UNIT II

RETAIL FORMATS

Organized and unorganized formats Different organized retail formats Characteristics of each format Emerging trends in retail formats MNC's role in organized retail formats. Traditional / Unorganised formats Traditionally there are three types of retail activities in India. They are : 1. Kirana shops or mom and pop shops 2. Independent neighbourhood stores 3. Cooperatives or government-controlled retail institutions like PDS, ration shops or cottage emporiums Historically, the Kirana shops came to existence several centuries back because the people felt the need of a medium to sell their surplus in agricultural production. Slowly the trading class emerged. Cooperative movement came prior to independence as a reaction to the feudal or Zamindari system and the this movement attempted to place the fruits of labour in the hands of the producer himself. Government-owned stores came into existence because of the governments responsibility to supply food and related items at a cheap price to economically weaker sections of the society, for preservation of handicraft, for distribution of essential items etc. 1. Kirana shops :: The characteristics of these shops are as given below These are mostly family-owned and family-run retail shops Even if they use hired labour, they have mostly less than three workers Operates in a very small area (often in areas less than 50 square feet) Stocks limited product range, varying from location to location depending on the needs of the clientele or based on the whims of the owner The physical site is often a low cost structure and have low real estate costs They do not pay any taxes generally A big strength is consumer familiarity and the retailer personally knows all the customers and their details and sometimes it passes on from one generation to the next The location and convenience is is a major factor of their popularity The retailer often offers credit to the buyer based on his knowledge about the customers credit rating The customers do not look for branded products particularly in smaller rural areas Retailers play a role in the purchase decisions of the customers who listen to the advice of the retailer Many of these shops offer the service of home-delivery free of cost and even telephonebased order delivery

The Indian retail sector has traditionally been structured around three small retail entities and they are the grocer, the general store and the chemist

Grocer: - Stocks non-packaged, un-branded / generic commodities such as rice, flour, pulses, salt, oil etc General stores - stocks branded and packaged FMCG The chemist, apart from dealing in pharmaceutical products also handles some FMCG products

In addition there are a number of other smaller and unorganized retail formats that exist like what is given below: Paan-beedi shops that stock products in sachets, batteries, confectioneries, soaps, etc Paani-Poori vendor Ironing services at streets Bakeries and confectioneries Fruit juice and tea stalls Ice-cream parlours Electrical items sellers Number of hawkers, carts Many door-to-door sellers like vegetable vendors WILL KIRANA STORES SURVIVE? All those who expect big retailers like Walmart to come in and devour small kirana shops should pause and think. Can Big Retail really do that? Just look at what the average kirana store offers the average Indian household. Firstly, it is just a stones throw away. So anytime the family needs something, it is easy to just stroll over and get it, even if it is as paltry as a loaf of bread. Secondly, there is the trust about all the items being fresh and reasonably priced at the friendly neighbourhood kiranawalla. Thirdly, there is free home delivery, usually on a bicycle, for the regular monthly supplies, colloquially called ration. And fourthly and most importantly, there is credit. Since the shopkeeper knows the families in the vicinity well enough, he can actually extend credit based only on the jottings made in a tiny pocket-sized plastic-covered notebook. A vast majority of middle class India still shops from one of the millions of tiny kirana stores for precisely these reasons. And there is no way Walmart or even the local big retailers like Foodworld, Big Bazaar or Reliance can lure away a chunk of the middle class big enough to make the kirana store go out of business for at least another few decades. About 70% of the population of our country lives below the poverty line. They will mostly shop in kirana stores only. Also the people living in rural areas ( about 70% of the population ) buy from unorganized retail outlets The small segment of the population which has made Foodworld and Big Bazaar run successfully is the very upper-middle-class. Families in this segment have a car so they can plan weekly or biweekly trips to the big shops. These families actually purchase a lot of packaged food items and

it makes sense for them to travel that extra distance. These families dont need credit. And yet even these families will still buy a considerable proportion of their groceries from the local kirana stores. This segment of the population is small. It is growing, but it is not growing nearly fast enough to gobble up the main clientele of the kirana store the middle and lower-middle class. The threat from Bharti-Walmart is not to the friendly neighbourhood kirana, but to purely Indian retailers like Big Bazaar and Foodworld. These retailers have been raking in profits because the upper middle class has grown in the last 10 / 15 years or so, there has been a rise in salary levels in that segment, and there isnt enough competition. With more players entering, competition will hot up. And margins will surely go down. 2. Independent Neighbourhood stores Characteristics of the independent stores Location and convenience: These stores are located in geographical proximity to the consumers home or work place making shopping very convenient Indians lack storage space at home and make frequent trips to the near-by stores Indian consumers always have a preference for fresh vegetables, milk etc traditionally Automobile ownership is limited even though it is growing fast. Traffic is also becoming a hassle. Hence people do not prefer to go far Sells branded products in a limited way

Value-added service They offer credit facility, home delivery, returns, change of items etc They advise the consumers on selection of products and brands

Importance in value chain These outlets are used extensively by the manufacturers not only to sell the products but also to stimulate the demand by providing POP materials , banners, refrigerators etc

