Major Research Project On A Comparative study between Organized and Unorganized retail industry in India For Partial Fulfillment

Of the Requirement for the Degree of MBA (Full Time) Batch - 2009 2011

Submitted by : (GOVIND NAGAR) MBA (IV)

Guided by : (Dr. C.K.GOYAL) IPS Academy, Indore

SOC&E, IPS ACADEMY

Rajendra Nagar, A.B. Road, Indore 452 012 (MP)

Affiliated to : Devi Ahilya Vishwavidyalaya, Indore

CERTIFICATE

This is to certify that Mr. Govind Nagar student of IV Sem MBA bearing has carried out the Major research project Report entitled A Comparative study between Organized and Unorganized retail industry in India under my supervision & guidance. The project report prepared by him/her is original to the best of my knowledge.

Signature of External,

Signature of the Guide, Dr. C. K. Goyal, Associated prof. MBA dept. I.P.S. Academy., Indore.

DECLARATION

I hereby declare that this dissertation entitled a study on A Comparative study between Organized and Unorganized retail industry in India, Submitted in partial fulfillment for the Award of Master of Business Administration to I.PS. Academy D.A.V.V. INDORE is a record of independent research work carried out by me. I also declare that this dissertation is a result of my own efforts and has not been submitted earlier for the award of any degree/ diploma or any other University.

Place: INDORE Date:

Govind Nagar MBA (IV)

ACKNOWLEDGEMENT

I would like to take this opportunity to express my since gratitude to all those who guide me in right direction to complete this Project. I express my deep sincere gratitude to Mr. Vivek Kushwah Director of I.P.S. ACADEMY, DEPT. OF MANAGEMENT for his encouragement throughout the course of this study. I also express my sincere thank to Dr. C. K. Goyal Department of Management Study, I.P.S. Academy, Indore, for his constant guidance and assistance throughout this study. Last but not the least, I would like to thank my respondents for sparing their precious time to answer my questionnaire and giving me the valuable information I needed. Finally my sincere thanks to my parents and to my entire friend to their support and motivation throughout the project.

Govind Nagar MBA(IV)

INDEX
Chapter 1 Content Research Topic Introduction a) Detail Of Retail sector b) Rationale of study Review of literature Research Methodology a) Objectives b) Hypothesis c) Research design d) Sample design e) Tools for data collection Analysis and interpretation of data Discussion of result a) Findings b) Limitations c) Suggestions d) Conclusion Bibliography and Webliography Annexure Page No. 1 6-25

2 3

26-39 40-43

4 5

44-50 51-55

6 7

56-57 58-62

INTRODUCTION

Introduction
The Indian retail industry is now beginning to evolve in the line with the transformation that has swept other large economies. There is a change a foot in Indian retail too, the liberalization of the consumer goods industry initiated in the mid-80s and accelerated through the 90s has begun to impact the structure and conduct of the retail industry. The concept retail, which includes the shopkeeper to customer interaction, has taken many forms and dimensions, from the traditional retail outlet and street local market shops to upscale multi brand outlets, especially stores or departmental stores. Hence, focusing on two aspects of retail marketing i.e. Store Retailing and Non store Retailing. Store Retailing as the departmental store, which is a store or multi brand outlet, offering an array of products in various categories under one roof, trying to cater to not one or two but many segments of the society and Non store retailing as the direct selling, direct marketing, automatic vending. Therefore, this concept of retail marketing through organized retail stores, which is coming up in a big way in India was decided to be studied in detail. The objective being to assess the various parameters that influences a buyer to shop at organized retail food and grocery store thereby contributing to its turnover (in terms of sales and profits) hence leading to its overall success. The extensive research brought me to conclude that departmental stores are soon emerging on the top priority lists, amongst the shopping spree in Delhi, as they seem to derive immense pleasure as shopping is considered as a experience now rather than a task and exposure to variety under one roof, in their extremely busy lives, when they dont have time for things. The organized retail food and grocery stores make constant efforts to induce customers to visit the store by discount offers. Most of these stores believe in creating not just a marketing activity with its customers, but rather favor relationship building with him so as to convert first time customers into a client. They provide better parking facilities to customers and the facility to examine the product. They also offer a wide range of payment options to customers. Hence this document entails me through these aspects in great detail, helping me to understand the concept of retail marketing through departmental stores in Delhi.

India is currently the twelfth largest consumer market in the world. According to a study by McKinsey Global Institute, India is likely to join the premier league of the worlds consumer markets by 2025, improving its position to the fifth. But this growth is not going to happen is smooth way. Any change always comes up with some friction, and Indian retail sector is and will be witnessing the same friction. Indian retail sector is still in its nascent form if we consider its full potential. While most of the developed market of US and Europe and also some SE Asian emerging market economies have reaped the benefits of modern retail, India has not yet entered into advanced phase of modern retail forms.

