, its retail market grew by

more than 12 percent in 2005 and remains very attractive. However, because

international retailers are fueling this growth, market saturation is also on the rise. More

than 40 foreign retailers have entered the market to date.

"Wave 1" retailers, such as grocers and convenience stores, entered the market in cities

along the east coast and have begun moving west. "Wave 2" companiesconsumer

electronics, do- it-yourself and apparel retailersis a few years behind, but is

following the same east-to-west path. This group includes Best Buy, Leroy Merlin and

Home Depot, which acquired Orient Home.

Success stories are on the rise. Do-it-yourself retailer B&Q entered China in 1999 and

has enjoyed double-digit growth every year since. Last year, sales grew by about 50

percent to nearly $550 million, and it purchased the China operations of Germany-

based home decor company OBI. Looking ahead, B&Q plans to open 100 stores in

China in the next five years.

Another example is Tesco. Although the U.K.-based retailer didn't move into China

until 2004long after Wal-Mart and Carrefour entered in the mid-1990sits

performance has been strong. With Wal-Mart and Carrefour firmly entrenched and

Tesco gaining ground, the retail market is poised for some interesting developments inthe next few months. However, saturation levels, especially in China's more attractive

tier-one centers, are increasing.

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Vietnam: the little India.

Vietnam raised five places this year to number 3 on the Index. Vietnam has consistently

performed well over the past five years and has one of the fastest growing economies in

Asia. Its ever-increasing population is a big draw: Half of its 84 million people are

below age 30 and they like to shop. Consumer spending increased by about 16 percent

and modern retail sales rose by 20 percent from 2004 to 2005.

Potential for all Formats to Thrive:

Most of the global powerhouses in the retailing sector such as Wal- Mart, Carrefour, andTesco etc have adopted multi- format and multi-product strategies in order to customize

their product offering for distinct target segments. Further, with the emergence of larger

store formats like superstores and hypermarkets in countries like UK, France, Germany,

Spain since the 1980s and Eastern Europe more recently, traditional food retailers have

been able to stock more extensive non-food ranges. In fact, Tesco, UK's leading grocer,

has become the number one apparel retailer in the Czech Republic and also a major

player in Hungary apart from being one of the fastest growing clothing retailers in the

UK.

Together with its rival, Wal-Mart-owned ASDA, Tesco is one of the food sector's most

successful exponents of clothing in Europe. To illustrate further, the various formats and

categories operated by 5 of the largest retailers in the world are highlighted below

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Consumption of goods by different types of format in the world

(All above source: Indian Retail Report Images Retail and KSA Technopak)

The variation in the structure of the global retail industry across economies is striking.

The retail industry in the developed economies operates largely through the organized

retail channels. As can be seen from the table below, the share of organized retail is

above 80% in US and Taiwan, and is substantial in other emerging markets like

Malaysia and Thailand. In China organized retail constitute about 20% of total retail

sales. India, in comparison, is dominated by the traditional retailing channels, with

organized retail having a negligible share.

Organized retail trade in India is at an inflexion point. The share of organized retail in

the total retail pie is set to increase from about 3% in 2004 to about 8 10 % by 2010.

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This growth is on the back of changing customer aspirations and improving retail real

estate infrastructure in the country.

Share of modern retail trade in different countries

Current organized INDIAN retail industry

Introduction of Organized RetailIndustry in India

Retailing is the second largest industry in the US in terms of number of people employed.

Wal-Mart, the largest retailer in the world with annual sales of US$ 284 billion is also the

largest employer in the US The retailing industry in the US employs more than 22 million

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Americans and generates more than $3 trillion in sales annually. Like the US, many

developed and developing economies rely on this sector for growth.

In India, the retail industry is broadly divided into the organized and unorganized sectors.

The total market in 2005 stood at Rs. 10,000 billion, accounting for about 9-10% of the

countrys gross domestic product (GDP). Of this total market, the organized sector

accounted for $350 billion (about 3.5 % of the total) of the total revenues.

Traditionally, the retail industry in India comprised of large, medium and small grocery

stores and drug stores which could be categorized as unorganized retailing. Most of the

organized retailing in India had recently started and was mainly concentrated in

metropolitan cities.

The retailing industry seems poised for a significant growth in the coming years owing to

the presence of a vast market, growing consumer awareness about product quality and

services, higher disposable income of consumers and the desire to try out new products.

Against a backdrop of accelerating modern retail globalization, India retained its position

as the worlds most attractive market for mass merchant and food retailers seeking

overseas growth, according to management consulting firm A.T. Kearneys 2006 Global

Retail Development Index (GRDI), an annual study of retail investment attractiveness

among 30 emerging markets.

Composition of Organized Retail

A breakup of sales in organized retail shows lifestyle (clothing and textile, footwear,

home, watches and jewellery and health and beauty, entertainment) as the largest segment

accounting for 71% in value terms. This is followed by Food and Grocery accounting for

14% of the organized retail value

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ORGANIZED RETAILING

3%2%

36%

17%

14%

13%

10%3%

1%1% HomePharma

Entertainment

Health & Beauty

Clothing & Taxtile

Jewellery & Watches

Food & Grocery

Footwear

Durables

Books Music & Gifts

Source: KSA Technopack research on Booming Retail Industry-2007

Rapid growth of organized retailing is expected in the food segment. This can be

attributed to the highly unorganized nature of the market currently, which thus presents

an attractive potential, and the growing preference of consumers to shop at modern retail

formats. Clothing is the other segment expected to show high growth potential.

