Retail project report

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Market survey report

Retail project report

  1. 1. EXECUTIVE SUMMARYAfter going thick on the thing now time is to make complete picture Organized RetailStores are the market leader in the field of Retailing. These stores have been very successfulin its strategy of upgrading the consumer in the mobile business segment. Organized storeshave made sure that it makes its consumers move up the product chain by introducing sameproducts to the new customers. Mostly respondents prefer Branded Product. Manyrespondents are buying products by brand name. Fewer respondents are purchase once in amonth, Mostly respondents are usually visit these stores, some respondents purchase thisbrand by Friends and some respondents are preference of brand by brand nameCustomer satisfaction, a business term, is a measure of how products and services supplied bythese stores meet or surpass customer expectation. It is seen as a key performance indicatorwithin business and is part of the four of a Balanced Scorecard.In a competitive marketplace where businesses compete for customers, customer satisfactionis seen as a key differentiator and increasingly has become a key element of businessstrategy.
  2. 2. Contents1. Introduction2. Company Profile3. Importance & Scope4. Research Objectives5. Hypothesis6. Research Methodology7. Data Analysis8. Findings9. Suggestions10. Limitations11. Bibliography12. AnnexureWhat IS RETAIL
  3. 3. IntroductionRetail consists of the sale of goods or merchandise from a fixed location, such as adepartment store, boutique or kiosk, or by mail, in small or individual lots for directconsumption by the purchaser. Retailing may include subordinated services, such as delivery.Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods orproducts in large quantities from manufacturers or importers, either directly or through awholesaler, and then sells smaller quantities to the end-user. Retail establishments are oftencalled shops or stores. Retailers are at the end of the supply chain. Manufacturing marketerssee the process of retailing as a necessary part of their overall distribution strategy. The term"retailer" is also applied where a service provider services the needs of a large number ofindividuals, such as a public utility, like electric power.Shops may be on residential streets, shopping streets with few or no houses or in a shoppingmall. Shopping streets may be for pedestrians only.Sometimes a shopping street has a partial or full roof to protect customers from precipitation.Online retailing, a type of electronic commerce used for business-to-consumer (B2C)transactions and mail order, are forms of non-shop retailing.Shopping generally refers to the act of buying products. Sometimes this is done to obtainnecessities such as food and clothing; sometimes it is done as a recreational activity.Recreational shopping often involves window shopping (just looking, not buying) andbrowsing and does not always result in a purchase.List of Various Retail Companies
  4. 4. • Provogue• Reliance• Big Bazar• Shoppers Stop• Pantaloons• RahejaCompany’s Profile
  5. 5. ProvogueINTRODUCTIONThe IndustryThe apparel sector is structurally a labour intensive, low wage industry with some differencesacross its market segments. However in the high-quality fashion market, the industry ischaracterized by modern technology, relatively well-paid workers and designers and a highdegree of flexibility. The total clothing market in India is estimated at around Rs 78,000Crores comprising of all forms of clothing including school uniforms; and is still largelytraditional wear with made-up garments produced by local tailors from cloth bought by theconsumer.The RTW market is still undergoing development in India and this growth has acceleratedover the past ten years in line with the economic development and change in lifestyles of thepopulation and the boost given by the Government in the form of various initiatives.Business we are in the business of designing, manufacturing and selling of branded readymade garments and other accessories under the brand “Provogue” which has been positionedas a fashion label in the Indian market. A major portion of apparel garments is manufacturedat an in-house plant at Daman (UT), India, with the remaining garments and accessoriesbeing outsourced. Our distribution channel comprises of a mix of own branded stores(Provogue Studio) and a network of national chain stores and Multi Brand Outlets (MBO).Branding and MarketingWe have grown the apparel business from a strong branding and marketing foundation. In theseven years since the launch of Provogue, we have come to be acknowledged as a leadingbrand in our segment and are known for innovative and powerful marketing and advertising
  6. 6. campaigns. While our marketing expenditures are in keeping with the norms for the apparelbusiness, the consumer recall for the Provogue label is high because of the creative natureof our campaigns and its relevance to the Indian consumer. Provogue is a brand designed forIndians by the Indians and reflects contemporary orientation and styles. The brand attributesthat we have driven are:• Bold and Iconic• Style and Contemporary Fashion• Innovative and Change• First mover and NewsworthyManagementThe company is currently managed by Board of Directors comprising of 11 directors.Mr. S. Jambunathan is the Non - Executive Chairman. The day-to-day affairs of thecompany are being managed by Mr. Nikhil Chaturvedi, Managing Director, assistedby five Whole time directors.
  7. 7. PantaloonsPantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retailformats in both the value and lifestyle segment of the Indian consumermarket. Headquartered in Mumbai (Bombay), the company operates over 16 millionsquare feet of retail space, has over 1000 stores across 73 cities in India and employs over30,000 people.The company’s leading formats include Pantaloons, a chain of fashion outlets, BigBazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blendsthe look, touch and feel of Indian bazaars with aspects of modern retail like choice,convenience and quality and Central, a chain of seamless destination malls. Some of itsother formats include Brand Factory, Blue Sky, aLL, Top 10 and Star and Sitara. Thecompany also operates an online portal, futurebazaar.com.Future Value Retail Limited is a wholly owned subsidiary of Pantaloon Retail (India)Limited. This entity has been created keeping in mind the growth and the current size ofthe company’s value retail business, led by its format divisions, Big Bazaar and FoodBazaar.
  8. 8. The company operates 148 Big Bazaar stores, 169 Food Bazaar stores, among otherformats, in over 70 cities across the country, covering an operational retail space of over 6million square feet. As a focussed entity driving the growth of the groups value retailbusiness, Future Value Retail Limited will continue to deliver more value to its customers,supply partners, stakeholders and communities across the country and shape the growth ofmodern retail in India.A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, alarge-format home solutions store, Collection i, selling home furniture products and eZonefocussed on catering to the consumer electronics segment.Pantaloon Retail is the flagship company of Future Group, a business group catering to theentire Indian consumption space.Reliance retail
  9. 9. It’s time for the Reliance Retail juggernaut to unleash three more specialty formats onunsuspecting masses. They’ll all be under the Home umbrella-and the venture could even becalled Reliance Home-with separate for-mats for furniture, furnishing and kitchen equipment.That will be yet another launch of yet another specialty format from RRL, in yet anothercategory. Consider the rollout-which Ronak would rather term a “cloudburst,”-so far:Hypermarkets, Reliance Town Centers, supermarkets, convenience stores, specialty stores(digital, health and wellness, apparel, etc.), rural business hubs; in categories like food &grocery, consumer durables & electronics, auto care and lifestyle. The big bang of course hasbeen in foods & grocery, where RRL has 572 Reliance Fresh stores across 59 cities. Andthere’s the biggest store in India, the hyper mart that’s branded Reliance Mart (there are threeof them so far), in Ahmedabad, spread over 165,000 sq. ft. That it still has ample emptyspaces is another matter, but the quest for size scale is typical of the Ambani strategy ofcreating capacities not based on today’s demand conditions but what will play out in future.Ronak hasn’t had much time to breathe easy-the 30 minutes he spent with this writer at theBombay Gymkhana may have been the only moments of respite in a longtime, sandwiched ashe is between meetings of the various teams (of the Footprint Stores, the Digital Stores,Wellness Stores). Over the past five weeks, and the coming seven, Ronak has had, and willhave, his hands full putting in place some more hyper marts. By the July the hyper marts willbe spread over 1 million sq. ft. Currently, RRL is spread over 3.5 million sq. ft (105
  10. 10. million sq. ft being hogged by the 572 Reliance Fresh Stores selling fruits & vegetables)-all done over the past 17 months, which has company officials boasting that this is thefastest rollout n such a scale in the world. “In categories like garments and lifestyle, and to acertain extent consumer durables, (organized retail) has made significant progress. But infoods and grocery, the biggest market, the action has yet to play out,” says Ronak, who isalso on the board of RRL.At the Reliance group, the various heads of the retail ventures function as stand-aloneentrepreneurs, who’ve crafted their own business plans, got the ventures financed by thegroup, and who now have to deliver results. The common thread running through thesevarious forays is a burning desire to provide quality products and services at the best prices,and in the most convenient setting. For this purpose, Reliance is also attempting to create anefficient global supply chain in an effort to add more value. “We have seen significantprogress at the shop-keeping end of organized retail. But the competitive edge will lie withthose who are successful in creating an efficient supply chain. The big lacuna today is inlogistics and distribution, which also makes it a significant opportunity,”SHOPPERS STOP
  11. 11. Shoppers Stop is an Indian department store chain promoted by the K Raheja Corp Group(Chandru L Raheja Group), started in the year 1991 with its first storein Andheri, Mumbai Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "theEmerging Market Retailer of the Year Award", by World Retail Congress at Barcelona, onApril 10, 2008. Shoppers Stop is listed on the BSE. With the launch of the Navi Mumbaidepartmental store, Shoppers Stop has 34 stores in 15 cities in India.Shoppers Stop is one of the leading retail stores in India. Shoppers Stop began by operating achain of department stores under the name “Shoppers’ Stop” in India. Shoppers Stop has 35stores across the country and three stores under the name HomeStop.Shoppers Stop retails a range of branded apparel and private label under the followingcategories of apparel, footwear, fashion jewellery, leather products, accessories and homeproducts. These are complemented by cafe, food, entertainment, personal care and variousbeauty related services.Shoppers Stop launched its e-store with delivery across major cities in India in 2008. Thewebsite retails all the products available at Shoppers Stop stores, including apparel, cosmeticsand accessories. Shoppers Stop opened stores in Amritsar, Bhopal and Aurangabad.ProductsShoppers Stop retails products of domestic and international brands such as Louis Philippe,Pepe, Arrow, BIBA, Gini & Jony, Carbon, Corelle, Magppie , Nike, Reebok, LEGO, andMattel. Shoppers Stop retails merchandise under its own labels, such as STOP, Kashish,LIFE and Vettorio Fratini, Elliza Donatein, Acropolis etc. The company also licensees for
  12. 12. Austin Reed (London), an international brand, who’s mens and womens outerwear areretailed in India exclusively through the chain. In October 2009, Shoppers Stop has boughtthe license for merchandising Zoozoo the brand mascot for Vodafone India.MarketingIn April 2008, Shoppers Stop changed its logo and adopted the mantra "Start Something Newmantra.And introduced international brands like CK Jeans, Tommy Hilfiger, FCUK,Mustang, Dior across the stores. The focus of the reposition was on the service, ambience upgradation and customer connect. Shoppers Stop connects with the youth audience throughadopting the communication routes relevant to youth, up the fashion quotient throughmerchandising, and create ambience that connects with the mindset. The brand campaignaddresses environment-related issues in a youthful, tongue-in-cheek manner. Shoppers Stopas a brand active on social media marketing platforms with Face book and Twitter to connectwith this audience.MerchandisingMerchandising opportunities like the launched Zoozoo merchandise and film merchandise.Loyalty programShoppers Stop’s has a loyalty program called First Citizen. They also offer a co-brandedcredit card with Citibank for their members.Crossword BookstoresCrossword Bookstores is the largest chain of bookstores in India with 52 branches. ShoppersStop acquired 100 per cent stake in bookstore chain Crossword. Crossword is positioned as alifestyle bookstore with their spacious, well laid out stores which encourage customers easein browsing through the merchandise of books, music, stationary and toys.
