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, Indiabulls

  1. 1. <br /> CHAPTER- 1<br /> <br />INTRODUCTION<br />Retail means selling goods and services in small quantities directly selling to customers. Retailing consists of all activities involved in marketing of goods and services directly to consumer for their personnel family and household use. <br />The Indian retailing industry is becoming intensely competitive, as more and more players are Vying for the same set of customers. The major retail players are Pantaloon Retail, Shoppers Stop, Reliance, Indiabulls,Spencer’s, More etc.., <br />Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant in retailing in India signifies the beginning of retail revolution. India's retail market is expected to grow tremendously in next few years. According to AT Kearney, The Windows of Opportunity shows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006. India's retail market is expected to grow tremendously in next few years. India shows US$330 billion retail market that is expected to grow 10% a year, with modern retailing just beginning. India ranks first in 2005.  In fact, in 2005 and 2006, India is the most compelling opportunity for retailers, because now India is in peaking stage. <br /> CHAPTER-2<br />Conceptual frame work<br />Beginnings of Retail Trade<br />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. .<br />Retailing is the last link in the chain of production which begins at the extractive stages, moves through manufacturing, and ends in the distribution of goods and services to the final consumer.<br /> Retailing is the business which considers every individual as a customer and accounts for less than 10% of the world wide labor force but is still the single largest industry in most nations.<br /> The distribution of the consumer products begins with the producer and ends at the ultimate consumer. Between the producer and the consumer there is a middle-man the retailer, who links the producers and the ultimate consumers. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demand of the consumer which supplies of all the manufactures. The word retail is derived from the French word “retailer”, meaning to cut a piece off or to break bulk. A retailer is a person, agent, agency, company or organization which is instrumental in merchandise or services to the ultimate consumer. <br /> Retailing scenario is changing day-by-day, every day brings new opportunities along with threats and learning because still retailing is in infantile stage so there is lots of things to learn. In retailing the best way for learning is benchmarking which gives an idea about our position along with competitors.<br /> In India, the retail sector is the second largest employer after agriculture. The retail sector in India is highly fragmented and consist predominantly small independent and owner managed shops. Food sales constitute a high proportion of the total retail sales. The share was 62.7% in 2001, worth approximately Rs. 7039.2 billion, while non food sales were worth Rs 4189.5 billion. The retail business in India is expected to reach Rs.19069.3 billion by the end of 2007. <br /> HOW RETAIL DEVELOPED<br />Producers<br />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<br />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.).<br />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<br /> DEFINITION OF RETAIL<br /> Retail here is defined as sales of goods between two distant parties where the deliverer has no direct interest in the transaction, the earliest instances of distance retailing probably coincided with the first regular delivery or postal services. <br />Origins of Retail Chains<br />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<br />The Supply Chain<br />In order to retail any product, the product needs to be obtained. This can range from a simple process of purchasing and collecting from a wholesaler to planning and executing the whole process from raw materials through to retailing to the end customer.<br />Producer<br />Producers are the makers of goods that are retailed. They may be factories or farms.<br />Importer<br />Importers can supply any part of the supply chain: they may supply parts to producers or even supply them with finished goods to supplement their range. They will also supply wholesalers and large retailers.<br />Packaging suppliers<br />Packaging suppliers would generally sell their packaging to the goods producers. The involvement of packaging suppliers can range from simply taking orders for packaging items to having detailed involvement with the logistics, marketing, specification, cost and legal aspects of the packaging. <br />Wholesaler<br />Wholesaler’s purchase and store large volumes of goods, usually from producers, but occasionally from other types of business, including other wholesalers<br />Retailer<br />Retailers purchase goods from a variety of sources. Smaller general stores will typically buy from a local wholesaler. Larger outlets will often buy fast selling goods directly from producers but still purchase slower selling and specialist lines from wholesalers and importers.<br />RETAIL MARKETING<br />In its simplest form, the retail trade sells goods to end users of those goods. In order to maximize sales and profits retailers will usually enhance the way they present their goods, their retail outlets and their company. This enhancement is retail marketing<br />Décor<br />The way a retail outlet looks will usually inform customers and potential customers about the type of store and type of products it sells. <br />Design<br />A store that sells high class goods will usually have high class décor. By contrast, a store that sells basic goods may have basic décor. 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 décor can score points over their competitors.<br />Frequency of Redecoration<br />Stores that sell fashion goods will often change their décor regularly to reflect the changing nature of their products. For some well established stores, their décor may be synonymous with their business and their product offer. Such stores may seldom change their décor or only change it in minor ways. Some stores offer a mixture of both – they may be well established and have traditional décor, but will also adapt it in order to highlight the changing fashions of their product offer. <br />Lighting<br />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. Very similar factors affect stores that are on the internet. For example, this online store that sells fly killers is mainly white and bright in order to symbolise hygiene.