3. Cooperatives and Governmental bodies Characteristics of cooperatives and Government bodies Ownership is dispersed widely among the members of the society or lies with the government These societies were formed for socio economic reasons, primarily to promote industries and generate employment These also gave opportunities to the manufacturers / growers who belong to rural areas to market their products effectively The customer service offered by these bodies are very average

They keep bureaucratic timing have been observed by them and their premises upkeep is poor The marketing and promotional efforts are not comparable to the aggressive private sector business

India has a large number of retail stores run by cooperative societies and government bodies. Some examples are: a) Mother Dairy, Delhi and the fruit and Vegetable Project, Delhi both set up by National Dairy Development Board (NDDB) IN 1974 and 1986 respectively were merged to form Mother Dairy Fruit and Vegetable Ltd. The new company has the following operations The plant handles more than 1.3 million liters of milk daily Undertakes its marketing operations through 650 own retail shops and 6500 other retail shops in Delhi It sells ice cream under the nrand name Mother Dairy and has 40% market share in Dehlhi The company markets fruits and vegetables through its own chain of 265 fruit shops and more than 20,000 other retail outlets

b) AMUL ; Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. Members: No. of Producer Members: No. of Village Societies: Total Milk handling capacity: Milk collection (Total - 2008-09): Milk collection (Daily Average 200809): 13 district cooperative milk producers' Union 2.79 million 13,328 11.22 million litres per day 3.05 billion litres 8.4 million litres

The sales turnover of GCMMF in the year 2008-09 is Rs 6700 crores List of Products Marketed: Bread spreads - Amul butter, Cheese Range, Mithaee Range (Ethnic sweets), Pure Ghee, Infant Milk Range, Milk Powders, Sweetened Condensed Milk, Fresh Milk, Curd Products, Amul Ice-cream, Chocolate & Confectionery, Flavoured milk, health beverage AAVIN The Dairy Development Department was established in 1958 in Tamilnadu. The administrative and statutory control over all the milk cooperatives in the State was transferred to the Dairy Development Department on 1.8.1965. With the adoption of 'Anand pattern' in the State of

Tamilnadu, Tamilnadu Co-operative Milk Producers' Federation Limited was registered in the State on 1st February 1981. The commercial activities of the Department such as Milk Procurement, Processing, Chilling, packing and sale of milk to the consumers etc., hitherto dealt with by the Tamilnadu Dairy Development Corporation Ltd., were transferred to the newly registered Tamilnadu Co-operative Milk Producers' Federation Limited, popularly known as "Aavin". OBJECTIVES (1) Assure a remunerative price for the milk produced by the member of the Milk Producers' Cooperative Societies through a stable, steady and well organized market support. (2) Distribution of quality milk and milk products to the consumers at reasonable price. Keeping these objectives in mind, a number of activities are undertaken by the Dairy Development Department, viz., Provision of free veterinary health cover to all animals owned by the members of milk cooperatives, implementation of Artificial Insemination Programme, supply of balanced cattle feed and inculcation of farmers with the modern animal husbandry methods and practices. Provision of necessary infrastructure facilities for marketing milk and milk products and supply of quality milk to the consumer has been made by way of establishing new chilling centres, pasteurization plants and adoption of modern processing system. MARKETING OF AAVIN PRODUCTS The three wings are carrying out the marketing of milk and milk products of the Federation namely: 1. Metro Liquid milk marketing. 2. Metro Milk Product marketing. 3. Up country marketing. The product wing of the Federation located at Nandanam directly carries of marketing of the products in Chennai Metro and suburbs. The products are stored at the Godown at Ambattur and distributed to the outlets. The sale of milk in sachets is being carried out through 18 zones, 292 Federation Depots, 184 Fedn. Distribution Points, 38 Whole Sale Milk Distributors, 89 Milk Retailers and 49 Milk Consumers Co-operative Societies and their depots numbering 221 and 142 distribution points. The sale of milk product is being carried out through 25 parlours, 145 Franchise Retail Outlets (FROs), 11 Wholesale dealers, and 2824 Retailers. The Federation also caters to the needs for functions like marriages by booking Special Orders. Standardised milk, Buffalo milk and double toned milk are being sold through 218 Automatic Vending Machines and 98 FRPs to the city consumers. Milk products are also sold in certain AVM Units. Sachet milk sales are also carried out in AVM units. c) Central Cottage Industries Emporium (CCIE)