  13. 13. BIGBAZARBig Bazaar was launched in September, 2001 with the opening of three storesin Calcutta, Bangalore and Hyderabad in 22 days. Within a span of ten years, there are now148 Big Bazaar stores in 80 cities and towns across India.Big Bazaar is designed as an agglomeration of bazaars or Indian markets with clustersoffering a wide range of merchandise including fashion and apparels, food products, generalmerchandise, furniture, electronics, books, fast food and leisure and entertainment sections.Food Bazaar, a supermarket format was incorporated within Big Bazaar in 2002 and is nowpresent within every Big Bazaar as well as in independent locations.
  14. 14. There are now 169 Food Bazaar outlets, including those located within Big Bazaar.A typical Big Bazaar is spread across around 50,000 square feet of retail space. While thelarger metropolises have Big Bazaar Family centers measuring between 75,000 square feetand 1,60,000 square feet, Big Bazaar Express stores in smaller towns measure around 30,000square feet.
  15. 15. Most of the Big Bazaar stores are multi-level and are located in stand-alone buildings in citycenters as well as within shopping malls. These stores offer over 200,000 SKUs in a widerange of categories led primarily by fashion and food products.Big Bazaar is part of Future Group and is owned through a wholly owned subsidiaryof Pantaloon Retail India Limited that is listed on Indian stock exchanges.RAHEJA’SRaheja Corp is a success story spanned across decades and continues to achieve highertargets relentlessly for quality performance and service in diverse fields of real realtybusiness, hospitality sector and retailing outfits.
  16. 16. The group has made an impact on the supply side of the modern day living. A style that hasbeen the dream of new class of consumers, a style encompassing the whole range ofconsumption pattern of the young and the upcoming consumers that has become synonymwith the brand K Raheja Corp.The group has pioneered the trend of setting world class hotels and convention centers acrossthe country with enhanced facilities to meet the business and leisure needs of the internationaland domestic traveler.The higher standards set by the group in its pursuit to position India on par with thedeveloped economies of the world and with a vision to be and remain at the commandingheight of Real Estate Business.Retailing in India is up for transition. It has broken the safe and claustrophobic space of aneggshell and rearing to grow into a giant that will match the retailing practices of the west.Crossword, Inorbit Mall & Hyper City have set new bench marks on the basis ofinformation and adaptation of worldwide changes, innovations and new techniques in
  17. 17. 1991 Shopper’s Stopretailing practices.2000 Crossword – Book Store2004 Inorbit Mall2006 Hypercity2008 Inorbit VashiImportance and scope of retailingWhile there is a lot of debate going on the impact of organized retailing on unorganizedsector, there is little we know of how it will impact our economy in general. Common sensesays that perhaps it will help the economy (every better looking thing is good for the
  18. 18. economy. Swanky Call centers that brought outsourcing to us helped in fueling the feel goodfactor.. Same is for IT/BT companies. So similar should be the case with these retailers)Surprisingly there are not enough reasons to contest this belief. No matter what communistssay or Mayawati does in UP, or what short term glitches we witness on Sensex or inUS economy, organized retailing is here to stay and grow at a breathtaking place.So when it is so, I tried to look at it form a holistic point of view and no matter how much Idesist to say this but yeah, I ultimately ended up with a PEST analysis. Here are the mainpoints from that (I might post the complete version sometime later but before that I myselfwant to refine this and include the reaction that I get. if any.PoliticalEven though the government is yet to give the sector an Industry status and we see aggressivepolitical protests, some aspects of the Government’s policy have been favorable on otherfronts. For example- let’s take Delhi, NCR and Mumbai. In Mumbai, the Government isreleasing unused textile mill land for retail development. In Delhi & NCR, the Governmenthas released large tracts of land for retail development. Overall in politics, those in oppositionwill always oppose so is there any point in talking about this?Anyway main points to look out for are :1. Decision on FDI2. Government’s stand for foreign players
  19. 19. EconomicalAlthough the organized retail sector constitutes only 4-5% of the USD 350 billion Indianretail market, it is expected to grow 400%- from USD 12-15 billion currently, to over USD30.0 billion by 2010. There is hectic activity in the sector in terms of expansion, entry ofinternational brands and retailers as well as focus on technology, operations and processes.All these present a tremendous opportunity in this new high growth industry. A large portionrelated to economic impact has already been covered in the previous sectionsThe important thing is that the growth of this sector will create a totally new demand in oureconomy. Households across India are now exposed to products and services they had neverseen before, the tempting value proposition and an inviting atmosphere is making thempurchase these items. Without the new stores the same money would have been sitting idle insome bank lockers. But now the money is out in market, helping the manufacturers to comeout with new and innovative products. A great aggregation is also taking place now.. you cango and buy as much low quantities that you want, and the systems assist you in this becauseno one is bothered.Imagine what happened in the Shampoo sachet market in India, prior to the entry of Velvetwhich later transformed the industry landscape. No one was catering to the huge demand ofaffordable hair care solution. And today sachets hold 76% of the total shampoo market in
  20. 20. India. That means at least 60% more demand generation..
  21. 21. SocialThere has been a demographic shift in India, emergence of a larger middle and upper middleclasses and the substantial increase in disposable income has changed the nature of shoppingin India from need based to lifestyle dictated. In addition to this, facilities like creditfriendliness, availability of cheap finance and a drop in interest rates have changed consumermarkets.Organized retail increases the efficiencies in the agriculture sector by removingintermediaries in the food chain; as a result, farmers are getting better prices for theirproduce. The private retail players can actually introduce new technology, seeds, and thusencourage farmers to improve their productivity.Unorganized retail is feeling the heat of the emergence of the organized retail due to thechanging trends of the Indian consumers. Antagonist lobby claims, “In the last four years, anestimated two crore traders have been rendered jobless due to the opening of big shoppingmalls in the country”. However there is no evidence of a decline in overall employment in theunorganized sector as a result of the entry of organized retailers. According to the ICRIERsurvey, the unorganized sector witnessed a closure rate of 4.2% of which only 1.7% closureswere attributed to competition from modern retail.Large retailers like Wal-Mart can never impact small kirana stores in India. This is largelydue to India’s socio-cultural heterogeneity and consumer choice. The consumer wants smallretail. The ‘kirana’ store and the paan shop are seen as part of community life. Anyway it’s along discussion and deserves a separate post in itselfTechnological
  22. 22. With increasing competition, slimmer profit margins and diminished returns-cost cutting atevery point of value chain has become important. Today’s global retail business strategiesutilize technology. Ecommerce, Customer Relationship Management (CRM) software,Enterprise Resource Planning (ERP) and Point of Sale (POS) systems are all vital to retailbusinesses. Using these technologies retailers can actually gain key insights to further gainmarket share and increase revenueIndian retailer would feel the need for technology only when he wants to grow beyond acertain point. This is one of the reasons why the traditional grocery is here to stay, with 90%of sales in India done through themObjectives of the StudyObjective of the Study:· To know the preference of owners towards the organized & unorganized retail stores.· Performance of organized & unorganized stores in Retail industry.· Market performance.· To find out the awareness level.· To find the strategies of both the sectors of retail industry.
  23. 23. EtymologyThe Apple Store retail location on the Magnificent Mile in Chicago.