<br />MERCHANDISING<br />Merchandising is the Supply Chain practice of making products in retail outlets available to consumers, primarily by stocking shelves and displays. While this used to be done exclusively by the stores' employees, many retailers have found substantial savings in requiring it to be done by the manufacturer, vendor, or wholesaler that provides the products to the retail store. By doing this, retail stores have been able to substantially reduce the number of employees needed to run the store.<br />INDIAN RETAIL INDUSTRY<br />Introduction<br />In India, organised retailing, is contributing 3% of total retail sector and is still evolving. However, it is expected to increase to 5%, by 2010. Retail sector forms 10-11% of GDP1. It is alluring in terms of investment, employment opportunity, and usage of technology. <br />Retailing is in a rapid state of change due to speedy technological developments, changing competitive positions, varying consumer behavior as well as their expectations and liberalized regulatory environment.<br />Industry overview<br />Indian organized retail industry was to the tune of Rs. 13,000 crore for the year 2000. Organized retail industry was expected to grow by 30 per cent in the next five years and was expected to touch Rs. 45,000 crore in 2005; by 2010.Indian retailing is clearly at a tipping point. <br />The retail sector in India is witnessing a huge revamping exercise as traditional markets make way for new formats such as departmental stores, hyper markets, supermarkets and specialty stores. Western style malls have begun appearing in metros and second rung cities alike introducing the Indian consumer to a shopping experience like never before.<br />Rated the fifth most attractive merging retail market, India is being seen as a potential goldmine. It has been ranked 2nd in a global Retail Development Index of 30 developing countries drawn up by A.T. Kearney. The list was developed as a response to requests from retail chains facing saturated demand in most western markets.<br />India’s vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets.<br />Though, Indian retail sector is at an inflexion point with changing demographics driving growth of organized retailing and driving growth in consumption.<br />India is witnessing a significant change in age and profiles of its 1 billion + population, which are likely to lead to, accelerated the consumption over the next few years. India has a median age of 24 years for its population against 36 years of the USA and 30 years for China. A younger population tends to have higher aspirations and will spend more as it enters the earning phase.<br />Further increase in consumers spends would be driven by nuclearisation of families, increasing number of working women and new job opportunities in emerging service sector such as IT enabled services. With declining interest rates an average Indian is not averse to taking loans. Not only the demographic factors become more favorable but also growing media penetration is leading to a convergence of aspirations of various classes of consumers.<br />A large number of household are getting added to consuming class with growth in income levels. The number of household with income of Rs. 45000 per annum is expected to grow from 58 mn in 1999-2000 to 71 mn in 2006-2007. Of this 56% (48 mn households) is expected to concentrate in urban India. This large base of household with growing disposable income is expected to drive demand for organized retail in India.<br />The changes in demographics are driving changes in consumption pattern in the country. Central Statistical Organization (CSO) estimates private final consumption of consumers in India at about Rs. 15000 bn in FY02. Of the total private consumption, retail sector accounts for approximately 60% at Rs. 8570 bn. Of this, food and beverages, apparels and consumer durables are the top three categories of consumer spend and form 87% of the total retail sales in India.<br />Growth in Organized Retail<br />In sharp contrast to the global retail sector, retailing in India though large in terms of size is highly fragmented and unorganized. With close to 12 million retail outlets India has the largest retail density in the world.<br />However, unorganized retailers suffer due to inability to offer a wide range of products. This is worsened by their inability to create economies of scale in sourcing. Therefore, artificially inflated cost structure due to their inefficiency in the supply chain presents a possible opportunity for organized retailers to draw on this large market. Lack of consumer culture and low purchasing power has, in the past, restricted the development of modern retail formats.<br />Migration from unorganized to organized retail has been visible with economic development, in most economies. The Indian retail industry is evolving in the line of changing customer aspirations across product groups, with modern formats of retailing emerging. This is in line with what has been observed in other developed markets. Share of organized retail in the total retail sector in India was less than 2% in FY 2002, and is expected to increase in line with the experiences of other developing nations such as China and Poland.<br />Organized retail derives its advantages in generating operational efficiencies, while simultaneously to rising customer aspirations. Size drives economies on procurement, and lower logistics and marketing cost while delivering better value to the customer in terms of lower price, better quality, greater selection, improved service and in- store ambience.<br />A.T. Kearney has estimated India’s total retail market at $202.6 billion which is expected to grow at a compounded 30% over the next five years.<br />In 2003-04, organized retailing, which has an annual growth rate of 8.5%, swept past the Rs. 200 bn mark ($4.5 bn), a figure that appears quite small if one were to compare the extent of the total market<br />Organized retail, at present comprises merely 2% of the total market in India. This means that the untapped segment amounts to a whopping Rs. 9800 billion.<br />The share of modern retail is likely to grow from its current 2% to 15% over the next decade, analysts feel.<br />No wonder a heavyweight like the reliance group is planning to do a Wal-Mart in India.