Abstract

1hls paper provldes deLalled lnformaLlon abouL Lhe growLh of reLalllng lndusLry ln lndla lL examlnes Lhe
growlng awareness and brand consclousness among people across dlfferenL socloeconomlc classes ln
lndla and how Lhe urban and semlurban reLall markeLs are wlLnesslng slgnlflcanL growLh lL explores Lhe
role of Lhe CovernmenL of lndla ln Lhe lndusLryiZs growLh and Lhe need for furLher reforms ln lndla
Lhe vasL mlddle class and lLs almosL unLapped reLall lndusLry are Lhe key aLLracLlve forces for global reLall
glanLs wanLlng Lo enLer lnLo newer markeLs whlch ln Lurn wlll help Lhe lndla 8eLall lndusLry Lo grow
fasLer 1he paper lncludes growLh of reLall secLor ln lndla sLraLegles sLrengLh and opporLunlLles of reLall
sLores reLall formaL ln lndla recenL Lrends and opporLunlLles and challenges 1hls paper concludes wlLh
Lhe llkely lmpacL of Lhe enLry of global players lnLo Lhe lndlan reLalllng lndusLry lL also hlghllghLs Lhe
challenges faced by Lhe lndusLry ln near fuLure

IN1kCDUC1ICN

1he lndla 8eLall lndusLry ls Lhe largesL among all Lhe lndusLrles accounLlng for over 10 per cenL of Lhe
counLryiZs Cu and around 8 per cenL of Lhe employmenL 1he 8eLall lndusLry ln lndla has come forLh
as one of Lhe mosL dynamlc and fasL paced lndusLrles wlLh several players enLerlng Lhe markeL 8uL all of
Lhem have noL yeL LasLed success because of Lhe heavy lnlLlal lnvesLmenLs LhaL are requlred Lo break
even wlLh oLher companles and compeLe wlLh Lhem 1he lndla 8eLall lndusLry ls gradually lnchlng lLs way
Lowards becomlng Lhe nexL boom lndusLry

1he LoLal concepL and ldea of shopplng has undergone an aLLenLlon drawlng change ln Lerms of formaL
and consumer buylng behavlor usherlng ln a revoluLlon ln shopplng ln lndla Modern reLalllng has
enLered lnLo Lhe 8eLall markeL ln lndla as ls observed ln Lhe form of busLllng shopplng cenLers mulLl
sLorled malls and Lhe huge complexes LhaL offer shopplng enLerLalnmenL and food all under one roof

A large young worklng populaLlon wlLh medlan age of 24 years nuclear famllles ln urban areas along
wlLh lncreaslng worklngwomen populaLlon and emerglng opporLunlLles ln Lhe servlces secLor are golng
Lo be Lhe key facLors ln Lhe growLh of Lhe organlzed 8eLall secLor ln lndla 1he growLh paLLern ln
organlzed reLalllng and ln Lhe consumpLlon made by Lhe lndlan populaLlon wlll follow a rlslng graph
helplng Lhe newer buslnessmen Lo enLer Lhe lndla 8eLall lndusLry