Indias Retail Sector: Basic Facts

Indias relevantprivate final consumption expenditure (PFCE) is estimated to be about

US$221 (28% of GDP) billion as of F2006. Note we are excluding part of PFCE such as

rent, fuel & power from the relevant spending estimate.

Currently, Indian retail distribution is completely fragmented with about 12 mn

players operating from small shops and handcarts.

Organized retail sector is currently just about 3% of the total relevant PFCE

Overall PFCE is estimated to have grown at 11.6% over the last three years.

Organized retail sector is estimated to be growing at 15-20%.

Wholesale and retail trade sector currently contributes to about 13% of GDP an

employs about 40 million people.

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Food and beverages account for 38% of the total retail spending.

Organized retail has huge opportunity for business in India. It will estimate 20% in 2010

and 64% in 2010.

ORGANIZED RETAIL OPPORTUNITY

For doing a business of organized retail there are two types of cost, direct and indirect.

Direct cost is that what you purchase goods from merchandise and indirect cost includes

Advertising & Promotion, Excise and Other Taxes, Warehousing, Freight, Man Power,

Packaging & Embellishments and Other Administrative Expenses. If your indirect cost is

minimum then your profit will increases. Indirect cost all companies try to rescue asmuch as possible. Below list is indirect cost of Ebony Company, what is their indirect

cost for operating company.

World giants entry in India

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World largest organized retail company, Wal-Mart has 40 stores in China and zero in

India. Carrefour and Tesco also not enter in Indian market. Above chart show the

comparison between India and China organized retail market.

Development of Indian Organized Retail

Indian retailing is undergoing a process of evolution and is poised to undergo dramatic

transformation. The retail sector employs over 8% of the national workforce but is

characterized by a high degree of fragmentation with over 5 million outlets, 96% of

whom are very small with an area of less than 50 m2. The retail universe more than

doubled between 1978 and 1996 and the number of outlets per 1000 people at an All

India level, increased from 3.7 in 1978 to 5.6 in 1996. For the urban sector alone, theshop density increased from 4 per 1000 people in 1978 to 7.6 per 1000 people in 1996.

Because of their small size, Indian retailers have very little bargaining power with

manufacturers and perform only a few of the flows in marketing channels unlike in the

case of retailers in developed countries.

The corner grocer or the kirana store is a key element in the retail in India due to the

housewifes unwillingness to go long distances for purchasing daily needs. An empirical

study was carried out to identify factors that influenced consumers choice of a store.

Although convenience and merchandise were the two most important 5 reasons for

choosing a store, the choice criteria varied across product categories. Convenience was

Section I.1 RetailerNo. of Stores in

CHINA

No. of Stores in

INDIAWal-Mart 40 -

Carrefour 53 -

TESCO 30 -

Metro 21 2

KFC Over1000 4

Star bucks 70 -

Mc Donalds 580 47

Pizza Hut 110 75

Huyo Boss 60 2

Louis Vuitton 6 2Prada 10 -

B&Q 20 -

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indicated by consumers as the most important reason in the choice of groceries and fruit

outlets, chemists and lifestyle items while merchandise was indicated as the most

important in durables, books and apparel.

In recent years, there has been a slow spread of retail chains in some formats like

supermarkets, department stores, malls and discount stores. Factors facilitating the spread

of chains are the availability of quality products at lower prices, improved shopping

standards, convenient shopping and display, and blending of shopping with 6

entertainment, and the entry of industrial houses like Reliance, Goenkas, Rahejas, Piramals

and Tatas into retailing.

However formats are not easily scalable across the country. Several companies have found

that it is not easy to expand beyond some regions and cities as evident from the examples

of Margin Free Market and Foodworld, which are active only in a few states or cities.

Affordable real estate prices and availability of sufficient number of economically well off

households in the catchments area are critical requirements that will determine new store

viability and thus the possibility of further expansion.

Foreign direct investment in the retail sector in India, although not yet permitted by

government, is desirable, as it would improve productivity and increase competitiveness.

New stores will introduce efficiency. Customers also gain as prices in the new stores tend

to be lower. The consequences of modernization in India may be somewhat different due

to lower purchasing power and the new stores may cater to only to branded products aimed

at upper income segments.

The need for a fresh perspective while developing theories to explain the new

developments has been stressed. The Indian retail environment is witnessing several

changes on the demand side due to increased per capita income, changing lifestyle and

increased product availability.

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The rapid growth of Big Bazaar (soon to be joined in by expansion of Giant, and a likely

entry of Bharti and Aditya Birla Group later this year in a similar format) testifies this,

and in turn, this will lead to many other major business houses in this sector very shortly.

The consumer appreciation has not only been limited to the national players.

