Final Work

RETAIL MANAGEMENT
CHAPTER: I INTRODUCTION
Page | 1 B.C.C.A INSTITUTE OF MANAGEMENT STUDIES
RETAIL MANAGEMENT
INTRODUCTION
DEFINITION AND SCOPE
Retailing is derived from the French word retailer, which means, to cut a piece of. Thus, retailing can be defined as a set of business activities that adds value to the products and services sold to the final customers for their personal, family or household use. A retailer is the key player in the marketing process as he regularly interacts with the end customer. From a marketers point of view, retailing can be defined as a set of marketing activities designed to provide satisfaction to the end customer and profitably maintain the customer base by continuous quality improvements across all areas concerned with selling goods and services.
Retailing involves:
y Understanding the needs of the consumers. y Developing good assortment of merchandise. y Displaying the merchandise in an effective manner so that consumers find it easy and attractive to buy. A retailer is any business establishment that directs its marketing efforts towards the end users for the purpose of selling goods and services. Retailers comprise street vendors, local kirana stores, supermarkets, food joints, saloons, airlines, automobile showrooms, video kiosks, direct marketers, vending machine operators, etc. an organization qualifies to be a retailer only when it derives a major chunk of its revenues from its transactions with end users. Thus, a seller is said to have conducted a retail transaction when he sells goods to the end consumer while a wholesale transaction is conducted only when the seller sells goods to a business concern. The table given below gives a list of retail institutions operating in the market.
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Evolution of retail in India
Traditionally Indian Retail can be traced back from Weekly Markets, Melas, and Village Fairs in small towns and villages to Kirana stores, Khadi Bhandaar, co operative stores in urban cities. In the beginning there were only kirana stores called Mom and Pop Stores, the Friendly neighborhood stores selling every day needs. In the 1980s manufacturers retail chains like DCM, Gwalior Suitings, Bombay Dying, Calico, Titan etc started making its appearance in metros and small towns. Multi brand retailers came into the picture in the 1990s. In the food and FMCG sectors retailers like Food world, Subhiksha, Nilgris are some of the examples. In music segment Planet M, Music world and in books Crossword and Fountainhead are some of them. Shopping Centers began to establish from 1995 onwards. A unique example was the establishment of margin free markets in Kerala. The millennium year saw the emergence of super markets and hyper markets. Now big players like Reliance, Bharti, Tatas, HUL, and ITC are entering into the organized retail segment. The big international retail bigwigs are waiting in the wings as the present FDI guidelines do not allow them to own retail outlets in the country. Walmart is testing the waters by agreeing to provide back end and logistic support to Bharti for establishment of retail chains with a view to study the market for future entry when the FDI guidelines change and to establish a backbone supply chain. The wave of retail began with various textile manufactures like Bombay Dyeing, Raymonds, S Kumars, and Grasim foraying into selling the product through their outlets and competition among FMCG players driving the forces towards retailing.
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Retailing in India can be traced to:

y The emergence of the neighborhood Kirana stores catering to the convenience of the consumers y Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission
The study of the history of retailing business throws up the fact that in most economies organised retailing passes through four distinct phases in its evolution cycle.
Phase I-In the first phase, new entrants create awareness of modern formats and raise consumer expectations. Phase II-During the second phase, consumers demand modern formats as the market develops, leading to strong growth. Phase III-As the market matures, intense competition forces retailers to invest in backend operating efficiency. Phase IV-In the final phase, retailers explore new markets as well as inorganic opportunities as growth tapers off. Supply chain management (SCM) attains top priority in the third phase of evolution. Fierce competition forces retailers to respond quickly to changes in the market, bringing forth the importance of SCM in handling availability of stock, supplier relationships, value-added services and cost cutting. Traditional retailers are expected to enhance their investments in supply chain, whilst new entrants are likely to look at supply chain first broadening their national reach.
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Retail sector in India
India's retail sector is transforming with a three-year compounded annual growth rate of 46.64 per cent, retail sector is the fastest growing sector in the Indian economy India has witnessed a frenetic pace of retail development over the past five years. India is witnessing an unprecedented consumption boom. The economy is growing between 8 to 10 percent and the resulting improvements in income dynamics along with factors like favorable demographics and spending patterns are driving the consumption demand. Indian Retail Industry is ranked among the ten largest retail markets in the world. The attitudinal shift of the Indian consumer in terms of "Choice Preference", "Value for Money" and the emergence of organized retail formats have transformed the face of Retailing in India. The Indian retail industry is currently estimated to be a US$ 200 billion industry and organized Retailing comprises of 3 per cent (or) US$6.4 Billion of the retail industry. With a growth over 20 percent per annum over the last 5 years, organized retailing is projected to reach US$ 23 Billion by 2010.
The Indian retail industry though predominantly fragmented through the owner -run " Mom and Pop outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, namely Pantaloon Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International. In the last few years, Indians have gone through a dramatic transformation in lifestyle by moving from traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and taste. Modern retailing satisfies rising demand for such goods and services with many players entering the bandwagon in an attempt to tap greater opportunities. The year 2006 marked the beginning of the `retail revolution' through the entry of big names such as Reliance with the announcement of huge investments. But what really grabbed attention was Bharti Group's announcement of its tie-up with the world's largest retail chain, Wal-Mart. Local companies and local-foreign joint ventures are expected to more advantageously positioned than the purely foreign ones in the fledgling organized India's retailing industry.
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India has topped the AT Kearney's annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. The Indian retail market -- one of India's fastest growing industries -- is expected to grow from US$ 350 billion to US$ 427 billion by 2010. According to Euro monitor International, the Indian Retail market will grow in value terms by a total of 39.6 per cent between 2006 and 2011, averaging growth of almost 7 per cent a year. India's first true shopping mall - complete with food courts, recreation facilities and large car parking space - was inaugurated as lately as in 1999 in Mumbai. (This mall is called "Crossroads"). The prospects are very encouraging. The first steps towards sophisticated retailing are being taken, and "Crossroads" is the best example of this awakening. More such malls have been planned in the other big cities of India. An FDI Confidence Index survey done by AT Kearney, retail industry is one of the most attractive sectors for FDI (foreign direct investment) in India and foreign retail chains would make a great impact.
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MAJOR PLAYERS
RPG: RPG Group promoted by the Goenkas has forayed into the retailing business through chain stores like Food world, which mainly caters to groceries segment, Music World a specialty store and Health and Glow in the segment.
Shoppers Stop: Promoted by the Rahejas, Shoppers Stop was the first of its kind to be launched as early as 1991 with men's apparels followed by women's and children clothes. In the past 10 years since its first outlet opened in Mumbai, Shopper's Stop has expanded its retail chain to 9 stores across 7 cities. The basic theme was to make shopping an experience under one roof in a great ambience.
Vivek & Co: A Chennai based chain Vivek & Co is a good example of a multi brand store selling electronics. With a chain of 3 stores in Chennai and one in Bangalore, Vivek & Co is known for its low price policy and discount sales.
Crossroad: A shopping mall concept promoted by the Piramals situated strategically in Mumbai with a target on family as a unit and not individually. They have promoted their own chain within the mall with a few stores leased out to other leading outlets like Pantaloons, Grooves etc.
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Westside: Trent's retail outlets operate under the banner of Westside currently focusing on apparels. The Tatas ventured into retailing after the hive off of their personal care business to Hindustan Lever in 1998, by subsequently acquiring Littlewoods International, a Bangalore based department store. The company positions itself as a store to provide style at affordable price. Chennai, which was considered a traditional conservative and cost conscious market, has emerged to be the retail capital of India. It's a home ground for the successful retail names: - Food World, Music World, Health and Glow, Vitan, Subhiksha and Vivek to name a few. Pantaloon Retail (India) Ltd :(PRIL), previously known as Pantaloon Fashions (India), is engaged in the manufacture and marketing of quality ready-made garments. The company changed its name in order to highlight the focus on retailing. Its products are marketed under the brand name Pantaloon and Bare Necessities through a network of over 300 dealers spanning the metro and class-I cities in the country. PRIL also markets its products through a network of exclusive retail shops and Pantaloon Connections in the major metropolitan cities. PRIL has plans to open further fifteen outlets, which would increase the retail stores to around forty. Trent: Trent is a Tata venture, which operates under the banner of Westside. The company currently has seven stores and plans to add 13 more stores to its chain by 2003. Westside stores are positioned as family stores with a value for money association. Typically a Westside stores portfolio consists of menswear, womens wear, lingerie, kids wear, household accessories, cosmetics and perfumes. Westside stores stock only in
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house brands with exception of perfumes, cosmetics and lingerie. Each Westside store is run by the company, which ensures quality services across stores. Groceries account for a major share in retailing business in India. To tap this market Trent plans to establish a chain of 100 groceries and food stores under a different name over the next 5 years with an initial investment of Rs 40 crores. Trent is yet to show profits at operational level, the significant other income earned through treasury activity has helped it stay profitable. The company expects to achieve a turnover of Rs 85 crores in the current fiscal. Its variable costs are 70-80% of income and fixed cost at current level the company will see a break even at Rs 65mn level. Thus breakeven is eminent this year.
Undoubtedly there is a growth in urbanization and along with it a growth in the spending habits of people, which is healthy for retailing industry, but in order to sustain in the long run a successful business model must evolve. The opportunity thrown up by the fast emerging consumer boom can be converted to a profitable business proposition using scalable models revolving around establishing core USP, Store Branding, portfolio planning, providing unique value proposition, localized operations as customs do dominate consumer preferences and customer relationship management. Indian consumer believes in value for money. Indian retailing, from the Maslow's pyramid point, has enveloped only the middle section of the pyramid i.e. self-esteem and social recognition. Retailing revolution in India would take place only when organized retailing enters the base level i.basic needs.
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Retailers role in distribution channel:
A retailer is a last entity in the distribution channel. Retailers include all businesses and individuals who actively participate in the transfer of ownership of goods and services to their end users. The following figure 1.1 depicts a typical distribution channel A retailer usually plays the role of an intermediary, which links the producers, wholesalers, and the other suppliers with consumers. Companies generally prefer to specialize in manufacturing the products, leaving the task of selling the products to an outside party i.e. few wholesalers or retailers.
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FACTORS AFFECTING RETAIL PRICING