ln lndla Lhe vasL mlddle class and lLs almosL unLapped reLall lndusLry are Lhe key aLLracLlve forces for
global reLall glanLs wanLlng Lo enLer lnLo newer markeLs whlch ln Lurn wlll help Lhe lndla 8eLall lndusLry
Lo grow fasLer lndlan reLall ls expecLed Lo grow 23 per cenL annually Modern reLall ln lndla could be
worLh uS$ 173200 bllllon by 2016 1he lood 8eLall lndusLry ln lndla domlnaLes Lhe shopplng baskeL
1he Moblle phone 8eLall lndusLry ln lndla ls already a uS$ 167 bllllon buslness growlng aL over 20 per
cenL per year 1he fuLure of Lhe lndla 8eLall lndusLry looks promlslng wlLh Lhe growlng of Lhe markeL
wlLh Lhe governmenL pollcles becomlng more favorable and Lhe emerglng Lechnologles faclllLaLlng
operaLlons
1nL INDIAN kL1AIL SCLNL
lndla ls Lhe counLry havlng Lhe mosL unorganlzed reLall markeL 1radlLlonally lL ls a famllyiZs llvellhood
wlLh Lhelr shop ln Lhe fronL and house aL Lhe back whlle Lhey run Lhe reLall buslness More Lhan 99
reLalleriZs funcLlon ln less Lhan 300 square feeL of shopplng space Clobal reLall consulLanLs kSA
1echnopak have esLlmaLed LhaL organlzed reLalllng ln lndla ls expecLed Lo Louch 8s 33000 crore ln Lhe
year 200306 1he lndlan reLall secLor ls esLlmaLed aL around 8s 900000 crore of whlch Lhe organlzed
secLor accounLs for a mere 2 per cenL lndlcaLlng a huge poLenLlal markeL opporLunlLy LhaL ls lylng ln Lhe
walLlng for Lhe consumersavvy organlzed reLaller
urchaslng power of lndlan urban consumer ls growlng and branded merchandlse ln caLegorles llke
Apparels CosmeLlcs Shoes WaLches 8everages lood and even !ewellery are slowly becomlng llfesLyle
producLs LhaL are wldely accepLed by Lhe urban lndlan consumer lndlan reLallers need Lo advanLage of
Lhls growLh and almlng Lo grow dlverslfy and lnLroduce new formaLs have Lo pay more aLLenLlon Lo Lhe
brand bulldlng process 1he emphasls here ls on reLall as a brand raLher Lhan reLallers selllng brands 1he
focus should be on brandlng Lhe reLall buslness lLself ln Lhelr preparaLlon Lo face flerce compeLlLlve
pressure lndlan reLallers musL come Lo recognlze Lhe value of bulldlng Lhelr own sLores as brands Lo
relnforce Lhelr markeLlng poslLlonlng Lo communlcaLe quallLy as well as value for money SusLalnable
compeLlLlve advanLage wlll be dependenL on LranslaLlng core values comblnlng producLs lmage and
repuLaLlon lnLo a coherenL reLall brand sLraLegy
1here ls no doubL LhaL Lhe lndlan reLall scene ls boomlng A number of large corporaLe houses iZ
1aLaiZs 8ahe[aiZs lramalsiZs CoenkaiZs iZ have already made Lhelr foray lnLo Lhls arena wlLh
beauLy and healLh sLores supermarkeLs selfservlce muslc sLores newage book sLores everydaylow
prlce sLores compuLers and perlpherals sLores offlce equlpmenL sLores and home/bulldlng consLrucLlon
sLores 1oday Lhe organlzed players have aLLacked every reLall caLegory 1he lndlan reLall scene has
wlLnessed Loo many players ln Loo shorL a Llme crowdlng several caLegorles wlLhouL looklng aL Lhelr
core compeLencles or havlng a well LhoughL ouL brandlng sLraLegy

S1kA1LGILS 1kLNDS AND CCk1UNI1ILS 2007
8eLalllng ln lndla ls gradually lnchlng lLs way Loward becomlng Lhe nexL boom lndusLry 1he whole
concepL of shopplng has alLered ln Lerms of formaL and consumer buylng behavlor usherlng ln a
revoluLlon ln shopplng ln lndla Modern reLall has enLered lndla as seen ln sprawllng shopplng cenLres
mulLlsLorled malls and huge complexes offer shopplng enLerLalnmenL and food all under one roof 1he
lndlan reLalllng secLor ls aL an lnflexlon polnL where Lhe growLh of organlzed reLalllng and growLh ln Lhe
consumpLlon by Lhe lndlan populaLlon ls golng Lo Lake a hlgher growLh Lra[ecLory 1he lndlan populaLlon
ls wlLnesslng a slgnlflcanL change ln lLs demographlcs A large young worklng populaLlon wlLh medlan
age of 24 years nuclear famllles ln urban areas along wlLh lncreaslng worklngwomen populaLlon and
emerglng opporLunlLles ln Lhe servlces secLor are golng Lo be Lhe key growLh drlvers of Lhe organlzed
reLall secLor ln lndla
GkCW1n CI kL1AIL SLC1Ck IN INDIA
8eLall and real esLaLe are Lhe Lwo boomlng secLors of lndla ln Lhe presenL Llmes And lf lndusLry experLs
are Lo be belleved Lhe prospecLs of boLh Lhe secLors are muLually dependenL on each oLher 8eLall one
of lndlaiZs largesL lndusLrles has presenLly emerged as one of Lhe mosL dynamlc and fasL paced
lndusLrles of our Llmes wlLh several players enLerlng Lhe markeL AccounLlng for over 10 per cenL of Lhe
counLryiZs Cu and around elghL per cenL of Lhe employmenL reLalllng ln lndla ls gradually lnchlng lLs
way Loward becomlng Lhe nexL boom lndusLry
As Lhe conLemporary reLall secLor ln lndla ls reflecLed ln sprawllng shopplng cenLers mulLlplex malls
and huge complexes offer shopplng enLerLalnmenL and food all under one roof Lhe concepL of
shopplng has alLered ln Lerms of formaL and consumer buylng behavlor usherlng ln a revoluLlon ln
shopplng ln lndla 1hls has also conLrlbuLed Lo largescale lnvesLmenLs ln Lhe real esLaLe secLor wlLh
ma[or naLlonal and global players lnvesLlng ln developlng Lhe lnfrasLrucLure and consLrucLlon of Lhe
reLalllng buslness 1he Lrends LhaL are drlvlng Lhe growLh of Lhe reLall secLor ln lndla are
O ow share of organlzed reLalllng
O lalllng real esLaLe prlces
O lncrease ln dlsposable lncome and cusLomer asplraLlon
O lncrease ln expendlLure for luxury lLems (CPA81)