<br />In the next couple of years, India will see at two Indian businesses attaining the magic figure of Rs1000 cr. ($218 mn) in sales. Several others are expected to attain a critical mass as growth in the industry picks up momentum. This will be driven by two key factors:<br />Availability of quality real estate and mall management practices<br />Consumer preference for shopping in new environment<br />Formats in Organized Retail:<br />Traditional retailers have been unable to keep pace with the changing needs of consumers, thereby creating a large addressable opportunity for corporate players aspiring to enter the industry. Each retailer must identify and develop a strategy offering a compelling value proposition. Most existing formats have evolved to offer value propositions along price, convenience and specialization.<br />Format Definition Value Proposition Indian example<br />Supermarket Food and household products Convenience Spencer’s, <br /> Nilgiris<br /> Convenience <br /> Store <br />Departmental Store Multiple product categories, usually Service and choice Shopper’s stop,<br /> Lifestyle driven with apparels and lifestyle, <br /> Accessories predominantly pantaloon,<br /> Westside etc.<br />Hypermarket/ large format in big box format Price and Choice Spencer’s, Discount store with volume based discounted price Big-Bazaar,<br /> Giant<br />Specialty Store/ Extensive Range of products under Service Tanishq, Bata,<br />Category killers a single category Vijay sales etc.<br /> <br />Retail pricing<br />The pricing technique used by most retailers is cost-plus pricing. This involves adding a markup amount (or percentage) to the retailers cost. Another common technique is suggested retail pricing. This simply involves charging the amount suggested by the manufacturer and usually printed on the product by the manufacturer.<br />In Western countries, retail prices are often so-called psychological prices or odd prices: a little less than a round number, e.g. $6.95. In Chinese societies, prices are generally either a round number or sometimes a lucky number. This creates price points.<br />Often prices are fixed and displayed on signs or labels. Alternatively, there can be price discrimination for a variety of reasons, where the retailer charges higher prices to some customers and lower prices to others. For example, a customer may have to pay more if the seller determines that he or she is willing to. The retailer may conclude this due to the customer's wealth, carelessness, lack of knowledge, or eagerness to buy. Another example is the practice of discounting for youths or students. Price discrimination can lead to a bargaining situation often called haggling, in which the parties negotiate about the price. Economists see this as determining how the transaction's total surplus will be divided into consumer and producer surplus. Neither party has a clear advantage, because of the threat of no sale, in which case the surplus vanishes for both.<br />Retailers who are overstocked, or need to raise cash to renew stocks may resort to " Sales" , where prices are " marked down" , often by advertised percentages - " 50% off" for example." Sales" are often held at fixed times of the year, for example January sales, or end-of-season sales, or Blue Cross Sale.<br /> KOTA-The Prodigal little town<br />Kota, the prodigal little town is situated in south east Rajasthan’s Hadoti region, on the east bank of the Chambal. Kota has a glorious history of atomic power plants, kota stone and heavy industries as far as art and textile is concerned, Kota-Bundi school of miniatures stand a class apart and the legendary Kota-doria saries are worn by women all over the nation. Today, the city is best known for its exceptional coaching institutes adding new dimensions to the preparation of engineering and Medical Entrance examinations. The results have been phenomenal to the extent that aspiring students from all over the country are heading towards this city to frame their future. Thus, while Kota is developing future of millions.<br />KOTA: Economic & Social profile<br />Kota is the Divisional Headquarter of Kota Division comprising five districts namely Kota, Jhalawar, Bundi, Baran and Sawai Madhopur. The catchments area of the proposed City mall will cover a target population of approx. 50 Lacs, making it the most business friendly location. <br />Kota is the education city of India having student population of approximately 60,000. These students come here for preparation of IIT-JEE, Pre-Medical and Pre-Engineering Tests. <br />All the major educational institutes are in the close vicinity of the proposed mall, which includes ALLEN CAREER INSTITUTE, BANSAL CLASSES, CAREER POINT, RESONANCE & NARAYANA IIT ACADEMY etc. (Within a radius of 1 Km.)<br />Local population: Approx. 12,00,000, belonging to Middle Class, Higher Middle Class & Higher Income group.<br /> <br />The opening of the Dry Port (CONCOR) is helpful in fetching foreign Revenue out of their exports, including better business for Sandstones, Kota Stones & Kota Doria, etc.<br />Some of the large scale companies like Chambal Fertilisers, Samcor Glass, DCM Shriram, NTPC, Nuclear Power Corporation are providing ample employment opportunities, thus supporting the purchasing power of the people.<br />Kota is connected with the Major Cities by Railways being on the Delhi-Mumbai railway line. Two National Highways passes through Kota, i.e., NH 12 and NH 76. NH 76 is part of East-West corridor.<br />Store brand growth is stimulated by five factors:<br />The inability of mass marketers to innovate and sustain those innovations as competitive edges for long in many categories. So products offered by brands are actually very similar and the category role of reinforcing social or self-image is fairly limited. Store brands provide enough guarantee of quality through their own basic brand equity.<br />Consumers moving up the " diminishing return" curve. After getting a certain level of quality in many categories, consumers are unwilling to pay more for incremental quality and so are ready to make do with " acceptable quality" , which store brands offer very easily.<br />Media fragmentation makes its more and more difficult for mass marketed brands to actually connect with consumers. So the battle moves to the market place where by sheer ownership, store brands hold an edge.<br />Advertising cynicism that sets in as the consumers get more and more sensitive to messages being beamed and begin to see them as " sales talk and claims" . Store brands talk quietly from the shelf and in the environment that they are in.<br />Cost advantage, because store brands operate on much less overheads because their target markets are limited to the catchment area in and around the store and so depend much less on " expensive" mass media brand-building advertising. And above all there are fewer partners to share the " margin goodies" with.