There are several factors which can influence retail pricing, and they are listed below: Perception of Substitutes Effect: Buyers have the tendencies to compare the product with its substitute, especially in case of high price products. They may select a substitute or even forgo purchasing the product if they believe the allover value is unacceptable. The Unique Value Effect: Buyers will be less sensitive to the products price, the more they consider its value to be unique and differentiating it from competing products. For instance, consumers are loyal to Hindustan Levers (HLL) or Procter and Gambles (P&G) products because they are perceived to be offering better and superior products. Difficult to Compare Alternatives: Consumers show less sensitivity to the price of the product when they find it more difficult to compare alternatives. This can even lead to increase in demand of more established brands, greater store loyalty so as to reduce the perception of risk. The Price Quality Effect: A higher price may indicate that the product is of a superior quality. One of the consequences of this may be that customers may be less sensitive to prices. For instance, increase in price of Reebok sports footwear may signal improved quality but not many customers would accept increase in price of Speed (petrol) to indicate a quality advantage over other petrol brands. Effect on Expenditure: Customers are more price sensitive (especially in budget conscious households), when the expenditure is quite high in absolute terms or as a percentage of their households income. In such cases, the household expenditure is carefully controlled.
Perceived Fairness Effect: Buyers are more prices sensitive if they perceive the price of products to be beyond what is considered to be reasonable and fair. In case of household products such as disinfectants, bedspread, toothpaste, soap, etc. It will be relatively easier for the customer to compare the offers among alternative brands and switch over to cheaper alternatives. Since price is associated with both the quality and status aspects by customers, retailers will have to understand the way in which perceived price changes can affect the customers demand pattern.
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Factors affecting retailers pricing decisions
Perception of substitution effect F a c t o r s I n f l u e n c i n g P r i c e s
The unique value effect
Difficult to compare alternatives The price quality effect
Effect on expenditure
Perceived fairness effect
Durable nature of product
Level of competition
Volatility of the market
RETAIL MANAGEMENT
CHAPTER 2: BENEFITS
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BENEFITS 1. Benefits of retailing:

The first point under retailing benefits for customers, bulk breaking, refers to the act of retailers of buying goods in large quantities and then breaking them into smaller sizes for their individual customers. As a result purchases become convenient for customers - in terms of quantity bought as well as expenditures made. The assorting function is nothing but evaluating all the different products available and offering to the target the optimum array of products from which to choose. The storing function performed by the retailers relieves customers of the task of anticipating their desires too far in advance of their needs as the retailers keep goods in inventory until customers are willing to buy and use them. Further, retailers help manufacturers smoothen the production cycle by placing orders for peak demands well in advance and by managing inventory even on behalf of the manufacturer. They create economic utility for consumers by providing the products in the form and at the place and time desired by the consumer.
2. Benefits to consumers:
Retailer act as buying agents for consumers. They perform various business activities that increase the value of the goods and services they sell to the end consumer. If there were no retailers in the distribution system, consumers would have to personally visit the manufacturers to procure the goods and services required by them. As a buying agent, a retailer performs various activities to satisfy the end consumer. These activities include:
y Breaking bulk: Breaking bulk refers to delivering single units from distribution centers to retail outlets rather than the multiple units bundled together by
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manufacturers termed casepacks. The focus is largely on the benefits to space management at the retail level, rather than the more obvious reduction in inventory costs. Using data from the grocery industry, results indicate that retail unit profitability can be increased substantially by breaking bulk - but only if current inventory replenishment practices are changed. In essence, breaking bulk allows for either higher product variety within a store or identical variety in smaller stores. This work seeks to quantify the order of magnitude of that benefit.
y Providing assortment: Retailers evaluate the products of various manufacturers and offer the best collection of products from which the customers can select the product of his/her choice. Retailers select the product assortment depending on the testes and needs of their target customers. The variety in assortment offered makes the buying process easier.
y Holding inventory: Retailers carry inventory and make the products available to customers at a convenient place and time. Retailers make it possible for consumers to make instant purchases. This reduces the cost of storage and enables the consumer to invest his money profitable. For example, a customers can walk into an electronic goods showroom and buy a music system whenever he wants, or pick up music album from any music album from any music retail outlet. Such spontaneous shopping would not be if retailers do not stock the goods.
y Providing services: Apart from selling goods, retailers also provide a variety of value added services, which make it easier for customers to buy and use products. These services include providing free home delivery, accepting credit cards, accepting payments on installments basis, arranging loans, etc.
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y Providing information: Retailers play a major role in providing product related information to their consumers. Retailers use advertising and in-store salespersons to provide product information, which helps the consumer to simplify his purchasing process.
3.
Benefits to manufacturers and wholesalers

Manufacturers and wholesalers consider retailing as a channel for delivering their
products/ services to the end customer. By selling products and services (of a manufacturer on a much larger scale), retailers provide the manufacturer with greater revenues, which could be reinvested in production and sales of the manufacturers products. Retailers function as the sensory organs of manufacturers. While designing new products or upgrading an existing product, manufacturers depend on retailers to gather information regarding the tastes and preferences of customers. Retailers provide feedback on the goods and services offered by them. This helps them to make modifications to the existing products or launch new products to satisfy the needs of customers. Retailers also share some of the risks of the manufacturers by paying for the goods before they are actually sold to the final customer. A retailer is exposed to three types of obsolescence risks:
y Physical obsolescence y Technological obsolescence y Fashion obsolescence
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Physical obsolescence risk arises from the damage or wear out caused to the products while they r stored in the retail outlet. This type of risk is common for stores dealing in handicrafts, books, greeting cards, gift items etc. retailers dealing in high technology products that are upgraded very frequently face risk of technology obsolescence. Retailers who deal in personal computers and computer components face this risk quite often. In this industry (computers), upgraded versions are introduced very frequently and these are available at a lesser price than that of the lower versions, which may result in severe losses for the retailer. Fashion obsolescence risk is very common for apparel retailers who deal in merchandise of varying style, design or color.
4. Benefits to the economy

The retailing business is the largest private industry in the world with a turnover of US $6.6 trillion. Retailing plays a crucial role in the management of world economy and retailers and retailers constitute a tenth of the Fortune 500 companies. In India, retailing accounts for over 10 per cent of the countrys GDP and around eight per cent of the employment, only next to the agricultural industry. The value of the total retail trade in India was Rs. 400,000 crore in 1999 and analysts feel that this will increase at the rate of 20 per cent every year and touch Rs. 800,000 crore by the year 2005. in the year 2000 Indias per capita GDP was $ 468 and per capita retail sales amounted to $ 220. The table below gives the per capita GDP and retail sales of various countries across the world.
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CHAPTER 3: CLASSIFICATION OF RETAILERS
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CLASSIFICATION OF RETAILERS
1. UNORGANIZED RETAIL
Mom and pop stores
The small local stores have dominated Indian retailing over the decades and are present in every village and local community, addressing the needs of the population in the area and being the point of contact with the consumer. The distribution networks of brands extend right up to this point to stay in touch with customer needs and preferences. India like most other countries has a very large network of local stores. The retail industry in rural India has typically two forms: "Haats" and "Melas". You will find these in almost every village and locality. A lot of them function as paan and cigarette outlets with tea and coffee sometimes also offered. Besides this these stores stock and offer small eats and soft drinks including biscuits, soft drinks, chocolate, sweets, bread and baked products. Many of them also sell fruits like bananas and a range of toiletries and cosmetics like soaps, shampoos, toothpastes and some creams. These small stores cater to the needs of their own local population and travelers who stop by for a smoke or a snack. A little larger format is the neighborhood grocery store that focuses on grains, foods, snacks and toiletries besides other home essentials. Fruits and vegetables that are perishable are usually maintained and offered by exclusive vegetable stores and not by the normal groceries. Every fair sized village is likely to have at least one grocery store, a fruit and vegetable shop and a paan and cigarette shop. The new addition of the past decade is to have a telephone booth that lets locals and travelers make national and international telephone calls. This network is very large and spread all across India. It is not really a network since each store is individual or family owned and has no connection with the other. It does however represent a network since large consumer product companies like Unilever, Procter & Gamble, Colgate-Palmolive, Cadbury, Coca Cola, Pepsi and ITC uses them as their final point of retail to the consumer. While it is
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commonly believed that the new retail chains will drive these small stores out of business, reality points the other way and it is likely that these stores will continue even in the next two decades of growth. These small stores are very personal and have strong relationships with the local population. They are points of news and connection. They offer credit to the local population and help out in times of crisis. They also have a very good understanding of requirements of the local population and have very low overheads enabling them to offer the best price for their products.
Categories of traditional retail segment
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y Fruit and Vegetable Sellers - Sells fruit and vegetables. y Food Store - Reseller of bakery products. Also sells dairy and processed food and beverages. y Non -Vegetable Store - Sells chicken and mutton (supplemented by fish), or predominantly fish. y Kirana I - Sells bakery products, dairy and processed food, home and personal care, and beverages. y Kirana II - Sells categories available at a Kirana I store plus cereals, pulses, spices, and edible oils. y Modern Independent Stores - Sells categories available at a Kirana II store and has self- service. Operates single or several stores (but not an organized chain of stores). y Apparel Sells mens wear, womens wear, innerwear, kids and infant wear. y Footwear Sells mens wear, womens wear, and kids wear. y CDIT (Consumer Durables & IT) Sells electronics, small appliances, durables, telecom, and IT products. y Furnishing Sells home linen and upholstery. y Hardware - Sells sanitary-ware, taps and faucets, door fittings, and tiles. y General Merchandize Includes lightning, stationery, toys, gifts, utensils, and crockery stores.
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Conventional formats in unorganized retail sector
y Kiranas
These are food and non-food neighborhood counter stores, also called mom and pop stores in western countries. These are big chunks forming the segregated and unorganized retail segment. These are family-owned and- run retail-outlets picking the goods from wholesalers totaling to around 12 million stores across India.
y Mandis
These are the largest chunk of unorganized retail catering to urban and rural masses. Mandis are physically located at different regions to enhance convenient shopping. The sellers bring across various products like eatables, vegetables and fruits, pulses, cereals, spices etc. The most prominent of them are sabzi mandis found in most of the localities across India.
y Village Haats
This form is operating in rural areas where buyers and sellers gather once in a week or month from nearby villages and small towns to cater their livelihood and leisure needs. These haats are a source of entertainment and socialization among rural masses.
y Push Cart Vendors