AnoLher credlble facLor ln Lhe prospecLs of Lhe reLall secLor ln lndla ls Lhe lncrease ln Lhe young worklng
populaLlon ln lndla hefLy pay packeLs nuclear famllles ln urban areas along wlLh lncreaslng worklng
women populaLlon and emerglng opporLunlLles ln Lhe servlces secLor 1hese key facLors have been Lhe
growLh drlvers of Lhe organlzed reLall secLor ln lndla whlch now boasL of reLalllng almosL all Lhe
preferences of llfe Apparel Accessorles Appllances LlecLronlcs CosmeLlcs and 1olleLrles Pome
Cfflce roducLs 1ravel and elsure and many more WlLh Lhls Lhe reLall secLor ln lndla ls wlLnesslng
re[uvenaLlon as LradlLlonal markeLs make way for new formaLs such as deparLmenLal sLores
hypermarkeLs supermarkeLs and speclalLy sLores
1he reLalllng conflguraLlon ln lndla ls fasL developlng as shopplng malls are lncreaslngly becomlng
famlllar ln large clLles When lL comes Lo developmenL of reLall space speclally Lhe malls Lhe 1ler ll clLles
are no longer behlnd ln Lhe race lf developmenL plans Llll 2007 ls sLudled lL shows Lhe pro[ecLlon of 220
shopplng malls wlLh 139 malls ln meLros and Lhe remalnlng 81 ln Lhe 1ler ll clLles 1he governmenL of
sLaLes llke uelhl and naLlonal CaplLal 8eglon (nC8) are very upbeaL abouL permlLLlng Lhe use of land for
commerclal developmenL Lhus lncreaslng Lhe avallablllLy of land for reLall space Lhus maklng nC8
render Lo 30 of Lhe malls ln lndla

lndla ls belng seen as a poLenLlal goldmlne for reLall lnvesLors from over Lhe world and laLesL research
has raLed lndla as Lhe Lop desLlnaLlon for reLallers for an aLLracLlve emerglng reLall markeL lndlaiZs
vasL mlddle class and lLs almosL unLapped reLall lndusLry are key aLLracLlons for global reLall glanLs
wanLlng Lo enLer newer markeLs Lven Lhough lndla has well over 3 mllllon reLall ouLleLs Lhe counLry
sorely lacks anyLhlng LhaL can resemble a reLalllng lndusLry ln Lhe modern sense of Lhe Lerm 1hls
presenLs lnLernaLlonal reLalllng speclallsLs wlLh a greaL opporLunlLy 1he organlzed reLall secLor ls
expecLed Lo grow sLronger Lhan Cu growLh ln Lhe nexL flve years drlven by changlng llfesLyles
burgeonlng lncome and favorable demographlc ouLllne
INDUS1k LVCLU1ICN
O 1radlLlonally reLalllng ln lndla can be Lraced Lo
O 1he emergence of Lhe nelghborhood iZklranaiZ sLores caLerlng Lo Lhe convenlence of Lhe
consumers
O Lra of governmenL supporL for rural reLall lndlgenous franchlse model of sLore chalns run by
khadl vlllage lndusLrles Commlsslon
O 1980s experlenced slow change as lndla began Lo open up economy
O 1exLlles secLor wlLh companles llke 8ombay uyelng 8aymonds S kumars and Craslm flrsL saw
Lhe emergence of reLall chalns
O aLer 1lLan successfully creaLed an organlzed reLalllng concepL and esLabllshed a serles of
showrooms for lLs premlum waLches
O 1he laLLer half of Lhe 1990s saw a fresh wave of enLranLs wlLh a shlfL from ManufacLures Lo ure
8eLallers
O lor eg lood World Subhlksha and nllglrls ln food and lMCC laneL M and Muslc World ln
muslc Crossword and lounLalnhead ln books
O osL 1993 onwards saw an emergence of shopplng cenLers
O Malnly ln urban areas wlLh faclllLles llke car parklng
O 1argeLed Lo provlde a compleLe desLlnaLlon experlence for all segmenLs of socleLy
O Lmergence of hyper and super markeLs Lrylng Lo provlde cusLomer wlLh 3 viZs value varleLy
and volume
O Lxpandlng LargeL consumer segmenL 1he SacheL revoluLlon example of reachlng Lo Lhe boLLom
of Lhe pyramld
O AL year end of 2000 Lhe slze of Lhe lndlan organlzed reLall lndusLry ls esLlmaLed aL 8s 13000
crore


