COMPARATIVE STUDY OF RELINACE IN RETAIL SECTOR

Comprehensive Project submitted to IILM ACADEMY OF HIGHER LEARNING, JAIPUR in partial fulfillment of the requirements for the award

POST GRADUATE DIPLOMA IN MANAGEMENT

Submitted By: Kumud pareek

Faculty Guide: MR Rustam bora Month 2012

ACKNOWLEDGEMENT
The satisfaction, which accompanies the successful completion of any task, is incomplete without the mention of the names of those people who made it possible, because success is the epitome of hard work, perseverance, undeterred missionary, zeal, determination and the most encouraging guidance and advice which serve as beacon light and crown our effort with success. I am immensely thankful to the RELIANCE RETAIL for giving me the opportunity to carry out my project work in this esteemed organization.

I am extremely grateful to MR Rustam bora faculty guide for his continuous support and precious inputs that added value to this project at every step of it. And finally I express my heartfelt gratitude to each and every individual who have been associated with my project work including those whom I may have inadvertently failed to mention.

Name: kumud pareek

TABLE OF CONTENTS

Acknowledgement

A) Executive summery B) Company Profile C) Overall market share of apparel

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10 19 25 38 41 43 45

Sector in retail
D) Industry profile E) Indias key retail brands F) Module I G) Module 2 H) Swot Analysis I) APPENDIX J) BIBLOGRAPHY

EXECUTIVE SUMMARY Company Profile Reliance Group

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of USD 22 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. The Group exports products in excess of USD 7 billion to more than 100 countries in the world. There are more than 25,000 employees on the rolls of Group Companies. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail limited), Indian Petrochemicals Corporation Limited and Reliance Industrial Infrastructure Limited.

Reliance Retail Limited

Reliance is gearing up to revolutionize the retailing industry in India. Towards this end, Reliance is aggressively working on introducing a pan-India network of retail outlets in multiple formats. A world class shopping environment, state of art technology, a seamless supply chain infrastructure, a host of unique value-added services and above all, unmatched customer experience, is what this initiative is all about. The retail initiative of Reliance will be without a parallel in size and spread and make India proud. Ensuring better returns to Indian farmers and manufacturers and greater value for the Indian consumer, both in quality and quantity, will be an integral feature of this project. By creating value at all levels, we will actively endeavor to contribute to India's growth. The project will boast of a seamless supply chain infrastructure, unprecedented even by world standards. Through multiple formats and a wide range of categories, Reliance is aiming to touch almost every Indian customer and supplier. RIL's Retail Project will be through the following companies: Reliance Retail Limited Ranger Farms Private Limited Retail Concepts and Services Private Limited Reliance Retail Insurance Broking Limited Reliance Dairy Foods Limited Reliance Retail Finance Limited Subsidiary of RIL Subsidiary of Reliance Retail Limited Subsidiary of Reliance Retail Limited Subsidiary of Reliance Retail Limited Subsidiary of Reliance Retail Limited Subsidiary of Reliance Retail Limited

Company Product Chart

Products Brands & End Use - Textiles

Vimal Suitings, Shirtings, Dress Material, Sarees Harmony Furnishing fabrics, Day curtains, Automotive upholstery

End Use: Fabrics RueRel Suitings

End Use: Furnishings, home textiles V2 - Ready-to-stitch, Take away fabric

End Use: Fabrics Reance - Readymade Garments

End Use: Fabrics

End Use: Suits, shirts & trousers

Growth through Governance

Reliance is in the forefront of implementation of Corporate Governance best practices Corporate Governance at Reliance is based on the following main principles:

Constitution of a Board of Directors of appropriate composition, size and commitment to discharge its responsibilities and duties.

Ensuring timely flow of information to the Board and its Committees to enable them discharge their functions effectively.

Independent verification and safeguarding integrity of the Company's financial reporting. A sound system of risk management and internal control. Timely and balanced disclosure of all material information concerning the Company to all its stakeholders.

Transparency and accountability. Compliance with all the applicable laws and regulations. Fair and equitable treatment of all its stakeholders including employees, customers, shareholders and investors.

OVERALL MARKET SHARE OF APPAREL SECTOR IN RETIAL

THE INDIAN RETAIL: DIVISION ACCORDING TO THE SECTORS

Source: KSA Technopak Report

INDUSTRY PROFILE
Call it the prosperity effect, indulgence or simply the need to dress smartly. Riding on the back of buoyant consumer sentiment and demand the retail apparel market has galloped to over Rs

1 Lakh crore. Indians across income strata are buying apparel, evident of the new brands being launched across categories and as diverse as big organized retailers to small entrepreneurs in more fusil towns. Year 2002 2006 Lakh Units 44,219 52,979 Rs. Crore 61,290 1,01,300

Branded apparel merchandising is gathering critical momentum in India, and thats a bit of a surprise in a country where preferences change every 25 km and loyalties change for a 10% difference in pricing.