Tug of war: organized vs. unorganized sector Future of retail sector in India is swerving- on one side organized retail is marching into life of urban consumers, while on the other our own neighborhood kirana stores are resisting fiercely with their existing strong foothold. India today is at the crossroads with regard to the retail sector. A shift between organized and unorganized retail sector is evident, which has led to a number of speculations on the fate of Indian retail.

Unorganized sector cannot be ignored In any newspaper or television channel, we find hordes of news about happening in organized retail sectors, which is indeed fairly real situation. While the role of organized retail sector in growth of economy cannot be denied, but one thing is also of extreme importance that unorganized retail format is a support to a large chunk of population- providing direct employment to 39,500,000 individuals. So there is no way that government or anyone can discount these foundation stone of Indian economy.

Changing landscape of Indian consumerism The face of Indian consumerism is changing: not Indian consumerism is evolving from Bajaj Scooter family man to Bajaj Pulsar trendy youngster. This changing 8

consumers taste and lifestyle, somewhere automatically give some advantage to organized sector. This makes imperative for unorganized retail sector to restructure itself in order to withstand the increasing competition and to meet consumer expectations by moving with trends. What they can do and what they are doing, some of these issues will be discussed in future parts of article.

Role of government As in other countries, government policy can and should play an important role in modernizing the unorganized sector and improve its competitiveness. But question is what should be exact role of government. Should it go for policies for protection of traditional retailers by restricting organized retail or encourage organized retail to reap benefits that are generated by it? What should be mechanism to promote or protect one or other? Can government act only as a facilitator or enablers or both? In the said context, it is imperative to develop a strategic roadmap for unorganized retail form to be able to survive, compete and keep the economy growing.

Retail Trends in past few years Before the decade of eighties, India with hundreds of towns and cities was a nation striving for development. The evolution was being witnessed at various levels and the people of the nation were learning to play different roles as businessmen and consumers. The foundation for a strong economy were being laid, youth were beckoning new awareness in all spheres. And this brought in an opportunity for retail industry to flourish. First in the metros and major cities later to impact sub urban and rural market as well. Retailing in India at this stage was completely unorganized and it thrived as separate entities operated by small and medium entrepreneurs in their own territories. There was lack of international exposure and only a few Indian companies explored the retail platform on a larger scale. From overseas only companies like Levi's, Pepe, Marks and Spencer etc. had entered targeting upper middle and rich classes of Indians. However as more than 50 % population was formed by lower and lower middle class people, the market was not completely captured. This was later realized by brands like Big Bazaar and Pantaloons who made their products and services accessible to all classes of people and today the success of these brands proves the potential of Indian retail market. 9

A great shift that ushered in the Indian Retail Revolution was the eruption of Malls across all regional markets. Now at its peak, the mall culture actually brought in the organized format for Retailing in India which was absent earlier. Though malls were also initially planned for the higher strata, they successfully adapted to cater to the larger population of India. And it no wonder, today Malls are changing the way common Indians have their shopping experience. However there is still great scope for enhancing Indian mall culture as other than ambience and branding many other aspects of Retail Service remains to be developed on international standards. To your surprise there was not a single mall in India a decade before and just a few years ago only a handful of them were striving, today there are more than 50 malls across different cities and 2 years from now around 500 malls are predicted to come up. Indeed this shows a very promising trend ahead, however before taking a leap into the future of Retail in India, let's see what the Indian retail Industry is currently occupied with.

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ORGANIZED RETAILING

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Organized Retailing
Organized retailing comprises mainly of modern retailing with busy shopping malls, multi storied malls and huge complexes that offer a large variety of products in terms of quality, value for money and makes shopping a memorable experience.

The recent years have witnessed rapid transformation and vigorous profits in Indian retail stores across various categories. This can be contemplated as a result of the changing attitude of Indian consumers and their overwhelming acceptance to modern retail formats. Asian markets witness a shift in trend from traditional retailing to organized retailing driven by the liberalizations on Foreign Direct Investments. For example, in China there was a drastic structural development after FDI was permitted in retailing. India has entered a stage of positive economic development which requires liberalization of the retail market to gain a significant enhancement.