kL1AILING ICkMA1 IN INDIA Ma||s
1he largesL form of organlzed reLalllng Loday ocaLed malnly ln meLro clLles ln proxlmlLy Lo urban
ouLsklrLs 8anges from 60000 sq fL Lo 700000 sq fL and above 1hey lend an ldeal shopplng experlence
wlLh an amalgamaLlon of producL servlce and enLerLalnmenL all under a common roof Lxamples
lnclude Shoppers SLop lramyd and anLaloon
Spec|a|ty Stores
Chalns such as Lhe 8angalore based klds kemp Lhe Mumbal books reLaller Crossword 8Cs Muslc
World and Lhe 1lmes Croups muslc chaln laneL M are focuslng on speclflc markeL segmenLs and have
esLabllshed Lhemselves sLrongly ln Lhelr secLors

D|scount Stores
As Lhe name suggesLs dlscounL sLores or facLory ouLleLs offer dlscounLs on Lhe M8 Lhrough selllng ln
bulk reachlng economles of scale or excess sLock lefL over aL Lhe season 1he producL caLegory can range
from a varleLy of perlshable/ nonperlshable goods
Department Stores
arge sLores ranglng from 2000030000 sq fL caLerlng Lo a varleLy of consumer needs lurLher classlfled
lnLo locallzed deparLmenLs such as cloLhlng Loys home grocerles eLc
ueparLmenLal SLores are expecLed Lo Lake over Lhe apparel buslness from excluslve brand showrooms
Among Lhese Lhe blggesL success ls k 8ahe[as Shoppers SLop whlch sLarLed ln Mumbal and now has
more Lhan seven large sLores (over 30000 sq fL) across lndla and even has lLs own ln sLore brand for
cloLhes called SLop
nyper marts]Supermarkets
arge selfservlce ouLleLs caLerlng Lo varled shopper needs are Lermed as SupermarkeLs 1hese are
locaLed ln or near resldenLlal hlgh sLreeLs 1hese sLores Loday conLrlbuLe Lo 30 of all food grocery
organlzed reLall sales Super MarkeLs can furLher be classlfled ln Lo mlnl supermarkeLs Lyplcally 1000 sq
fL Lo 2000 sq fL and large supermarkeLs ranglng from of 3300 sq fL Lo 3000 sq fL havlng a sLrong focus
on food grocery and personal sales
Conven|ence Stores
1hese are relaLlvely small sLores 4002000 sq feeL locaLed near resldenLlal areas 1hey sLock a llmlLed
range of hlghLurnover convenlence producLs and are usually open for exLended perlods durlng Lhe day
seven days a week rlces are sllghLly hlgher due Lo Lhe convenlence premlum
M8C
MulLl 8rand ouLleLs also known as CaLegory klllers offer several brands across a slngle producL
caLegory 1hese usually do well ln busy markeL places and MeLros
INDIAS NUM8Lk CI DCMLS1IC GkCCLk CnAINS AND LAkL ICkLIGN LN1kAN1S

kLCLN1 1kLNDS
O 8eLalllng ln lndla ls wlLnesslng a huge revamplng exerclse as can be seen ln Lhe graph
O lndla ls raLed Lhe flfLh mosL aLLracLlve emerglng reLall markeL a poLenLlal goldmlne
O LsLlmaLed Lo be uS$ 200 bllllon of whlch organlzed reLalllng (le modern Lrade) makes up 3
percenL or uS$ 64 bllllon
O As per a reporL by kMC Lhe annual growLh of deparLmenL sLores ls esLlmaLed aL 24
O 8anked second ln a Clobal 8eLall uevelopmenL lndex of 30 developlng counLrles drawn up by A1
kearney
O MulLlple drlvers leadlng Lo a consumpLlon boom
4 lavorable demographlcs
4 CrowLh ln lncome
4 lncreaslng populaLlon of women
4 8alslng asplraLlons value added goods sales
O lood and apparel reLalllng key drlvers of growLh
O Crganlzed reLalllng ln lndla has been largely an urban
O henomenon wlLh affluenL classes and growlng number of doublelncome households
O More successful ln clLles ln Lhe souLh and wesL of lndla 8easons range from dlfferences ln
consumer buylng behavlor Lo cosL of real esLaLe and LaxaLlon laws
O 8ural markeLs emerglng as a huge opporLunlLy for reLallers reflecLed ln Lhe share of Lhe rural
markeL across mosL caLegorles of consumpLlon
4 l1C ls experlmenLlng wlLh reLalllng Lhrough lLs eChoupal and Choupal Sagar rural
hypermarkeLs
4 P ls uslng lLs ro[ecL ShakLl lnlLlaLlve iZ leveraglng women selfhelp groups iZ Lo
explore Lhe rural markeL
4 Mahamaza ls leveraglng Lechnology and neLwork markeLlng concepLs Lo acL as an
aggregaLor and serve Lhe rural markeLs
O l1 ls a Lool LhaL has been used by reLallers ranglng from Amazoncom Lo e8ay Lo radlcally change
buylng behavlor across Lhe globe
O LLalllng slowly maklng lLs presence felL
8L1Al SALS ln lnulA