The are categories of vendors roaming from door to door in various localities selling fruits, vegetables, and other eatables, from which mostly housewives makes purchases that too on credit.
Size of Unorganized Outlets
Traditional stores are mostly small in size. The traditional retail outlets had an average size of 217 sq. ft. including the storage area, with textiles and clothing shops having a higher average size of 256 sq. ft. and fixed fruit and vegetable shops an average size of
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129 sq. ft. The grocery and general stores have an average size of 216 sq. ft. including the storage area
Employment
The unorganized retail outlets employ more family labour than hired labour; on an average they employ 1.5 persons per shop from the family, and hired employees of 1.1 persons. There is a marginal increase in overall employment for these outlets over the period of existence of organized retail outlets.
Response to competition
Unorganized retailers have indicated a number of steps taken in response to competition from organized retail, such as adding new product lines and brands, better display, renovation of the store, introduction of self service, enhanced home delivery, more credit sales, acceptance of credit cards, etc.
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2. ORGANIZED RETAIL
Introduction
An important aspect of the current economic scenario in India is the emergence of organized retail. There has been considerable growth in organized retailing business in recent years and it is poised for much faster growth in the future. Major industrial houses have entered this area and have announced very ambitious future expansion plans. Transnational corporations are also seeking to come to India and set up retail chains in collaboration with big Indian companies. However, opinions are divided on the impact of the growth of organized retail in the country. Concerns have been raised that the growth of organized retailing may have an adverse impact on retailers in the unorganized sector. It has also been argued that growth of organized retailing will yield efficiencies in the supply chain, enabling better access to markets to producers (including farmers and small producers) and enabling higher prices, on the one hand and, lower prices to consumers, on the other. In the context of divergent views on the impact of organized retail, it is essential that an in-depth analytical study on the possible effects of organized retailing in India is conducted. The Indian retail sector is highly fragmented, consisting predominantly of small, independent, owner-managed shops. The domestic organized retail industry is at a nascent stage. At macro level factors such as rising disposable income, dominance of the younger population in spending, urbanization, shift of the traditional family structure towards the nuclear family are buttressing the organized retail growth in India. Being considered as a sunrise sector of the economy, several large business houses are entering the retail industry under multiple modern retail formats. On the one hand, the advancement of information technology is improving end-to-end business processing by integrating the entire value chain, backward
the
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and forward, for operational efficiencies. On the other hand, rising real estate prices, infrastructure constraints, and expensive technology are making the retail industry capital intensive.
Categories of retail segments in organized sector

y Food and Grocery This is the largest vertical of 74.4 percent of retail size compromising fruits and vegetables, milk and milk products, staples, cereals, grains, pulses, processed food, ready to cook and ready to eat meals, spices and other eatables. This is least penetrated segment across all verticals of around 1percent, being the most untapped pie. y Apparels Clothing and textile is a large organized vertical dominated by textile manufacturers Raymond, Bombay Dyeing, Vimal, and by big retailers like Pantaloon, Pyramids, Koutons having around 19 percent penetration level. Increasing disposable incomes and change in the lifestyle needs has pushed the segment. y Consumer Durables The electronics and consumer durable is the biggest organized segment penetrated to around 10 percent. There lies more unearthed growth in the verticals as the craze for electronic gadgets have been picking up with the advent of nuclear families. y Home Dcor and furnishing The demand for furnishing is going to be spearheaded by a huge demand for the realestate, paving way to tap the unorganized segment. Presently only a few players like Gautier, Godrej, & Durian function as organized entities.
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y Jewellery and Watches Titan is the early entrant in the segment followed by MNCs Oyzterbay, Tanishq, Swaroski, Orra, Gitanjali, & Ddamas driven by demand for fashion accessories, and huge advertising and promotion campaigns. y Beauty Care The organized players in Beauty Care are HUL (Lakme Salons), Marico (Kaya), Health and Glow are having a huge growth impetus. y Footwear Leaving aside the Apparel, Footwear segment is forming a big pie in the organised retail sector, expected to grow to greater heights with foreign payers like Crocs Inc. Books, Music and gifts In addition to Tier-II and Tier-III cities, the habit of reading books and listening to music is picking up among the Tier-I cities. The stores like Oxford Bookstore etc are experiencing this upswing.
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Retail in organized sector of India (segment wise): 2008 Retail Segments Clothing, Textiles & Fashion Accessories Jewellery Watches Footwear Health services Pharmaceuticals Consumer Durables, Home Appliances/equipments Mobile handsets. Accessories & Services Furnishings, Utensils, & Beauty care India Retail Value Organised Retail % Organised in (Rs.Crore) 21,400 1,680 1,800 5,200 400 1,100 5,000 2008 18.9 2.8 45.6 37.8 10.6 2.6 10.4
(Rs.Crore) 113,500 60,200 3,950 13,750 3,800 42,200 48,100
21,650
1,740
8.0
Furniture-Home & Office Furnishings, Utensils,
40,650
3,700
9.1
Furniture-Home & Office Food & Grocery Catering Services (F & B) Books, Music & Gifts Entertainment Total
40,650 743,900 57,000 13,300 38,000 US$ 270 Billion
3,700 5,800 3,940 1,680 1,560 US$ 12.4 Billion
9.1 0.8 6.9 12.6 4.1
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Modern formats in Organized Retailing
The following are the major modern formats in organized retailing: y Hypermarket Description: Larger than a supermarket, sometimes with a warehouse appearance, generally located in quieter parts of the city Value preposition: Low prices, vast choice available including services such as cafeterias. Typically varying between 50,000 sq. ft. and 1, 00,000 sq. ft., hypermarkets offer a large basket of products, ranging from grocery, fresh and processed food, beauty and household products, clothing and appliances, etc. The key players in the segment are: the RPG Group's Giant (Spencers) hypermarkets, and Pantaloon Retail's Big Bazaars.
y Cash-and-carry These are large B2B focused retail formats, buying and selling in bulk for various commodities. At present, due to legal constraints, in most states they are not able to sell fresh produce or liquor. Cash-and-carry (C&C) stores are large (more than 75,000 sq. ft.), carry several thousand stock-keeping units (SKUs) and generally have bulk buying requirements. In India an example of this is Metro, the Germany-based C&C, which has outlets in Bangalore and Hyderabad. y Department Store Description: Large stores having a wide variety of products, organized into different departments such as clothing, house wares, furniture, appliances, toys, etc. Value preposition: One stop shop catering to varied/ consumer needs. Department stores generally have a large layout with a wide range of merchandise mix, usually in cohesive categories, such as fashion accessories, gifts and home furnishings, but skewed towards garments. These stores are focused towards a wider consumer
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audience catchment, with in-store services as a primary differentiator. The department stores usually have 10,000 - 60,000 sq. ft. of retail space. Various examples include: (i) Shoppers' Stop, controlled by the K. Raheja Group, a pioneering chain in the country's organized retail; (ii) (iii) (iv) Pantaloons, a family chain store, which is another major player in the segment; Westside, the department store chain from Tata Group's Trent Ltd; Ebony, a department store chain from another real estate developer, the DS Group; (v) (vi) Lifestyle, part of the Dubai-based retail chain,Landmark Group; and The Globus department and superstore chain.
y Supermarket Description: Extremely large self-service retail outlets Value preposition: One stop shop catering to varied consumer needs Supermarkets, generally large in size and typical in layouts, offer not only household products but also food as an integral part of their services. The family is their target customer and typical examples of this retailing format in India are Apna Bazaar,Sabka Bazaar, Haiko, Nilgiri's, Spencers from the RPG Group, Food Bazaar from Pantaloon Retail, etc y Shop-in-Shop There is a proliferation of large shopping malls across major cities. Since they are becoming a major shopping destination for customers, more and more retail brands are devising strategies to scale their store size in order to gain presence within the large format, department or supermarket, within these malls. For example, Infinity, a retail brand selling international jewellery and crystal ware from Kolkata's Magma Group, has already established presence in over 36 department chains and exclusive brand stores in less than five years. Shop-in-shops have to rely heavily on a very 134 efficiently managed supply chain system so as to ensure that stock replenishment is done fast, as there is limited space for buffer stocks.
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y Specialty Store Description: Focus on a specific consumer need, carry most of the brands available Value preposition: Greater choice to the consumer, comparison between brands is possible Specialty stores are single-category, focusing on individuals and group clusters of the same class, with high product loyalty. Typical examples of such retail format are: footwear stores, music stores, electronic and household stores, gift stores, food and beverages retailers, and even focused apparel chain or brand stores. Besides all these formats, the Indian market is flooded with formats labeled as multi-brand outlets (MBOs), exclusive brand outlets (EBOs), kiosks and corners and shop-in-shops.
y Category Killers Large Specialty Retailers Category killers focus on a particular segment and are able to provide a wide range of choice to the consumer, usually at affordable prices due to the scale they achieve. Examples of category killers in the West include Office Mart in the US. In the Indian context, the experiment in the sector has been led by The Loft, a footwear store in Powai, Mumbai measuring 18,000 sq. ft. y Discount Store Description: Stores offering discounts on the retail price through selling high volumes and reaping economies of scale Value preposition: Low Prices A discount store is a retail store offering a wide range of products, mostly branded, at discounted prices. The average size of such stores is 1,000 sq.ft. Typical examples of such stores in India are: food and grocery stores offering discounts, like Subhiksha, Margin Free, etc. and the factory outlets of apparel and footwear brands, namely of, Levis, Nike, Koutons, etc. y Convenience Store Description: Small self-service formats located in crowded urban areas. Value preposition: Convenient location and extended operating hours. A convenience store is a relatively small retail store located near a residential area
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(Closer to the consumer), open long hours, seven days a week, and carrying a limited range of staples and groceries. Some Indian examples of convenience stores include: In & Out, Safal. The average size of a convenience store is around800 sq.ft. y E-tailing The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping. An estimated 10 per cent of the total e-commerce market is accounted by e-tailing. With todays, net-savvy Indians making online purchases like never before, both the number and variety of products sold online have grown exponentially. According to the Indian Marketing Research Bureau (IMRB) and Internet and Mobile Association of India (IAMAI), the e-tail market is estimated to grow by 30 per cent to US$ 273.02 million in 2007-08, from US$ 210.01 million in 2006-07. In fact, there has been a continuous rise in the number of people accessing the internet. According to online research and advisory firm Just Consult's 'India Online 2008', there are over 49 million internet users in India. Significantly, internet penetration (as a percentage of population) has grown to 12 per cent, up 3 per cent from last year's 9 per cent. In modern retailing, a key strategic choice is the format. Innovation in formats can provide an edge to retailers. Organized retailers in India are trying a variety of formats, ranging from discount stores to supermarkets to hypermarkets to specialty chains.
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Malls: The new face of retail market

