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c Banks, capital goods, engineering, fast moving consumer goods (FMCG), software
services, oil marketing, power, two-wheelers and telecom companies are leading the sales
and profit growth of India Inc in the fourth quarter of 2008-09. India continues to be
among the most attractive countries for global retailers. At US$ 511 billion in 2008, its
retail market is larger than ever and drawing both global and local retailers. Foreign
direct investment (FDI) inflows as on July 2009, in single-brand retail trading, stood at
approx. US$ 46.60 million, according to the Department of Industrial Policy and
Promotion (DIPP).
c The organised retail sector, which currently accounts for around 5 per cent of the Indian
retail market, is all set to witness maximum number of large format malls and branded
retail stores in South India, followed by North, West and the East in the next two years.
c According to the report ǮMall Realities India 2010ǯ by leading property consultants, Jones
Lang LaSalle Meghraj and Cushman & Wakefield India in association with Shopping
Centres Association of India, over 100 malls of over 30 million sq feet of new shopping
centre space are projected to open in India between 2009 and end-2010.
c Further, this sector is expected to invest around US$ 503.2 million in retail technology
service solutions in the current financial year. This could go further up to US$ 1.26 billion
in the next four to five years, at a CAGR of 40 per cent.
c India has one of the largest numbers of retail outlets in the world. The sector is
witnessing exponential growth with retail developments taking place not only in major
cities and metros but even in tier-II and tier-III cities in India.
c Marks & Spencer Reliance India is planning to open 35 more stores over the next five
years, according to Mark Ashman, CEO of the company. The 51:49 joint venture between
UKǯs Marks and Spencer and Reliance Retail Ltd already has 15 stores in India.
c Carrefour SA, Europeǯs largest retailer, may start wholesale operations in India by 2010
and plans to set up its first cash-and-carry outlet in the National Capital Region.
Currently, Carrefour exports goods worth US$ 170 million from India to Europe, UAE,
Indonesia, Europe, Thailand, Singapore and Malaysia.
c Jewellery manufacturer and retailer, Gitanjali Group and MMTC are jointly setting up a
chain of exclusive retail outlets called ShuddiȂSampurna Vishwas. The joint venture,
which plans to open around 60 stores across India by end of this year, will retail
hallmarked gold and diamond jewellery.
M1]
M1]
A A Ahmedabad
A A Pune
A A Surat
A A Kanpur
A A Coimbatore
A A Lucknow
A A Nagpur
A A Jaipur
A A Visakhapatnam
A A Vijayawada
w
c %
The largest form of organized retailing today. Located mainly in metro cities, in proximity to
urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal
shopping experience with an amalgamation of product, service and entertainment, all
under a common roof.Examples include Shoppers Stop, Piramyd, Pantaloon.
À É É
hains such as the Bangalore based Kids Kemp, the Mumbai books retailer rossword,
RPG's Music World and the Times Group's music chain Planet M, are focusing on specific
market segments and have established themselves strongly in their sectors.
À m
É
ôs the name suggests, discount stores or factory outlets, offer discounts on the MRP
through selling in bulk reaching economies of scale or excess stock left over at the
season. The product category can range from a variety of perishable/ non perishable
goods
m
÷
Departmental Stores are expected to take over the apparel business from exclusive
brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop,
which started in Mumbai and now has more than seven large stores (over 30,000 sq.
ft) across India and even has its own in store brand for clothes called Stop!.
À {
É
Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These
are located in or near residential high streets. These stores today contribute to 30% of all food &
grocery organized retail sales. Super Markets can further be classified in to mini supermarkets
typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000
sq ft. having a strong focus on food & grocery and personal sales.
À É
These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock
a limited range of high-turnover convenience products and are usually open for extended
periods during the day, seven days a week. Prices are slightly higher due to the convenience
premium.