Share of Organized Retail

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Total Retail (US $ Bn) Organized Retail (US $ Bn) % Share of Organized Retail

1999 150 1.1 0.70%

2002 180 3.3 1.80%

2005* 225 7 3.20%

THE Big Bazaars of India know God is in retail. Analysts swear by their stated corporate ambitions, promising growth potential and soaring performance graphs. Yet, indicators suggest that we are far from being declared as the tourism destination for retail therapy. Like in case of the foods and groceries category, which constitutes 14 per cent of the total share of organized retailing in India second only to apparels; key indicators hint that metropolitan India is way behind cities in South East Asian countries. According to a recent fast-track A. C. Nielsen study, the informal eating out (IEO) market in India is undersized as against Asian markets. When compared on a scale of visits per 100 population, Mumbai and Delhi score 638 and 1,015 visits respectively, as against 3,371 in Manila and over 4,000 in Jakarta. Visits per 100 population, a measure of the visit volume in a market, shows the number of visits to a category made by any 100 consumers. It is the product of market penetration in the past four weeks and the average visits in the same duration.

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The international food retail chain introduced the Happy Meal offer priced at Rs 20 in April this year. This affordability plank significantly improved the bottom-line in the following quarter. Noteworthy to mention is the status of the US-derived `temples of consumerism' on Indian soil. Deliberations during the recently-concluded India Retail summit revealed that only 77 malls out of the estimated 300 to be developed by 2007 are in any serious stage of execution. Against the current rate of development of malls in India, he cites the example of Wal-Mart, which opens a new store every three days. Yogesh Samat, MD, InOrbit Malls, says malls have been there in the country for a while but have not really evolved. Pantaloon had registered a turnover of Rs 650 crore by then. The corporate strategy now is to expand from 13 lakh sq ft held currently to 15 lakh sq ft by 2007. RPG, Shoppers' Stop, Lifestyle, Westside, Ebony are the other flag bearers of modern Indian retail, flanked by Pyramid, Globus and Tanishq. These companies are cumulatively worth more than Rs 2,000 crore.

Rapid growth
Organized retailing was worth Rs 23,000 crore in 2003 and is growing at a rate of 25-30 per cent annually. According to Harminder Sahni, Associate Director and Principal, KSA

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Technopak, by 2010, organized retailing will be valued at Rs 70,000 crore and will engage 10 per cent of the total retail market. While discussing the opportunities of retail in India, B. S. Nagesh, MD & CEO, Shoppers' Stop, points out that total spend by SEC B has surpassed that of SEC A and small towns are ready for change and growth. Like in the case of clothing category, which holds 36 per cent share of the organized retail basket, key players are widening their distribution outlets besides using current retail outlets as a B2B avenue. Arvind Brands plans to push the retail presence of Newport jeans, the once top-selling massmarket denim brand priced at Rs 399, from 1,200 outlets across 480 towns to 3,000 outlets covering 800 towns by the end of this financial year. Similarly, Ruf 'n Tuf, Arvind's entry-level jeans will ride piggyback on the retail boom spearheaded by Big Bazaar. Ruf 'n Tuf have an exclusive distribution arrangement with Big Bazaar. There have been an increasing number of announcements of major capacity-expansion plans in fibers, fabrics, processing and garmenting facilities by leading names such as Reliance, Indo Rama, Vardhaman, Raymond, Zodiac, Madura, Arvind, and Orient Craft and practically by all others in the list of the top Indian 100. Also, most companies are adopting forward and backward integration to add value to their offerings. If things stand their ground, the target for the clothing and textile exports from India by 2013 set at US$ 25-30 billion should be achieved.

This is also the time for consolidation of available resources. With the abolition of quotas, large buyers would prefer dealing with a few select countries and vendors ones who can offer quality and quantity in quick time. Margins will decrease dramatically when dealing with the likes of Wal-Mart. Profits will come only from savings across the production and management systems. Smaller units will either close down or will be part of the emerging cluster groups. Large companies will be looking out to buy small but innovative brands. Exporters will talk to their 13

respective principals and international brands for manufacturing and marketing rights for India. A lot of international brands that already have presence in the Middle-East region will step into the Indian market, either through franchising arrangements or by setting up their own manufacturing bases. Talks are already on with Treviso to set up a mini-Italian cluster in Tirupur.

Meanwhile, the past two years have seen a churning on the home front as well. Until a few years back, it was an uphill task for most companies to go beyond the Rs 1 billion mark, both because retail space was limited and investment in apparel companies was restricted by law. This deterred large corporate houses and foreign companies from getting into the apparel sector, which was also the primary reason why large investments could not be made in branding and marketing efforts.