CCIE is a Government of India undertaking to promote the sale of artisanal goods to tourists as well as to local customers. Their objective is to develop, promote and market quality Indian handloom and handicrafts products Their products are art items. Silver articles, Tea and herbal., Dress fabrics, garments, accessories, Home decoration items, furnishings etc They have 9 showrooms in India and one in Denmark. They are all well-equipped multistoreyed complexes containing selection of handicrafts from every corner of the country. In order to provide attractive markets in urban centres and right prices to artisans / craftsmen, CCIE has been launched

d) The Tamil Nadu Handloom Weavers' Co-operative Society Limited (Co-optex) The Tamil Nadu Handloom Weavers' Co-operative Society Limited (CO-OPTEX) was established in the year 1935 with the main objective of organizing and promoting the Handloom Industry in the Cooperative Sector. The main functions of Co-optex are to market the products produced by the Weavers Cooperative Societies and to supply yarn to the Weavers Cooperative Societies in Tamil Nadu. Co-optex is having 134 Showrooms within the State and 66 Showrooms outside Tamil Nadu. The Co-optex is also acting as a nodal agency for procuring and supplying cloth required under Free Distribution of Sarees and Dhoties Scheme, Free Supply of Uniform to School Children Scheme and Supply of Sarees and Dhoties to old age pensioners. During the year 2005-06, Co-optex has procured handloom and powerloom goods worth Rs.315.11 crore from the Weavers Co-operative Societies and sold goods worth Rs.420.70 crore which also includes export sales of Rs. 3.27 crore e) TNSC BANK TNSC Bank, the Apex Co-operative Bank and the main purveyor of agricultural credit in Tamil Nadu, has completed 99 years of useful and purposeful existence. TNSC Bank is old in tradition but young and dynamic in outlook and action. TNSC Bank is the Leader of the Co-operative Credit Movement in Tamil Nadu for over a century. f) TUCS Triplicane Urban cooperative Services : This cooperative society operated a number of retail outlets in Chennai including the famous outlet Kamadhenu in Teynampet 4. Retail outlets within villages Periodic markets (Shandies / Haats / Jathras) Rural customers regularly congregate on any one day of the week They are also sometimes conducted during the festival days in the village Large number of temporary shops are set up to sell all kinds of items

5. Public distribution system (PDS) These are called the Ration shops. These have been created with a view to ensure that the essential items are supplied to all the families in the country , particularly to the poorer sections

of the society. Items like rice, wheat, sugar and kerosene are the main items supplied. Both the central government and the state government have roles in it. The central government procures, stores, does bulk allocation and transports to states The state government distributes to the families who have authorized ration card

ORGANISED RETAILING INDUSTRY AND FORMATS Product categories In India the retail sector formats are dependant on the product catogories. In product catogories where the risk and relevance aspect is emphasized by the customer, retail formats are driven by the need to offer better customer service and provision of adequate information to the customer. Take the case of selling financial products like Equity or Insurance where a customized retailing is required and can not be done in certain retail formats. In certain product categories characterized by intense competition, discounting may be required . In India, we can broadly form the product categories as below but this is not the most comprehensive product listing. Retail sales as a percentage of total retail sale in 2006, 2011 and estimates for 2016 are given below: ( All figures are in Billions of US $ ) 2006 Total retail market in India 310 Food 217(70% ) 25 (8%) 17 (5.5%) 17 (5.5%) 8 (2.5%) 26 (8.5%)

2011 470 325(69%)

2016 675 425 (63%)

Apparel Jewellery and watches

35(7.5%) 26 (5.5%)

50 (7.5%) 44 (6.5%)

Consumer electronics

23 (5.0%)

43 (6.5%)

Pharmacy

14 (3.0%)

23 (3.5%)

Others

47(10.0% )

90(13.0%)

Predominant sectors in the others category are related to education, beauty and health 1. Food and grocery category formats The characteristics of retailing in this category are as below:

Large variety of retailing formats within this category because of the enormous size of the food market Traditional type of retailing including kirana shops or family-run shops dominate this sector. Supermarkets account only a small percentage of total sales Traditional retailers have advantage of lower cost, low overheads, lower margin, proximity to cuastomers, long opening hours etc Major formats followed for organized food retailing in India are supermarkets, discount stores, fresh product outlets, specialty stores and convenience stores

1. a ) Super market : Characteritics of the supermarkets The concept of supermarket was imported from USA in the middle of 20 th century Main advantage to the customer is the self-service opportunity Offers a much faster method of shopping Customer gets involved with the purchase and is able to compare products / brands Now they offer very convenient method of shopping for most of the household items to most of the customers

There is no clear-cut definition for supermarket. Indian supermarkets are typically smaller in size as compared to those in the West. A popular supermarket chain is FoodWorld or Spencers belonging to the RPG group FOODWORLD SUPERMARKET Part of RPG group and set up in 1996 in Chennai with a 2400 sq.t store Initially operated only in South India with focus on Bangalore, Hyderabad and Chennai Set up stores within the city at a location in a 2 kms radius having more than 4000 house holds Typical stores is about 3500 sq ft in size and stocks 5500 items (SKUs) Plans for expansion in a big way aligning with strategic objectives Target to have 200 Foodworld stores across the country in different formats Product portfolio includes all grocery items, fruits, vegetables in fresh/chilled forms, food that can be directly consumed, food and non-food FMCG products and general household items like buckets, cups etc

