SYNOPSIS ON GROWTH OF RETAILING IN INDIA

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A5(NOWLEDGE$ENT
. I would like to take this opportunity to thank the following people who have directly or indirectly contributed towards the completion of this dissertation and without their help this in the present form would have not been possible. I am very much thankful to $r% Ra&ee' 7u"ar6 Faculty Guide for giving me opportunity to work on such a nice Synopsis as my Synopsis. And last but not the least my special thanks to my parents without their support my P S! G"A#$A!% #IP& 'A I( 'A(AG%'%(! course would not have been possible.

RADHA (ATIYAR

TA8LE OF 5ONTENTS

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RETAIL SE5TOR AN INTRODU5TION

SI=E India is one of the ten largest retail markets in the world "etail sales were ;)<. billion in )<<1= over )2> of G#P rganised "etail? constitutes only ,.:> of total retail sales @ about ;.., billion p.a. +owever organised retail has been growing at over ),> p.a in the last : years STRU5TURE !he Indian "etail sector is highly fragmented9 mostly owner@run A'om and Pop? outlets . ver 1) million retail outlets Average outlet siBe C :<< sD.ft !here are a few medium siBed Indian retail chains like Pantaloon= Shoppers? Stop= Foodworld E"PG GroupF and 0estside E!ata GroupF @ all growing rapidly 'ainly in the apparel and food 7 grocery segments #airy Farm= 'etro= Shoprite and 'arks 7 Spencer are the only maGor international retail chains in India9 %ach has a marginal presence through either franchisee or wholesale formats POLI5Y 1<<> F#I is allowed in *ash and *arry 0holesale formats. Franchisee arrangements are also permitted in retail trade. F#I upto :1> is permissible in the retail trade of single brand products

RETAIL 4ALUE PROPOSITIONS9 !he value proposition that retail offers to a consumer is easy availability of the desired product in the desired siBe at the desired time.

RETAILING IN INDIA > (EY POINTS !otal *onsumer Spend in the -ear <.@<1 @ I(" H2<< billion E$S# 81: billionF growing over :.:> annually "etail sales @ :2> at I(" )2< billion E$S# )<: billionF rganised "etail @ nly ,> but growing at 2.:> rganised retail to cross I(" 1<<< billion mark by )<1<.

ORGANI=ED RETAILING nly , per cent of the retail trade in India belonged to organised retail. It covered items such as apparel= grocery= music= electronics= automobiles and financial services. !his is inconseDuential compared to )< per cent in *hina= ,< per cent in !hailand and 2< per cent in the $nited States. !he emergence of organised retail in India is= moreover= so far restricted to the top 1: cities. !he strength of organised retailing lies in the ability to source directly from the manufacturers due to increased bargaining power achieved through large@scale operation. rganised retail chains can get bulk discounts on large purchases and reduce cost by eliminating middlemen and by reducing the supply chain. +owever= the potential benefits of lower prices is not evident in the early stages because modern retailing tends to concentrate on the upper segment of the market where consumers are willing to pay higher prices for convenience and a superior shopping environment.

S5OPE OF THE STUDY

!he study will focus on the growth of retail industry particularly in the fast growing economy of India. It will further put light on the consumer perception 7 their changing dressing= eating= spending habit of Indian consumers= which has brought shopping mall culture in the country. 'oreover it will focus on the growing opportunities for domestic companies as well as for foreign companies

LITERATURE RETAIL SE5TOR AN INTRODU5TION

SI=E India is one of the ten largest retail markets in the world "etail sales were ;)<. billion in )<<1= over )2> of G#P rganised "etail? constitutes only ,.:> of total retail sales @ about ;.., billion p.a. +owever organised retail has been growing at over ),> p.a in the last : years

STRU5TURE !he Indian "etail sector is highly fragmented9 mostly owner@run A'om and Pop? outlets . ver 1) million retail outlets Average outlet siBe C :<< sD.ft !here are a few medium siBed Indian retail chains like Pantaloon= Shoppers? Stop= Foodworld E"PG GroupF and 0estside E!ata GroupF @ all growing rapidly 'ainly in the apparel and food 7 grocery segments #airy Farm= 'etro= Shoprite and 'arks 7 Spencer are the only maGor international retail chains in India9 %ach has a marginal presence through either franchisee or wholesale formats