Today, the Indian marketplace is all decked up to create a world of opportunities. The ongoing changes both in consumer lifestyle and retailing make it the most happening place to be in. Can our apparel brands and retailers afford not to take up the challenge? Kishore Biyani of Pantaloon has set the ball rolling for Indian retail and there is no reason why large international retailers should not come to India once FDI rules become liberal. Premium apparel brands are playing by the ear. Even Pierce Brosnan's own apparel brand is planning a retail foray to woo metropolitan India. Reid & Taylor Retail Pvt Ltd currently has 16 exclusive stores and plans to set up 50 such stores by 2005 end. However, all is not hunky-dory with the show business of organized retail in India. The taxation system still favors small retail business, even as there is differential sales tax across the length and breadth of the country. Intrinsic complexities of retailing such as rapid price changes, constant threat of product obsolescence and low margins makes it a perennial white elephant. The Government, however, took a slight shift from its zero tolerance stance against retail players last week by proposing to allow FDI in retail of specific brand of products. Though this may call for more competition, retail players felt that it was a step in the right direction.

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Ask him about the looming competition from the international czars of retailing, he says, this time around, when organized retail is just 3 per cent of the total market, there is enough room to accommodate competition. "It is only when organized retail touches around 25 per cent of the total market, key players will feel the competition pinch," he added. In case of deriving the perfect food retail model for India, procurement is a cog in the wheel. The retailer has to fight issues like fragmented sourcing, unpredictable availability, unsorted food provisions and daily fluctuating prices as against consumer expectations of round-theyear steady prices, sorted and cleaned food and fresh stock at all times. RPG Retail's Food World has devised a procurement model by contracting directly with nearly 400 farmers in Hoskote near Bangalore for procuring fresh vegetables daily. The food chain also arranges finances, professional advice for these farmers. However, in the business of retail, HRD is as critical as procurement. There aren't enough people around for multitudinous reasons. There is no regulation that addresses employees of retail. Unlike other industries, not much is offered in terms of remuneration and training. Nevertheless, like most industry-related seminars, India Retail Summit also wound up with a positive outlook. According to Nagesh, the next two-three years will see $200 million investment for retail expansion nationwide, which will result in 15-20 hypermarkets, 25-30 large department stores, 25-30 large supermarkets, 750 small- and medium-sized supermarkets, and 1,500 brand chains.

Changing consumer behavior

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The Indian retailing industry, which was traditionally dominated by small and family-run stores, has come of age. The retail sector is the second largest employer after agriculture in the country and also. The second largest untapped market after China. There are some 12 million retail outlets in India. Besides, the country is also dotted with low-cost kiosks and pushcarts. Organized retailing is only 3% Of the total retail industry Over the past couple of years there have been sweeping changes in the general retailing business, mainly in apparel retailing which was once strictly a made-to-order market for clothing has changed. To a ready to wear market. Flipping through a catalogue, picking the color, size and type of clothing a person wanted to purchase and then waiting to have it sewn and shipped was standard practice. Fashion element and design content was minimal in the pre-1990s, owing mainly to the lack of National level brands. At the turn of the century some retailers would have a storefront where people could browse, and new pieces being sewn or customized in the back rooms. Among the few players who have been catering to the branded market are Park Avenue, Charagh Din, and Liberty, Double Bull, Prolife and Snow white. It took a quite long time for brands such as Allen Solly and Van Heusen to create a respectable market share in the ready-to-wear market. Big players like Tata, Raheja, Biyani, etc have intensified the competition with their professional retail chains like Westside, Shoppers Stop and Pantaloons. Recently, India is increasingly being looked upon as a major supplier of high quality fashion apparels and Indian apparels have come to be appreciated in major markets internationally. Mens apparel market is 46 percent of the total apparel market in India. Preference for readymade garments is increasing and this has become inevitable with the rise in urbanization. Whereas, womens apparel market is 17 percent of the total apparel market in India. The preference for the branded Western and Indo-western apparels among the working women is on the rise, which is a welcome relief for the manufacturer and retailers of branded apparel. The dressing habits are getting refined if not changed specifically among the working women. Kids apparel market is 37 percent of the total apparel market. Being the brand penetration in this segment lowest at 9 percent shows a lot of potential for the branded players to exploit this segment.

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Indias key branded apparel companies at present

Madura Garments Madura Garments, the numero uno branded Apparel Company of India, has an impressive array of fashion brands: Louis Philippe, Van Heusen, Peter England, Allen Solly and SF Jeans. With a top-line growth of 20 per cent, and over 500 retail stops across India covering over two lakh sq ft of retail space, the companys turnover touched Rs 392 crore in 2003-04 with projections of a significant jump in the next few years. Madura Garments claims to have a 35 per cent share in the market for premium shirts and 17

over 20 per cent in the market for premium trousers. Madura Garments future plans include expansion in jeans wear, suits, accessories and womens wear. Over the next three years, its total turnover is projected to touch Rs 650 crore, in line with a planned 20 per cent growth for itself while the market grows at 15 per cent. The company is also expanding its presence in the retail segment by increasing its EBO network. There are already 110 EBOs for fashion brands like Van Heusen, Allen Solly and Louis Philippe. Another 30 will be added to this category. About 150 EBOs are devoted to Peter England alone, and will soon be augmented by another 20. Also, the existing count of 35 Planet Fashions, the companys exclusive showrooms, will be increased to 45. Planet Fashion showcases all Madura Brands under one roof. Maduras investment will be in advertising/brand communication as far as retailing is concerned. However, Madura is open to direct tie-up with promoters for opening EBOs in critical malls. Madura Garments annual spend on communication usually comprises 8-9 per cent of the brand turnover.