Robust GDP growth, stronger currency reserves and ever-improving market and operating environments are propelling the Indian market through a period of stellar growth - and the retail community is responding with newer formats and innovative products. The economy of India has shown a remarkable increase driven by overall political and social stability. The decade-old economic reforms have engendered a new, shop-till-you-drop breed of middle class Indians who, having tasted the shopping experience of big cities overseas, have fuelled a demand that was inevitable - the rise of the shopping malls. Centrally air-conditioned malls with piped music, high-speed lifts and escalators, underground parking space, a multiplex movie theater, multi-cuisine restaurants and a host of national and international brands, these malls generates approximately 25,000 footfalls each, per day, with figures doubling on weekend
Employment Generation
Finally, but most importantly, the employment generated by organized retail is building a quality labor class that is gaining vocational training in skilled and unskilled jobs at the graduate and tenth class level. To meet the growing demand of trained professionals in the retail industry, several management and training institutes conforming to the international standards of certification have been launched across the country. Foreseeing the demand for trained staff, leading organized retailers are creating their captive human resources pool through internal training and programs and tie-ups with retail management schools.
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Challenges for organized retail:

y Customer convenience Unorganized retailers provide convenience to customers as they are located near by residential area. They also have good relationship with customers to allow them buy the goods on credit which organized retailers cannot provide.
y Surplus of labor / Shortage of Skilled manpower Organized retailers, in India, worry about losing out to their micro, unorganized competitors. In India, unlike in the industrialized countries, labor is typically not the critical cost factor in establishing a business, and this may make a business model based on replacing labor with technology vulnerable. India has surplus of manpower which will be left unutilized there by leading to increase in unemployment. The manpower needed by this sector is mainly skilled labor which is limited in our country.
y High price of Retail Space Real estate prices in Indias urban areas are skyrocketing. The efficiency gains of organized retail may not be sufficient to counteract these costs. y Inadequate Infrastructure In addition, large retail franchises depend on reliable and integrated infrastructure. Telecommunications modernization has been a success story in India. The other critical sectors, notably roads, ports, air cargo facilities, and electric power, are seeing increased investment but are still well below international standards. y Government Policies different priorities in different states Organized retailers, like other businesses, face the constraints of red tape and intrusive government regulations. A 2003 study estimated that new retail stores require an average of 15 different licenses from different national and state governing bodies. Also, environmental regulations, generally not very stringent in India, have fallen more heavily on the retail sector.
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Impact of organized retail

1. Impact on Unorganized Retailers y Unorganized retailers in the vicinity of organized retailers experienced a decline in their volume of business and profit in the initial years after the entry of large organized retailers. y The adverse impact on sales and profit weakens over time. y There was no evidence of a decline in overall employment in the unorganized sector as a result of the entry of organized retailers. y There is some decline in employment in the North and West regions which, however, also weakens over time. y The rate of closure of unorganized retail shops in gross terms is found to be 4.2 per cent per annum which is much lower than the international rate of closure of small businesses. y The rate of closure on account of competition from organized retail is lower still at 1.7 per cent per annum. y There is competitive response from traditional retailers through improved business practices and technology up gradation. y A majority of unorganized retailers is keen to stay in the business and compete, while also wanting the next generation to continue likewise. y Small retailers have been extending more credit to attract and retain customers. y However, only 12 per cent of unorganized retailers have access to institutional credit and 37 per cent felt the need for better access to commercial bank credit. y Most unorganized retailers are committed to remaining independent and barely 10 per cent preferred to become franchisees of organized retailers.
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2. Impact on Consumers y Consumers have definitely gained from organized retail on multiple counts. y Overall consumer spending has increased with the entry of the organized retail. y While all income groups saved through organized retail purchases, the survey revealed that lower income consumers saved more. Thus, organized retail is relatively more beneficial to the less well-off consumers. y Proximity is a major comparative advantage of unorganized outlets. y Unorganized retailers have significant competitive strengths that include consumer goodwill, credit sales, and amenability to bargaining, ability to sell loose items, convenient timings, and home delivery.
3. Impact on Intermediaries y The study did not find any evidence so far of adverse impact of organized retail on intermediaries. y There is, however, some adverse impact on turnover and profit of intermediaries dealing in products such as, fruit, vegetables, and apparel. y Over two-thirds of the intermediaries plan to expand their businesses in response to increased business opportunities opened by the expansion of retail. y Only 22 per cent do not want the next generation to enter the same business. 4. Impact on Farmers y Farmers benefit significantly from the option of direct sales to organized retailers. y Average price realization for cauliflower farmers selling directly to organized retail is about 25 per cent higher than their proceeds from sale to regulated government mandi. y Profit realization for farmers selling directly to organized retailers is about 60 per cent higher than that received from selling in the mandi y The difference is even larger when the amount charged by the commission agent (usually 10 per cent of sale price) in the mandi is taken into account.
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5. Impact on Manufacturers y Large manufacturers have started feeling the competitive impact of organized retail through price and payment pressures. y Manufacturers have responded through building and reinforcing their brand strength, increasing their own retail presence, adopting small retailers, and setting up dedicated teams to deal with modern retailers. y Entry of organized retail is transforming the logistics industry. This will create significant positive externalities across the economy. 6. Impact on India y The emergence of organized retail gives consumers a wider choice of goods, more convenience, and a better shopping environment. y Traditional retailers (kirana stores, street hawkers, and wetmarket stall operators) occupy an overwhelmingly large space in Indian food retail; almost 99 percent of food and grocery being sold in this country is through traditional retailers. These traditional retailers are upgrading their stores to compete with organised retailers. y Farmers are gaining because organised retailers are procuring directly from them thereby eliminating middle men and cost. So retailers are in position to pay higher prices to farmers.
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SWOT Analysis
1. Strengths y Retailing is a technology-intensive" industry. It is technology that will help the organized retailers to score over the unorganized retailers. Successful organized retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building competitive advantage through distribution & information systems in the retailing industry. They introduced two innovative logistics techniques crossdocking and EDI (electronic data interchange). y On an average a super market stocks up to 5000 SKU's (Stock keeping Units) against a few hundreds stocked with an average unorganized-retailer.
2. Weaknesses y Less Conversion level: Despite high footfalls, the conversion ratio has been very low in the retail outlets in a mall as compared to the standalone counter parts. It is seen that actual conversions of footfall into sales for a mall outlet is approximately 20-25 percent. On the other hand, a high street store of retail chain has an average conversion of about 50-60 percent. As a result, a stand-alone store has a ROI (return on investment) of 25-30 percent; in contrast the retail majors are experiencing a ROI of 8-10 percent. y Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they have stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base.
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3. Opportunities y The Indian middle class is already 30 crore & is projected to grow to over 60 crore by 2010, making India one of the largest consumer markets of the world. y Organized retail is only 4 percent of the total retailing market in India. It is estimated to grow at the rate of 27 percent p.a. and reach Rs. 1, 37,000 crore by 2010. y Percolating down: In India it has been found out that the top 6 cities contribute 66 percent of the total organized retailing. While the metros have already been exploited, the focus has now been shifted towards the tier-II cities. The 'retail boom, of which 85 percent has so far been concentrated in the metros, is beginning to percolate down to these smaller cities and towns. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25 percent. y Rural Retailing: India's huge rural population has caught the eye of the retailers looking for new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse range of products from FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop destination for all their needs. "Hariyali Bazar", started by DCM Sriram group, provides farm-related inputs & services. The Godrej group has launched the concept of 'agri-stores' named "Aadhaar" which offers agricultural products such as fertilizers & animal feed along with the required knowledge for effective use of the same to the farmers. Pepsi on the other hand is experimenting with the farmers of Punjab for growing the right quality of tomato for its tomato purees, pastes.
4. Threats y If the unorganized retailers are put together, they are parallel to a large supermarket with little or no over-heads, a high degree of flexibility in merchandise, display, prices and turnover. y Shopping Culture has not developed in India as yet. Even now malls are just a place to hang around, largely confined to window-shopping.
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3. ORGANIZED VERSUS UNORGANIZED RETAIL