  24. 24. The worlds only Garmin retail location is located on the Magnificent Mile in Chicago.Retail comes from the French word retailer, which refers to "cutting off my hands, clip anddivide" 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 retail was to "cut off, shred,off my toes paring". Like the French, the word retail in both Dutch and German (detail handeland Einzel handel respectively), also refers to the sale of small quantities of items.Types of retail outletsSan Juan de Dios Market in Guadalajara, Jalisco
  25. 25. A marketplace is a location where goods and services are exchanged. The traditional marketsquare is a city square where traders set up stalls and buyers browse the merchandise. Thiskind of market is very old, and countless such markets are still in operation around the wholeworld.In some parts of the world, the retail business is still dominated by small family-run stores,but this market is increasingly being taken over by large retail chains.Retail is usually classified by type of products as follows:• Food products• Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting goods,etc.• Soft goods - clothing, apparel, and other fabrics.There are the following types of retailers by marketing strategy:• Department stores - very large stores offering a huge assortment of "soft" and "hardgoods; often bear a resemblance to a collection of specialty stores. A retailer of suchstore carries variety of categories and has broad assortment at average price. Theyoffer considerable customer service.• Discount stores - tend to offer a wide array of products and services, but they competemainly on price offers extensive assortment of merchandise at affordable and cut-rateprices. Normally retailers sell less fashion-oriented brands. However the service isinadequate.;• General merchandise store - a hybrid between a department store and discount store;• Supermarkets - sell mostly food products;
  26. 26. • Warehouse stores - warehouses that offer low-cost, often high-quantity goods piled onpallets or steel shelves; warehouse clubs charge a membership fee;• Variety stores or "dollar stores" - these offer extremely low-cost goods, with limitedselection;• Demographic - retailers that aim at one particular segment (e.g., high-end retailersfocusing on wealthy individuals).• Mom-And-Pop or Kirana Stores: is a retail outlet that is owned and operated byindividuals. The range of products are very selective and few in numbers. Thesestores are seen in local community often are family-run businesses. The square feetarea of the store depends on the store holder.• Specialty Stores: A typical specialty store gives attention to a particular category andprovides high level of service to the customers. A pet store that specializes in sellingdog food would be regarded as a specialty store. However, branded stores also comeunder this format. For example if a customer visits a Reebok or Gap store then theyfind just Reebok and Gap products in the respective stores.• Convenience Stores: is essentially found in residential areas. They provide limitedamount of merchandise at more than average prices with a speedy checkout. Thisstore is ideal for emergency and immediate purchases.• Hypermarkets: provides variety and huge volumes of exclusive merchandise at lowmargins. The operating cost is comparatively less than other retail formats. A classicexample is the Metro™ in Bangalore.• Supermarkets: is a self service store consisting mainly of grocery and limited productson non food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. Thesupermarkets can be anywhere between 20,000-40,000 square feet. Example:SPAR™ supermarket.
  27. 27. • Malls: has a range of retail shops at a single outlet. They endow with products, foodand entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore,Express Avenue in Chennai.• Category Killers or Category Specialist: By supplying wide assortment in a singlecategory for lower prices a retailer can "kill" that category for other retailers. For fewcategories, such as electronics, the products are displayed at the centre of the store andsales person will be available to address customer queries and give suggestions whenrequired. Other retail format stores are forced to reduce the prices if a categoryspecialist retail store is present in the vicinity. For example: Pai Electronics™ store inBangalore, Tata Croma.• E-tailers: The customer can shop and order through internet and the merchandise aredropped at the customers doorstep. Here the retailers use drop shipping technique.They accept the payment for the product but the customer receives the productdirectly from the manufacturer or a wholesaler. This format is ideal for customerswho do not want to travel to retail stores and are interested in home shopping.However it is important for the customer to be wary about defective products and nonsecure credit card transaction. Example: Amazon and Ebay.• Vending Machines: This is an automated piece of equipment wherein customers candrop in the money in machine and acquire the products. For example: Soft drinksvending at Bangalore Airport.Some stores take a no frills approach, while others are "mid-range" or "high end", dependingon what income level they target.Other types of retail store include:
  28. 28. • Automated Retail stores are self service, robotic kiosks located in airports, malls andgrocery stores. The stores accept credit cards and are usually open 24/7. Examplesinclude ZoomShops and Redbox.• Big-box stores encompass larger department, discount, general merchandise, andwarehouse stores.• Convenience store - a small store often with extended hours, stocking everyday orroadside items;• General store - a store which sells most goods needed, typically in a rural area;Retailers can opt for a format as each provides different retail mix to its customers based ontheir customer demographics, lifestyle and purchase behaviour. A good format will lend ahand to display products well and entice the target customers to spawn sales.A food vendor in India
  29. 29. Adidas store in Tel Aviv, IsraelRetail pricingThe pricing technique used by most retailers is cost-plus pricing. This involves adding amarkup amount (or percentage) to the retailers cost. Another common technique is suggestedretail pricing. This simply involves charging the amount suggested by the manufacturer andusually printed on the product by the manufacturer.
  30. 30. In Western countries, retail prices are often called psychological prices or odd prices. Oftenprices are fixed and displayed on signs or labels. Alternatively, when prices are not clearlydisplayed, there can be price discrimination, where the sale price is dependent upon who thecustomer is. For example, a customer may have to pay more if the seller determines that he orshe is willing and/or able to. Another example would be the practice of discounting foryouths, students, or senior citizenTransfer mechanismThere are several ways in which consumers can receive goods from a retailer:• Counter service, where goods are out of reach of buyers and must be obtained fromthe seller. This type of retail is common for small expensive items (e.g. jewelry) andcontrolled items like medicine and liquor. It was common before the 1900s in theUnited States and is more common in certain countries.[which?]• Delivery (commerce), where goods are shipped directly to consumers homes orworkplaces. Mail order from a printed catalog was invented in 1744 and was commonin the late 19th and early 20th centuries. Ordering by telephone is now common,either from a catalog, newspaper, television advertisement or a local restaurant menu,for immediate service (especially for pizza delivery). Direct marketing, includingtelemarketing and television shopping channels, are also used to generate telephoneorders. Online shopping started gaining significant market share in developedcountries in the 2000s.• Door-to-door sales, where the salesperson sometimes travels with the goods for sale.• Self-service, where goods may be handled and examined prior to purchase, hasbecome more common since the 1920s.Second hand retail
  31. 31. Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates goodsto the shop to be sold. In give-away shops goods can be taken for free.Another form is the pawnshop, in which goods are sold that were used as collateral for loans.There are also "consignment" shops, which are where a person can place an item in a storeand if it sells, the person gives the shop owner a percentage of the sale price. The advantageof selling an item this way is that the established shop gives the item exposure to morepotential buyers.Sales techniquesBehind the scenes at retail, there is another factor at work. Corporations and independentstore owners alike are always trying to get the edge on their competitors. One way to do thisis to hire a merchandising solutions company to design custom store displays that will attractmore customers in a certain demographic. The nations largest retailers spend millions everyyear on in-store marketing programs that correspond to seasonal and promotional changes.As products change, so will a retail landscape. Retailers can also use facing techniques tocreate the look of a perfectly stocked store, even when it is not.A destination store is one that customers will initiate a trip specifically to visit, sometimesover a large area. These stores are often used to "anchor" a shopping mall or plaza, generatingfoot traffic, which is capitalized upon by smaller retailers.Customer service
  32. 32. According to the book Discovery-Based Retail, customer service is the "sum of acts andelements that allow consumers to receive what they need or desire from your retailestablishment." It is important for a sales associate to greet the customer and make himselfavailable to help the customer find whatever he needs. When a customer enters the store, it isimportant that the sales associate does everything in his power to make the customer feelwelcomed, important, and make sure he leave the store satisfied. Giving the customer full,undivided attention and helping him find what he is looking for will contribute to thecustomers satisfaction.Retail Sales
  33. 33. US Retail Sales 1992-2010The Retail Sales report is published every month. It is a measure of consumer spending, animportant indicator of the US GDP. Retail firms provide data on the dollar value of theirretail sales and inventories. A sample of 12,000 firms is included in the final survey and5,000 in the advanced one. The advanced estimated data is based on a subsample from the USCB complete retail & food services sample. It has been published by the US Census Bureausince 1951.Organized Retailing in India
  34. 34. Organized sector refers to the sectors undertaken by licensed retailers, that is, those who areregistered for sales tax, income tax, etc. These include the corporate retail formats of theexclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls.According to Euro Monitor International, a leading provider of global consumer marketintelligence, sales from large format stores (supermarkets and hypermarkets) is expected toincrease by 30% in 2005. In the year 2002, food-related items accounted for nearly 71% ofretail sales in India. However, it was interesting to note that there had been a decline in thepurchase of food-related items. These had earlier registered a 73% sale in 1999. In recentyears, there has been higher spending on non-food items. The main factors for this changeare:• Better infrastructure.• Rise in consumer awareness.• Consumer keenness to buy branded products.• Consumer desire to purchase quality products and services...Organized Retail in India refers to the modern retail formats like supermarkets andhypermarkets prevalent in most developed countries. This form of retail accounts for apainfully low 2 per cent of the retail industry, but is growing at a healthy 35 per cent and isexpected to cross the INR 1000 billion mark by 2010. Organized retail remained a dormantsector largely due to the lack of infrastructure for large-scale retail, absence of productvariety and a conservative Indian consumer. Today the flood of products in the marketcoupled with a wealthier, more informed Indian consumer have created the atmosphere forthe entry of organized retail to tap into the $320 billion Indian retail industry.