According to this years Global Retail Development Index India is positioned as the

leading destination for retail investment. This followed from the saturation in western

retail markets and we find big western retailers like Wal-mart and Tesco entering into

Indian market. Indias retail industry accounts for 10 percent of its GDP and 8 percent of

the employment to reach $17 billion by 2010. There are about 300 new malls, 1,500

supermarkets and 325 departmental stores being built in the cities very soon.

A shopping revolution is ushering in India where, a large population between 20-34 age

groups in the urban regions is boosting demand by 11.1 percent in 2004-05 to an Rs

23,308 purchasing power. This has resulted in huge international retail investment and a

more liberal FDI.

Specialty players like Loft (footwear retailing), Vijay Sales and Vivek (consumer durable

retailing), Fabindia (clothing/accessories) and even local players (e.g. Bombay Selection

and Mehrasons in Delhi) have been able to draw consumers from the traditional high

streets to new swanky malls and/or modern, large footprint stand-alone stores. In case of

Delhi, we are now already beginning to see emergence of new "Lajpat Nagars" and

"Connaught Places" in malls such as DLF City Center and Metropolitan (both in

Gurgaon).

Hence, the growth in organized retail is no longer determined only by the growth plans of

the existing national players -- new entrants as well as local/regional players making

rapid expansion beyond their traditional markets will be actually driving the growth now.

The second significant change is that from the end of 2004 and through almost 2007,

India will see the coming to market of new, large shopping malls almost every week.

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Next year alone is likely to have at least 330 new malls planning for opening.

The year 2006 may see another 100 or more ready for possession. This makes entry into

retailing far easier for almost all kinds of entrants, for almost all kinds of formats and

scale of operations. The rentals are likely to settle down at about Rs 40 -- Rs 60 per sq ft

per month making most retail businesses financially very viable.

Scaling up will also is easy for the new entrants once they have got their initial business

models right and resources (financial and human) put in place. The easier availability of

space will therefore encourage retail start-ups in high potential categories such as food

and grocery, consumer durables, furniture and furnishings, jewellery etc.

Financial resources themselves would be very easy from 2004 itself. The forthcoming

IPO of Subhiksha is likely set very encouraging benchmarks for raising capital from the

primary markets, and thereby attracting adequate interest of various categories of

investors including VCs to look at funding retail ventures at various stages.

The fourth significant change is the likely entrance of many leading international

brands/retail businesses in India initially through the franchising route, (Wal-Mart

coming with Bharati Group) and subsequently through direct retailing route when the

FDI policy on retail is liberalized (hopefully soon after the next general elections).

With the increased attractiveness of India, many top international brands are already

presence in India. These may include Calvin Klein, Tommy Hilfiger, Athlete's Foot,

Tiffany etc. and creating a multiplier effect in various formats and product categories

giving further stimulus to growth of organized retailing.

Factors underlying evolution of modern retail in IndiaThe foregoing review has provided some information that enables the construction of a

framework for analyzing the retail development in India. The driving forces towards

Development can be broadly classified into categories shown in Table 1 below, which is

followed by a discussion on each of the driving forces.

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Economic development

The development of the Indian economy is a necessary condition for the development of

the Indian retail sector. The example of Thailand shows that the impetus to modernization

of retail was provided by the economic boom in Thailand. Development increases the

disposable income in the hands of consumers and leads to an increase in the proportion of

spending on discretionary non- food items. Economic development also enfranchises new

households as potential customers for modern retail and leads to increased ownership of

personal transportation among consumers, which in turn can increase their willingness to

travel longer distances to shop in new format stores. The growth of the economy can also

provide gainful employment to those who would otherwise enter retailing in areas like

hawking, roadside vending and other similar low cost entries into the retail sector. Rapid

economic development may also positively influence the views of international retailing

companies about the business prospects and investment attractiveness in a country.

Improvements in civic situation

The civic situation includes factors like safety and security in the city and the various

municipal regulations governing the opening, location and operation of stores, and the

nature of public transport available. A safe and secure environment will encourage the

setting up of 24 hour convenience stores and the operation of shopping plazas and

encourage shopping expeditions for the whole family. The presence of adequate parking

facilities or excellent public transportation will encourage consumers to be more mobile in

their choice of store. City or state regulations on opening or closing hours, rent control

laws, availability of adequate electrical power and regulations relating to licensing will

affect both the time required to set up a new store as well as the cost of store operation and

its viability.

Changes in consumer needs, attitudes and behavior

The growth of modern retail is linked to consumer needs, attitudes and behavior.

Marketing channels including retailing emerge because they receive impetus from both the

supply side, and the demand side. On the demand side, the marketing channel facilitates

provides service outputs that consumers value. These service outputs may include but are

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not limited to bulk-breaking, spatial convenience, waiting and delivery time and assort. In

Indian retailing, convenience and merchandise appear to be the most important factors

influencing store choice, although ambience and service are also becoming important in

some contexts. Modernization will have to address convenience issues while presenting

strong alternatives to the weaknesses of traditional formats in selection of merchandise

available for sale. Modern formats need not be expensive and can offer lower prices to

consumers. Lower prices in turn will increase the attractiveness of modern formats and

rapid growth in the preference for purchasing from new format stores.