Strategy is to sell about 100 items below MRP at any point of time . This is applied on items that the customer considers as important or attaches value Purchase for each state is done collectively to reduce cost At peak season, FoodWorld stocks about 125 items in its fruit and vegetable shelf The three prime variables that the Company sticks to are stock turn, volumes and efficiency. In May 2007, the first concept store of Foodworld Gourmet has been opened in Bangalore. It offers a wide range of international and premium products Foodworld pioneered private label development in the value-added food and non- food areas in India, following the trend of successful retailers worldwide In May 2007, Dairy Farm own brand products No Frills and First Choice have been exclusively launched in Foodworld stores. In July 2007, the first Foodworld Superstore with about 15000 sq ft has been opened in Hyderabad. It provides extensive range from fresh food, grocery products and up to household needs. A chain to offer a complete range of fresh foods, which includes Fruits, Vegetables, Bakery etc. To offer a 100% Unconditional Replacement Guarantee

NILGIRIS SUPERMARKET Nilgiris is South Indias leading chain of retail stores providing consumers a shopping experience that hinges around freshness of produce, superior quality and better value. From humble beginnings in the hills around Ooty and Coonoor at the turn of the twentieth century, Nilgiris has grown from being a Dairy Farm specializing in butter to a supermarket chain of over 90 stores spread across Indias southern states. It is the only supermarket chain that lays special emphasis on its own products, sold under the brand name of Nilgiris 1905. With in-house capabilities centering on Bakery and Dairy products, Nilgiris has grown to become a household name in the south with consumers spanning successive generations. Nilgiris is one of Indias pioneering champions of organized retail and has ushered in the age where consumers now seek more value in their shopping experience than before. Beginning with a single store on Brigade Road in Bangalore with butter as its mainstay, Nilgiris has scripted a story of success with multiple stores across cities each delivering unmatched value in terms of range and shopping experience to the consumer, offering a wide range of grocery, general merchandise and personal care products. With the mission of constantly improving and upgrading capacities to satisfy consumers through

a wide range of food products and service offered at the right quality, quantity and price supported by innovative solutions, Nilgiris is all set to embrace emerging technologies and be recognized for its integrity, customer focus and commitment to quality. 1. b) Supercentres Characteristics of supercentres These are large stores of size between 1,50,000 sq ft to 2,20,000 sq ft. Wal-Mart operates over 2000 centres in USA Offers broad assortment of grocery and general merchandise products under one roof, supercentre provides one-stop shopping experience In USA, customers will typically drive farther to a supercentre than to visit a conventional super market because supercentre offers varieties Non-food items are purchased on impulse when customers primarily visit the supercentre to buy food and grocery items. The profit margins are higher for the non-food items. Hence the retailers price the food items aggressively and pull the customers to their stores Some customers feel that because the supercentres are very huge in size, it is difficult to locate things 1. c) Hypermarkets Characteristics of hypermarkets Very large in size , even upto 3,00,000 sq ft Food items constitute 60 to 70% and general merchandise form 30 to 40% Items stored are food, grocery, hardware, sports equipments, computers etc Hypermarkets were created in france after World War II. To avoid violation of land-use laws, these were built on the outskirts of the city Hypermarkets are more seen in Europe and not seen in USA Hypermarkets carry a larger proportion of of food items than the supercentres It has a warehouse-like structure with a lot of space for parking In Europe and Japan, the space availability is limited and this poses a problem. Hence the new hypermarkets are in multi-storey structures In countries like USA and those in Europe, there is a feeling against these large retail formats like supercentres and hypermarkets that these stores will drive local dealers out of business and that they have unfair trade practices, offer lower salaries, etc 1. d) Convenience stores Provides limited variety and assortment of merchandise Located in a convenient area and the floor area is 2000 3000 sq ft This is the modern version of the mom-and-pop shop It enables the customers to make purchase fasterwithout having to wait at the counter or without having to search through the store for any item They offer only limited variety and charge higher prices. People do not mind paying extra because of the convenience

Milk, eggs and bread account for a very large percentage of total sales

1. e) Discount stores Characteristics of discount stores A discount store is a type of department store, which sell products at prices lower than those asked by other department stores and other traditional retailers These stores offer discounts on RSPs because of the very high volume of sales that they are able to achieve. Their USP is price and price only. Discounts stores which were mere dump yards for factory seconds a few years ago have emerged as a brand new business opportunity for Indian retailers. These stores no longer stock export surplus rejects and offer a great value proposition to the savvy, price sensitive Indian consumer, in price, ambience, service and overall shopping experience. What is a discount store? Any store that sells 60 per cent to 70 per cent of its merchandise at 15 per cent to 25 per cent or more, below the maximum retail price, all through the year, qualifies to be a discount store, said Mr Gibson G. Vedamani, CEO of Retailers Association of India Analysts say, the opportunity in the discount retailing space will peak at Rs 30,000 crore by 2012 and Indian retailers have massive ramp up plans to capitalise on this trend. . SUBIKSHA DISCOUNT STORE Started in the year 1997 in Thiruvanmiyur in Chennai with Rs 5 Lakhs, it grew up fast to a turnover of Rs 235 crores in 2002-03 It catered to all household needs of a family It also met their demand through thehome delivry route Subhiksha was an Indian retail chain with 1600 outlets selling groceries, fruits, vegetables, medicines and mobile phones The retail chain has seen a considerable growth by offering goods at cheaper rates and thereby increasing its customer base As of January 2009, Subhiksha has been facing severe financial crises pertaining to liquidity. This has led to the shutting down of a large number of stores across the Nation 1. e) Specialty Store Specialty stores offer items within narrow product lines but good depth within that product line Characteristics of a specialty store A specialty store is a store, usually retail, that offers specific and specialized types of items. These stores focus on selling a particular brand, or a particular type of item. For example, a store that exclusively sells cell phones or video games would be considered specialized. Univercell, Croma etc are examples Gives customers a wide choice in the chosen field MTR ( food specialty store) Mavelli Tiffin Room was set up in the year 1950 incorporating international standards in hygiene MTR becomes pioneers in packaged foods in India in 1976