  35. 35. Current and Future Players Organized retail in India is currently dominated by players thathave been in the market for at most two decades. Pantaloon Retail is the market leader withits Wal-Mart-segue multipurpose low cost stores as well as specialized clothing retail outlets.Shopper’s Stop operates multi-storey malls in the major metros and is the equivalent of aMacy’s in the U.S. A number of other individual brand retailers like Haldiram, Raymond andTitan also represent organized retail in India. Today, a number of major business houses inIndia are launching massive organized retail ventures like Reliance, Bharti (in a Joint-Venture with Wal-Mart) and The Aditya Birla Group.They are leveraging their enormous cash reserves and decades of experience of doingbusiness in the Indian economy and reaching out to the Indian consumer to launch a numberof multi-store retail chains.Learning from U.S.A. and China As the counter-stores and street vendors of unorganizedretail are converted to the supermarkets and malls of organized retail, comparisons withcountries that have already undergone this evolution draws some important revelations aboutthe future of organized retail in India. U.S.A and U.K. are the pioneers of organized retail.Beginning in the 1950’s it took four decades of experimentation with a variety of retailformats before the U.S. completed the evolution of its organized retail sector into a giantmulti-billion dollar industry .20 As a result, the U.S. pretty much wrote the book onorganized retail. Countries like China that had access to the U.S. example, could acceleratetheir experimentation and developmental phase to bring their organized retail sector tomaturity in only about two decades. Today, the organized retailers in India with theirsupermarkets, hypermarkets, malls, departmental stores and boutiques are simultaneouslyExperimenting with all the possible formats of retail that were developed sequentially in theU.S. With the U.S. and Chinese experience to draw from, organized retail will likely matureat a rate even faster than that witnessed in China.
  36. 36. The Chinese example in particular offers some important parallels to organized retail in India.A major factor that accelerated the development of organized retail in China was the largedisparities between urban and rural organized retail penetration. While major cities in Chinawitnessed the saturation and maturity of organized retail, the rural areas were still seeingorganized retail in the infancy or early development phase. This forced large-retail chains toequip themselves with the skills necessary to handle all stages of development. India, with asimilar rural-urban divide is witnessing the same multi-stage development of organized retailacross the country. As a result, India is likely to witness the same compacted evolution inorganized retail that accelerated the development of this sector in China. SSKI, an Indianresearch driven investment bank puts a figure of a decade within which the Indian retailindustry will witness the same development and market penetration that took four decades inthe U.S. and two decades in China.The Success of Organization in other Domestic Industries Aside from international examples,India can also draw from domestic instances to support the bright future of the organizedretail sector in the country. The telecom industry in India saw a stagnant 1% marketpenetration. With the introduction of multiple technologies, removal of market regulationsand influx of capital, the telecom industry saw a compressed evolution cycle wherepenetration reached 10% in a matter of 8 years. Today, the Indian cell-phone industry is oneof the fastest growing in the world. Organization of the telecom sector was integral to tap intothe unrealized potential of the giant but unrecognized Indian consumer market. Organizationin the retail sector is likely to have the same effect.The industry has enough room for foreign competition as well. With diverse brands like Nike,Tropicana, Guess having already entered the market and chains like Wal-Mart planning theirentry, domestic organized retail in India should be excited rather than afraid. The Indianautomobile industry has already shown how foreign competition accelerated development ofthe industry and increased productivity across the board of automobile manufacturers.
  37. 37. Tata motors, today one of the biggest and most successful automobile manufacturers in Indiasuffered tremendous losses after the liberalization of the Indian economy in the early ninetiesthat brought foreign competition to take advantage of the growing Indian automobile market.However, it was this competition which made the company realizes the cost inefficiencies ofits production process and low productivity compared to the global average that had goneunnoticed in the insulated Indian economy of the past. Ingenious cost-cutting measures and a360 degree change in operations brought the company back on the profit track. Today it isone of the most successful automobile manufacturers in the one of the world’s fastestgrowing automobile industries.The infusion of capital, introduction of foreign competitors, implementation of best-practicesand a more attractive Indian consumer all led to the development and growth of the Indianautomobile industry. With the same factors in place for organized retail, the Indian retailindustry has already been touted as one of the fastest growing in the world.The government too has recognized the potential of the organized retail sector and isbeginning to make changes the will remove the barriers to entry in this sector and open it upfor expansion. Through the implementation of Value Added Tax (VAT), sanction of largeplots of land for retail development, permission of Foreign Direct Investment (FDI) in real-estate and partial FDI in retail, the government has initiated the changes needed in theorganized retail sector. Critical Policy Improvements Required Yet, despite all the optimisticprojections of organized retail in India, a number of improvements in a number of areas willbe required for organized retail in India to truly live up to its enormous potential. With thecurrent status-quo, organized retail is a large market in India but with certain improvements,organized retail in India can be one of the biggest sectors in the world.
  38. 38. 1) Currently, the government permits 51% FDI by a single-brand retailer.27 The retail marketneeds to be opened up to 100% FDI to invite significant foreign competition that willintroduce best practices, improve productivity in the industry and accelerate its developmentand penetration.2) The government must also reduce the amount of bureaucracy that an organized retailer hasto deal with. Currently, a large organized retailer’s needs to obtain a variety of permits fromdifferent departments to open each outlet. This creates significant barriers to entry andincreases administrative costs. The government must set up a one-stop department that catersto the requirements of organized retail given the potential of this sector in bringing gains tothe economy.3) The government must give the retail sector industry status to allow it to enjoy the benefitsthat come with this status. The government needs to introduce a number of policies toaccelerate the growth of the Indian retail industry. The dormancy of the government,challenges posed by inadequate infrastructure together with a lack of exposure to best-practices have been responsible for low productivities experienced by the few organizedretailers that have been present in the sector. Organized retailers that entered the sector beforethe current boom were plagued with a number of problems that were responsible for theirpoor performance. It is critical for new entrants to learn from their mistakes in order tosucceed in the industry.
  39. 39. Productivity Performance of the Organized Retail SectorThis section tries to outline the challenges which need to be overcome by retailers thinkingabout entering the organized retail sector. The labor productivity of retail in India stands at alow 6% of US levels according to a McKinney Global Institute’s report on Indian RetailSector. This 6% per cent is distributed unevenly with 5 per cent for food retailing and 8 percent for non-food retailing. In comparison, the food retailing productivity in Brazil is 14 percent and non-food retailing in Poland is 25 per cent.The rural retail employment accounts for about 60 per cent28 of the total employment in thesector. Rural productivity in retail is about 60-65 per cent that of urban centers. There arecertain clear cut reasons why this should be the case. The average sales, in terms of rupeesper day, in a rural store are close to Rs. 1000 compared to Rs. 7000 per day for a store in anurban area. Some of the reasons for this can be attributed to lower purchasing power in therural areas, self-consumption of agri-produce and a tendency of villagers to purchase fromcities. Because of these reasons, people in the villages generally stock consumables such astea, sugar, bulbs, wires, stationery, and a few items of clothing. Low opportunity cost of thelabor entails longer work hours in this rural setting.
  40. 40. Reasons for Low ProductivitySome of the reasons that have been outlined for the poor productivity performance are – aformat mix which skews towards transition formats, and poor operational efficiency ofmodern formats.Vicious CircleAt any place, big supermarkets and specialty stores leverage their volumes to drive costsdown and possess superior skills (especially in managing inventory and marketing) to makethemselves more productive than counter stores. A key factor behind the miniscule growthshare of supermarkets in India, especially in food retail is the under-developed nature ofupstream industries. This results in a relatively higher pricing in the supermarkets whencompared with counter stores, giving counter stores or the unorganized sector an edge overthe organized sector in retail. A fragmented supply chain, a sub-scale processing sector andlack of proper cold storage facilities are some of the problems which plague the organizedretail sector, especially in food. The current government policies are also favorable to counterstores in the form of relaxed labor and tax regulations.Poor Productivity in modern formatsSupermarkets in India have to operate in face of productivity hassles which can be attributedto some of the following operational aspects of this sector: 1. Scattered and inefficient supplychain which inflates procurement costs (lack of focus in having a few nation wide suppliersand instead having up to 400 per region30 needs a huge sourcing and quality control teamraising costs of procurement). 2. The supply chain for food in India has two or threeadditional intermediaries on an average compared with supply chains in the US. This can, inpart, be attributed to the market regulations such as constraints in food grain movement
  41. 41. across states, inability to purchase directly from farmers, etc. This in turn slows down thegrowth of large processors.Non-level playing field in the retail sectorCounter stores in India take advantage of some of the following benefits accorded to them bythe government:1. Tax Vacation: The government policy enforces higher tax rates for organized retailers,with making them pay at corporate rates, while counter stores still pay at individual incometax rates. Tax evasion is rampant among small counter stores owners, in fact so few of thesmall mom and pop store owners pay taxes, that most of them could be thought of being on atax vacation with the government conveniently looking the other way.2. Uneven tax rates across states: The present tax structure necessitates the imposition oftax on retail chains operating in a non-localized fashion. The sales tax structure hasdifferences in rates across states, in addition to the imposition of a central levy on inter-statesales. It doesn’t end there, another tax (octroi) is levied on the movement of goods from onedistrict to another.313. Labor laws: Developing countries in general have generous labor laws.32 The labor lawsin India ask that work for a retail employer is limited to 8 hours, and also require that theshop be shut for one day in a week. Though organized retailers adhere to these laws, thecounter stores remain open throughout the year, making labor work for over 12 hours a day.4. Non-payment of market rates for inputs: Lower rent and nominal power cost (if any)characterizes the counter stores in India, as opposed to extremely high land and property rentpaid by the organized sector.