RESEAR5H $ETHODOLOGY
A research process consists of stages or steps that guide the Synopsis from its conception through the final analysis= recommendations and ultimate actions. !he research process provides a systematic= planned approach to the research Synopsis and ensures that all aspects of the research Synopsis are consistent with each other. INTRODU5TION !his chapter aims to understand the research methodology establishing a framework of evaluation and revaluation of primary and secondary research. !he techniDues and concepts used during primary research in order to arrive at findings= which are also dealt with and lead to a logical deduction towards the analysis and results. RESEAR5H DESIGN I propose to first conduct a intensive secondary research to understand the full impact and implication of the retail industry= to review and critiDue the industry norms and reports= on which certain issues shall be selected= which I feel remain unanswered or liable to change= this shall be further taken up in the neIt stage of eIploratory research. !his stage shall help me to restrict and select only the important Duestion and issue= which inhabit growth and segmentation in the industry. !he various tasks that I have undertaken in the research design process are 9

#efining the information need. #esign the eIploratory= descriptive and causal research. Follow each step one by one and conclude the research.

RESEAR5H PRO5ESS !he research process has four distinct yet interrelated steps for research analysis It has a logical and hierarchical ordering9 #etermination of information research problem. J#evelopment of appropriate research design. J%Iecution of research design. J*ommunication of results. E?PLORATORY RESEAR5H !he data I used for eIploratory research was Primary #ata Secondary data

PRI$ARY DATA (ew data gathered to help solve the problem at hand. As compared to secondary data which is previously gathered data. An eIample is information gathered by a Duestionnaire. SE5ONDARY DATA Information that already eIists somewhere= having been collected for another purpose.Sources include census reports= trade publications= and subscription services.#ata that have already been collected and published for another research Synopsis Eother than the one at handF. There are t@o t#2e, of ,econdar# data interna) and eAterna) ,econdar# data%

DATA 5OLLE5TION #ata collection took place with the help of filling of Duestionnaires. !he Duestionnaire method has come to the more widely used and economical means of data collection. !he common factor in all varieties of the Duestionnaire method is this reliance on verbal responses to Duestions= written or oral. I found it essential to make sure the Duestionnaire was easy to read and understand to all spectrums of people in the sample. It was also important as researcher to respect the samples time and energy hence the Duestionnaire was designed in such a way= that its administration would not eIceed ,@: mins. !hese Duestionnaires were personally administered. !he respondents were contacted at shopping malls= markets= places that were near to showrooms of the consumer durable products etc. !he data was collected by interacting with 1<2 respondents who filled the Duestionnaires and gave me the reDuired necessary information. !he respondents consisted of house wives= students= business men= professionals etc. the reDuired information was collected by directly interacting with these respondents.

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5ON5LUSION
!he Indian retail sector is witnessing tremendous growth with the changing demographics and an increase in the Duality of life of urban people. At this moment= it is still premature to say that the Indian retail market will replicate the success stories of names such as 0alt@'art Stores= Sainsbury and !esco but at least the winds are blowing in the direction of growth. "etailing in India is gradually inching its way toward becoming the neIt boom industry. !he whole concept of shopping has altered in terms of format and consumer buying behavior= ushering in a revolution in shopping in India. 'odern retail has entered India as seen in sprawling shopping centres= multi@storeyed malls and huge compleIes offer shopping= entertainment and food all under one roof. !he Indian retailing sector is at an infleIion point where the growth of organiBed retailing and growth in the consumption by the Indian population is going to take a higher growth traGectory. A large young working population with median age of ), years= nuclear families in urban areas= along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key growth drivers of the organiBed retail sector in India. !he Indian consumer is dressing up= eating= spending= like never before. And helping him look good = ready to eat= leather products are the hugely successful brands. 6uick to adapt to current trends and the latest in fashion and completely in sync with customersK wants= these highly versatile brands have given a bold new shape to whether the ready@ to@wear apparel industry= leather industry= Gems and 4ewellery Industry Indian consumer is showing an increasing fascination for branded wear= ornaments= leather products. !he reasons are clear @ one= the increased disposable income of Indian households and two= the fast paced changes in the leather= apparel= food industries. !odayKs customers are fussier than ever before @ they are more aware of current trends= are totally in sync with the latest in fashion and demand the best products as well as service at an affordable price.