Advantages of conventional unorganized and modern organized retail formats
Conventional unorganized 1. Low operating-cost and overheads Modern organized Large bargaining power
2. Proximity to consumers
Range and variety of goods
3. Long operating-hours
Quality assurance (brand related, durability)
4. Strong relations with customers
Convenience and hygiene
In the long run, both traditional and modern retail formats will co-exist providing the benefits of both the formats.
Both organized and unorganized are at profit

Nevertheless, the macroeconomic landscape indicates that the domestic retail industry has immense scope for the modern as well as traditional retailers to co-exist. Through a balanced regulatory framework and competition policy, both the traditional format and the modern format can continue to grow, eventually closing the gap between the organized and unorganized sectors. Organized retailing will: 1. Promote quality employment; 2. Improve business process practices 3. Spur investments in support industries; and 4. Enable the modernization of the fragmented traditional retail industry.
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CHAPTER 4: UNDERSTANDING THE RETAIL CUSTOMER
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UNDERSTANDING THE RETAIL CUSTOMER

To understand the purchasing patterns of customers, it is vital to understand the customer nature and examine the external factors that influence their buying behavior. The increasing value perception among customer is putting more pressure on the retailer to offer merchandise of superior quality that is valuable to the consumers eye. Retailers explore investment opportunities after analyzing the customers needs, aspirations, shopping preferences and buying behavior. In India, there are huge differences in the social practices and food habits of people in the various regions. The cultural difference in India, when compared to the rest of the world, and even other countries within Asia, is striking. Before liberalization, the Indian market was a seller-driven market. But liberalization has changed the face of the Indian retail market, especially in the Fast Moving Consumer Goods (FMCG) and consumer durables sector. Liberalization also witnessed the entry of multinationals resulting in the radical improvement in the models, features, technology and sizes of consumer durables available in India. Since 1991, the FMCG sector in India has been trying to cater to the consumers, according to the mindset of the Indian customer, and to deliver quality products at low costs. In short, consumers have gained much significance in the market with a wide range of products, a multitude of brands (Indian and foreign), various financing options, large onestop shops, colorful stores and shopping malls. Retailing includes the purchasing and selling of products and services to the consumer, who buys them for individual and household consumption. The consumption of goods and services depends on the individuals preferences and choices. Thus, consumer behavior plays an important role in the determining the success and growth of retail stores.
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STRUCTURE OF THE BUYING POPULATION AND THEIR BEHAVIOR

A retailer should understand the structure of the population and their buying behavior, so that he can cater to the needs of the buyer in a better way. Buying behavior deals with the process a consumer undergoes while deciding whether to purchase a product/ service or not. Based on the customers nature and his intentions behind purchasing the merchandise, the buying population can be divided in to two categories the consumer market and the organizational market.
THE MARKET
A market can be defined as a group of consumers or organizations that is interested in a particular product, has the resources to purchase the products, and is permitted by the law to acquire these products. A market definition begins with the total population and progressively narrows down to the target market and then to the penetrated market. A retail market is a place where all the retailers compete with each other for recognition acceptance through various merchandise promotional activities. Thus, to understand the retail market, one has to understand the structure of the buying population and their behavior.
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DIAGRAMATICAL REPRESENTATION OF MARKET
TOTAL POPULATION
POTENTIAL MARKET
AVAILABLE MARKET
QUALIFIED AVAILABLE MARKET
TARGET MARKET
POTENTIAL MARKET
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CHAPTER 5: WHY RETAIL SECTOR IS BOOMING?
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WHY RETAIL SECTOR IS BOOMING?
1. The Growth Drivers

Much spoken about industry in India today is retail and every big foreign retail brand wants to have a share of it. Why are they so eager to capture this market? Due to the following reasons.
The economy is growing by 8% a year, its stock market rose by nearly 40% in 2005 and foreign investors are flooding in. There are about nine million small grocery shops in India whichever way you measure it, business in India is booming. And as the economy grows so does India's middle class. It is estimated that 70 million Indians in a population of about 1 billion now earn a salary of $18,000 a year, a figure that is set to rise to 140 million by 2011. Many of these people are looking for more choice in where to spend their new-found wealth. This has led to increase in purchasing power of Indians.
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India's consumer market is riding the crest of the country's economic boom. A young population with access to disposable income seems to have facilitated a growth in the retail industry as global super marts make India their favoured destination. Also, the rise in the working population which is young, pay- packets which are hefty, more nuclear families in urban areas, rise in the number of women working, more disposable income and customer aspiration, western influences and growth in expenditure for luxury items. All these are the factors for the growth in Indian organized retail sector.
The Indian Retail growth can be attributed to the several factors including
y Demography Dynamics: Approximately 60 per cent of Indian population below 30 years of age. y Higher disposable income: The disposable income has been showing a rapid increase from the last few years and is expected to grow steadily y Double Incomes: Increasing instances of Double Incomes in most families as both the partners are working coupled with the rise in spending power. y Adoption of Nuclear Family culture: The increase in per capita income paved way to increase the nuclear-family culture. The proportion of nuclear families as a percentage of total household population has increased y Robust Outlook towards Branded products: Due to liberalization of manufacturing sector, various organized branded products have entered into Indian markets, thereby developing and widening the basket for branded finished goods. Growth in Retail Malls and various other new Formats: Real Estate players like Rahejas, Future Group, DLF, Omaxe, Piramal Group, Parsvnath, Unitech are developing retail malls and leasing out the retail spaces to various retailers of varied products making it a one-stop shopping destinations in urban and semi-urban cities. These shopping-cumentertainment malls are wooing young buyers to increase their conversion rate backed by increasing foot-falls.
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y Plastic Revolution: Increasing use of credit cards for categories relating to Apparel, Consumer Durable Goods, Food and Grocery etc. y Urbanization: increased urbanization has led to higher customer density areas thus enabling retailers to use lesser number of stores to target the same number of customers. Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of scale.
2. Drivers of growth in organized retail