CnALLLNGLS CCk1UNI1ILS
8eLalllng has seen such a LransformaLlon over Lhe pasL decade LhaL lLs very deflnlLlon has undergone a
sea change no longer can a manufacLurer rely on sales Lo Lake place by ensurlng mere avallablllLy of hls
producL 1oday reLalllng ls abouL so much more Lhan mere merchandlslng lLiZs abouL casLlng
cusLomers ln a sLory reflecLlng Lhelr deslres and asplraLlons and forglng longlasLlng relaLlonshlps As
Lhe lndlan consumer evolves Lhey expecLs more and more aL each and every Llme when Lhey sLeps lnLo a
sLore 8eLall Loday has changed from selllng a producL or a servlce Lo selllng a hope an asplraLlon and
above all an experlence LhaL a consumer would llke Lo repeaL

lor manufacLurers and servlce provlders Lhe emerglng opporLunlLles ln urban markeLs seem Lo lle ln
capLurlng and dellverlng beLLer value Lo Lhe cusLomers Lhrough reLall lor lnsLance ln Chennal
CavlnkareiZs lmelLe MarlcoiZs kaya Skln Cllnlc and Apollo PosplLaliZs Apollo harmacles are
examples Lo name a few where manufacLurers/servlce provlders comblne Lhelr own manufacLured
producLs and servlces wlLh Lhose of oLhers Lo generaLe value hlLherLo unknown 1he lasL mlle connecL
seems Lo be lncreaslngly llvely and experlenLlal Also manufacLurers and servlce provlders face an
explodlng rural markeL yeL only marglnally Lapped due Lo dlfflculLles ln rural reLalllng Cnly lnnovaLlve
concepLs and models may survlve Lhe LesL of Llme and lnvesLmenLs
Powever manufacLurers and servlce provlders wlll also lncreaslngly face a hosL of speclallsL reLallers
who are characLerlzed by use of modern managemenL Lechnlques backed wlLh seemlngly unllmlLed
flnanclal resources Crganlzed reLall appears lnevlLable
8eLalllng ln lndla ls currenLly esLlmaLed Lo be a uS$ 200 bllllon lndusLry of whlch organlzed reLalllng
makes up a palLry 3 percenL or uS$ 64 bllllon 8y 2010 organlzed reLall ls pro[ecLed Lo reach uS$ 23
bllllon lor reLall lndusLry ln lndla Lhlngs have never looked beLLer and brlghLer Challenges Lo Lhe
manufacLurers and servlce provlders would abound when markeL power shlfLs Lo organlzed reLall

CCNCLUSICN

1he reLall secLor has played a phenomenal role LhroughouL Lhe world ln lncreaslng producLlvlLy of
consumer goods and servlces lL ls also Lhe second largesL lndusLry ln uS ln Lerms of numbers of
employees and esLabllshmenLs 1here ls no denylng Lhe facL LhaL mosL of Lhe developed economles are
very much relylng on Lhelr reLall secLor as a locomoLlve of growLh 1he lndla 8eLall lndusLry ls Lhe largesL
among all Lhe lndusLrles accounLlng for over 10 per cenL of Lhe counLryiZs Cu and around 8 per cenL
of Lhe employmenL 1he 8eLall lndusLry ln lndla has come forLh as one of Lhe mosL dynamlc and fasL
paced lndusLrles wlLh several players enLerlng Lhe markeL 8uL all of Lhem have noL yeL LasLed success
because of Lhe heavy lnlLlal lnvesLmenLs LhaL are requlred Lo break even wlLh oLher companles and
compeLe wlLh Lhem 1he lndla 8eLall lndusLry ls gradually lnchlng lLs way Lowards becomlng Lhe nexL
boom lndusLry