Arvind Brands Arvind Brands Ltd, a wholly-owned subsidiary of Ahmedabad-based Arvind Mills, the Lalbhai Group flagship, was established in 1993. A pioneer in branded garment business in India, Arvind Brands Ltd is a licensee for Arrow, Lee and Wrangler in the country. It also owns other domestic brands such as Excalibur, Newport, Flying Machine, Ruggers and Bay Island. The company, thus, has a strategic basket of brands at different price points, which cater to every segment of the domestic market. While the 2002-03 turnover was around Rs180 crore, the projected turnover for 2003-04 was about Rs 265 crore. Arrow, the companys premium menswear brand that is celebrating 10 years in India, is expected to turn up with Rs 100 crore (current turnover about Rs 62 crore) in the companys top line by 2005. Interestingly, in a recent initiative, Arvind Brands tied up with Pantaloon Retail to retail its Ruf & Tuf range of jeans fashion wear through the latters Big Bazaar outlets across the country. This venture will

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sell close to 100,000 pieces per month, thereby translating into a turnover of Rs 300 million to start with. VIP Group Maxwell Industries, the flagship company of the VIP Group, is among the worlds largest hosiery manufacturers and marketers, commanding a global distribution network. In India it sells across 200,000 outlets across the country. The VIP brand, created in honor of the Indian consumer, is exported to countries around the world, including Germany, the United States, the United Arab Emirates, and those in the Middle East and South Asia. The VIP portfolio includes popular brands such as the VIP Frenchie, VIP Feelings and VIP Bonus, among others. VIP Group is a licensee for a number of international brands including Lovable, Vanity Fair and Try. While Lovable is handled by Lovable Lingerie Pvt Ltd and is sold in some 100 cities for Vanity Fair, a new company, La Reine Fashions Pvt Ltd, was formed under licensing arrangement from the US-based VF Corporation. The Vanity Fair sub-brands came with names such as Body Perfect, Bedazzle and Mesmer. Marking out an investment of Rs 10 crore, the company intends setting up at least four company-owned exclusive Vanity Fair boutiques across the metros, while franchisees would be roped in for future expansion. Vanity Fair should make a turnover of Rs 20 crore this year. Gokaldas Images Gokaldas Images Ltd (GI), with a turnover of Rs 350 crore, is the only clothing company in India with some sizable presence in both domestic and international markets. The Bangalorebased company caters to such global fashion brands as Tommy Hilfiger, Gap, Levis, Weil Besancon, Liz Clairborne and Playtex (manufacturers of Wonderbra). The group has 18 manufacturing units, including many export-oriented units in and around Bangalore, employing approximately 9,000 workers. Seeking to diversify into newer categories, GI has entered into strategic long term alliances with global brands like Weil Besancon, Playtex and Levi Strauss and this led GI to organize its

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operations into six independent product specific divisions. Gokaldas Images was one of the first few companies in India to introduce the concept of retail franchisees with the launch of Weekender in 1987 through its associate firm Personality Ltd. Today, Weekender and its sub-brand Weekender Kids are retailed through two separate franchise chains in 70 exclusive outlets in cities across the nation. Raymond Raymond has charted a growth plan to expand on both the home and international fronts with the core areas as worsted textile, denim and apparel. Looking at the opportunity in valueaddition, Raymond is earmarking 15-20 per cent of its capacity for conversion to garments, while not detracting from the volumes already being sold. As part of its Rs 211 crore expansion drive there is also a plan to set up a suit and formaltrouser manufacturing facility in Bangalore. On the home turf, Raymond Apparel Ltd (RAL) is busy expanding on its product and brand offering. The company recorded a turnover of Rs 214 crore in 2002-03. The acquisition of Color Plus has enabled Raymond to make a broader based offering to the Indian man. While Color Plus fits in the premium-casual category, Parx is positioned in the mid-price casual wear segment. Park Avenue and Manzoni, the other brands, are in the premium and high-end formalwear segment. Raymond enjoys the largest exclusive retail network with 281 exclusive Raymond shops across 132 Indian cities. This is in addition to 20 overseas stores in 15 cities of the Middle East, Sri Lanka, Bangladesh and Nepal, besides a presence in Europe as well. The Raymond Shop retail chain that sell Raymond fabrics as well as its apparel brands occupy a space of 1 million sq ft built-up area and has a turnover of Rs 470 crore. Raymond Apparel Ltd is a 100 per cent subsidiary of Raymond Ltd. Incorporated in 1925, Raymond Ltd is Indias leading producer of worsted-suiting fabric with a 60 per cent market share. With a capacity to manufacture 25 million meters per annum, the company is planning to increase its capacities by another 4-5 million mtpa. This will mainly be done through capacity expansions and acquisitions. Raymond has also been scouting around for

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acquisitions in Europe for quite some time.