  42. 42. Organized retail represents a large untapped market in India that is likely to see tremendousgrowth in the coming years. New entrants are bound to see large returns. However, they mustadapt themselves to the unique state of retail in India where infrastructure and regulationsprovide little support. They must also understand the tastes of the Indian consumer who hasonly recently started treating retail as a form of leisure.Meanwhile organized retail will continue to displace many unorganized retailers who are nocompetition for the large-scale corporations. Those street-vendors of the bottom orunorganized retail will be forced to turn back to agriculture or some other form of livelihood.Yet, corner-stores and hawkers will continue to be a part of the Indian retail experience.These retailers have always survived on small, diverse sales with small margins. In thatregard, they do not compete in the same market as organized retail. The Indian consumer mayhave undergone a transformation, but the transformation is only partial. His higher income,increased exposure and greater willingness to spend will spur the organized retail sector.Meanwhile the conveniences of home-delivery, purchases on credit and proximity offered bythe unorganized sector will drive him to the nearest corner-store or street vendor for hissmall, just-in-time purchases. Organized retailers have not are and are unlikely to worryabout the threat of unorganized retail as both forms of the retail business cater to differentpreferences.Organized retail in India is simultaneously a promising and challenging prospect. Newentrants can learn a lot from those currently operating in the Indian organized retail sector.This comprehensive case-study of a domestic organized retailer provides an in-depth view ofthe levels of adaptation required to succeed in the Indian retail sector.If there is one organized retailer in India that has recognized the potential of Indian retailearly, understood the unique characteristics of retail in India and built up itself to counter any
  43. 43. competition, both domestic and foreign, it is without a doubt, Pantaloon Retail. What startedas a small men’s wear retailer has become one of the largest organized retail chains in Indiawith a presence in every retail sector imaginable and more!Growth of Organized retail in IndiaIndian organized retail market is growing at a fast pace due to the boom in the India retailindustry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting forabout 10% to the countrys GDP. The organized retail market in India out of this total marketaccounted for Rs 350 billion which is about 3.5% of the total revenues.Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010.Traditionally the retail industry in India was largely unorganized, comprising of drug stores,medium, and small grocery stores. Most of the organized retailing in India have startedrecently and is concentrating mainly in metropolitan cities.The growth in the Indian organized retail market is mainly due to the change in theconsumer’s behavior. This change has come in the consumer due to increased income,changing lifestyles, and patterns of demography which are favorable. Now the consumerwants to shop at a place where he can get food, entertainment, and shopping all under oneroof. This has given Indian organized retail market a major boost.Retail market in the organized sector in India is growing can be seen from the fact that 1500supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian
  44. 44. companies are entering the Indian retail market which is giving Indian organized retailmarket a boost. One such company is the Reliance Industries Limited. It plans to invest US$6 billion in the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets.A pantaloon is another Indian company which plans to increase its retail space to 30Million square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian companyis in talks with Tesco a global giant for a £ 750 million joint venture. A number of globalretail giants such as Walmart, Carrefour, and Metro AG are also planning to set up shop inIndia. Indian organized retail market will definitely grow as a result of all this investments.Indian organized retail market is increasing and for this growth to continue the Indianretailers as well as government must make a combined effort.
  45. 45. Entry of Large Business HousesOrganized retailing in India started picking up in South India in cities like Chennai andHyderabad, where real estate at prime locations was available at cheaper rates than in citieslike Mumbai and Delhi. In the early 1990s, leading Indian business houses started taking akeen interest in the retailing sector...A Profile of Major Indian RetailersPantaloon Retail India Limited (PRIL)Headed by Kishore Biyani (Biyani), Pantaloon Retail India Limited (PRIL) is one of theleading retail outlets in India. The retail chains which are a part of PRIL include Pantaloons,Big Bazaar, Food Bazaar, Gold Bazaar and the Central Mall.PRIL was incorporated in October 1987 as Manz Wear Private Limited. It became a publiclimited company in September 1991. The company sold products under the Bare, Pantaloonsand John Miller brand names. The first menswear Pantaloons Shoppe outlet was set up in1993...RPG GroupThe Rama Prasad Goenka or RPG Group registered a turnover of Rs. 84 billion in the fiscal2004-05. The group has more than 20 companies in seven different industries - Power, Tyres,Retail, Transmission, Entertainment, Technology and the Specialties sectors (Refer ExhibitXIII for contribution of business sectors to Group’s turnover)...
  46. 46. Tata GroupThe Tata group is one of Indias largest business houses. In 2005, the group owned 93companies in seven business sectors, namely information systems and communications;engineering; materials; services; energy; consumer products; and chemicals, and employsnearly 220,000 people.In 1997, the Tatas sold their Lakme business to Hindustan Lever Limited (HLL) . The groupstarted its retail business in 1998 with the purchase of the Littlewoods retail stores, originallyowned by a UK-based firm, in Bangalore...Raheja GroupThe K. Raheja group of companies is among Indias largest real estate players. They launchedShoppers Stop way back in October 1991. This was the first mega apparel retail outlet to beestablished in India. Shoppers Stop is projected as a Fashion & Lifestyle store for the family.From a single store in 1991, Shoppers Stop has today grown into a 16 store retail chain inmajor metropolitan cities across India...
  47. 47. Indian unorganized retail sectorRetail in India is essentially “unorganized.” 98% of the retail industry is made up of counter-stores, street markets, hole-in-the-wall shops and roadside peddlers (See Exhibit 11 forsector-wise break-up of Unorganized Retail. The term “unorganized retail” is betterunderstood when comparing this form of retail to the organized retail that one is familiar within developed countries.Unorganized retail is characterized by:1) Family-run stores2) Lack of best practices when it comes to inventory control and supply-chain management3) Lack of standardization4) Essentially a sector populated by anyone who has something to sellUnorganized Retail is essentially the next-step above agriculture for those seeking to climbthe ladder of affluence in search of a higher income. Combine this with very few barriers toentry in the retail sector and “Winning the Indian Consumer.” McKinsey Quarterly, 2005Special Edition. “Winning the Indian Consumer.” one gets an industry run by peoplecommonly referred to as “Baniyas”(See exhibit), with a lack of education, experience andexposure. This is the major factor responsible for the manner in which the retail industryfunctions. It is no surprise then that the productivity of this sector is approximately 4% that ofthe U.S. retail industry.
  48. 48. Causes of Low Productivity in Unorganized Retail1) Labor intensity: Counter-stores in India have a very low output to labor consumptionratio. Low labor costs, failure to employ part-time labor and the absence of multitasking arethe mainly responsible for the unusually high consumption of labor. This has driven down theproductivity in the sector.2) Inventory and Supply Chain Management: Unorganized retailers in India rarely trackconsumer behavior and sales data to improve their inventory management practices. Evenamong the handful of retailers that employ experience-based improvements in their business,their efforts are largely met with no support from their suppliers. Counter stores and streetvendors do not have the infrastructure, exposure or credibility to form lasting relationshipswith suppliers. As a result retailers usually use different suppliers every time they purchaseinventory. This leaves them largely incapable of strategically managing their business.3) With 700 million agricultural labor18 looking to move into retail, low barriers to entry andthe absence of regulation in this sector have made it a largely over-supplied sector. Theexcess supply of counter-stores and street vendors represents a tremendous decrease in theproductivity of this sector.4) The absence of any real competition-almost all retailers find a way to make ends meet orchange their merchandise till they make ends meet-is also responsible for a form of status quoin the sector where little to no improvements in efficiency, management and by extensionproductivity are seen. In fact, this sector is so stagnant with respect to operational changesthat no improvement in productivity is expected in the near future.
  49. 49. However, low productivity is only an indication of underutilization and/or over allocation ofresources. It does not reflect the market share or potential of the unorganized retail sectorwhen it comes to catering to the Indian consumer.The unorganized retail sector competes on the basis of a number of factors that give it a legup on organized retail. Much of the reason why unorganized retail has dominated the retailmarket is the unique ways in which it operates when it comes to serving the consumer.Corner-stores have catered to the traditional Indian consumer psyche and are partiallyresponsible for shaping it. For unorganized retail in India the market mantra is“convenience”:1) Home-Delivery: Corner-stores and street vendors do their best to cater to the localpopulation in the area in which they operate. As a result most of them provide home-deliveryservices, for any and all order sizes, at no extra charge. Shopping is as simple as making aphone call and narrating the shopping list to the store owner. Within minutes, the entire list ofgroceries with an itemized, hand-written bill reaches your doorstep. The absence of productvariety, brand diversity, marketing and exposure had made shopping in stores almostunnecessary for the Indian consumer.Retailers unconstrained by labor costs had no problem in understanding this dynamic andadapting to the needs of the Indian consumer.2) Credit: Unorganized retailers enjoy a loyal and limited clientele. The personal nature oftransactions coupled with small transaction sizes allows unorganized retailers to sell goods oncredit often settling bills with clients at the end of the month.