<br />Clearly, the impact of this retail revolution could be bigger than just the changing façade of the market place and enhancing consumer buying experience. It is a looming threat to " mass brand marketers" and the sooner they take cognizance of that, the better. Mass retailers may not only redefine shopping experiences, but also redefine market spaces.<br />India's retail revolution has been driven by large expectations, a flurry of interest by Indian and international companies and a large activity in the development and operation of retail malls. These malls anchored by large stores have become home to several large international and Indian brands that are using this channel to spread themselves out.<br /> <br /> CHAPTER-3<br /> COMPANY PROFILE<br />Indiabulls Financial Services Ltd is listed on the National Stock Exchange, Bombay Stock Exchange and Luxembourg Stock Exchange and is part of the Indiabulls Group (other listed group companies are Indiabulls Real Estate Limited and Indiabulls Securities Limited). The market capitalization of Indiabulls is around USD 3,330 million (as of 30 September 2007) and the consolidated market capitalization of Indiabulls Group is around $7,000 million. Consolidated net worth of the group is around USD 950 million (as of 30 September 2007). Indiabulls Group has attracted more than USD 1000 million of equity capital in Foreign Direct Investment (FDI) since March 2000. Some of the large shareholders of Indiabulls are the largest financial institutions of the world such as Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon Capital.<br />Group Companies<br />Indiabulls Securities Ltd. <br />Indiabulls Real Estate Ltd. <br /> History<br />Sameer Gehlaut, Rajiv Rattan and Saurabh Mittal started Indiabulls Group by acquiring a minor brokerage company, Orbis Securities, in 1999. The group started it business as a stock-brokerage firm and pioneered online brokerage business in India before diversifying into other financial services areas such as consumer credit (2004) and mortgages (2005). The group partnered with Farallon Capital to purchase land-mark bombay land assets and is currently building one of the largest integrated commercial real estate projects in India (valued at more than $2 billion). The group recently entered the Power generation business and aims to have more than 5000 MW of power generation under construction before 2008 end.<br />The three founders today control the Indiabulls Group.<br />Acquisition and Retail Sector<br />In the month of December 2007 - Indiabulls Wholesale Services, the retail arm of Indiabulls Real Estate, acquired Piramyd Retail, a company owned by the Ashok Piramal Group which runs 35 neighbourhood retail stores and seven lifestyle stores.<br />Indiabulls Wholesale has acquired 63.92 per cent stake in Piramyd Retail at an enterprise value of around Rs 208 crore (Rs 2.08 billion), said sources close to the deal.<br />They also made an open offer in the weekend to acquire an additional 20 per cent of the fully diluted paid-up capital of Piramyd Retail, at Rs 74.73 per share. Piramyd runs a lifestyle retail (Piramyd Megastore) and convenience store chain (Trumart) with 42 stores spread over 10 lakh square foot of retail space in states like Maharashtra, Gujarat, Rajasthan, Delhi, Punjab (India) and Madhya Pradesh.<br />Indiabulls Wholesale, which is setting up 30 hypermarkets in as many tier-II cities at a cost of Rs 1,500 crore (Rs 15 billion), plans to expand Piramyd's existing network of 42 stores to over 150 stores by the end of 2008.<br />With this acquisition, Indiabulls will have a presence across different formats hypermarkets, lifestyle and convenience store formats. The acquisition provides Indiabulls 1,300 trained people and 10 lakh square foot of prime retail space.<br />Pyramid Retail had reported a net loss of Rs 47.81 crore (Rs 478.1 million) on gross sales of Rs 162.01 crore (Rs 1.62 billion), taking up its accumulated losses to Rs 55.28 crore (Rs 552.8 million). Retailers have been bogged down by high real estate prices and supply chain issues.<br />Indiabulls Real Estate is developing commercial properties in Lower Parel in Mumbai and recently announced the launch of Indiabulls Centre One, its first building offering 1,400,000 square feet (130,000 m²) for lease.<br />It is also developing over 50,000 residential apartments across India and has over 4,000 acres (16 km²) of land bank which it intends to use for commercial and residential development.<br />Growth Story<br />Year2000-01Indiabulls Financial Services Ltd. established one of India’s first trading platforms with the development of an in house team.2001-03Indiabulls expands its service offerings to include Equity, F&O, Wholesale Debt, Mutual fund, IPO distribution and Equity Research.2003-04Indiabulls ventured into Insurance distribution and commodities trading.Company focused on brand building and franchise model.2004-05Indiabulls came out with its initial public offer (IPO) in September 2004. Indiabulls started its consumer finance business.Indiabulls entered the Indian Real Estate market and became the first company to bring FDI in Indian Real Estate.Indiabulls won bids for landmark properties in Mumbai.2005-06Indiabulls has acquired over 115 acres (0.47 km²) of land in Sonepat for residential home site development.Merrill Lynch and Goldman sac, one of the renowned investment banks in the world have increased their shareholding in Indiabulls.Indiabulls is a market leader in securities brokerage industry, With around 31% share in online trading, Farallon Capital and its affiliates, the world’s largest hedge fund committed Rs. 2000 million for Indiabulls subsidiaries Viz. Indiabulls Credit Services Ltd. and Indiabulls Housing Finance Ltd.Steel Tycoon Mr. LN Mittal promoted LNM India Internet venture Ltd. acquired 8.2% stake in Indiabulls Credit Services Ltd.2006-07Indiabulls entered in a 50/50 joint venture with DLF, Kenneth Builders & Developers (KBD). KBD has acquired 35.8 acres of land from Delhi Development Authority through a competitive bidding process for Rs 450 crore to develop residential apartments.Indiabulls Financial Services Ltd. is included in the prestigious Morgan Stanley Capital International Index (MSCI).Farallon Capital has agreed to invest Rs. 6,440 million in Indiabulls Financial Services Ltd. Indiabulls ventured into commodity brokerage business.Indiabulls has received an “in principle approval” from Government of India for development of multi product SEZ in the state of Maharashtra.Dev Property Development plc., has subscribed to new shares and has also acquired a minority shareholding from the Company.Indiabulls Financial Services Ltd. Board resolves to Amalgamate Indiabulls Credit Services Limited and demerge Indiabulls Securities Limited.