SCHOOL OF ADVANCED MANAGEMENT

MAJOR RESEARCH PROJECT SYNOPSIS

On

SCOPE OF RETAIL OUTLETS IN RURAL INDIA

A Research Project Synopsis Submitted to Add Value in the

Post Graduate Diploma in Management

(2009-2011)

Faculty Guide: Targeted Company

Dr. Pragya Jaroliya ITC Choupal Sagar

SIMS

Director: Chair-Person (PGDM)

Dr. Prashant Gupta Prof. Aditya Verma

Submitted by:

Pankaj Wadhwani
 Scope of Rural Retail
Outlets

PGDM (2009-11)

Area of MRP:
Rural Marketing.

Topic of MRP:
What is the scope of Retail Outlets in Rural India and to know the difference
between Retail outlets in Urban and Rural Locality?

Major Research Project Synopsis Page 2

 Scope of Rural Retail
Outlets

SYNOPSIS:

According to Indian Retail Report, of the Rs.12,00,000 crore retail market, food &
grocery retail is by far the single largest block estimated to be worth a whopping
Rs.7,43,900 crore, but more than 99 per cent of this market is dominated by the
neighbourhood kirana stores.

Deliberating on the advantages of the organized retail, efficiencies can be increased

in the agricultural sector by removing intermediaries in the food supply chain.
While urban customers benefit from reduced prices of farm sector goods, rural
farmers benefit by way of higher returns for their produce.

Talking about the global perception about India, about its economic might and
potential in terms of market size, there had been a drastic change over the last few
years. While the buoyant manufacturing and services sectors had contributed in
fuelling consumption demand in urban as well as rural areas, the government on its
part remained committed to improving infrastructure and providing a congenial
environment for indigenous business modules to blossom and harness domestic as
well as foreign investment to optimum levels. Economic prosperity also meant
higher standards of living and higher consumption levels, and only an efficient and
organised Retail sector could ensure and sustain this growing demand of the
evolved consumer.

At present, India's retail sector is largely unorganized, with about 15 million tiny
outlets catering to consumer needs across the country – it employs the second-
largest number of people after agriculture. Organised retail is now focused
primarily on the 300 million urban "middle classes'' and an additional 200 million
rural rich, who form a consumer market worth more than US$100 billion. So, there
is enough ground for the modern and the traditional formats to co-exist.

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 Scope of Rural Retail
Outlets

“There would be a real revolution in the Indian retail industry, if the changes being
witnessed in the metropolitan and other tier-one towns percolates to all the 784
urban settlements, with populations above 50,000 persons. This is likely to happen
as the real estate prices in the large metropolitan towns are increasingly becoming
prohibitive and consequently giving distinct advantage to those who are already in
the business of retailing, viz., the traditional mom & pop stores. Rural and semi-
urban incomes are also expectedly to grow much faster in future, once the
agriculture growth rate pushes up. Our civic laws concerning construction and
property development also need to be re-looked, as the earlier convenience-stores
get replaced by shopping malls and other formats of organized retail trade”.

Choupal Sagar

Following the success of the e-Choupal, ITC launched Choupal Saagar, a

physical infrastructure hub that comprises collection and storage facilities and a
unique rural hypermarket that offers multiple services under one roof. This
landmark infrastructure, which has set new benchmarks for rural consumers also
incorporates farmer facilitation centres with services such as sourcing, training, soil
testing, health clinic, cafeteria, banking, investment services, fuel station etc. 24
'Choupal Saagars' have commenced operations in the states of Madhya Pradesh,
Maharashtra and Uttar Pradesh. ITC is engaged in scaling up the rural retailing
initiative to establish a chain of 100 Choupal Saagars in the near future.

Choupal Fresh

Choupal Fresh, ITC's fresh food wholesale and retail initiative, leverages its
extensive backward linkages with farmers and supply chain efficiencies. It focuses
on stocking fresh horticulture produce like fresh fruits and vegetables. Five
Choupal Fresh retail stores are currently operational at Hyderabad. The company
has also set up a complete cold chain for ensuring the availability of fresh products
in the market, besides directly sourcing farm fresh produce from the farmers.

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 Scope of Rural Retail
Outlets

India’s largely rural population has also caught eye of retailer looking for new areas
of growth. ITC launched the India’s first rural mall ‘Choupal Sagar’ offering a
diverse product range from FMCG to electronics appliance to automobiles,
attempting to provide farmers a one stop destination for all their needs.

Still India’s 70% of population belongs to rural locality and rural retail sector carry
a huge scope in future, same said by press and articles on rural market.

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