Zodiac Clothing Company The House of Zodiac, is a Rs 200+ crore design driven, vertically integrated, transnational clothing company that control the operations from design-production- shelf. Today, it is a premium menswear Indian brand of the longest standing, celebrating 50 years of successful operations this year. Zodiac is the only Indian clothing brand that has asserted its presence in Europe, the UK, the US and the Middle East, competing with premier international brands at similar prices. The brand has taken the Made In India label to foreign shores at premium prices. Zodiacs combined manufacturing capacity is 6 million shirts besides a large capacity for manufacturing neck ties and socks. It has manufacturing facilities in India (Karnataka, Gujarat) and the United Arab Emirates (Dubai), with design and sales offices in three of the five fashion capitals of the world New York, London and Dsseldorf. Zodiacs acquisition of one of the biggest suit and trouser manufacturing facilities (from NiryatSam Apparels, Noida) will enable it to be present in all segments of the menswear market and also make a formal entry into the fine tailoring category. The plant, to be relocated to Bangalore, will manufacture 400 jackets and 1,100 trousers a day when it becomes fully operational. The expansion will naturally add significantly to Zodiacs top line. With 12 branches in India and about 3,500 people in employment, the House of Zodiac is one of the few apparel majors in India that controls entire operations from design to retail a seamless organization between in-house design, development, manufacturing, distribution, marketing and retail. Its retail network includes over 800 outlets, all large format stores and almost 80 exclusive Zodiac Retail Shops spread across the country. Zodiac is the first woven-garments company in the world to get the SAA 8000 and has a place in the Guiness Book of World Records for the Worlds Longest Tie. Zodiac launched its shirts in the UK with Ciro Citterio, a UK-based retailer with 130 stores across the country. The Europe launch was with The Bijenkorf in Holland and Peek & Cloppenberg in Germany. In the Middle East, Zodiac retails its brand through Landmark

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Group-owned Splash stores and other select chains. Zodiac shirts have recently been launched successfully in Canada as well. In 2002, Zodiac launched ZOD! And that opened a whole new club wear segment in the Indian casual wear market.

ITC ITCs foray into fashion retail with its Wills Sport stores was initially not taken very seriously by the industry. However, its expansion to 48 stores (Wills Lifestyle chain of exclusive specialty stores) in 38 cities across India within 30 months of its operations and the launch of its mass fashion brand, John Players (already selling through some 2,500 outlets), as also the entry of the Wills Lifestyle brands into department stores are indicators of what ITC can do to expand its business. Having consolidated the Wills Lifestyle chain operations and established a sizable network for John Players, ITC will now look forward to the next level jumping. Opening 5-6 more stores for Wills Lifestyle each year or even adding 100 more retailers to sell John Players is surely not enough to add something substantial to ITCs balance sheet. A brand like John Players in the women wear segment offering western casuals and work wear at an affordable price could possibly be the next launch from ITC. Some indication on ITCs retail capability can be gauged through its e-choupal venture, which already covers some 18,000 villages reaching 1.8 million farmers and the network is expected to spread across over 100,000 villages or one-sixth of rural India by 2010.

New Retail Entrepreneurs

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 Delhi-based Ebony has commenced a massive expansion in northern India with eight new stores and a combined retail space of 150,000 square feet. Besides sprucing up exiting stores in Delhi and Punjab, the company is expanding to other north Indian states. As lifestyles change, fashion in India is becoming more stratified, as in the West. Lifestyle, a part of the Dubai-based Landmark Group retail chain, now owns seven stores located across various metro cities. The company wants to double its presence to 14 stores by 2006, occupying a combined retail space of one million square feet. Mumbai-based lifestyle chain Pantaloon has spent around US $ 660000 this year to revitalize its brands and promote new brands. Bangalore-based Shoppers Stop which currently has 15 stores spread over 9 of Indias largest cities, plans to open 35 more outlets in the next three years. TCNS Clothing has 17 stores across the country and is planning to increase the number to 37, covering all major cities Spykar has set up 22 stores across the country, and plans to add 30 more by mid 2006. India has huge potential as a market for foreign clothing, given its large population and growing household incomes.

MODULE 1 Objective of Study

Profile the customers both psychographically and demographically Study the local competition so as to derive information regarding the kind of market that already exists Find the preferred price band which the customers are ready to spend on various merchandise Give suggestions on the layout of the store after studying the local market

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Methodology of study
Understanding the customer demography and psychographically with the help of Observation Questionnaire Personal interviews

Identifying the main markets around the Mall Studying the already existing competition and collecting relevant data about them Identifying the residential areas from where these stores get most of their customers Identifying the gaps in the market, if any

Findings of the questionnaire

Gender Male Respondents - 24 Female Respondents - 35

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 Age Group Under 18 19 25 25 26 35 23 36 45 - 6 46 55 - 1 56 or above 4

Education 12th Grade - 7 Graduate Degree 34 Masters Degree - 18

Preference w.r.t. purchase location Local Market Malls in the surrounding areas Central Markets (eg. G.T,vaishali nagar, rajapark ) Others Men's 27 14 9 7 Women's 27 16 7 8 Kid's 23 11 6 5