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!o encash this growing and changed demand of Indian consumers= many garment manufacturing companies are opening up their retail outlets. *ompanies like "aymond= &evis= Pantaloon= %bony= 4ohn Player= &ifestyle= Shoppers Stop= !*(S *lothing= Spykar= PiBBa +ut= 'c #onald= #!* #iamond= !anishDE A !A!A productFetc. already have their retail stores at various part of the country. As the sector is growing many foreign companies are eying to enter into the retail market and specially in the apparel sector. It was difficult for them to directly enter into Indian retail sector earlier= but now as the F#I in the sector has been allowed up to :1> it has opened up the sector for the foreign companies to set up their business . Perception of the consumer towards the retails also goods. !hey are ready to adopt the L'all *ultureM and they are also ready to change according to that culture. "etailers also use so many promotional tools to attract the consumers.

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RE5O$$ENDATIONS
FDI IN RETAIL E4OL4ING AN INDIA0SPE5IFI5 $ODEL pinions on F#I were divided at the IFF symposium. L!he Government of India would be wise not to open the doors to foreign retail too wide as it is better to develop IndiaKs own modern retail model than give away the businesses to global retailers like 0al@'art and !esco.M selective approach in allowing F#I= which could be directed towards9 $a)) De'e)o2"ent Sho22ing 5entre de'e)o2"ent and "anage"ent LuAur# retai)ing Life,t#)e !rand retai)ing Life,t#)e 2roduct, and !rand, "anufactured in India INDUSTRY STATUS TO RETAIL !he wish list of retailers included setting up single window clearance and the demand for according industry status to retail was high on their agenda. 3.S. (agesh earlier said= NIndian retail has no parentage in the Government of India. 0e do not know which 'inistry to report to. !he Government should grant us industry status.N !o this= Oamal (ath replied9 L!he "etail sector is already in a position whereby it can decide which ministry it wishes to adopt= rather than asking the government to adopt retail as an industry. 6uoting from the Images@OSA "etail "eport contained in the I'AG%S -%A" 3 O )<<: which Oamal (ath released on the occasion= he said of the estimated "s.H8<=<<<@ crore EK<8@K<,F retail industry= organised retailing accounted for a mere "s.)2=<<< crore= Gust 8 percent of the total market. L!his figure stands against 2: percent Eorganised retailF in the $S and hence the need to plan differently=M he eIplained. the "etail "eport )<<1 that siBes up the total Indian market= organised retail= various sectors and scope therein= and siBe and performance of key players. !hese two studies establish benchmark figures for the Government and industry to work on. 18

LI$ITATION

FUTURE S5OPE FOR STUDY

Advances in technology= like the Internet= have helped make retailing an even more challenging and eIciting field in recent years. !he nature of the business and the way retailing is done are currently undergoing fundamental changes. +owever= retailing in some form will always be necessary. For eIample= even though the Internet is beginning to make it possible for manufacturers to sell directly to consumers= the very vastness of cyberspace will still make it very difficult for a consumer to purchase every product he or she uses directly. n@line retailers= like AmaBon.com= bring together assortments of products for consumers to buy in the same way that bricks@and@mortar retailers do. In addition= traditional retailers with physical stores will continue to be necessary. f

course= retailers who offer personal services= like hair styling= will need to have face@to@ face interaction with the consumer. 3ut even with products= consumers often want to see= touch and try them before they buy. r= they may want products immediately and wonKt want to wait for them to be shipped. Also= and perhaps most importantly= in many cases the eIperience of visiting the retailer is an important part of the purchase. %verything that the retailer can do to make the shopping eIperience pleasurable and fun can help ensure that customers come back.

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8I8LIOGRAPHY
PRI$ARY DATA 6$%S!I (AI"% NEWSPAPER 3 $AGA=INES

!he %conomic !imes

!he Financial %Ipress

3usiness Standard

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"etail 'arketing P Sullivan 7 Adcock

"etail 'anagement EA Strategic ApproachF P 3arry 3erman 7 4oel ". %vans

REFEREN5ES
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