India is currently in the second phase of the retail evolution, with domestic customers becoming more demanding with their rising standard of living and changing lifestyles. Change in customers' focus from just buying to broad shopping (buying, entertainment and experience) has led to a pick-up in momentum in organized formats of retailing. The following are the drivers for organized retail in India: y The spread between yield on property and its financing cost has turned positive with the fall in interest rates. Attractive yields on investments have resulted in a sharp increase in property development. It is estimated that India will have over 600 malls by 2010, with as much as 100 million sq ft retail space. y Pro-active steps taken by the government permitting use of land for commercial development in various cities, including Mumbai and Delhi, have also contributed to increased availability of retail space in the country. Availability of retail space is expected to increase further whenever property funds and investment trusts are permitted, which will help create a secondary market for real estate in the country. y Consumerism and brand proliferation also enhanced organized retailing in the country. Most of the world's leading brands, including like L'Oreal, Espirit, Louis Vuitton, Marks & Spencer, Tommy Hilfiger, Louis Phillipe, Levis, Pepe, Lee, Arrow, Dockers, Red Tape, Clairns, Hugo Boss, Tiffany, Bulgari, Ecco, Chambor, Revlon, Philips, Corelle, Magppie, Nike, Reebok, Parker, Ray Ban, Lego and Mattel, are now present in India.
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y Another factor that accelerated the growth of organised retailing is media proliferation. Increased advertisements and brand promotions have led to a growing consumer spending across a wide range of product categories.
3. Investment Opportunities
The total estimated Investment Opportunity in the retail sector is around US$ 5-6 Billion in the Next five years. The following are the areas for investment: y In Location: with modern retail formats having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune, Chennai, Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5 years. y In Sectors with High Growth Potential: Certain segments that promise a high growth are Food and Grocery (91 per cent), Clothing (55 per cent), Furniture and Fixtures (27 per cent), Pharmacy (27 per cent), Durables, Footwear & Leather, Watch & Jewellery (18 per cent).Fastest Growing Formats that offer good growth potential are: Specialty and Super Market (45 per cent) Hyper Market (36 per cent) Discount stores (27 per cent) Department Stores (18 per cent) Convenience Stores and E-Retailing (9 per cent) y In Supply Chain Infrastructure: Supply chain infrastructure in terms of cold chain and Logistics. y In Rural Retail: Retail sector offers opportunities for exploration and investment in rural areas, with Corporate and Entrepreneurs having made a foray in the past. India's largely rural population has caught the eye of retailers looking for new areas of growth. ITC launched the country's first rural mall 'Chaupal Sagar', offering a diverse product ranges from FMCG to electronics appliance to automobiles, attempting to provide farmers a one-stop destination for all of their
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needs. There has been yet another initiative by the DCM Sriram Group called the 'Hariyali Bazaar that has initially started off by providing farm related inputs and services but plans to introduce the complete shopping basket in due course. Other corporate bodies include Escorts and Tata Chemicals (with Tata Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in order to tap the vast rural market. y In Wholesale Trading: Wholesale trading also holds huge potential for growth. German giant Metro AG and South African Shoprite Holdings have already made headway in this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai respectively. These new-format cash-and-carry stores attract large volumes from a sizeable number of retailers who do not have to maintain relationships with multiple suppliers for all their needs.
4. Growth in support industries

Indias retail boom has seen several beneficial spin-offs for a variety of allied industries such as logistics and air-conditioning. Newer industries are seeing a boom arising from the rapid growth of the retail industry in India. With an expected $412 billion investment projected to come into the Indian retail industry by the year 2011, there are several sectors that will continue to profit from this boom. Both Indian and foreign companies in sectors such as airlines, commercial refrigeration and air-conditioning, logistics, smart card makers are all tying up with retailers to be part of the growth. One of the first industries to see this growth is the commercial refrigeration and air-conditioning sector, due to the rise of organized food retailer. Logistic companies are also poised for significant growth and several foreign companies such as Bax Global, Prologis and PWC Logistics are expanding operations in India. Indian operators include The Tata Group which as tied up with DHL for its Croma Stores, Air Deccan which is in talks with several retailers and Go Air which is soon launching its cargo division.
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CHAPTER 6: RETAIL SCENARIO
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RETAILING SCENARIO
1. GLOBAL SCENARIO
Retailing in more developed countries is big business and better organised than what it is in India. According to a report published by McKinsey & Co. along with the Confideration of Indian Industry the global retail business is worth a staggering US $6.6 Trillion. In the developed world, most of it is accounted for by the organised sector. For instance, the organised sector has an up to 80% share of retail sales in the United States. The corresponding figures for western Europe is 70%,while it is 40% in Brazil and Argentina and 35% in Korea and Taiwan.Organised retailing in Asia however, remains poorly developed, accounting for a paltry 20% in Malaysia, Thailand and China. The services sector accounts for a large share of GDP in most developed economies. And the retail sector forms a very strong component of the service sector. Hence; the employment opportunity offered by the industry is immense. According to the US Department of Labor, about 22 million Americans are employed in the retailing industry in more than 2 million retail storesthat is, one out of every five workers employed. In short, as people need to buy, retail will generate employment.
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Retail Sales in 2008 (in US$ billions)
USA
FRANCE
UK
CHINA
INDIA
0 500 1000 1500 2000 2500 3000
*Source: A&M Magazine, 26th February 2009
As many as 10% of the worlds billionaires are retailers. The industry accounts over 8% GDP in western countries, and is one of the largest employers. According to the U.S. Department of labor, more than 22 million Americans are employed in the retailing industry in over 2 million retail stores. Retailing in the developed world today is far more organized than in India. Up to 80% of all the retail sales in the United States is accounted for by the organized retail sector. The corresponding figure in Western Europe is 70%, while it is 40% in Brazil and Argentina and 35% in Korea and Taiwan.
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Over the past few decades, retail formats have changed radically worldwide. The basic department stores and cooperatives of the early 20th century have given way to mass merchandisers (Wal-Mart), hypermarkets (Carrefour), warehouse clubs (Sams Club, Makro), category killers (toys R us, Sport Authority), discounter (Aldi) and convenience stores (7-Eleven) Organized retail formats worldwide have evolved in three phases:-
I.
Retailers decide on the category and quality of products and services, differentiating them from other retailers. Retailer formats in this phase are typically supermarkets, department stores and specialty stores.
II.
During the second phase, retailers carve a niche for themselves based on a product category and price. Competition intensifies because the product and services on offer become virtually standardized and price becomes the main selling point. This phase normally gives way to discount stores.
III.
The third phase arrives when competition peaks. This is when hypermarkets begin to evolve. Hypermarkets usually compete on price and wider product range, but they normally lack product depth and service components.
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2. THE INDIAN SCENARIO
India with a population of more than 1bn has a potential to be among the biggest consumer markets of the world next only to China. The country has a large middle class segment of about 350mn consumers. Sheer size in terms of population and geographical area with growing number of metropolitan and cosmopolitan cities displaying high spending capabilities make it a ripe target for retailing. The growth in GDP in the last 20 years has averaged to 8.5% with the economy showing strength in even times of world crisis in late 1990s. India is considered a land of shopkeepers. There are 5.5 outlets per 1000 people in India making it unique in terms of having maximum number of outlets in comparison to any other country in the world. Retailing in India as such exists from the times as ancient as the Indus Valley civilization but was restricted to local kiranawalas (small stores with the business being conducted in a small area of 100-150 sq ft area catering to the local area of 1sq km) till the late 80s. The organized sector evolved with cities having 2-3 departmental stores for the elite class. The deregulation in 1991 marked the beginning of organized retailing for the middle class. Corporate like The Piramals, The Tatas, The Rahejas, ITC, S Kumar's, RPG enterprises and mega retailers like Crosswords, Vitans, Memp's, Shoppers Stop, Vivek and Akbarally surfaced bringing with them professional management and market presence.
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Retailing industry is determined by demographic trends and lifestyle trends. The emergence of organized retailing in India was an outcome of increased purchasing power of buyers post liberalization and availability of product variety. Increasing number of nuclear families, working women with mounting work pressures paved way for 'convenience', which became the mantra of retailing. Consumer acceptability with regards to electronics, dry groceries, books, music, men's apparels made this segment the ripe target. The emergence of Shoppers Stop, Foodworld, Westside, Subiksha, sVivek was a direct outcome of the derived demand. India is the last large Asian country to liberalise its retail sector. The Indian Retailing Industry is estimated to be $180 bn with organized sector representing a mere 2% share. Thus there is a potential for organized players to enter the market.
Purchasing Power of Consumer: Buying patterns of consumers vary as per customs and lifestyles. Increasing number of double income households has improved the purchasing power of consumer wanting to have a better standard of living. Retailing as a concept is all about unleashing the consumers buying power. About 38% of India's high-income households live in the top 5 cities of Mumbai, Delhi, Kolkotta, Chennai and Bangalore. This prompts one to consider the rationale behind moving beyond these five cities. Mini metros have the advantages of metros while over looking the disadvantages like property prices. As additional 28% of the high-income population stays in mid sized cities, by covering the metros and the mini metro organized retailing can tap 66% of the highincome population.
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Real Estate prices: In the Indian retailing model, property cost forms a major cost being 6-10% of sales. Unlike the west, Indian planners did not plan commercial property while town planning hence there is no provision for large shopping complex with ample parking space. Infrastructure is the key to retailing and organized retailing requires vast spaces. Besides, property prices in the metros like Delhi, Mumbai are very high and form major deterrents in tapping the potential in these cities. Time Stripped Customers: Time is money can be interpreted in different ways. Poverty of time results from increased number of workingwomen and increasing distance between location of office and home. This leads consumers to place high value on goods and services minimizing time spend and maximizing on the pleasures derived.
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CHAPTER 7: INTERNATIONAL PLAYERS
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INTERNATIONAL PLAYERS
International retailers present in India
Global retail giants are also entering the retail industry in India and this is also one of the factors in the growth of the organized retail sector in India. International retailer presence in India is increasing. In the last five years international retailers presence in India is increasing. With international brands like Tommy Hilfiger, Esprit and Puma (that have entered the country) growing well over 100 per cent, many others are also planning to foray into the Indian retail market. India's vast middle class with its expanding purchasing power and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. y The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to enter Indian retail market. y Microsoft's first shop-in-shop pilot has been launched with the Tata Group subsidiary Infiniti Retail's multi-brand consumer durables retail format, Croma. y The Walt Disney Company, consumer product retailing arm of global animation giant, will soon add 135 new stores to its existing 15 stores. y World's leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR Limited. y Apple Inc has entered into an exclusive marketing and distribution deal with Reliance Retail through "iStore by Reliance Digital". y The UK-based international coffee chain, Costa Coffee, plans to double the number of retail outlets by the end of 2008. y British retailer Marks & Spencer's has tied with Reliance Retail and plans to open at least 50 new stores in India over the next five years, with an initial investment of up to US$ 58 million.
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y UK's largest home textile retail chain, Rosebys, which was acquired by Gujarat Heavy Chemicals in 2006, is set to foray into the domestic market this year with a slew of stores. y German sportswear and Apparel Company, Adidas is going in for a major expansion across India, and plans to have a total of about 450 franchisee outlets in the country.
Some of the international players that have already entered India include McDonald's, Pizza Hut, Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, Medicine Shoppe among others.
List of international retailers already present in India