In 1976, MTR ventured into retailing of groceries and other items by opening a departmental stores MTR has three stores in Bangalore which deal only in MTR products Target customers are working women and products are designed in all sizes to meet the needs of the end customers Their product range includes the soups, ready-to-eat items, frozen foods, rice meals, spice powders, instant sweet/snack mixes, masala powders, papads. Pickles, ice creams etc After the success in south, MTR has moved to north India also. They have launched a number of products to suit north Indian taste

Value proposition of MTR products are 100% natural have no preservatives and use only the finest, most authentic ingredients Ready to Eat dish, pickles or soups, all MTR products are known for their "homecooked" taste. Uncompromised quality 100% vegetarian The other specialty stores in the food category can be Kovai Pazhamudir nilayam for fruits and vegetables, Adayar Ananadha Bhavan for sweets and savouries, shops elling only fresh fruit juices, etc 1. f) Restaurants Restaurants cater to people of all ethnic groups, all ages and at all locations Specialty restaurants in India serve a focused menu of Chinese, Continental, Italian, Thai, Japanese or Mexican food Fast food industry is also gaining ground with us fast food chains like McDonalds, KFC, Dominos Pizza, Pizza Hut Kentucky Fried Chicken (KFC) : KFC Corporation has its headquarter in Kentucky in USA and is the worlds leading chicken restaurant chain. Everyday 12 million customers are served in KFC worldwidwe in 109 countries. KFC operates 5200 outlets in USA and more than 15000 outlets all over the world It is famous for its original fried chicken whose formula was developed more than 50 years ago The company is ranked 239 in the Fortune 500 list KFC has outlets in all major cities in India Traditionally, Pizza Hut has been known for its ambiance as much as food offerings Saravan Bhavan a chain of vegetarian restaurants Headquartered in Chennai, it now operates several branches in India They have outlets in Singapore, Gulf countries, USA, Europe etc Priced at about 30% higher than other vegetarian outlets offering the same variety of food Quality and taste are the major thrust areas of this chain of business

 Cleanliness is the watchword 2. Health and Beauty product category 2 a) Pharma stores or Chemists Out of 5 million retailers in India , 15% are chemists Most of the pharmaceutical shops give value-added service like prescription of medicines, prescription records etc They offer home delivery Pharma stores also keep in stock self-diagnostic equipments, baby care items, skin care items, magazines etc Mostly manned by owner and his family or relatives Majority of such outlets have less than a staff strength of three The major hospital group, Apollo Hospital has over 100 round-the-clock retail outlets in locations including airports. They maintain a stock of prescription drugs and other healthrelated products 2 b) Diagnostic laboratories Characteristics They conduct blood tests, X-ray exanmination, Urine tests and other regular and complicated tests They tie up with private hospitals and private doctors who refer the cases to them Some of these labs send people to the homes of the patients to collect samples of blood, urine etc Offer master heath check up facilities One of the leading diagnostic centres in Chennai is Hitech Diagnostic Centre

Hitech Diagnostic Centre was started in the year 1986 Proper equipments, high quality reagents, strict internal and external quality assessment and control backed up by well qualified and dedicated professionals Hitech is accepted as one of the leading laboratories in the southern part of India Apart from the Doctors & Hospitals in Chennai more than 600 labs and hospitals in all over India uses their services First one to start full-fledged Molecular Diagnostic Centre in India in the private sector

. 2 C) Beauty Salons Characteristics They have the latest equipments and offer beauty treatments through highly trained personnel They offer services in the areas of hair care, skincare, Hand and feet care, bridal services etc The ambience is kept hygienic Caters to the working women and affluent sections of the society

Beauty Products like lipstick, cosmetics, nail polish, make-up items can be purchased from the salons Most of the salons are owned and operated by individuals. There are a few organized retail formats in this segment like Shahnaz, Lakme, Lever, VLCC, Health and Glow , etc

3. Footwear category 3.1 BATA VARIOUS FORMATS AND THEIR CHARACTERSISTICS Bata has a worldwide reach, with operations across 5 continents managed by 3 regional meaningful business units (MBUs). Each unit benefits from synergies specific to their environment, such as product development, sourcing or marketing support. Each MBU is entrepreneurial in nature, and can quickly adapt to changes in the market place and seize potential growth opportunities. Bata today

Serves 1 million customers per day Employs more than 40,000 people Operates 4,600 retail stores Manages a retail presence in over 50 countries Runs 40 production facilities across 26 countries