Changes in government policies

The Indian government has clarified on a number of occasions that foreign direct

investment will not be permitted in India. Major international retailer organizations will be

watching for signals of policy change especially because China has permitted foreign

investment in retail. In opening up the retail sector, the government may consider various

approaches such as insisting on joint ventures, limiting the foreign stake, or specifying the

cities areas where investment is permitted. Thailands example shows that in case of joint

ventures, the local partner can play a significant role in the success of the joint venture.

The Brazilian experience shows that local retailing groups can successfully compete

against international chains if they adopt innovations and restructure operations in

accordance with market needs. Some policy protection can be given to consumer

cooperatives which have been providing value to their members and customers. This

protection can be in the form of allowing these organizations to access capital from the

local market and operate in a more professional manner. The government can also play a

positive role in simplifying or eliminating the plethora of regulations governing retailing.

Specific laws relating to franchising will also be desirable for foreign and Indian brand

owners to adopt the franchise route in a bigger way.

Increased investment in retailing

The prospects for significant modernization and development in retailing will depend on

the nature of investment in this sector. The investment will be of two types- foreign and

domestic. The quantum and nature of investment will depend on the factors outlined

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earlier namely economic development; civic situation; consumer needs, attitudes and

behavior; and government policies.

Although FDI is not yet permitted in retailing, a number of global retailers are testing the

waters by signing technical agreements and franchises with Indian firms. Fast food chains

like McDonalds and Pizza Hut are already operating in the metros. A Marks and Spencer

store is already operational in Mumbai & in other cities. Several global retailers are

awaiting a change in policy. However, the development of the Indian retail sector is

dependent not just on foreign investment but on Indian investment as well. Since the

1980s industrial groups such as Reliance and Raymonds have been active in encouraging

development of well appointed exclusive showrooms for their textile brands. In the 1990s

industrial houses like Rahejas, Piramals, and Tatas have entered retailing. Several Indian

and foreign brands have used franchising to establish exclusive outlets for their brands.

At present the new format stores cater mostly to households belonging to the higher

income families. The catchments area for these modern stores has to be fairly large as the

number of such households is small in relation to the total population. This limits the

number of stores and constrains the growth of chains. The modern stores have also been

plagued by low conversion in relation to the number of footfalls. This means that although

a large number of people visit the store, the number of buyers and the average bill amount

is small. Due to low sales, the bargaining power of the retailers with suppliers and

manufacturers is low and this restricts their average gross margin. On the other hand the

expenses involved in setting up and maintaining a modern format store tend to be much

higher than traditional store due to the additional expenses on larger size, better locations

and superior ambience. Therefore if the returns on investment in the new formats have to

be attractive, modern retailers have to develop a strong supply chain that provides them

significant gross margins while delivering merchandise at attractive prices to customers. In

order to do this, modern retailers will need to eliminate middlemen and buy directly from

suppliers and make use of technology to control inventory. These developments will

impact the survival and existence of middlemen such as wholesalers and agents who will

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have to find new business models to survive. Manufacturing firms will also face pressure

from strong buyers on price, delivery and service terms.

Increase in power of organized retail

Bargaining power of organized retail translates directly into higher gross margins for the

retailers. At present there are a large number of independent retailers with little bargaining

power vis a vis manufacturers, distributors and wholesalers. Manufacturers have been

promoting their brands and generating consumer demand for branded products. This

makes it necessary for all varieties of stores especially in urban areas to stock branded

products. Manufacturers take advantage of the consumer pull to limit margins to the

retailers. Retailers manage their profitability by operating on a very low cost basis. This is

possible because of low rental expenses due to historical reasons and low labour costs due

to employment of family members in the store. The modern stores have somewhat higher

gross margins, but their net margins are not very significant for providing the cash flow

required to fuel rapid growth in outlets.

Retailers can increase their power in several ways. They can invest efforts in developing

their own store brands. The supermarket chain Food world has begun doing this in a

limited way with food grains and pulses. Secondly they can invest in supply chain, buydirectly from the sources and eliminate middlemen. Thirdly they can attempt to obtain

volumes in buying by aggregating the requirements of various stores, and bargaining for

better prices by placing large orders. Although this strategy suits chain stores, independent

grocers may also get together by forming a cooperative or buying club in order to benefit

from scale economies in purchasing. Retailers can also obtain several benefits from using

information technology. They can monitor their stocks and sales using IT and thus manage

their working capital more efficiently. They can also analyze data about customers and

their buying habits and be in a position to develop marketing strategies and promotional

offers to increase customer purchasing at the outlet.

Penetration

In the Indian Market the penetration of the organized retail is also taking place which is

given below.

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Penetration of Organized Retail

2005 Estimate Total Retail Organized RetailMkt. size

Rs. Bn

Mkt.shae

(%)

Mkt. Size

Rs. Bn

Mkt.