<br />Indiabulls Retail Services Limited, formerly Piramyd Retail Limited, is engaged in the retail business. The Company has a brand presence with 47 stores located in seven cities. Indiabulls Retail operates nine Lifestyle stores under Indiabulls Megastore, 36 super mart stores under Indiabulls Mart and cash and carry stores under Indiabulls Wholesale. Indiabulls Megastores are lifestyle shopping destinations offering assortment across apparels, accessories, fragrances, cosmetics, footwear, home furnishing and decor products. Indiabulls Marts sell groceries and other daily need products in Mumbai, Pune, Nagpur, Ahmedabad, Jaipur and Indore. Indiabulls Wholesale offers over 18,000 articles for hotels, restaurants, caterers, food and non-food traders, institutional buyers and professionals.<br />Peninsula Spenta Senapati Bapat Marg Mathuradas Mill Compound Mumbai, 400 012 India +91-22-66154651 (Phone)+91-22-66154593 (Fax)Company website:http://www.indiabulls.com/Corporate History/Profile <br />  Officers and directors<br />Vikas Khandelwal >Compliance Officer, Company SecretaryOfficer Since: 01/03/2008Ikroop Singh Kehal >Whole Time DirectorOfficer Since: 01/03/2008Ikroop Singh >Whole Time DirectorOfficer Since: 01/02/2008Mridumesh K. Rai >Deputy General Manager – StrategySameer Gehlaut >Non-Executive Chairman of the BoardOfficer Since: 01/03/2008Rajiv Rattan >Non-Executive DirectorOfficer Since: 01/03/2008Tarun Tyagi >Non-Executive DirectorOfficer Since: 01/03/2008Udesh Jha >Non-Executive DirectorOfficer Since: 01/03/2008Aishwarya Katoch >Independent Director<br />   Indiabulls Retail is one of the fastest growing retailer having broad national brand presence with 47 stores located in 7 cities. Founded in 2007, Indiabulls Retail operates 9 Lifestyle stores under Indiabulls Megastore, 36 super mart stores under Indiabulls Mart andupcoming cash & carry stores under Indiabulls Wholesale. Indiabulls Retail is committed to provide customers with Best quality products at lowest possible price, Par Excellence customer service and shopping convenience never seen before. By FY09, Indiabulls Retail plans to increase Megastores to 35, Marts to 100 and Wholesale stores to 25 across India.  Indiabulls Megastores are one-stop lifestyle shopping destinations offering extensive assortment  across apparels, accessories, fragrances, cosmetics, footwear, home furnishing and décor products. With a covered area of around 530,000 square feet they are mostly located in malls in Pune, New Delhi, Jaipur, Ahmedabad, Ludhiana and Nagpur. Indiabulls Marts are neighborhood stores selling groceries and other daily need products in Mumbai, Pune, Nagpur, Ahmedabad, Jaipur and Indore. Currently, 35 such stores are operational covering an area of 130,000 sqft. Indiabulls Wholesale offers over 18,000 articles at the best wholesale prices for Hotels, Restaurants, Caterers, Food and Non-food Traders, Institutional buyers and professionals.  <br />Indiabulls plans retail foray<br />November 27, 2007 09:29 ISTAfter consumer finance and real estate, the Indiabulls Group is set to step into the retail business. Indiabulls Wholesale Services Ltd, a subsidiary of listed firm Indiabulls Real Estate Ltd will set up 30 hypermarkets across as many smaller cities in the country in the next 15 to 18 months with an outlay of Rs 1,500 crore (Rs 15 billion). <br />The first of these stores is expected to come up by March/April 2008 in one of the three cities the company is targeting simultaneously, confirmed Indiabulls director Gagan Banga. <br />These large-format stores, spread over 100,000 to 150,000 square feet, will be modelled on the lines of Costco Wholesale stores in the US, which operates the largest membership warehouse club chain in the world.<br />Costco focuses on selling products at low prices but at very high volumes. Goods are bulk-packaged and marketed primarily to large families and businesses - it expects customers to buy 10 kg of Surf against 500 gm. <br />Indiabulls hypermarkets would be a B2C (business-to-consumer) format and not business-to-business format like Metro (though the wholesale word may connote a different meaning). It will bank on a low operating cost model to provide higher discounts to customers.<br />" The value proposition to the consumer will be in the form of discounts," added Banga. <br />Indiabulls plans to offer discounts of 15 to 18 per cent on maximum retail price (MRP) against 5 to 10 per cent offered by other organised retailers today. <br />Each small city may have just one store. " We want to connect with as many people as possible. So, instead of having ten stores in Ahmedabad, we want to just one and pass on the benefits of scale to our customers," said Banga. <br />These stores will be located in the heart of the city, and not on the outskirts or suburbs as most hypermarkets are located in the US or Europe. <br />The company is targeting Ahmedabad, Jodhpur, Indore, Kanpur, Patiala and Ludhiana, many of which have seen a spurt in per capita income (India's per capita income has doubled to $1,000 in the last five years).<br />" Tier-II cities are better suited for a discount model. Bulk-purchasing cannot take off in big cities as there's no space to store," said Banga. <br /> The company has procured land in 21 of these 30 cities, where construction is on, claimed Banga. Indiabulls Wholesale will be the anchor tenant in these malls, which will also house a multiplex, and other smaller shops. <br />The malls will be owned by the parent, Indiabulls Real Estate Ltd, which is also developing 3.5 million sq feet of commercial space in Mumbai's mill lands. <br />Indiabulls' retail foray is being led by CEO Ikroop Singh, an Indian who was working with the Microsoft and has huge experience in deploying technology in retail and has done so for several wholesale companies in the US. Ikroop has put together a team of 70 to 80 people, including three expatriate executives. <br />Indiabulls' entry into retail comes after big groups like Reliance Aditya Birla, and RPG and Future Group have got a headstart and are busy consolidating.<br />IndiabullsTypePublic (NSE: [1])Founded2000 As Indiabulls Financial Services Ltd.HeadquartersMumbai, IndiaKey peopleSameer Gehlaut, Chairman & CEO Rajiv Rattan, President & CFO, Saurabh Mittal DirectorIndustryFinancial ServicesProductsSecurities, Consumer Finance, Mortgages, Real EstateEmployees~ 20000 (2007)Websitehttp://www.indiabulls.com/<br />Indiabulls (NSE: INDIABULLS) is India's leading financial services and real estate company with a Pan India presence.