Bata has four formats: 1. Bata City Stores: These stores are operated in worlds fashion capitals It offers the discerning urban customers the best in todays fashion They are located in prime posh locations where the affluent section of people live It offers a very high level of personalized services If offers exclusive fashion wear with suitable accessories The shopping environment is contemporary 2. Bata Superstore: Located in urban and suburban locations, mainly in shopping malls Offers a wide assortment of fashion, casual, formal and athletic wear Offers high value products by providing good quality shoes at reasonable prices 3. Bata Family Stores: Bata has been traditionally known and recognized as a manufacturer supplying for the entire family. These stores cater to the entire family They offer wide assortments of shoes and accessories for men, women, children, athletes etc The products carry only the Bata brand but procure from local and international sources They offer handbags, belts, wallets etc as a trusted source for the family 4. Bata Value Store Bata Bazaar stores and depots offer a very variety of products They are offered at very affordable prices

The shopping environment is of self-service type Offers long-lasting products to meet the needs of the value-conscious customers

3.2 The Loft Biggest Footwear store in INDIA The Loft operates the biggest footwear retail outlet in India. They have two outlets one in Mumbai and the other in Banjara Hills in Hyderabad They plan to have another 5 stores in the next 2 to 3 years They plan to have a complete foot care solutions section for the customers The foot care services will include a pedicure centre, Doctors corner, acupressure shoes, shoes for handicapped people etc The store will sell all leading brands viz Bata, Gaitonde, Woodlands, Lotus BAWA, Liberty, Reebok, Nike, Adidas etc The Loft is adopting a Quick Response model, where vendors will supply directly to the stores and there will be no stocks except what is in store Currently the industry operates at about 6 months stock. Loft wants to reduce it to 2.5 months stock

RELIANCE RETAIL Limited (RRL) announced the launch of a new specialty store Reliance TimeOut on Cunningham Road in Bangalore . This store houses Books, Music, Stationery, Toys and Gifts. After the successful launch of Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness and Reliance Jewels, this is the 8th format of stores from Reliance Retail to be launched in India. Spread over 21,000 sq feet and with over 56,000 products, Reliance TimeOut offers the customers an extensive range of merchandise in Books, Music, Stationery, Toys and Gifts. Reliance TimeOut is all set to revolutionize this business with its unique combination of wide product range and an exciting customer experience. In todays world, with all the pressures, stress and workload at office, home and school, we need a place where we can unwind and relax, where we can browse, buy a book, sample some music, choose a gift, buy a toy, or some exclusive stationery for ourselves. At Reliance Timeout, they offer a comprehensive range of products in these categories along with a fascinating customer experience in a warm, lively ambience. In Books, Reliance TimeOut has over 30,000 titles, sourced from National & International publishers. Recognizing customer preference for self-help and professional development the store has an impressive range of non-fiction books. Reliance TimeOut also has a range of Academic and Professional books and Vernacular books in 6 languages, apart from fiction, popular genres and a huge childrens section. To help enhance this experience the store has a kids wall, where kids can cuddle-up with a book. In Music and Movies, Reliance TimeOut has over 12,000 titles sourced from leading international and national music companies. Listening pleasure is enhanced by the imported sound domes, which provide hygienic sampling of music. Reliance TimeOut also has a Karaoke Studio where the customer can sing along with a song of their choice and record it in a professional quality-

recording studio. There is also a cafe at the store, which makes Reliance TimeOut a wonderful hangout for youth and adults alike. Searching for your favourite music and books is efficiently handled by a search engine and complemented by knowledgeable and energetic staff, so that customers can easily find what they want in a store of this size. The Stationery section with over 7000 products is a wonderland for children, students and working people. For the first time in India, Professional Artists too have an exciting range of products to buy their art supplies from. Reliance Retail Limited, a 100% subsidiary of Reliance Industries Limited started rolling its stores in November last year and today operates over 418 stores in over 17 cities spanning 1.5 million Sq ft. The formats that RRL operates in are Reliance Fresh, Reliance Digital for consumer durables and information technology, Reliance Mart, a Hyper Market, Reliance Trendz - the apparel store, Reliance Wellness - offering wellness products, Reliance Footprint -a footwear store & Reliance Jewels -a jewellery store. New Emerging Retail Formats 1. On-line retailing In India out of the total retail market of nearly $ 475 billion currently, about $ 1 billion comes from on-line sales. It is expected to cross $ 8 billion by 2015 Increase in the broadband and dial-up internet connections , limited personal time, increased traffic congestions, the increased use of plastic money , the increased use of computers by youngsters etc are all facilitation the growth of on-line shopping Players like rediff.com, eBay.com, indiatimes.com, were the first entrants to the Indian on-line retail market and they achieved fantastic revenues through online transactions. Pantaloon India has entered this segment through their site futurebazaar.com venture Many small retail portals are emerging on the world wide web, meeting niche Indian customer requirements like ethnic apparel, handicrafts, jewelry, books, etc With value-added-services like cash-on-delivery to facilitate on-line transactions by consumers without credit or debit card, unique bidding schemes etc, e-commerce is fast gaining acceptance in India Online marketing is the fastest growing form of direct marketing in this era of computers. Widespread use of internets on various needs in day-today life has made this medium very important. Various technological developments like animations, link-up pages etc has made this very a very effective medium having dramatic effect on buyers and sellers. Many airline tickets can be bought over the internet these days availing discounts as and when they are offered. Train tickets in India are now purchased by many people through internet these days. There are many travel portals in India like yatra.com where you can browse and plan your travel. There are also portals like Bharath Matrimony where people can choose their spouses.