Average monthly expenditure on apparels Up to 500 - 1 Rs 500 - Rs 1000 - 11 Rs1000 - Rs 1500 - 24 Rs 1500 - Rs 2000 - 9 Rs 2000 and above - 14

Availability of desired merchandise - Everything available - 44 - Desire more merchandise - 15

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 Would you go up to the 1st and 2nd floor of the Mall - Yes - 54 - No 5 Awareness about the store opening - Aware 17 - Not aware 42 Preference w.r.t. ready to wear or fabric - Ready to wear - 34 - Fabric - 5 - Both - 20 Range of merchandise that should be available in the store Mens wear Yes - Formal Suits 59 - Formal wear 53 - Ethnic wear 34 - Casual wear 54 - Accessories 53 Womens wear - Salwar Kameez - Formal wear - Sarees - Ethnic wear - Accessories 8 20 12 23 6 6 5 25 6 Number

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- Lingerie Kids wear - Casual wears - Formal wears - Ethnic wears - Accessories Average amount spent on the following Rs Mens wear - Formal shirts - Casual shirts - Trousers - Denims - Ethnic Wear - Party Wear Womens wear - Salwar kameez - Sarees - Formal shirts/trousers - Denims - Fabric - Lingerie Kids wear - Casual wear - Formal wear - Ethnic wear Kid's Wear 21 7 7 10 1 3 Women's Wear 11 30 2 8 6 14 8 17 24 15 23 6 7 8 4 6 3 1 4 10 3 1 500 up to 500 Rs 1000 Rs 1000 -Rs 1500 Rs

15 9 11 20 6

1500 Rs 2000 >Rs 2000

Men's Wear 29 21 35 14 18 22 12 20 2 1

5 2 10 11 2 4

3 4 3 5

3 5

3 13

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 Satisfaction with present purchase location - Satisfied 52 - Not satisfied - 7

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Graphical Representation of data collected

12% 31%

M ale 24 41% F em ale 35 59%

12th G rade

M ale F em ale

G raduate Degree M as ters Degree

57%

10%

2%

7%

0% 42%

Under 18 19 25 26 35 36 45 46 55

20, 34% 34, 58% 5, 8%

Ready to wear Fabric Both

39%

56 or above

20
29% Aware Not Aware 71%

Others Central markets 41 77 Malls in the surrouding areas Local market

22 1

20

40

60

80

100

Rs 2000 and above Rs 1500 - Rs 2000 Rs1000 - Rs 1500 Rs 500 - Rs 1000 Upto 500 0 1 11 9

14

15, 25%
24 Series2 Series1

Everything available Desire more merchandise

44, 75%

10

15

20

25

30

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Profiling of Customers Location wise

Number of respondents interviewed at the mall 21 (M:F 43:57) Respondent profile: 90% of the respondents were either graduates or post graduates Since most of these respondents were within the age group of 19 - 25 they could be classified as young, enthusiastic, impulsive people who seek variety and would spend comparatively high proportion of income on fashion, entertainment and socializing. Number of respondents interviewed at the market 17 (M:F 29:71) Respondent profile: 82% within the age group of 19 35 88% were married and had kids 70% of the respondents were either graduates or post graduates All of the respondents shopped from the local market for most of their desired merchandise and all except one were satisfied with their present purchase location The respondents mostly constituted conservative, conventional and traditional people. Mostly loyal to the stores they buy particular merchandise from. 67% of the total respondents in the age group of 19 25 61% had one or more kids 86% preferred to purchase from branded showrooms located either in the nearby malls or central market locations

Number of respondents interviewed in the residential areas 21 (M:F 38:62) Respondent profile: 71% were with the age group of 19 35 All the respondents were either graduates or post graduates The respondents included mostly married people who were focused towards their work and families and would buy products to demonstrate success to their neighbors.

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Information about Local Competition

Sanjay textile(Men's Store Footfalls Male: Female ratio Conversions Bills/day ATV Area Femina style 86 20:80 ratio 70% 60 5000 Basement Men's wear, Ground floor - kid's and women's Layout wear Girl's and women's Fast movers Slow movers Avg Basket Size Private labels wear Ethnic wear 4-5 products Shirts Ties 3 Casual wear Women's 500 Girl's - 400 Average price points SKUs Boy's - 400 Men's 1000 Coats 1,500 Jeans 1,000 Shirts - 400 2,500 Sarees Rs100-Rs300 Salwar Kameez Rs200-Rs600 150 Formal wear - 200 Ethnic wear 400 Salwar Kameez Woolen Newly born kid's wear wear) 79 Anmol Women's wear 60 70 Paradise Kid's wear 129 10:90 ratio 45% 60 150