Share(%)

Penetration(%)

Food Beverages &

tobacco

7,738 75.8 65 19 1

Clothing

& textile

716 75.8 141 40 20

Consumer Durable 416 4.1 43 13 10

Jewellery

&Watches

416 4.1 25 7 6

Home Deco

& Furniture

300 2.9 25 7 8

Beauty Care Items 214 2.1 7 2 3

Footwear 104 1.0 32 9 31

Books Music

& Gifts

87 0.8 11 3 13

Total 9,990 100.0 349 100

Entry barrier for new player

Factors Descriptions ImplicationsFDI bottleneck Barriers to

FDI

FDI not permitted in

pure retailing

Franchisee arrangement

all owned

Absence of Global Players

limited exposure to best

practices

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Non

recognized

industry

Lack of

Industry

status

Government does not

recognize the industry.

Restricted availability of

finance restrictions growth

and scaling up.

Structural

Impediments

Structural

Impediments

Lack of urbanizations,

poor transportations,

Infrastructure,

Consumer habit of

buying fresh food,

Administered Price.

1. Lack of Awareness of

Indian consumers

restricted retail growth of

small, one store formats,

with unmatchable cost

structure wastage of

almost 20-25% of farm

produce.

Costly Real

Estate

High cost of

real estate

Pro tenant rent laws,

non availability of

Government. Zoning

restrictions, lack of

clear ownership titles

high stamp duty.

Difficult to find good real

estate in terms of locations

and size

High land cost owing

constructed supply.

Disorganized nature

transactions.

Supply chain

bottlenecks

Supply chain

bottlenecks

1. Several

segments like foodfor SSIs distribution,

logistics, constrains.

2. Restrictions of

purchase and

movement of food

grains.

3. Absence of cold

chain in

Infrastructure long

intermediations

chain.

1. Limited product range

makes scaling up difficulthigh cost and complexity

of sourcing and planning.

2. Lack of value addition

and increase in costs by

almost 15%

Complex Complex 1. Differential Added cost and complexity of

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taxation taxation

system

sales taxations across

states. Multi points

control.

2. Sales tax

avoiding by smaller

stores.

distribution cost advantage for

smaller sales through tax

evasion.

Multiple

Legislation

Multiple

Legislation

1. Stringent labor

laws governing hours

of work minimum

wage payments.

2. Multiple licenses

clearance required.

Limits flexibility in

operations irritant value in

establishing chain operations

adds to overall cost.

Customer

Diversity

Customer

preference

Local consumption

habit need for verity

cultural issues.

1. Leads to product

profile ration need to

stock..

2. Increase complexity

on sourcing & planning

mergers the cost of store

management.

Man Power Availability

of Talent

1. Highly educated

class does not

consider realty as a

choice of profession

2. Lack of proper

transaction.

1. Lack of trained

personnel.

2. Higher trial and

managing retail

operations.

3. Increase in personnel

costs.

Manufacturers Manufacturers

Backlash

No measures in

managing

Manufacturers refuse to

disintermediation and pass

on intermediary margins to

retailers.

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Major Areas of Indian OrganizedRetailingIn Indian Retail Industry there are so many sectors but we have selected major sectors

which are as follows

Food & Grocery

Footwear

Apparel

Consumer Durable

Gems & Jewellary

FMCG

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Retailers look to corner unbranded food space

The message is clear. With modern food formats like Food Bazaar and Spencer's offering

to take the negative labour out of positive Indian home pleasures by setting up an in-

house chakki (flour mill), offering to knead the dough and cut vegetables free of charge,

retailers have their eye on the unbranded 'centre of the plate' in the Indian homemaker's

staple meal.

Its an area where many Indian and multinational companies have failed miserably. The

attempt is to seek a share of the unbranded part of the consumers shopping basket, which

constitutes as much as 60% of the total purchases and growing sharply, say AC Nielsen

estimates. Retailers are offering a package of convenience and freshness, and have an

edge over manufacturers that focus mainly on packaged conveniences.

We are looking at taking the negative labor out of such positive Indian pleasures of life.

Incomes in India are going up and becoming interesting to build aspirational brands now.

But the media is already fragmented and expensive, and retail is getting consolidated.

With 60% of the grocery basket still unbranded, the opportunity for brand creation ishuge. In the new paradigm, however, the method of brand creation will have to be

different and in tune with the new reality. The retailers come with no baggage to this new

opportunity and therefore, will have a mindset advantage over traditional branded guys,

says Damodar Mall, president, Food Bazaar.

Food retailers are offering live kitchen formats, which offer on-the-spot home-style

gravies, dals, cooked rice and kneaded dough with options like grinding coffee fresh at

store, idli batter, paneer, curd and cut vegetables. By cutting heavily through

intermediaries with a real drastic cut in the supply chain length, retailers are reducing the

shelf-life of products to less than a week.

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Consumers like the touch, smell and feel of commodities like grains or flour they

purchase and retailers are trying to build their offerings around this need. Adapting to

Indian needs is the key. Some of our formats stock vegetarian and non-vegetarian stuff.

They also stock regional specialities, for instance, Gujarati, South Indian, Mangalorean or

Keralite items in areas dominated by people from these regions. But these are essential

investments in the long-term understanding of the Indian psyche and ensuring customer

pull, which is localising each format to suit the demands and sensitivities of the Indian

market.