<br />Chairman Sameer Gehlaut (previously with Halliburton, an oil company) started Indiabulls in May 2000 as an online stock brokerage with two fellow engineering graduates from the Indian Institute of Technology, Delhi (Rajiv Rattan, COO (previously with Schlumberger (also an oil company) and Saurabh Mittal, Director).<br /> <br /> CHAPTER-4<br />research methODOLOGY<br />Project Title:- “AN aNALYSIS OF CUSTOMER PERCEPTION ABOUT <br /> INDIABULLS MART AT KOTA CITY”<br />objectiveS<br />This survey is done regarding to the awareness about the Indiabulls Mart among the people.<br />The main objective of this research work was to know the perception of the people related to the products and services.<br /> To know about<br />Fruits and Vegetables section <br />All items of the Indiabulls Mart<br />Aware about the different promotional scheme<br />Perception about the store cleanness<br />The Indiabulls Mart as a brand<br />METHODOLOGY: --<br />This section of the report is very important from the viewpoint that is describing the whole research procedure of the report. This section includes the overall research design, the sampling procedure, the data collection method, the field method, and the analysis procedure. These are stated as fallows: --<br />(1) RESERCH DESIGN:--<br /> <br />Research design is the specified pattern of the framework for controlling the collection of data accurately and by much economical manner: -- <br /> HARPER W.BOYD & RALPH WASTFALL<br />The research is the basic plan, which guide the data collection and analysis phases of the project. It the frame work to design and specifies: --<br />The type of information is to be collected.<br />The source of data.<br />Data collection procedure.<br />A project having good research design will make sure what the information gathered is—<br />Consistent and accurate with the research and study objective.<br />The collected is accurate and collected by accurate and economical procedure.<br />For making our report a successful report we have design our whole research in the following manner: --<br />Specify the research objectives:-- In this step of the research process I had first obtain answer that “what is the purpose of the study?” and “what are the objectives of our research?” answering these question help us to give our report a right direction to achieve the desired goal of our research. I had identified some problems, which I have to come across during our research project and our different sources, which I have to adopt to make our research successful. <br />Preparing the list of the needed information— After making clear statement of desired objectives it is necessary for me to prepare a list of the information needed to attain the objectives. The content of such a list will be determined by the objectives of the research and the situation leading to research request. The list should be such that it fulfils the desired need. For fulfilling the desired need the very first thing which strikes the mind is that to how to get more and more information from the customer in a limited time period. The need can be fulfil by papering the appropriate and fulfil the questionnaire, which can be circulating to different customer to get the desired information. Questionnaire should be such that it may not carry any technical terms. For this purpose I should collect all information of the product for which has been carrying out through secondary data and consulting different articles and journals.<br />(2) DATA COLLECTION METHOD:-- This steps include whole process by which the data has been collected for carrying out the research process. This process include that by what mean the data has been collected and organized whether it is form secondary source or from primary sources, were result collected by survey or observation. Whatever method chosen should fulfil the desired need of research. For this reason we survey method for carrying out our research. The survey we had conducted by papering standardized questionnaire. This questionnaire contains a list of questions to be asked to the respondents. Each question is worked exactly as it is to be asked, and the question is to be listed in an established sequence. The questionnaire contains open-ended question and closed ended question.<br />REASON FOR CHOOSING THIS METHOD:-- <br />This method we found appropriate for our research work because of fallowing reason: --<br />Speed and Cost: --The greatest advantage we had found for this method is cost and time saving. I found that this is the appropriate mean of collecting ideas and taste of various customers in an economical way and with a limited period of time.<br />Versatility: -- The greatest advantage of this method is its versatility. This method helps us to obtain the taste, ideas, and preferences of the large number of people. The data help to study various problem and finding out their solutions in a much satisfactory way.<br />(3) SAMPLING: -- This part of our research report includes the type of sample I had taken to carry out our research work. My sample consists of 150. These customers are mainly are belongs to KOTA . In My sample I had tried to cover the Customers of normally almost this area. This much of sample size I found appropriate for providing the right direction to my research work in finding the desired conclusion.<br /> DATA TABULATION & ANALYSIS<br />Table 1. From where do you purchase ?<br /> <br /> (a) Kirana store - 63 <br /> (b) Organized retail- 87<br /> 58%42%Kirana storeOrganised retial<br />Table 2. Would u like to do shopping under a single roof.<br />Yes- 30 <br />No - 120<br />Yes80%No20%YesNo<br />Table 4. Any scheme or discount can change your perception?<br /> <br /> (a)Yes - 90<br /> (b)No - 60<br /> <br />Yes60%No40%YesNo<br />Table5.How much distance would you like to travel for shopping?<br /> (a) 1 Km - 35 <br /> (b)2 Km - 56 <br /> (c) 3Km - 48 <br /> (d) 4 Km - 11<br />1 Km 2 Km 3 Km 4 Km <br />Table 7.Which category you did not find in retail outlet?<br /> (a)Appreals - 42 <br /> (b) Local Brands - 15 <br /> (c)White goods - 78<br /> (d) Others - 15<br />28%10%10%52%ApprealsLocal brandsl OthersWhite goods<br />Table 8.Which retail store have the better billing speed?<br /> (a) Spencer’s - 53<br /> (b) Big Bazar - 49<br /> (c) Reliance Fresh - 27<br /> (d) Indiabulls Mart - 21<br />35.33%32.66%14%18%Spencer’sBig BazarIndiabulls MartReliancefreshl<br />Table 9.What do feel about the Staff Behaviour?