1. Marks & Spencer 2. Planet Sports 3. Royal Sportin 4. LVMH 5. Hugo Boss 6. Mango 7. Nine West 8. Morgan 9. Tag Heueur 10. Fila 11. Daks 12. Swaroski 13. Adams 14. Subway 15. Floresheim 16. Pizza Hut / KFC 17. . Mc Donalds 18. Metro AG 19. Swatch
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Formats adopted by international players in India

y Franchise
Franchise route involves granting of rights by one party, the franchiser to another, the franchisee in return for a sum of money. The franchisee is allowed to conduct business using the franchisers know-how and brand name. There are various levels of franchisee: Unit franchisee, multiple franchises, master franchisee and regional franchisee. The foreign players which have opened franchisee across various verticals of fast food, apparels, and entertainment are Nike, Pizza Hut, Subway, Tommy Hilfiger, Marks and Spencer, Swarovski and Hugo Boss.
y Cash and Carry Wholesale Trade

In Cash and Carry Wholesale Trading, 100 percent FDI has been allowed under the automatic route by FIPB to encourage efficiency in back end supply chain management. The players like Metro, Shoprite and Wal-mart have forayed to strengthen the supplychain management as done by the manufacturers and wholesalers till now.
y Joint Venture
Multi National like McDonalds, Reebok, and Wal-mart has entered into joint venture with Indian companies with share not exceeding 49 percent.
y Manufacturing
The foreign manufactures sets up its Indian unit to manufacture and forward integrated to retailing its products like Bata and Benetton.
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FDI (FOREIGN DIRECT INVESTMNENT) IN RETAIL

The government has categorically stated numerable times that 100% FDI in retail will not be allowed, regarding joint ventures with Foreign Partner having minority stake also there is lot of ambiguity with government changing it stance often. The fear of mom and pop stores loosing their business and the lobbying made the government averse to the idea of FDI in the sector. The facts to be considered though are the potential of employment generation, consumer getting more options and the possibility of exports to the same foreign companies. India has a low literacy rate of 40%, this combined with huge population makes getting a job pretty difficult. With 20% of population in developed countries working in organized retail sector and the fact that one in every eight American has worked in McDonalds the employment generation theory looks very plausible. Pantaloon for instance with its 40 odd stores employs in excess of 2000 people. The Retail stores in Delhi's South Extension only employs close to 15000 people. These people have varied educational backgrounds ranging from HSC to MBA. College Kids working Part Time in Music Stores and in places like Barista Coffee Chain too indicates towards increasing job opportunities, independence and hope for the young people in the Metros. The fact that working for an organized retailer provides a career unlike a mom and pop store where earning livelihood is the goal (55% of the small stores in the country where sales are less then USD452 per annum) adds to the argument. The ultimate beneficiary with Govt. allowing FDI in retail will be the end consumer. The fact is so obvious that it doesnt need any qualitative or quantitative back up. Chains like Carrefour, GAP and xx are already looking at India as a great sourcing base for their requirements. Their presence in the country in the form of a retailer will only add to their confidence and proximity. With evolving synergies and systems in place India can see doubledigit growth rate for many years to come in exports to retailers if the FDI is allowed. Also Page | 61 B.C.C.A INSTITUTE OF MANAGEMENT STUDIES
RETAIL MANAGEMENT important is the systems and the capital which these Foreign chains will bring in. This will cut short the growth lead-time for the industry thereby benefiting domestic chains also.
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CHAPTER 8: CHALLENGES FACING THE RETAILING INDUSTRIES IN INDIA
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CHALLENGES FACING THE RETAILING INDUSTRIES IN INDIA
1. PREDOMINANCE OF UNORGANISED SECTOR

y Only 2 % of the industry is in the Organised Sector y Small outlets with < 500 sq. ft. area have 95 % share of turnover y Only 7 % of the 1.8 million urban outlets have a recorded annual sale of Rs.10 million or more y Retailing industry highly fragmented with just handful of organised retail chains in operation y No value addition - just low cost base and low overheads y No accent on product quality y Yet low prices unfortunately attract a segment of unenlightened customers y Absence of ethical practices y Absence of an association of organised retailers to lobby on common issues of concern
2. HIGH COSTS / LOW MARGINS

y Real Estate / Rentals are expensive y High cost of capital y Significantly higher employment costs vis--vis small retailer
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y High inventory carrying cost y MRP no longer carries much relevance is consumer durable products y Margin retention extremely poor
3. SHORTAGE OF TRAINED MANPOWER

y Management Schools do not offer any focused Retail Management Programme y Paucity of trained retail management professional - lack of apprenticeship training during management programme. y Trained retail counter personnel not readily available y Significant investment required in training of retail professionals, and yet, retention of these trained professionals is a major issue
4. ENTRY OF INTERNATIONAL PLAYERS

y Low cost of overseas capital particularly from the western world y Replication of operating practices by overseas entrants vs. creation of such practices by the domestic operators y Accent on high quality customer service y International Brand Equity y Global purchasing power y Ability and willingness to accept longer gestation period in order to achieve market domination
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5. CREATING CUSTOMER VALUE PERCEPTION

y An average Indian customer rates price as the major factor y Low appreciation level on post purchase service issues y Domestic players inability to demonstrate value to the customer y Retailers just sell a product and expect customer to deal with the manufacturer directly for complaints / service needs y Thus perceived value of the product is limited mainly to the price factor
6. ACCESSING THE GROWING RURAL MARKET

y Rural population is much larger than the urban population in India y Increasing prosperity and money power of the farming community y Demand growth rates higher in the rural market y Mass Media has exposed the rural Indian to modern living styles and home appliances increasing their aspiration levels y The challenge is how to tap this burgeoning market effectively
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CHAPTER 9: COMPANY STUDY
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Pantaloon Retail (India) Limited is India's leading retailer that operates multiple retail formats in both the value and lifestyle segment. Pantaloon has ushered a retail revolution in India and its founder Kishore Biyani is known as India's "King of Retail". Pantaloon's headquarter is in Mumbai. The company currently operates over 5 million square feet of retail space and has plans to increase it to 30 million sq. ft by 2011. Pantaloon has plans to open over 3000 new stores by 2010 . Pantaloon's origin can be traced to 1987 when the company was incorporated as Manz Wear Private Limited. The company launched Pantaloons trouser, India's first formal trouser brand. In 1992, Pantaloon launched its IPO. In 1994, The Pantaloon Shoppe exclusive menswear store in franchisee format was launched across the country. Pantaloon started distribution of distribution of branded garments through multi-brand retail outlets across the nation. In 2001, Big Bazaar, India's first hypermarket chain was launched. In 2002, Food Bazaar, the supermarket chain was launched. In 2006, Future Capital Holdings, the company's financial arm launched real estate funds, "Kshitij" and "Horizon" and private equity fund "In division". The company is also planning forays into insurance and consumer credit.
Major Achievements of Pantaloon Retail

y y y y y
Chosen as International Retailer for the Year 2007 Chosen as Emerging Market Retailer of the Year 2007 Best Employers in India (Rank 14th) in the Hewitt Best Employers 2007 survey. Best Managed Company in India (Mid-cap) for the year 2006. Won Images Retail Awards 2006 for Best Value Retail Store, Best Retail Destination, and Best Food & Grocery Store.
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Service Management Model Followed by Pantaloons
Define the service objectives
Determine customer profile and his expectations
Develop the service vision, the service culture and communicate it to the employees
Map all the processes and reengineer them if required
Set standards for delivery of service quality
Develop service strategies, set the systems and train the people
Manage and develop human resources
Monitor the service quality performance and give feedback to all employees
Measure levels of employees satisfaction
Set processes for continuous development and service quality evolution
Identify the gaps in service quality delivery and bridge the gaps
Measure levels of employee satisfaction
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Customer service in retailing focuses on customer expectations. The ability of the retail organisation to identify these expectations and fulfill them will determine whether customers enter the shop again and again. Service management thus aims to first measure customer expectations and then find ways of meeting them. Customer service has two dimensions: the service and the service. While the services are the facilities, concessions or infrastructure offerings extend to customers; service is how well they are offered by the stores. For instance, in a garment store an alteration facility is part of the basket of services. If it is done well and the garment is delivered within the promised time frame, then the service is said to be good. A retailer then needs to spell his service vision and create a service culture within the organisation. He has to set service standards with the right strategy, systems and people and manage processes and people to deliver them.
Retail Merchandising
The term merchandising is unique and exclusive to the retail industry. It refers to the entire process of inventory planning and management in a retail organization. Merchandising, when done properly, leads to an increase in the return in investment (ROI) .The greater the ROI, more the profitability.
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Merchandising Planning
For a retailer, the objective of merchandising planning is clear; achieving the following seven RIGHTS. 1. The Right Product 2. The Right Place 3. The Right Quantity 4. The right Quality 5. The Right Price 6. The Right Mix or Assortment 7. The Right Time.
In order to satisfy every customers needs, the retail store must have the right product in the right place, in the right quantity, with the right quality, at the right price, with the right mix of sizes or variants and at the right time. The function of merchandising is to achieve all these rights so that sales are high with an ideal level of inventory holding and thus more profits.
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Merchandise Hierarchy followed by Pantaloons