Trumart is looking to tie up with vendors to make fresh batter for the idli or dosa in-

house and set up a bakery and offer fresh bread to consumers. Earlier consumers chose

fresh and pure products where there was a lot of drudgery involved. They shifted to

conveniences like packaged atta, but were unsatisfied with the quality and taste. Retailers

are entering the space and offering them the same conveniences, but with a lot of in your

eye freshness appeal. The Rs 27,258-crore Indian foods industry, which forms 44% of

entire FMCG sales, is growing at 9% and has set the growth agenda for modern trade

formats.

India's emergence as a leading producer of food items and particularly items like milk,

poultry saw the distribution of these through organized retail channel taking place along

with the traditional channel. This saw the emergence of discount grocers like Subhiksha

and supermarkets like FoodWorld. The organized retail is expected to benefit the

producers as well as the customers. There are some questions being posed regarding

manpower employed in the unorganized retail industry and in the processing of harvest

items. Will they be redundant with the growth of retail industry? There is no answer to

this question at present as only time will present an answer.

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Major Players of Indian OrganizedRetailingReliance

Reliance Fresh & Mall

Is the retail chain division of Reliance Industries of India which is headed by Mukesh

Ambani. Reliance has entered into this segment by opening new retail stores into almost

every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in

the next 4 years in their retail division and plans to begin retail stores in 784 cities across

the country. The Reliance Fresh supermarket chain is RILs Rs 25,000 crore venture and

it plans to add more stores across different g, and eventually have a pan-India footprint by

year 2011. The super marts will sell fresh fruits and vegetables, staples, groceries, fresh

juice bars and dairy products and also will sport a separate enclosure and supply-chain for

non-vegetarian products.

Reliance Fresh recently (24th Jan, 2007) opened several "Fresh" outlets in Chennai,New Delhi, Hyderabad,Jaipur, Mumbai, Chandigarh, Ludhiana increasing its total store

count to 40. While Reliance mall has been started the biggest mall in Ahmedabad &

looking forward to open it in other cities also. Reliance is still testing its retail concepts

by controlled entry beginning in the southern states.

According to Deccan Herald, the company is planning on opening new stores with store-

size varying from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and vegetables,

staples, FMCG products and dairy products. Each store is said to be within a radius of 1-2

km of each other, in relation to the concept of a neighbour store. However, this is only the

entry roll-out that the company has planned. Bangalore is said to have 40 stores in all by

the end of the year.

48
http://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Mukesh_Ambanihttp://en.wikipedia.org/wiki/Mukesh_Ambanihttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/New_Delhihttp://en.wikipedia.org/wiki/Hyderabad%2C_Andhra_Pradeshhttp://en.wikipedia.org/wiki/Jaipurhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Chandigarhhttp://en.wikipedia.org/wiki/Ludhianahttp://en.wikipedia.org/wiki/Deccan_Heraldhttp://en.wikipedia.org/wiki/FMCGhttp://en.wikipedia.org/wiki/Reliance_Industrieshttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Mukesh_Ambanihttp://en.wikipedia.org/wiki/Mukesh_Ambanihttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/New_Delhihttp://en.wikipedia.org/wiki/Hyderabad%2C_Andhra_Pradeshhttp://en.wikipedia.org/wiki/Jaipurhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Chandigarhhttp://en.wikipedia.org/wiki/Ludhianahttp://en.wikipedia.org/wiki/Deccan_Heraldhttp://en.wikipedia.org/wiki/FMCG


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In a dramatic change due circumstances prevaling in UP, West Bengal and Orissa, It was

mentioned recently in News Dailies that, Reliance Retail is moving out stocking.

Reliance Retail has decided to minimise its exposure in the fruit and vegetable business

and position Reliance Fresh as a pure play super market focusing on categories like food,

FMCG, home, consumer durables, IT, wellness and auto accessories, with food

accounting for the bulk of the business. The company may not stock fruit and vegetables

in some states, Orissa being one of them. Though Reliance Fresh is not exiting the fruit

and vegetable business altogether, it has decided not to compete with local vendors partly

due to political reasons, and partly due to its inability to create a robust supply chain. This

is quite different from what the firm had originally planned. When the first Reliance

Fresh store opened in Hyderabad last October, not only did the company said the stores

main focus would be fresh produce like fruits and vegetables at a much lower price, but

also spoke at length about its farm-to-fork theory. The idea the company spoke about

was to source from farmers and sell directly to the consumer removing middlemen out of

the way. Reliance may exit some businesses If the business does not increases by March

2008.

Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint,

Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various

formats that Reliance has rolled out.

In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain

of Apple Specialty Stores branded as iStore, starting with Bangalore.

Pantaloon Retail

The company was incorporated on October 12, 1987 as Manz Wear Private Limited. TheCompany was converted into a public limited company on September 20, 1991 and on

September 25, 1992 the name was changed to Pantaloon Fashions (India) Limited and in

the same year the Company made an initial public offering. Later changed name to

Pantaloon Retail (India) Limited on July 7 1999.

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The company started its operations by selling branded garments under Pantaloon, Bare

and John Miller brands. We set up our first menswear Pantaloon Shoppe Outlet in 1993.