40% 30 1000 - 1200

50% 30+ 700 2,500 sqft

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Cantabi lMen's Store Footfall s Male: Female ratio Conver sions 50:50 ratio 80% 60% 80-85 (WD) Bills/da y ATV Area Layout 300 200 10,000 sqft (5 floors) Basement Household accessories, Ground floor - Men's ethnic wear/winter wear 1st floor - Men's wear, 2nd floor - Kid's wear, 100 (WE) 3,000 9,000 sqft 30 33 100 4,000 sqft Ground Floor Kid's wear, 1st floor Men's wear, 2nd floor Women's wear Ground floor Women's wear, 1st floor - Kid's wear, 2nd floor - Men's wear 500 500 700 50% 50:50 ratio 60-70% 40:60 ratio 70% Vishal Megamart 380 wear 160 TNG Men's wear 70-75 Pocket friendly 1,000 Charlie outlaw 700+

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3rd floor Women's wear Men's Fast movers Slow movers Avg Basket Size Men's Trousers Household items Men's shirts Inner wear 3-4 product s Trous ers Acces sories shirts and trousers Ethnic wear 2-3 products Bluemoon, Lovebirds (kid's wear), Durific Jeans (women's wear, Free Private labels Avg price points 10,000 SKUs units Zepplin, Kitan & Chlorine None TNG Concept Jeans (men's wear) Women's 650 Men's - 500 Kid's - 400 Cardigans, shirts Ethnic wear

Key observations
Respondents Most of the respondents within the age group of 19 25 and very much exposed to the mall culture Large percentage prefer the local market to purchase the desired merchandise and second to it is the those buying from nearby Malls such as MGF mall in 22godown

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For a large proportion of respondents the monthly expenditure on apparels lies between Rs 1000 to Rs 1500 25% of the total respondents desired more merchandise range when it came to buying from the local markets Womens clothing has a higher price range than Mens

Competition Large format retailers have an edge over smaller retailers as one stop family shopping stores Lack of stores for Kids wear and lingerie The market attracts customers from close locations as it is the only option for shoppers present in the surrounding residential areas A visit to the nearby malls revealed that visible areas of the mall were occupied by gaming zones in order to lure kids as a large number of visitors to these malls come with their families having small kids

Suggestions on store layout

As seen among the competitors, Mens Wear Shirts and Trousers have a high usage rate thus they should be on the second floor as destination goods Along with that the second floor can house Womens Salwar Kameez and Sarees which most of the women in that area buy frequently Among these there could be products like Mens formal wear and casual wear along with Mens Accessories The best suited merchandise for first floor would be Kids wear (casual wear, formal wear and accessories) as most visitors to the mall had one or more kids. Along with that the local market does not offer many option in this category.

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Along with that Casual wear, lingerie and accessories for women is an appropriate merchandise as something the shopper would go browsing through, these would lead to impulse purchase.

The products which can be dropped are Mens ethnic wear, Kids ethnic wear and Womens Formal wear.

Average Price Points

The average price for merchandise such as Mens formal shirts, casual shirts, Womens fabric and lingerie and Kids Casual wear is mostly preferred up to the range of Rs 500. Mens trousers, denims, Womens Slawar kameez, formal shirts and trousers, denims and formal and ethnic wear for kids is preferred within the range of Rs 500 to Rs 1000. Respondents were ready to spend Rs 1500 or more on merchandise such as Mens party wear, Mens Ethnic wear and Womens Sarees.

Summary
Most residents in the area lie within the age group of 19-35 Taste in apparels vary from traditional wear for women (Sarees and Salwar Kameez) to western and casual wear for young college goers The price band acceptable by a large proportion lies within Rs 300 to Rs 1500 for most range of merchandise

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The local competition includes several small retailers located in Krishan Nagar for Mens wear such as English Channel, Newman, for Womens apparels Anmol, Anu and for Kids wear Child Junction, Paradise

The large format retailers located within close proximity to the mall are Vishal Megamart ,Femina style , Pocket Friendly store and Charlie store

The segment where the gap exists in the market is kids wear and Womens lingerie The categories of products mostly fast moving are Mens shirts and Trousers and Womens Slawar Kameez while the merchandise that the local Retailers need to push are Mens and Kids Ethnic wear and Accessories for Men in large format stores.

Module 2
Study potential brands present in the market which are presently restricted to the local level and enjoy top of the mind recall with customers Objective of Study
To find brands which are well known in the local market. The reason for the same is that such brands could be an alternate to private labels as they would be a vital source of

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greater margins as well as would be able to communicate the store image in a better manner. Also, lesser time and money would be required to make the customers acquainted with these brands as they have already come across these brands earlier. Methodology Used The project involved visits to the following markets o Tonk road o Rajapark o Malviya nagar o Vaishali nagar As well as to the following stores o Lifestyle o Big bazaar o Sanjay textile o Vishal Megamart I was involved in looking for brands that have greater visibility which was done by observation and also talking to the customers to know about the recall value of various brands.