À % B
Multi Brand outlets, also known as ategory Killers, offer several brands across a single
product category. These usually do well in busy market places and Metros.
w
w
m
Éw
c Retailing in India is witnessing a huge
revamping exercise as can be seen in the
graph
c India is rated the fifth most attractive
emerging retail market: a potential
goldmine.
c Estimated to be US$ 200 billion, of which
organized retailing (i.e. modern trade)
makes up 5 percent or US$ 6.4 billion
c As per a report by KPMG the annual
growth of department stores is estimated
at 24%
c Ranked second in a Global Retail
Development Index of 30 developing
countries drawn up by AT Kearney.
Retailing in India is still
evolving and the sector is witnessing a series of experiments
across the country with new formats being tested out. Ex.
g
past majority of the twelve Quasi-mall, sub-urban discount stores, ash and carry etc.
million stores are small "father and son"
outlets É
Biggest challenge for organised retailing to
create a ³customer-pull´ environment that increases the
Mostly small individually amount of impulse shopping. Research shows that the
owned businesses, average size of outlet chances of senses dictating sales are upto 10-15%. Retail
equals 50 s.q. ft. Though India has the chains like MusicWorld, Baristas, Piramyd and Globus are
highest number of retail outlets per capita laying major emphasis & investing heavily in store design.
in the world, the retail space per capita at
2 s.q. ft per person is amongst the lowest.
hey are expected to
spearhead the organised retailing revolution. Stores trying to
Nearly two thirds of the stores
are located in rural areas. Rural retail emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay
industry has typically two formsB "Haats" Bazaar, RPGs.
and ³Melas". Haats are the weekly
markets B serve groups of 10-50 villages g
To meet the
and sell day-to-day necessities. Melas are challenges of organized retailing such as large cineplexes,
larger in size and more sophisticated in and malls, which are backed by the corporate house such as
terms of the goods sold (like Tps) 'ônsals' and 'PpRµ the unorganized sector is getting
organized. 25 stores in Delhi under the banner of Provision
mart are joining hands to combine monthly buying. Bombay
Bazaar and Efoodmart formed which are aggregations of
Kiranas.
c %
c Favorable demographics
c Growth in income
c Increasing population of women
c Raising aspirations : Value added goods sales
c
c
in India has been largely an urban phenomenon with affluent classes and growing
number of double-income households.
c More successful in cities in the south and west of India. Reasons range from differences in consumer buying
behavior to cost of real estate and taxation laws.
c emerging as a huge opportunity for retailers reflected in the share of the rural market
across most categories of consumption
c ITC is experimenting with retailing through its e-Choupal and Choupal Sagar Ȃ rural hypermarkets.
c LL is using its Project Shakti initiative Ȃ leveraging women self-help groups Ȃ to explore the rural
market.
c Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve
the rural markets.
c w is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change buying
behavior across the globe.
c Ǯe-tailingǯ slowly making its presence felt.
c Companies using their own web portal or tie-sups with horizontal players like Rediff.com and
Indiatimes.com to offer products on the web.
%
Leading Retailers
c Indiaǯs top retailers are largely
lifestyle, clothing and apparel
stores
c Toys "R" Us, which acquired the mall-based Imaginarium chain last
year, is rolling out the concept as a store-within-a-store format.
c Barnes & Noble, which acquired Babbages earlier this year, is hoping to build a side
business in games as it did in music and coffee. The retailer is planning a test that will
feature an electronic games store-within-a-store in its traditional book stores.
c These are just some examples of initiatives that retailers are pursuing in order to
capitalize on consumer trends and differentiate their concepts in the marketplace. They
are also examples of the continued blurring of retail as well as alliances with non-
traditional partners.
c One can argue, and have some fun doing so, about whether some of these efforts make
strategic sense or not.
c But one fact is certain: These types of efforts will only continue as retailers are more
willing than ever to embrace change in search of growth and prosperity in a cutthroat
marketplace .
É
c AT Kearny
c Forrester Research 2006
c KPMG-FICCI Report
c http://www.indiainbusiness.nic.in/