Our business has grown from one store in Kolkata in 1997 occupying an area of 8,000 Sq

ft to 72 stores, apart from our 22 factory outlets located in the multiple cities occupying

an aggregate area of 21,07,608 Sq. ft. Company focus on the Lifestyle segment through

14 Pantaloon stores, 3 Central Malls, 2 aLL, 2 Fashion Station and 1 MeLa store. In the

Value offering, we cater to the mass through our 21 Big Bazaar and 30 Food Bazaar

outlets.

Stores of Pantaloon Retail

ALL

Big Bazaar

Blue Sky

Central

Fashion Station

Gini & Jony

Pantaloon

Shoppers StopShoppers' Stop started professional, organized retailing in India. It was the only retailer to

hire graduates and place them in front line selling activities and was also one of the first

few retailers to recruit from business schools. In 1991, the first Shoppers' Stop outlet

opened in an area of 2,800 sq. ft., as a ready-to-wear men's wear store.In 1992, ladies

wear was added and in 1993 the kids' section and accessories including jewellery,

cosmetics and watches. Shoppers' Stop was now a complete department store.

In August 1993, institutional sales were introduced for corporate clients, sale of gift

hampers, gift vouchers and dress kits. 1994 saw the launch of 'STOP' - the first in-house

brand of merchandise.

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In response to the ever-growing customer base, Shoppers' Stop launched the first retail

loyalty programme in April 1994. All buyers who became members of this programme

were entitled to special privileges and benefits.

Shoppers' Stop expanded operations outside Mumbai with its second store, at Bangalore

in 1995. This was followed by a store in Hyderabad in 1998. Shoppers' Stop next entered

the Northern markets of Jaipur and New Delhi in 1999.

Expansion was part of Shoppers' Stop original strategy for growth. Towards this end, by

2001, it had entered Chennai and Pune; and in Mumbai it had opened stores in Chembur

and Bandra. In 2002/2003, it added four new stores including those in Kandivli and

Mulund in suburb of Mumbai when the K. Raheja Corp Group (Chandru L. Raheja

Group) began executing its vision of providing an international shopping experience to

Indian customers.

Shoppers' Stop redefined the shopping experience in India by introducing the 'everything-

under-one-roof' format coupled with the convenience of cash & carry from a customer-

friendly display of merchandise. It is a strategy, which has made Shoppers' Stop into a

Rs. 4 billion (2003/04) organisation today.

Shoppers' Stop runs a chain of departmental stores offering apparel, accessories,

footwear, jewellery and home products. Currently 1,805 employees man its fourteen

departmental stores in Mumbai, Bangalore, Hyderabad, Chennai, Pune, Jaipur, Delhi,

Gurgaon and Kolkata. The stores are spread over 629,471 sq. ft of retailing space with an

average footfall of 50,000 customers per day across the chain.

The company has aggressive expansion plans and is expected to continue to lead the

growth of the organised retailing in India projected at Rs.13,500 billion (Industry

projections as per the India Retail Review by Knight Frank).

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Positioning

Shoppers Stop is positioned as a family store delivering a complete shopping experience

defined by its mission, vision and values.

Customer Profile

Shoppers Stops core customers represent a strong SEC A skew. They fall between the

age group of 16 years to 35 years, the majority of them being families and young couples

with a monthly household income above Rs. 20000 and an annual spend of Rs.15000. A

large number of Non - Resident Indians visit the shop for ethnic clothes in the

international environment they are accustomed to.

Future Plans

Shoppers Stop aims to position itself as a global retailer. The company intends to bring

the worlds best retail technology, retail practices and sales to India. Currently, they are

adding 4 to 5 new stores every year.

Tata TrentThe Westside stores have numerous departments to meet the varied shopping needs of

customers. These include Menswear, Womens wear, Kids wear, Footwear, Cosmetics,

Perfumes and Handbags, Household Accessories, lingerie, and Gifts. The company has

already established 23 Westside departmental stores (measuring 15,000 - 30,000 square

feet each) in Mumbai, Bangalore, Hyderabad, Jaipur, Chennai, Pune, Delhi, Noida,

Gurgaon, Ghaziabad, Kolkata, Nagpur, Indore and Ahmedabad. The company hopes to

expand rapidly with similar format stores that offer a fine balance between style and price

retailing.

Trent ventured into the hypermarket business in 2004 with Star India Bazaar, providing

an ample assortment of products made available at the lowest prices, aptly exemplifying

its Chota Budget, Lambi Shopping motto. Star India Bazaar, presently has one 50,000

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square feet store in Ahmedabad and plans to extend its presence across all major metros.

This store offers customers an eclectic array of products that include staple foods,

beverages, health and beauty products, vegetables, fruits, dairy products, consumer

electronics and household items at the most affordable prices. Star India Bazaar also

includes a large range of fashionable in-house garments for men, women and children,

exclusively available at the store.