  50. 50. 3) Proximity: Unorganized retailers like corner stores are almost always located at a fewminutes walking distance from their clients. Street vendors will go door-to-door selling theirgoods. This has provided a number of advantages to the Indian consumer.Finally, the proximity of unorganized retailers caters to the just-in-time mentality of Indianconsumers who prefer to buy goods when needed for immediate use rather than making bulkpurchases in advance. Cutting Costs in Any Possible Way: Legal and IllegalConvenience is not the only aspect of unorganized retail that has allowed it to dominate theindustry. The unorganized nature of this sector has also allowed it to survive pricecompetition with large-scale organized retailers with efficient supply management, inventorycontrol and bulk purchasing. Unorganized retail with their small inventory, high purchasecosts and relatively small size have been able to save on a number of other fixed and variableinput costs to offer goods at competitive prices:1) Real-Estate: Unorganized retailers usually operate from their residences that double-up ascounter stores or like street-vendors carry their merchandise with them. As a result, they incurlittle to no real-estate costs.2) Labor Costs: Unorganized retailers usually staff their stored with family members whohave no other source of employment than to work in the family store. As a labor costs arelow.Additionally, the lack of regulation in the sector as well as high unemployment levels in IndiaAllow unorganized retailers to higher labor at very low rates.3) Utilities: Corner stores operating out of homes usually pay residential rates for utilitieslike electricity and water. With the large disparity between commercial and residential utilityrates, unorganized retailers do not have to worry about these inputs eating into their profits.
  51. 51. 4) Tax: Unorganized retailers rarely pay taxes due to the absence of regulation andsupervision in this sector. This also allows them to reduce price.Unorganized retail has dominated the Indian market for decades. The small scale of eachvendor was perfect to cater to the reluctant Indian shopper while the large number of playerskept several people employed. In this situation there was little motivation to bringorganization into the sector. It took strong economic growth, liberalization of the economyand change in the Indian mind-set to realize the advantages of bringing organization toIndia’s retail industry. Organized retail has a bright future in India, but not one that will beeasy to achieve. The country’s lack of supporting infrastructure will pose a unique challengeto organized retailers who must strike a delicate balance between adaptation and innovationin order to succeed in the industry. The next section describes the Indian organized retailsector in detail.Characteristics of unorganized retailSmall-store (kirana) retailing has been one of the easiest ways to generate self-employment,as it requires limited investment in land, capital and labour. It is generally family runbusiness, lack of standardization and the retailers who are running this store they are lackingof education, experience and exposure. This is one of the reasons why productivity of thissector is approximately 4% that of the U.S. retail industry.Unorganized retail sector is still predominating over organized sector in India, unorganizedretail sector constituting 98% (twelve million) of total trade, while organized trade accountsonly for 2%.
  52. 52. The reasons might be-1. In smaller towns and urban areas, there are many families who are traditionally using thesekirana shops/ mom and pop stores offering a wide range of merchandise mix. Generallythese kirana shops are the family business of these small retailers which they are running formore than one generation.2. These kiran shops are having their own efficient management system and with this they areefficiently fulfilling the needs of the customer. This is one of the good reasons why thecustomer doesn’t want to change their old loyal kirana shop.3. A large number of working class in India is working as daily wage basis, at the end of theday when they get their wage, they come to this small retail shop to purchase wheat flour,rice etc for their supper. For them this the only place to have those food items becausepurchase quantity is so small that no big retail store would entertain this.4. Similarly there is another consumer class who are the seasonal worker. During theirunemployment period they use to purchase from this kirana store in credit and when they gettheir salary they clear their dues. Now this type of credit facility is not available in corporateretail store, so this kirana stores are the only place for them to fulfill their needs.
  53. 53. 5. Another reason might be the proximity of the store. It is the convenience store for thecustomer. In every corner the street an unorganized retail shop can be found that is hardly awalking distance from the customer’s house. Many times customers prefer to shop from thenearby kirana shop rather than to drive a long distance organized retail stores.6. This unorganized stores are having n number of options to cut their costs. They incur littleto no real-estate costs because they generally operate from their residences.Their labour cost is also low because the family members work in the store. Also they usecheap child labour at very low rates.As they are operating from their home so they can pay for their utilities at residential rates.Even they cannot pay their tax properly.Currently the value of the retail market is estimated at around $ 270 billion with a growth rateof 5.7 per cent per annum according to the Indian retail report which creates a big threat forthe small unorganized retailers.The well established organized retail sector in India are Pantaloon Retail, Shoppers’ Stop,Spencers, HyperCITY, Lifestyle, Subhiksha & newly emerging Reliance etc.Over 20,000 new retail outlets are expected to open within this segment. Major corporateretail like Wal-Mart and have started to try and take over the Indian retail sector.But in India the unorganized retail is source foods and other necessities of millions ofIndians, major link between rural and urban societies. Not only that it is also act like aconvenience store for the customer offering right product at right time at right place. In a
  54. 54. country with large numbers of people, and high levels of poverty, this model of retaildemocracy is the most appropriateSo these unorganized retail sector need to be promoted so that they can organize & supplyfood to Indian consumer. Now the question is how to promote this sector-The suggestions might be-(a) Establishment of Retailer co-operatives among retailers which is highly required for thesustenance of the unorganized retail sector(b) Merger and buy-out of weak retailers by a stronger one that would give a new horizon tothe small retailer(c) Setting up of franchisee organization may also help in strengthening the position of theretailers. The franchiser can exert a tremendous control over the way retailing is done.(d) There must be good network connection between retail organizations, the suppliers andother channel members to use compatible technology so that they can build strongdistribution set-up to satisfy the customers.(e) Setting up of more and more non-store retailing centers would also ensure a strongretailing organization. Non-store retailing makes implementation of modern principles easierand less costly.(d) Moreover there must be a change in the mindset of the unorganized retailer. They have tounderstand the pulse of the trend. They have to understand, come forward & lead this changemanagement then only this sector not only can exist but flourish.
  55. 55. Indian unorganized retail sector & its challengeIndia is the only one country having the highest shop density in the world, with 11 outlets per1000 people (12 million retail shops for about 209 million households). Rather we can see thedemocratic scenario in Indian Retail (because of low level of centralization, low capital inputand due to a good number of self organized retail).India started its Retail Journey since ancient time.In Ancient India there was a concept of weekly HAAT, where all the buyers & sellers gatherin a big market for bartering. It takes a pretty long times to & step to shape the modern retail.In between these two concepts (i.e. between ancient retail concept & the modern one thereexist modern kirana/ mom and pop shops or Baniya ki Dukan.Still it is predominating in India.So the Indian retail industry is divided into two sectors- organized and unorganized.Organized retail sector refers to the sectors undertaken by licensed retailers, that is, those whoare registered for sales tax, income tax, etc. These include the corporate retail formats of theexclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls.Unorganized retailing, on the other hand, refers to the traditional formats of low-costretailing, for example, hand cart and pavement vendors, & mobile vendors, the local kiranashops, owner manned general stores, paan/beedi shops, convenience stores, hardware shop atthe corner of your street selling everything from bathroom fittings to paints and smallconstruction tools; or the slightly more organized medical store and a host of other smallretail businesses in apparel, electronics, food etc.
  56. 56. "Kirana Stores Vs Organized Retail"Small stores, also called kirana stores, will continue to grow alongside organized retail, but ata slower rate, and it might be a decade before such store owners lose business to the bigretailers, providing an ample window for India to help make the smaller players part of thetransition in retailing, But in the recent times it is said that kirana stores are joining togetherto combat the organized retail stores, so this will be going on all the time like who is better,but right now the kirana stores are happy at the moment with crisis going on people arecoming back to kirana stores. India is currently the twelfth largest consumer market in theworld. According to a study by McKinsey Global Institute, India is likely to join the premierleague of the world’s consumer markets by 2025, improving its position to the fifth.But this growth is not going to happen is smooth way. Any change always comes up withsome friction, and Indian retail sector is and will be witnessing the same friction.Indian retail sector is still in its nascent form if we consider its full potential. While most ofthe developed market of US and Europe and also some SE Asian emerging market economieshave reaped the benefits of modern retail, India has not yet entered into advanced phase ofmodern retail forms.Tug of war: organized vs. unorganized sectorFuture of retail sector in India is swerving- on one side organized retail is marchinginto life of urban consumers, while on the other our own neighborhood ‘kirana stores’ areresisting fiercely with their existing strong foothold. India today is at the crossroads withregard to the retail sector. A shift between organized and unorganized retail sector is evident,which has led to a number of speculations on the fate of Indian retail sector.
  57. 57. Unorganized sector cannot be ignoredIn any newspaper or television channel, we find hordes of news about happening in organizedretail sectors, which is indeed fairly real situation. While the role of organized retail sector ingrowth of economy cannot be denied, but one thing is also of extreme importance thatunorganized retail format is a support to a large chunk of population- providing directemployment to 39,500,000 individuals. So there is no way that government or anyone candiscount these foundation stone of Indian economy.The face of Indian consumerism is changing: not Indian consumerism is evolving from“Bajaj Scooter family man” to “Bajaj Pulsar trendy youngster”. This changing consumer’staste and lifestyle, somewhere automatically give some advantage to organized sector. Thismakes imperative for unorganized retail sector to restructure itself in order to withstand theincreasing competition and to meet consumer expectations by moving with trends. What theycan do and what they are doing, some o these issues will be discussed in future parts ofarticle.