Dell computer products are marketed on line and you can order any configuration that suits your personal requirement and they will assem ble the same and deliver to you. Many countries like Singapore, Malaysia, etc give details of their countries tourist spots and also different offers available for visiting them. 2. Rural Retailing ITC - E-CHOUPAL Before ITC introduced e-Choupal, the farmers were restricted to selling the produce in the local mandi. They had to go through middlemen and prices were low. ITC trained the farmers to manage the Internet kiosk in the village. Today they are a community of e-farmers with access to daily prices of a variety of crops in India and abroad this helps them to get the best price. They can also find out about many other important things weather forecasts, the latest farming techniques, crop insurance, etc. e-Choupal has not only changed the quality of their lives, but their entire outlook A powerful illustration of corporate strategy linking business purpose to larger societal purpose, e-Choupal leverages the Internet to empower small and marginal farmers who constitute a majority of the 75% of the population below the poverty line. By providing them with farming know-how and services, timely and relevant weather information, transparent price discovery and access to wider markets, e-Choupal enabled economic capacity to proliferate at the base of the rural economy. ITC Chaupal Sagar Chaupal Sagar cannot be shoehorned into any of the retailing categories we are familiar with. At 7,000 square feet, it is too small to be a mall. And while it has opted for self service, stocking its merchandise on shelves lining the neat aisles, it stocks a breadth of products no supermarket can. It offers almost everything - from toothpastes to televisions, hair oils to motorcycles, mixergrinders to water pumps, shirts to fertilisers...It is just a very sharply thought-out rural store. Most of the brands it sells are national. You see Marico, LG, Philips, torches from Eveready, shirts from ITC's apparel business, bikes from TVS, and tractors from Eicher. We will look at this part of the equation in greater detail later. ITC is offering a very compelling proposition to these companies. But first, a look at how this place came up next to the warehouse. It works like this. With its network of e-chaupals , ITC communicates its latest commodity prices to the farmers via the Internet or VSAT lines. If they find these attractive, they sell their produce to ITC. Now, by setting up the mall next to the warehouse, ITC is trying to monetise the footfalls from farmers. ITC realised that the farmers had just got money, that they would spend it anyway, and that they had an empty vehicle with which they could lug the stuff back. Thus Choupal Sagar retails products and also acts as a procurement hub for for ITCs E-Choupal where farmers are offered better prices for their produce, as compared to the prevalent Mandi rates for the same

3. Indian Oil Corporations KISAN SEVA KENDRA Kisan Seva Kendra is an award-winning retail outlet model pioneered by IndianOil to cater to the needs of customers in the rural segment. Today, KSK outlets have emerged as dominant players in the rural markets, riding on the rapid growth of upcoming second and third tier roads in the rural areas. The KSK come with a fresh perspective enabling dealers to tap the huge demand driven in by consumers there. In addition, non-fuel retail facilities like convenience stores have been added to the KSK to sell pesticides, vegetables, banking products and stationery items. IndianOil has tied up with Indo-Gulf for fertilisers, National Seeds Corporation for marketing seeds and agricultural inputs as well as alliances with Nabard, Oriental Bank of Commerce and Bank of Baroda for banking products. Some KSK have installed internet kiosks, communication facilities, etc. Business alliances have been signed to market products from Dabur, Airtel, Tata Chemicals, Godavari Fertilisers, Gokulam Fertilisers, Hindustan Unilever and Godrej Agrovet. Other alliance partners are Emami for personal care products, Money Gram for money transfer, MILMA and OMFED for milk products, and Supplyco for convenience stores. 4. Leisure and entertainment Entertainment retail is redefining the Indian lifestyle with multiplexes, gaming zones etc coming up as much as malls There are only 10 screens in India per population of one million in India as against 40 screens in Europe and 117 in USA 5. Transit channels like airports Fast paced infrastructural development , including development of international airports and metro rails is opening up additional opportunities for retail development The Airport Authority of India is embarking on the upgradation of 9 metro airports and 15 non-metro airports with plans to spruce up the retail space. Chennai airport today has retail operations of Sangeetha restaurant, Krishna Sweets, Apollo Pharmacy, Caf Coffee Day, etc etc The joint venture between Shoppers Stop and The Nuance Group AG has set up dutyfree and duty-paid retailing outlets in the Bangalore and Hyderabad international airports Mass Rapid Transit System, currently in operation in Delhi, and in upcoming locations like Bangalore, Hyderabad and Chennai will open additional space for retail

MNC's role in organized retail formats. 1. DHL plans to set up healthcare supply chain for quick delivery of lifesaving products in India DHL Life Sciences and Healthcare, a division of the worlds leading logistic services player, is likely to soon set up a supply chain infrastructure for providing logistic services to deliver drugs and related healthcare products that are sourced from foreign manufacturers to retailers in India. This, while ensuring quick supply of lifesaving products, will eliminate the need of several layers of intermediaries in the supply chain. DHL already operates similar healthcare supply chain systems in Australia and other countries of the world. Through these services, DHL ensures that the customers receive ordered materials overnight. Time is of critical importance in delivery of healthcare products as it can make difference between life and death of a patient. DHL also has the advantage of owning Blue Dart, an efficient and reputed courier service, having offices, warehouses, and trained staff spread all over the country.