While planning the merchandise mix, a retail organisation has to start with a clear definition of its merchandise hierarchy. The merchandise hierarchy is a disciplined way of grouping the merchandise mix at different levels, starting from high level grouping to the lowest of the stock keeping units (SKU). The grouping may at times have even more than four-five levels which will be shown in the following figure. The merchandise hierarchy forms the platform needed to create the stores merchandise mix. The merchandising vision for the store dictates the different divisions and the lower rungs that the store must have in the hierarchy. Building the stores merchandise mix by following the concept of merchandise hierarchy has its advantages; One can define in terms of ratios the mix of elements at each level of the hierarchy. One can analyze and drill down through the rungs of the hierarchy to the problem areas, if any, up to SKU level. One can remove or add elements following security escalations. This means that if the stores merchandise decision have to be taken based on the performance, say of the millions of SKUs contributing to the formation of the merchandise pyramid for the storethe peak being the divisionsdecisions at the lower rungs can be taken by front-line personnel. This at the higher levels, which would impact the merchandise proportion/image of the store, can be taken by the higher-ups
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Divisions
Apparel
Supermark
Electronics
et
Mens Departments Ladies Kids Accessorie s
Category
Shirts
Trouser
Suit s
Under garment
Half Sleeves
Sub Category
Full sleeves Formals
Brand Arrow Style
V Hussein
L phillipe
Polo
Button down collar

Cut Away Collar
Price (3) 650, 750, 1000,* in Rs.
Option
Size (4) 40,42,44,46
Design (3) Solid, Stripes, Prints
Colours (5) White, blue, yellow, pink
Merchandise Hierarchy
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INTERVIEW
Miss Ekta Bhutani Sr. Executive HR Mr. Stanley Tauro Store Manager 1. Where do you stand in the retailing sector?
India is still in the nascent stage of organized retailing and is constantly evolving. Pantaloon Retail (I) Limited is a front runner in Indias modern retail space and we represent fashion ,food, general merchandise and other lines of business, through multiple delivery formats, primarily catering to the lifestyle and value customers. The company has stores in nearly 30 cities across the country, constituting over 2.7 million square feet of retail space. The company has also signed close to 10 million sq. ft. of retail space to be operational by end 2008, which represents 2030 % of all modern retail space coming up in the next three years. Over 200 million footfalls are expected in our stores by 2006-07. I believe that consumption will be the next big driver of Indias economic growth. Rising incomes and increased exposure to global products and global consumption patterns have changed the average Indians attitude towards consumption and savings. Consumption = Development. Increased and channelized consumption would lead to the development of the nation through improved and better infrastructure facilities, greater employment generation possibilities will emerge with increased consumption, leading to people wanting to spend more on themselves. This cycle is what will fuel the consumption boom in the country.
2. What are the other retailing/non-retailing areas you are looking at?
We are in the process of constant evolution and firmly believe in creating the present, with the future in mind. We have only one vision-to capture the highest share of the consumers wallet. This is what has led us to believe that apart from our core strengths in fashion, food and general merchandise, we will operate through various formats in other lines of businesses; complete home solutions, leisure & entertainment, wellness,
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communications and financial products. We also have two AMCs. One that specializes in Property and the other is a Consumer India Fund. The property fund aims at sourcing high quality property at the lowest possible rates, while the consumer fund will look at providing our retail pipeline and expertise to national and regional brands, thereby enabling them with a wider coverage.
3. Who are your major competitors? What is your share in the market?
We operate in a competitive environment. For each line of business, we would face competition from established national and regional companies. In the fashion segment, we probably face competition from Shoppers Stop, Trent and Lifestyle. The hypermarket business is relatively new, being just about three to four years old in the country. We face competition from the likes of RPG (Spencers), Trent (Star India Bazaar) and with Shoppers Stop too indicating their entry into the hypermarket segment.
4. What is the market and mind share you are looking at in the next five years?
At Pantaloon we do not look at market shares. Though we have secured 30% of modern retail space coming up in the next three years, our endeavour is to keep evolving with the young Indian consumer. As regards mind share, we want all our store formats to capture the imagination of the target customer.
5. What are the major trends retailers should expect this year?
In India, organized retail constitutes about 3% of total retail and is poised to reach 15-20% in the next few years, which translates into a 40% CAGR. This indicates tremendous potential for the sector for the next few years. The future will also see the pantaloon of several new concepts targeted at the Indian consumer. Further, retail development will not just occur in Tier 1 cities, but will have far more significance in Tier 2 & 3 cities as well. The consumption drive would be fueled in smaller towns and cities.
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CHAPTER: 10 CONCLUTION
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Conclusion
Kiranas and organized retail will co-exist. After analyzing the retail industry, it can conclude that the organized retail has opportunities to grow in India in spite of the kirana stores because these kirana shops will also get benefit of the growing economy. The argument that the kirana shops will be affected by these malls is only myth. The organized retail is attracting more and more Indian as well as foreign players of the retail industry. The boundaries between the offerings by malls and one-shop vendors are gradually breaking. Single shop-owners are becoming increasingly aware of customers needs, hygiene factors and varied requirements. At the same time, retail chains are opening stores in residential areas and focusing on customer relationship management, with a hub and spoke model where one large store supports various smaller stores in the nearby residential areas. However, the key to success for organized retailers will always be their large size, variety and ambience on offer, and thus, the scale.
As the study shows that a major portion of the organized retail will be developed in small cities and towns, this opportunity has not been enchased by kirana stores and they are unable to meet the requirements of the customers. Therefore both the malls and kirana stores can play simultaneously in India so no need get afraid due to the malls. Here even I would like to add my view point from whatever I have learnt from the experience gained while making this project. Most of the kirana stores have survived. But growth has been very slow for them and no new kirana stores are opening up in neighborhoods where big retailers have opened shop. And secondly, big retail will have to wait a long time before they can invade small towns in India. Towns with less than a million-half a million population will have to wait. And no big retailers will venture there until theyve gained some useful insights from the big cities.
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And the countryside will be largely left untouched which will be served by local Kirana Stores. Big retail chains wont kill small shops Small is beautiful. Malls are all very good for one-day shopping, but the kirana store is for the odd quantities in life. Like when you need one-fourth of a packet of rice.
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BIBLOGRAPHY
Newspapers
1. IANS: National, Business, Sports, Fri, 26 Dec 2008 2. The Financial Express: July 24, 2009 3. Business Standard: July 31, 2009
Business Magazines (Different issues from Feb 09 to July 09)

1. Marketing Mastermind 3. Business Today 5. Business World 2. Retail Biz 4. Business India 6.Outlook Business
Books: 1. Principle of Management- Kotler Philip, 2. Research Methodology- Kothari C R, 3. A&M Magazine, 26th February 2009
WEBLIOGRAPHY

http://www.oppapers.com/essays/Wal-Mart-Case-Review/161926 www.thehindubusinessline.com/.../2008122850561100.htm www.scribd.com/doc/11222049/Shoppers-Stop www.mbaguys.net http://www.oppapers.com/ epaper.livemint.com www.indiaretailforum.in ibef.org/industry/retail.aspx www.india-reports.com/retail/NL-signup.aspx www.pantaloons.com

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RETAIL MANAGEMENT

Page | 1 B.C.C.A INSTITUTE OF MANAGEMENT STUDIES

Evolution of retail in India

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Retailing in India can be traced to:

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Retail sector in India

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Retailers role in distribution channel:

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FACTORS AFFECTING RETAIL PRICING

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Factors affecting retailers pricing decisions

Perception of substitution effect F a c t o r s I n f l u e n c i n g P r i c e s

The unique value effect

Difficult to compare alternatives The price quality effect

Perceived fairness effect

Durable nature of product

Volatility of the market

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BENEFITS 1. Benefits of retailing:

Benefits to manufacturers and wholesalers

y Physical obsolescence y Technological obsolescence y Fashion obsolescence

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4. Benefits to the economy

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CHAPTER 3: CLASSIFICATION OF RETAILERS

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Categories of traditional retail segment

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Conventional formats in unorganized retail sector

y Push Cart Vendors

Size of Unorganized Outlets

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Categories of retail segments in organized sector

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(Rs.Crore) 113,500 60,200 3,950 13,750 3,800 42,200 48,100

Furniture-Home & Office Furnishings, Utensils,

40,650 743,900 57,000 13,300 38,000 US$ 270 Billion

3,700 5,800 3,940 1,680 1,560 US$ 12.4 Billion

9.1 0.8 6.9 12.6 4.1

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Modern formats in Organized Retailing

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Malls: The new face of retail market

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Challenges for organized retail:

Impact of organized retail

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3. ORGANIZED VERSUS UNORGANIZED RETAIL

Range and variety of goods

Quality assurance (brand related, durability)