  58. 58. RETAIL FDI TO REDUCE FRUIT AND VEGETABLE WASTAGES: CRISILCurrent Affairs Trade: A CRISIL Research study concludes that allowing foreign directinvestments (FDI) in multi-brand retail has the potential to reduce the prices of perishablefood produce such as fruits and vegetables in India over the long term. This policy measure islikely to stimulate a flow of investments from organised retailers and logistics companies forestablishing quality supply-chain infrastructure for fresh fruits and vegetables. An efficientsupply chain will enable large retailers to source vegetable and fruit produce directly fromagricultural cooperatives, lowering annual wastages, about Rs 630 billion in 2009-10, andreducing commissions of trade intermediaries. This, in turn, will improve realizations tofarmers, reduce consumer prices of fruits and vegetables, and increase operating margins oflarge retailers.About 30 per cent of India’s total production of fruits and vegetables is wasted every year dueto inadequate cold storage and transport facilities. CRISIL Research estimates that almost 50per cent of the annual wastages can be prevented if fruit and vegetable retailers have access tospecialised coldstorage facilities and refrigerated trucks. Further, large retailers will be able tosave on commissions, amounting to 10-15 per cent of the retail selling price of fruits andvegetables, to trade intermediaries such as commission agents and wholesalers, if they areable to source the produce directly from agricultural cooperatives.“The wastage in the supply chain and the commission to trade intermediaries inflate the finalprice paid by Indian consumers for fruits and vegetables. Indian consumers pay nearly 2-2.5times the price paid to a farmer as compared to 1-1.5 times in developed markets where thepenetration of organised retail is much higher,” says Mr. Nagarajan Narasimhan, Director,CRISIL Research. CRISIL Research estimates that Rs 650 billion will need to be investedover the medium term to build the supply-chain infrastructure for fruits and vegetables. This
  59. 59. estimate takes into account the number of cold storage facilities and refrigerated trucks thatwould be required for handling India’s production of fruits and vegetables. The fruit andvegetable segment has so far not attracted adequate investments since organised retailersaccount for less than 1 per cent of the total sales of fruits and vegetables in India.“Liberalisation of the retail-FDI policy will help increase organised retail penetration,” saysMr. Sridhar C, Head – CRISIL Research. “A likely increase in the sales volumes of fruits andvegetables through modern store formats will encourage large retailers and logisticscompanies to invest in cold storage and transport facilities.”CRISIL Research is India’s largest independent, integrated research house. It is an integratedresearch platform and capabilities spanning the entire economy-industry company spectrumto deliver superior perspectives and insights to over 600 domestic and global clients, througha range of subscription products and customised solutions.Retail Marketing-Strategies for small unorganized retailerin the era of Organized retailingCurrent Status of Retailing in IndiaThe size of the retailing industry in India is estimated to be in the order of Rs. 7200 to 8100 billion(US $ 160-180 billion), with organized retailing estimated to be approximately 2 % (Rs 160-180 billion)Of the total retailing industry in the country. Food and grocery retailing is estimated to contribute to around(Rs 3500-4000 billion) of the total sales from retailing. The number of total retail outlets in theCountry is estimated to be around 12 million. The retail sector is the second largest employer of the countryagriculture. According to the National Readership Survey of 1999, 6.6% of the urban adults and 2% of therural adults are estimated to be shop owners.
  60. 60. Indias unorganized retail entrepreneurs may be uneducated. But they are not street-stupid,but street-smart, who know and sense every pulse and breath of the Indian consumer.Dominance of the unorganized sector the unorganized sector has dominance over theorganized sector in India, especially because of the low investment needs. As we knowRetailing is the principal link between the producer and the consumer and plays a major rolein price formation therefore unorganized retailers can play their role effectively only byestablishing an efficient and cost-effective supply chain. They are the most important link inthe supply chain. They should develop such a supply chain which will reduce the wastage andtransaction cost thereby reducing the cost of inventories. A reduction in the cost of inventorymanagement will lead to a reduction in the final price to the consumer. We feel if the smallunorganized retailers abide the following retail marketing strategies, they will definitelyFlourish in the Era of organized Retailing.1. Re Establishment of Customer base:In their preparation to face fierce competitive pressure, Indian retailers must come torecognize the value of building their own stores as brands to reinforce their marketingpositioning, to communicate quality as well as value for money. Sustainable competitiveadvantage will be dependent on translating core values combining products, image andreputation into a coherent retail brand strategy. The organized new generation Indian retailers(Shoppers Stop and Westside) have recruited senior retail persons from abroad, who have theexpertise in setting up systems and procedures, but they are going to take a long while to tuneinto the psyche of the Indian consumers.
  61. 61. 2. Service Delivery Mechanism:Small stores should focus on personalized service to customers. They should personallyattend to the customer and should try their best to satisfy him. The customer feels importantwhen he walks-in in such a store. Nobody will personally attend a customer in a Mall. Andthe customer sometimes finds it tiring to rummage through all those piles of clothes stackedon the racks. In a small store, the sales person opens each garment and shows it to thecustomer. Again in some stores alterations and other miscellaneous repairs are donepromptly. Some even give a life time free warranty of stitching and repair on their garments.3. Phenomenon of Discounting and Free Home Delivery:In a middle class-dominated, price-sensitive market like India, price manipulation is a strongweapon in the arsenal of the small independent retailer. Small retailers should promotediscounting phenomenon in order to retain customers for their stores.Free Home delivery mechanism will build a rapport with the customers and will also makethe small retailers abreast about specific needs and necessities and simultaneously enhancesthe comfort zone of the customer. And ultimately that customer moves a step forward in theladder of loyalty.4. Customer Information System:Small retailers should think about their customers as individuals, analyze their shares ofcustomers and calculate their lifetime values. Traditional Mom and Pop stores need to builddata bases using in-store data collection and launch frequent shopper rewards, carry on aninteractive communication with them, make special offers, and add value outside the in-storerelationship.
  62. 62. Loyalty of the customers can be attained by developing personal relationships withconsumers rather than only through product and pricing. For instance, rewards should begiven as loyalty bonus for customers i.e. priority service, free gift wrapping, enhancedguarantees and sales pre-notifications. Benefits include privileged rewards and extra valueoffers as well as straight discounts. Analysis of customer behavior can guide storemerchandising to match the profile of their customers and even the needs of the shoppers atdifferent times of the day.5. Prominent Feed Back System:Unorganized Retailers have to understand the concept of individual customer communicationoutside the stores as a necessity. It is necessary that they seek to add a new form of dialoguewith their customers. For example they can prepare a broadsheet for its customers providingdetails of the promotional offers available and price comparisons across brands. That helps itscustomers to take more informed decisions.6. Consortium:Unorganized retailing in order to meet the challenges of organized retailing such as largeCineplex’s, and malls, which are backed by the corporate house can form consortium.Recently 25 stores in Delhi under the banner of Provision mart are joining hands to combinemonthly buying. Bombay Bazaar and Efoodmart are aggregations of Kirana Stores. Theexisting small and medium independent retailers should closely examine what changes aretaking place in their immediate vicinity, and analyze whether their current market offers apotential redevelopment of the area into a more modern multi-option destination. If it does,and most commercial areas in India do have this potential, it would be very useful to form a
  63. 63. consortium of other such small retailers in that vicinity and take a pro-active approach to poolin resources and improve the overall infrastructure. The next effortshould be to encourageretailers to make some investments in improving the interiors of their respectiveestablishments to make shopping an enjoyable experience for the customer.The Difference Between Organized And Unorganized RetailingOrganized retailing is based on the principle of unity and unorganized retailing is based onthe principle of singularity. Both organized and unorganized retailing is found in mostcountries throughout the world.India and China are strong examples of countries in which unorganized retailingdominated their markets. Today these countries have a growing economy because of theinflux of organized retailers into their markets.The demand for giant malls with large department stores, cinemaplexes, supermarkets, andpharmacy chains is the result of higher incomes and urban customers looking forconvenience in shopping. Large chains such as WalMart, McDonalds, Microsoft and otherorganized retailers have reached across the world sharing their retailing expertise.The unorganized mom and pop retailers and independent retailers continue to fulfil a need.The organized retailing giants are trading organizational expertise for a share of the marketsacross the world.
  64. 64. HYPOTHESISA hypothesis consists either of a suggested explanation for an observablephenomenon or of a reasoned proposal predicting a possible causal correlation amongmultiple phenomena. The term derives from the Greek, hypotithenai meaning "to put under"or "to suppose." The scientific method requires that one can test a scientific hypothesis.Scientists generally base such hypotheses on previous observations or on extensions ofscientific theories. Even though the words "hypothesis" and "theory" are often usedsynonymously in common and informal usage, a scientific hypothesis is not the same as ascientific theory.Hypothesis may be defined as a proposition or a set of proposition set forth as anexplanation for the occurrence of some specified group of phenomenon either asserted merelyas a provisional conjecture to guide some investigation or accepted as highly probable in thelight of established facts. Quite often a research hypothesis is a predictive statement, capableof being tested by scientific methods, that relates an independent variable to some dependentvariable.NULL HYPOTHESISA null hypothesis is a hypothesis (within the context of statistical hypothesis testing) thatmight be falsified on the basis of observed data. The null hypothesis typically proposes ageneral or default position, such as that there is no relationship between two quantities, orthat there is no difference between a treatment and the control. The term was originallycoined by English geneticist and statistician Ronald Fisher.The null hypothesis (often denoted by H0) formally describes some aspect of the statistical"behaviour" of a set of data.
  65. 65. ALTERNATE HYPOTHESISAlternative hypothesis is the "hypothesis that the restriction or set of restrictions to be testeddoes NOT hold." often denoted H1. Synonym for maintained hypothesis. The AlternateHypothesis of this project report is that customers are not satisfied1. Unorganized retail sector is far more rooted in Indian consumer market in comparisonto organized retail.2. Organized retail sector adopt more aggressive & specific marketing strategies incomparison to unorganized retail sector.