Interestingly, Zeullig Pharma one of the major Asian pharma distributors which in the past had tried to set up a similar supply chain in the country was, however, unable to make much headway in the face of stiff resistance from AIOCD (All India Organisation of Chemists and Druggists) a trade body representing interests of over 500,000 chemists and druggists in India. The situation, however, has since considerably changed as the AIOCD in the meantime appears to have lost its teeth as the trade body, despite several boycotts, has failed in stopping emergence and growth of organised modern pharma retail chains in the country. The trade body is opposed to the setting up of such chains in India. 2. Walmart eyes India and China for future expansion; Asia will lead global recovery, says Walton Walmart the worlds largest big box retailer which operates in India via its 50:50 JV with Indias private telecom giant Bharti group, is keen on expanding its operations in India.. Internationally, they are focusing on larger markets. China ant India are the major markets.as Asia is expected to lead the global economic recovery. Walmart, which derives close to one quarter of its global revenues (over $400 billion) from outside the USA, is currently operating over 600 stores in China and Japan, though company was forced a couple of years or so ago to withdraw its operations from South Korea- another growing Asian economy in the far Eastern region. Bharti Wal-Mart Pvt Ltd Walmarts Indian JV with Bharti Retail, has launched its first cash and carry wholesale store in Amritsar from May, 2009. The store is operating under the brand name of Best Price Modern Wholesale. The JV company is planning to open 10 to 15 such stores, which are expected to provide employment to around 5,000 persons. Walmart had to reconcile with launching its operations through cash and carry route as no foreign direct investment (FDI) is allowed in multi-brand, front-end retail under current policy framework of India. Walmarts Indian partner, though, is quite hopeful of change in the policy soon. According to Rajan Mittal, vice chairman of the group, who supervises the groups retail initiative, Bhartis are expected to achieve $ 1 billion in retail sales and employ around 60,000 people by 2015.
In view of the present policy hurdles, Bharti Retail has already forayed into front-end, multi-brand, retail on its own. It operates a general merchandise retail chain called Easyday comprising 28 stores under supermarket (26) and mini-hypermarket (2) formats in Punjab and Haryana. The retail chain is looking at adding 40 new stores in NCR during this quarter before the end of calendar 2009. 3. KFC opens 50th Indian outlet; unveils aggressive 10-fold expansion plan. Yum! Brands to also launch Taco Bell chain in India Yum! Brands, the US-based worlds largest network of system restaurants with nearly 36,000 restaurants in over 110 countries/ territories, employing over 1.4 million persons, has decided to go aggressively on expanding the network of its restaurants in India. The company will expand its present strength of 50 KFC restaurants by ten-fold to 500 KFC restaurants by 2015. Apart from KFC, the quick service food retailer also own the globally known restaurant brands of Pizza Hut and Taco Bell.

The company is looking at opening 100 outlets by end 2010 and 300 outlets by 2011. KFC follows a mixed (company and franchise) model of ownership and management model for its restaurant outlets. Each KFC outlet requires an average investment of Rs 3 crore. While, KFC will focus on big metro cities for its growth, it will continue to put emphasise on affordability and innovation to address the needs of young people between 19 and 29 years of age, who constitute its core customers. The company has been quite happy with the growth of its brands in India. While, KFC grew by 20 per cent over the last year, the growth for Pizza Hut (bigger and more famous), according to Chaudhry, was 6 to 7 per cent. Buoyed by its performance in the country, the worlds largest restaurants retailer, which accounts for $14 billion in global turnover, has decided to unveil its third restaurant brand in India. The first restaurant of Taco Bell brand, which specialises in Mexican delicacies, is scheduled to be launched at Bangalore before the end of this calendar year. Questions PART A 1. Mention four characteristics of a kirana shop 2. Give examples of small and unorganized retail formats widely seen in ouir country 3. Name four cooperative and governmental bodies that are engaged in retail sales 4. What are the common organized retail formats? 5. What are the characteristics of a supercentre? 6. What is a discount store? Give an example 7. What are the retail formats of Bata? Mention the main characteristic of each 8. What are the emerging retail formats? 9. What are the advantages of on-line retailing? 10. What is rural retailing ? PART B 1. Explain in detail the traditional and unorganized forms of retailing. Do you think these formats will survive? 2. Explain in detail, with examples, the cooperative and governmental bodies that are engaged in retailing. What are their characteristics? 3. Elaborate the various formats of organized retailing with examples and their characteristics 4. List and explain the various specialty retail outlets in India 5. What new formats of retailing are emerging in India? Explain their features and advantages