<br /> (a) Friendly - 57<br /> (b) Average - 46<br /> (c) Poor - 47<br />38%30.66%31.33%Friendly AveragePoor<br /> Table 11. We would like to know your views about -------(mention current brand)<br /> Overall good shop ------5-------4--------3-------2--------1-------Overall bad shop<br /> <br />VariableOverall good shopGood shopAverageBad shopOverall bad shopVariety or Range 58(38.66%) 32(21.33%) 26(17.33%) 18(12%) 16(10.66%)Service quality 18(12%) 22 (14.66%) 42(28%) 32(21.33%) 36(24%)Freshness 39(26%) 47(31.33%) 38(25.33%) 14(9.33%) 12(8%)Price 5(3.33%)12(8%) 28(18.66%) 46(30.66%) 59(39.33%)Brand image 36(24%)42(28%) 42(28%) 18(12%) 12(8%)Billing time 4(2.66) 9(6%) 47(31.33%) 52(34.66%) 38(25.33%)Promotional offer 46(30.66%) 47(31.33% 39(26%) 12 (8%) 6(4%)<br /> <br /> <br />SPANCER, 25 Indiabulls mart, 10 RELIANCEFRESH, 65010203040506070BRAND IMAGE IN %SPANCERIndiabulls MartRELIANCEFRESHNAME OF THE RETAILERCUSTOMER RESPONSE GRAPH WHO VISIT THE OUTLET<br /> FINDINGS<br />I surveyed more than hundred and fifty customers and found that their perception are common in some aspects but at some extent it vary from product to product. <br />I found customers where complaining about the freshness about the fruits and vegetables and regretting why they have came here for shopping purpose.<br />Majority of the customers’ grievances regarding to vegetables and fruits were as follows:<br />Vegetables are not regularly fresh<br />Vegetables are comparatively costly than the vendors<br />Vegetables and Fruits get rotten soon after purchasing<br />I found some of the customers were complaining about the services. They were mainly complaining<br />1. The staff do not respond properly<br />2. The promotion scheme changes at rapid pace<br />3. They have to stay for long time in queue at billing counter<br />I also found the customers were complaining about the staple goods also.<br />They were complaining <br />The staple goods get denature due to keeping in cold environment<br />Some products are expiry products<br />Smaller packs of the product cost double than the larger pack<br /> <br /> <br />CONCLUSION<br />►58% respondents purchase from kirana store.<br />►80% respondents like shopping under a single roof.<br />►60% respondents can change there perception due to any scheme/discount.<br />►37.33% respondents can move 2 km for shopping.<br />►52% respondents did not find white goods in retail outlet.<br />►35.33% respondents say that Spencer’s billing system better <br /> than other. <br />►38% respondents satisfied with staff behavior but 31.33% <br /> respondents did not satisfied. <br />SUGGESTIONS<br />-To increase promotion scheme should be more in Indiabulls Mart because still lot <br /> of competitor are survive in the market so capture the target market these things are play a big role.<br />-Billing and other services should improve.<br />-Mark down of SKUs especially for Fruits & Vegetables to be done at proper time.<br />-Price should be reasonable in Indiabulls Mart.<br />-Provide local brand.<br />-Replacement service should be improve.<br />-Add more product and brand in store.<br /> There are various avenues through which Indiabulls Mart can attract more customers from current catchments area as well as expand its area of catchment. However, to make it more acceptable in the middle class and higher- middle class it first need to the hurdle of it being looked upon a destination for only higher- middle and elite class customers. Therefore, making Spencer’s a favorite destination for shopping among them; there is a need of several below-the-line promotions which should be communicated through an aggressive Above-the-line communication strategy.<br />However, customers in the catchment area often do cross-shopping and don’t find a specific reason to visit exclusively Indiabulls Mart; it needs to give them a reason to visit exclusively Indiabulls Mart.<br />Membership<br />Reason- Customers exhibited the fact that they prefer to visit a store which is offering them rewards such as discounts, gifts, schemes etc. it has been observed in most of the cases that the same card is being used commonly by husband and wife. Respondents those were not the member of any other hyper store echoed the view that “Lack of information about the benefits of membership” was the primary reason of not being the member of any hyper store. One more reason was that “they never felt need of membership”.<br />Details- Efforts should be done to make people aware about the benefits of membership at Indiabulls Mart. But communication should not persuasive because “Any communication which the customer perceives is to be non-persuasive that is more likely to be accepted.” Indiabulls Mart should make them feel the need of membership.<br />Inside the store discount should be mentioned on the price tag. <br />Visual merchandising (VM)<br />It is an important function and lots of tools have been developed in west. It is the way merchandise is displayed, SKUs (stock keeping units) are stacked, use of colors and sequence blocks, lighting, windows, mannequins. It makes shopping easier for customers and helps in portraying an unprecedented image of a retailer.<br />The new tools of VM apart from color, lighting, texture, mannequins and other traditional aids to engender the much-used 'wow effect' are;<br />Digital Signage’s & High Definition Screens,<br />Mobile Technology (SMS/ Bluetooth<br />Touch Screens,<br />RFID Technology<br />Moving Mannequins<br />Holography “Magic of diaphanous”<br />Scent Technology<br />IC Colour - using a software programme to control intelligent lighting fixtures, IC colour captures the aesthetic energy of a video source and translates it into a colour theme that saturates the surrounding area, enhancing the content and sensory stimulation,<br />Interactive POS<br />Robots: Chatbot, a new avatar of robotics can interact with people and give response to the shopper's queries.<br />Seasonal variations<br />Seasonal variations on stocking pattern and need to clear inventory at the end of season should be understood by the retailer. Typically once an item is sold from the outlet, retailer ensures that there is no repetition of same. It gets replaced by different design, style, and colour.