Findings
These are the various brands which are presently operating at the local level but are well known among the customers: 1) Chhabra 555 Womens Ethnic wear 2) Desam Mens casual wear shirts Stores in which the brand is available biba Wears, femina style, Vishal Megamart 3) Farenheit Mens casual wear shirts

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Stores in which the brand is available - Ritu Wears 4) Laromani Mens formal and casual shirts Stores in which the brand is available - biba Wears, Sanjay textile , Big Bazaar Average Price Rs 700 5) NYX Mens formal wear Stores in which the brand is available Big Bazaar Average Price Rs 2000 6) Crimsoune Mens formal and casual shirts Stores in which the brand is available biba wears Average Price Rs 500 7) Vasari Mens Ethnic wear The price range for this brand is anywhere between Rs.800 to Rs.5,000 for shirts, Rs.500 to Rs.5,000 for ties, Rs.1,100 to Rs.2,500 for trousers and Rs.6,500 to Rs.15,000 for suits. Currently the merchandise is retailed out through chainstores like Lifestyle, Shoppers Stop, and Ebony across the country. Stores in which the brand is available biba Wears,Sanjay textile , Vishal Megamart 8) Eternal - Mens Ethnic wear Stores in which the brand is available biba Wears, femina style Average Price Rs 2500 9) Bonsoir Mens formal wear Stores in which the brand is available Ritu Wears, Chunmun Average Price Rs 2000

10) Dapper Mens casual shirts Average Price Rs 395 Stores in which the brand is available Ritu Wears 11) Caviar - Mens casual shirts Average Price Rs 500 Stores in which the brand is available Ritu Wears

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Apparel Industry SWOT Analysis

Strengths o Fierce development of organized retail/multiple-retail formats in recent past. o Innovations in technology from fiber to finishing. o Increasing the number of organized players at all levels of the value chain.

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o Developing new markets both geographically and through new usage occasions. o India has an advantage on production costs. Large entities have the funds and the experience to sustain fashion growth. o The Indian middleclass is more than willing to offer a higher price for the enhanced value that fashion brands can render. Weaknesses o Fragmentation in marketing, o Distribution and retailing; o Shortage of retail options, o Expensive retailing space. Opportunities o Branded players coming up with renewed thrust and mass focus; o Fabrics mills expanding with forward integration and international tie-ups; o Export houses foraying into home market with a basket of international brands (plus expanding on its exports); o Retail players expanding on its store labels o Use interactive platforms to learn more about customers and factors that influence share of wallet in favor of clothing o Indian corporate foraying into home market with a large manufacturing and retail network o Foreign brands/retailers entering India with a mass brand and large manufacturing facilities o The less developed regions of this country offer significant potential, which remains unutilized owing to an inadequate distribution mechanism. Threats

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o Eliminate gap between target and achievement of export of textile products due to general recession in the global market and fierce competition from low-cost suppliers such as Bangladesh and China even
o o o Lack of qualified pools of expertise Improving the regulatory environment for essential business services Eliminate lingering roadblocks to the establishment of retail distribution system and distorting production measures.

o Developing global competencies. o Influencing customer decisions on disposable income and shifting customer preference from unorganized organized retail. o Adapting to customers social and economic reality.

Appendix
Questionnaire for Module II
Q1. What is your gender? o Male o Female

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Q2. What age group are you in? o o o o o o Under 18 19 25 26 35 36 45 46 55 56 or above

Q3. What is the highest level of education that you completed? o 12th Grade o Graduate degree o Masters degree Q4. Which is you preferred purchase location for apparels? o Mens o Womens o Kids Q5. What is your average monthly expenditure on apparels? o o o o Up to Rs. 500 Rs. 500 Rs. 1000 Rs. 1000 Rs. 1500 Above Rs. 1500

Q9. Any merchandise that you are likely to buy which is not presently available in the local market?

Q10. Would you go up to the 1st and 2nd floor of the mall in order to buy your desired merchandise? o Yes o No Q11. What is the average price you spend on apparels for the following?

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o o o

Mens Wear Formal Shirts Casual Shirts Trousers Denims Womens Wear Salwar Kameez Sarees Formal shirts/trousers Denims Kids Wear

Q12. Are you aware that a new store with a complete range in your locality is coming up in your neighborhood? o Yes o No Q13. Do you prefer ready to wear clothes or buy the fabric and get it stitched? o Ready to wear o Fabric Q14. What range of merchandise do you expect from one stop apparels store? o o o Mens Wear Formal Suits Formal Wear Ethnic wear Sherwani Casual wear T-shirts, denims Accessories ties, belts, inner wear, watches, wallets Womens wear Salwar Kameez Formal Wear Coats, trousers, formal shirts Sarees Ethnic Wear Lingerie Accessories Jewellery, cosmetics, handbags, watches, perfumes Kids wear Casual wear T-shirts, denims Formal wear Ethnic wear Accessories belts,

Q15. Are you happy with your present purchase locations? 43

o Yes o No Q16. If not, why so?

Name

Ph No/e-mail id

Thank you for taking the time to complete this survey

BIBLOGRAPHY
Books 1) Marketing Management - Philip Kotler 2) Retailing Management Levy and Weitz

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Websites 1) www.imagesfashion.com 2) www.thehindubusinessline.com 3) www.fibre2fashion.com 4) www.deccanherald.com 5) www.ril.com

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