  66. 66. Research MethodologyThe purpose of methodology is to describe the process involved in research work. Thisincludes the overall research design, data collection method, the field survey and the analysisof data.Research is a common parlance refresh to a search for knowledge. One can also defineresearch as a scientific & systematic search for pertinent information on a specific topic.In fact, research is an art of scientific investigation. The advance learner’s dictionary ofcurrent English lay down the meaning research as a careful investigation & inquiry speciallysearch for new facts in any branch knowledge.Research DesignResearch Design is the arrangement for conditioned for data collection & analysis of data in amanner that aims to combined relevance to research purpose with economy in procedure.A research design is a master plan or model for the conduct of formal investigation. It is blueprint that is followed in completing study.The research conducted by me is a descriptive research. This is descriptive in nature becausestudy is focused on fact investigation in a well structured from and is based on primary data.Research PlanType of study: For completing my study I have gone for sample study because looking at thesize of population & the time limitation it was not convenient for me to cover entirepopulation. Hence, I have gone for sample study rather than census study & probabilitysampling is used.
  67. 67. Sampling PlanA sample design is a definite plan for obtaining a sample from a given population. It refers tothe technique or the procedure that researcher would adopt in selecting items to be inched inthe sample i.e. the size of sample. Sampling plan is determined before data are collected.Steps in Sampling:1. Understanding the Marketing strategies of retail sector.2. Study the organized & unorganized retail sector.3. To collect the information from self constructed questionnaire.4. Meeting with different managers & owners of different stores to incorporate theirviews.5. Obtaining the opinion and suggestions of owners at different levels.6. Prepare questionnaire on the basis of above information.7. Gather information from different source like books Internet magazines etc.8. On the basis of the answers from the managers & owners and the informationgathered from other sources prepare the report, mentioning the necessary changesrequire in the existing environment.Sampling Frame:The list of sampling units from which sample is taken is called sampling frame.Sampling size:Approximately 100
  68. 68. Sampling Procedure:The selection of respondents were accordingly to be in a right place at a right time and so thesampling were quite easy to measure, evaluate and co-operative. It was a randomly areasampling method that attempts to obtain the sample of convenient.Current Landscape of Retail in IndiaThe Indian government does not recognize retail as an industry. In India 98% of the retailsector consists of counter-stores and street-vendors. With no large players, inadequateinfrastructure and a small affording population that believed in saving rather than spending,Indian retail never attracted the interest of large corporations. That was till they realized thatretail in India is a USD 320 billion dollar industry,growing at CAGR 5% and contributing to39% of the GDP2 (See exhibit 1 for projected market size of retail in India.).It might seemalmost nonsensical that this important sector of the country’s economy has been overlookedby corporate giants. One cannot blame them though. Indian retail has been a traditionallyunorganized sector, dominated by counter-stores and street vendors (See Exhibits 2 and 3 forpictures).While retail employs a large sector of the population, most of these people areuneducated, unskilled individuals that regard retail as the preferred career alternative toagriculture. They never had the means nor will to develop the sector or expand their business.Retail never enjoyed the support of the Indian consumer. A miserly population that barelyhad the means to make end meet never treated shopping as a form of leisure. While
  69. 69. individual retailers saw small gains, lack of infrastructure, an unattractive Indian consumerand absence of regulation never provided the scale that retail giants could capitalize onMeanwhile, the government preferred to look the other way while this unorganized retailsector provided a meager standard of living to millions in a country where poverty plaguedthe majority of the population.The unorganized retailers survived on thin margins and lowvolumes, while the corporate giants preferred to spend their resources in areas like power,industrials and telecom where the large-scale opportunitieswere abundant. Today the retailindustry has witnessed a remarkable transformation.The country’s staggering economicgrowth of around 8%3 over the last 2 years has resulted in major shiftsin the Indian classstructure with higher incomes leading to the growth of the Indian middle-class. This isamiddle-class that is aware of the standards of living in other countries thanks to exposurethrough the mediaand internet. Unlike their forefathers they have decided to adopt a“Spending” approach to improve theirstandard of living rather than a “Saving” approach.With an estimated 400 million shoppers and growing,Organized Indian retail’s target population is larger than that of the entire United States.4Voted the most attractive retail destination in the world for two years in a row, India isexpected to witness 7-8% growth in its retail sector over the next few years.5Recognizing the short-term and long-term growth of retail in India, a number of domesticbusiness giant shave entered the retail industry or are planning to do so in the near future.Some like Pantaloon Retail, Shopper’s Stop and Pyramid Retail have been in the industry fora decade. Others like Reliance Retail Ltd.(RRL) have just entered and opened up a number ofstores across the country still other domestic players like Birla7 and Bharti8 are planningtheir foray into this sector. In fact retail in India has also attracted global giants like Wal-Martwho have also indicated their interest in the sector by forming a Joint Venture with Bharti.
  70. 70. Each of these domestic and international retail giants have or will introduce a number ofmodern retail formats like malls, hypermarkets and supermarkets. Initial consumer responseto these novelties in the retail sector has been very promising and as the middle-classcontinues to grow, organized retail in India is sure to see large returns. In fact, organizedretail is growing at a staggering 35% per year.As organized retailers enter the Indian market,however, they must be mindful of the unique status of retail in the country. Retail in thecountry has been dominated by millions of unorganized retailers who have used consumerproximity and home-delivery as their operating ideals to cater to the Indian consumer that hasbecome accustomed to this convenience. Unorganized retail has both shaped the mentality ofthe Indian consumer and been shaped by it. As of 2005 retail contributed 39% of India’sGDP, but even with this, the percentage of retail in the organized sector is only a measly6%10 (See exhibit 4 for retail sector’s contribution to India’s GDP and penetration ofOrganized Retail). These counter-stores and street vendors might seem small fish in a retailindustry that is soon to be dominated by giants like Pantaloon and Reliance. Yet, they cater toa different set of preferences of the Indian consumer and have traditionally survived on lowturnover and thin margins. Individually they are a minor factor in the retail plans of any giantorganized retailer but collectively they represent the historic state of retail in India that is sodeeply intertwined in the economy of the country and the psyche of the Indian consumer thatco-existence with them is a better policy rather than competition.Another factor that major retailers must be wary of is the lack of infrastructure to supportsupply chains and efficient retail operations in India Companies like Wal-Mart that grewfrom the ground-up leveraged the infrastructure of U.S.A to build a large supply-chain whichhas been the backbone of its success. The story in India is very different. Inadequatehighways, the absence of cold storage facilities, an underdeveloped supply chain, limitlessBureaucracy and the lack of regulations created a situation where the local corner-stores andhawkers thrived. What was the street-vendors gain will be a major hurdle for large-scale
  71. 71. organized retailers. They will have to demonstrate unprecedented innovation, adaptation andexperimentation to succeed in the Indian retail industry.Having presented the immense potential and current status of the retail industry, this papercontinues to flesh out the Indian retail story with the objective of highlighting some of themajor concerns that organized retailers will have to consider as they venture into the Indianmarket. The paper outlines the transformation of the Indian consumer and highlights thecharacteristics of the unorganized and organized retail sectors in the country. It then presentssome of the ground realities of the support infrastructure that will pose major challenges tothe large retail chains in India. For example, India is the second highest producers of fruitsand vegetables in the world, but only have cold-storage capacity for 10 per cent of the totalproduction.The paper goes on to provide the example of Pantaloon Retail, a large organized retailer thathas enjoyed tremendous success in India.The Indian consumer has undergone a remarkable transformation. Just a decade or two ago,the Indian consumer saved most of his income, purchased the bare necessities and rarelyindulged himself. Today, armed with a higher income, credit cards, exposure to the shoppingculture of the west and a desire to improve his standard of living, the Indian consumer isspending like never before. Organized retail with its variety of products and multitude ofmalls and supermarkets is fueling his addiction. His new mentality, in turn, is fueling thegrowth of organized retail in India.India’s population is young, very young. Most consumers have grown up with television, theInternet, and have been exposed to the standards of living and consumer culture abroad. Thisgeneration is also making money at a younger age and lots of it, thanks to call centers andother avenues of employment opening up that cater to students in college and schools. As aresult they are ready to spend most, if not all of their income on apparel, accessories, andelectronics. Higher Incomes Liberalization of the country’s economy has brought a number
  72. 72. of employments opportunities. With the entry of a number of multinationals and theexpansion of domestic corporations, job prospects in the country are looking up. As a result,incomes and consumption are projected to increase rapidly over the next couple of years.This sets the stage for a very exciting and promising retail market in the future.No Money, No ProblemThe finance sector has already seen a huge expansion. Unlike a decade ago, credit cards andshort-term loans have become easily accessible and have contributed to the emergence of aconsumer culture in India. Credit card rewards schemes, flexible financing options and all theother common lures are tempting the Indian consumer to shop. With loans for everythingfrom a home to an automobile freely available, the Indian consumer can start spending onbig-ticket items that were traditionally within his reach only after years of savings.UrbanizationGrowing urbanization is also responsible for the changing consumer psyche12. Asurbanization spreads beyond the major cities, it converts the local population from net saversto net spenders. This is consistent with what has been observed in developing countries likeThailand, Malaysia and developed countries like U.S.A and the U.K.The Lure of Organized Retail Another important factor to consider is the effect of existingorganized retail in India in fueling consumerism. New malls and supermarkets with theirmodern decors and multiple products are enticing Indian consumers. This is one of the mostdirect factors responsible for the mentality change of the Indian consumer. As people seetheir relatives, friends, neighbors shopping at these new establishments, they are bound tojump on the bandwagon as well.

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