<br /> <br />Importance of store layout, décor is very critical. A browser visiting the store frequently likes to see changes in the layout otherwise he may carry the impression that stocks are not moving out of the store. Category management becomes very crucial function as transformation of design into production and delivery before the fad/ fashion changes occur in the market<br />Decision Support System (DSS)<br /> Decision Support System (DSS), which provide timely and accurate information, can be viewed as an integrated entity providing management with the tools and information to assist their decision making. There is a constant need to capture accurate information and make it available not only within the store but send it to warehouse, distributors and manufacturers. <br />Decision Support System plays a vital role for organized apparel retailers. There is a tremendous change in the type of DSS in retail outlet, as development in affordable technology results in growing use of more sophisticated DSS tools. Study indicates that apparel retailers are keen to invest in DSS systems as long as ROI is assured. There is a tendency to use customized DSS developed by a local supplier as per the needs. During the development and implementation phase few teething problems are faced but once sorted out through close interaction and feedback, DSS becomes operational and scalable. <br />It appears that Indian apparel sector is in a trajectory and new players are keen to enter with latest DSS tools to use information for decision making which may provide them a competitive edge. <br />The integrated solution will help the company streamline its operations in the areas of retail, manufacturing, finance and accounting management, customer order processing, distribution, and supply chain management.<br />It has helped the retailer to effectively manage its back-end by providing stock visibility across the supply chain from 'vendor' to 'shelf' and to optimize inventory levels for savings on interest costs and improved return on investment (ROI), besides other benefits. As a result, there has been improvement in service levels at retail stores and overall increased efficiencies in manufacturing and distribution operations.<br />Increase Footfall<br />Get customers to walk through your front door. Here are some techniques to increase footfall: <br />Have a grand opening: - Planning on opening a business in the near future? Make Day One as big a deal as possible. Provide food, offer door prizes, and serve up other enticements and entertainment to make the day memorable. And, while you're doing it, keep tabs on who shows up. " Nothing is as powerful as a grand opening to attract customers," says Robert Smith of Robert Smith and Associates, a Rockton, lll, public relations concern. " But, once they arrive, you should collect their names and addresses or ask for their business cards." <br /> <br />Plan on holding other promotional events: - Just because your business has been up and running for a while doesn't preclude celebrations that attract foot traffic. Any promotional event that draws attention can be effective. Look into an in-store raffle or giveaway, and advertise the event as widely as your budget will allow.<br />If yours is a business that can somehow connect with a local celebrity — say, an author or sports figure — having him or her on the premises can bring in clientele. But, no matter what you do, make it sufficiently fresh and appealing. " Promotional events have to be really exciting and different; otherwise, people just won't come," says Rick Segal, author of " The Retail Business Kit for Dummies." (For tips on hosting events, see this five-step strategy for a winning marketing campaign.)<br />Make your business newsworthy: - Foot traffic on the day of an event is one thing. Attracting business beyond that 24-hour window is something else again. That's why it's important to leverage media whenever possible. For instance, donating a portion of the day's take to charity can win a flattering article in your local newspaper. Taking a completely different tack, investigate whether a radio station would be willing to broadcast live on the day of your promotional event. The key is to grab the attention of customers who can't make it in at that particular time. That drives foot traffic in the future. " The more creative the event, the more likely that a newspaper will write about it," Segal says. " And that makes it all the more likely that customers will read about it and come check it out." <br /> <br />Have a sale: - Old fashioned? May be. Still, nothing beats the lure of something that's less expensive for a limited amount of time. And, while the idea of a sale may seem a bit blasé to some, technological advances have made sales events more potent than ever before. For example, if you maintain a database of customers, contact them via an e-mail newsletter to let them know of upcoming sales events and other promotions. To further boost foot traffic, urge them to pass along your e-mail to others. That's not only effective but exceedingly cost efficient, as you're not dropping money on mass mailings that only saturates the uninterested. " Offers that come with a sense of urgency are always effective to get customers to come to stores," says Irene Dickey of the University of Dayton's School of Business Administration.<br /> <br />Host a seminar or workshop: - Boosting foot traffic doesn't even have to involve a direct effort to sell a product or service. These days, education is every bit as important, as consumers want to know how to get the most out of what they buy. And that makes in-house seminars and workshops powerful weapons to build foot traffic. To illustrate: If you own an accounting firm, offer free tax-cutting workshops. Sporting goods stores can consider a variety of events, from strength training clinics to nutrition seminars. But, no matter the actual event, publicize it to the hilt. " Promote the event via in-store signage, fliers, ads and press releases," says Segal. " Home Depot does it and so does Williams-Sonoma. And look at how successful they are." <br /> <br />Follow up with your contacts: - Even the best-planned promotional event is of little import if you fail to leverage the initial contact. Keep encouraging foot traffic by staying in touch with customers. Let them know about events that may otherwise attract little attention. Encourage them to pass along the news with friends and neighbors. " A great event is only half the battle," Smith says. " If you want consistent foot traffic, you have to follow up, and then follow up some more. Send those offers, special announcements or anything you can think of to get them into your store." (For ways to market your business inexpensively, see this page.)<br /> <br />Emphasize customer service: - One advantage that a bricks-and-mortar store has over mail-order and Internet competitors is a personal relationship with customers. Special events can be terrific in building foot traffic, but what keeps customers coming back — and spreading the good word as they do — is the product knowledge and enthusiasm that can only be conveyed face to face. Things may be cheaper on the Web or via the post office, but getting to know your customers and what they value can trump those handicaps. And, in turn, can build a steady stream of foot traffic for the long haul.<br />

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