In addition, Trent recently acquired a 76% stake in Landmark, one of the largest books

music retail chains in the country. Landmark began operations in 1987 with its first store

in Chennai with a floor space of 5500 sq. ft. At present Landmark has 7 stores, varying in

size from 12,000 sq. ft. to 45,000 sq. ft, 3 in Chennai and 1 each in Bangalore, Kolkata,

Mumbai and Vadodara. Until 1996, Landmarks product portfolio comprised books,

stationery, greeting cards. It was later that music was added to it. Landmark also sparked

the trend of stocking curios, toys, music, CDs and other gift items. What separates

Landmark from other stores of its kind is the range and depth of its stock.

Profile

Established in 1998, Trent operates Westside, one of India's largest and fastest growing

chains of retail stores. The company has a turnover of Rs 246.1 crore (FY 2004-2005)

and currently operates 21 stores in the major metros and mini metros of India.Promising

high-quality, the latest styles, an international shopping experience and value for money,

Westside has created a loyal following with its own brand of merchandise. Almost

everything at Westside is exclusively designed for Westside. Boasting of a variety of

designs and styles, the merchandise at the Westside stores are a mix of stylised clothes,

footwear and accessories for men, women and children, table linens, artifacts, home

accessories and furnishings.

The Westside stores have numerous departments to meet the varied shopping needs of

customers. These include Menswear, Womens wear, Kids wear, Footwear, Cosmetics,

Perfumes and Handbags, Household Accessories, lingerie, and Gifts. The company has

already established 23 Westside departmental stores (measuring 15,000 - 30,000 square

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feet each) in Mumbai, Bangalore, Hyderabad, Jaipur, Chennai, Pune, Delhi, Noida,

Gurgaon, Ghaziabad, Kolkata, Nagpur, Indore and Ahmedabad. The company hopes to

expand rapidly with similar format stores that offer a fine balance between style and price

retailing.

STAR INDIA BAZZAR

Trent ventured into the hypermarket business in 2004 with Star India Bazaar, providing

an ample assortment of products made available at the lowest prices, aptly exemplifying

its Chota Budget, Lambi Shopping motto. Star India Bazaar, presently has one 50,000

square feet store in Ahmedabad and plans to extend its presence across all major metros.

This store offers customers an eclectic array of products that include staple foods,

beverages, health and beauty products, vegetables, fruits, dairy products, consumer

electronics and household items at the most affordable prices. Star India Bazaar also

includes a large range of fashionable in-house garments for men, women and children,

exclusively available at the store.

LANDMARK

In addition, Trent recently acquired a 76% stake in Landmark, one of the largest books &

music retail chains in the country. Landmark began operations in 1987 with its first store

in Chennai with a floor space of 5500 sq. ft. At present Landmark has 7 stores, varying in

size from 12,000 sq. ft. to 45,000 sq. ft, 3 in Chennai and 1 each in Bangalore, Kolkata,

Mumbai and Vadodara. Until 1996, Landmarks product portfolio comprised books,

stationery, greeting cards. It was later that music was added to it. Landmark also sparked

the trend of stocking curios, toys, music, CDs and other gift items. What separates

Landmark from other stores of its kind is the range and depth of its stock.

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EbonyNew Delhi & Mumbai, The Sensex may not be booming, but the cash outflow from

shoppers' pockets is zooming like never before. Swanky new shopping malls, with shiny

glass facades, roof-top parking, tube lifts, lifted straight out of Visit Dubai postcards,

have sprung up all over the country, delighting the hearts of incorrigible shoppers.

If the most happening place in Mumbai is Crossroads, in Delhi its suburban Noida's

Sector 18 market, in Thrissur, the Dubai-style City Centre, in Indore, the Singapore

Market... glitzy malls have sprung up in almost every city.

The fact that Crossroads has become an ordeal for Mumbai's traffic police since it openedon August 29 says it all. India's economic capital is quite overwhelmed by the newest

place to put one's money. In Delhi, the newest Ebony store in Noida with four huge floors

of shopping, saw more than 10,000 shoppers blowing up their bucks in the first week of

its opening.

Crossroads, promoted by the Rs 1,500-crore Piramal group, spans a whopping 1,50,000

square feet of prime land at Haji Ali in South Mumbai. Its state-of-the-art facilities,

including the latest car elevators that lead to a roof-top parking lot, a video wall and a

spacious atrium, which were hyped up in the media before the opening, lured 20,000

curious onlookers on the first day itself. An estimated Rs 3 billion is said to have been

invested in the mall, and it is expected by its owners to break even in two years.

Crossroads encompasses the big names in style: Shyam Ahuja, Lacoste, Ensemble,

Swarovski, L'Oreal, Zegna, Hallmark, Ashley Shoes, Danabhai Jewellers, Aria Crystals,

Rohit Bal, Ritu's and J J Valaya. Mumbai's biggest bookstore, Fountainhead,also situated

here, is already making book lovers salivate. Apparel franchisee brands like Levi's, Planet

Kids, Lee Cooper, Adidas, Reebok, Nike and Benetton have all rented space at

Crossroads.

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ProvogueThe Company was incorporated on November 11, 1997 as Acme Clothing Private

Limited. Provogue stands for fashion and not pure apparel; this in itself makes it the

leader instantly. Its designs are cutting edge and radical, which epitomises its mantra

Redefining Fashion.

The Company launched

Documents

2740. MACRO ANALYSIS OF INDIAN ORGANIZED RETAILING