Domestic consumption market in India is estimated to grow approximately 7 to 8% with retail accounting for 60% of the overall segment. Of this 60%, organized retail is just 5% which is comparatively lesser than other countries with emerging economies. In developed countries organized retailing is the established way of selling consumer products. Despite the low percentage, Indian textile industry has grown noticeably in organized retailing of textile products. The negative phase in exports may have compelled the Indian textile retailers to explore the opportunities in the domestic market substantially causing the outstanding growth in the concerned segment. These indications give a positive notion that organized retailing has arrived in the Indian market and is here to stay. It is expected to grow 25-30 per cent annually and would triple in size from Rs35,000 crore in 2004-05 to Rs109,000 crore ($24 billion) by 2010.

India is on the radar screen in the retail world and global retailers and at their wings seeking entry into the Indian retail market. The market is growing at a steady rate of 11-12 percent and accounts for around 10 percent of the countrys 12

GDP. The inherent attractiveness of this segment lures retail giants and investments are likely to sky rocket with an estimate of Rs 20-25 billion in the next 2-3 years, and over Rs 200 billion by end of 2010. Indian retail market is considered to be the second largest in the world in terms of growth potential.

A vast majority of India's young population favors branded garments. With the influence of visual media, urban consumer trends have spread across the rural areas also. The shopping spree of the young Indians for clothing, favorable income demographics, increasing population of young people joining the workforce with considerably higher disposable income, has unleashed new possibilities for retail growth even in the rural areas. Thus, 85% of the retail boom which was focused only in the metros has started to infiltrate towards smaller cities and towns. Tier-II cities are already receiving focused attention of retailers and the other smaller towns and even villages are likely to join in the coming years. This is a positive trend, and the contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%.

Major Indian Retailers

y y y y y y y y y y y y y

Next retail India Ltd (Consumer Electronics)(www.next.co.in) Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe Deposit Lockers PGC Retail -T-Mart India [3], Switcher , Respect India , Grand India Bazaar ,etc., REI AGRO LTD Retail-Formats:6TEN Hyper & 6TEN Super RPG Retail-Formats: Music World, Books & Beyond, Spencers Hyper, Spencers Super, Daily & Fresh Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, Depot, aLL, E-Zone etc. Marks & Spencer: Clothing, lifestyle products, etc. The Tata Group-Formats: Westside, Star India Bazaar, Steel junction, Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets, Croma. K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, Inorbit Mall Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores. Pyramid Retail-Formats: Pyramid Megastore, TruMart Nilgiris-Formats: Nilgiris supermarket chain Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain. 13

y y y y y y y y y y

Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket chain Vishal Retail Group-Formats: Vishal Mega Mart BPCL-Formats: In & Out Reliance Retail-Formats: Reliance Fresh Reliance ADAG Retail-Format: Reliance World German Metro Cash & Carry Shoprite Holdings-Formats: Shoprite Hyper Paritala stores bazar: honey shine stores Aditya Birla Group - more Outlets Easy day

Challenges facing the Organized Retail Industry:

Despite the rosy hopes, some facts have to be considered to positively initiate the retail momentum and ensure its sustained growth. The major constraint of the organized retail market in India is the competition from the un-organized sector. Traditional retailing has been deep rooted in India for the past few centuries and enjoys the benefits of low cost structure, mostly owner-operated, therein resulting in less labor costs and little or no taxes to pay. Consumer familiarity with the traditional formats for generations is the greatest advantage to the un-organized sector. On the contrary, organized sector have big expenses like higher labor costs, social security to employees, bigger premises, and taxes to meet.

Availability and cost of retail space is one major area where Government intervention is necessary. Liberalizing policy guidelines for FDI needs focus as well. Proper training facilities for meeting the increasing requirements of workers in the sector would need the attention of both Government and the industry. Competition for experienced personnel would lead to belligerence between retailers and higher rates of attrition, especially during the phase of accelerated growth of the retail industry. The process of avoiding middlemen and providing 14

increased income to farmers through direct procurement by retail chains need the attention of policy makers. Taking care of supply chain management, mass procurement arrangements and inventory management are areas that need the focus of entrepreneurs. India is now on the radar of global retailers. Accelerated development of retailing industry in the country and building brand value of domestic products is essential not only for marketing our consumer products more efficiently, but also for the development of our own retailing industry. The Indian organized retail industry is valued at about $300 billion and is expected to grow to $427 billion in 2010 and $637 billion in 2015. Retail Market India today is the second fastest growing economy of the world after China. Indian economy will grow larger than Britain's by 2022, Japan by 2032 and by 2050 will become the second largest economy of the world after China. Indian market has become the most lucrative market for retail investment in the world. Some of the factors which have contributed to the growth of organized retail in India are: increase in the purchasing power of Indians, rapid urbanization, increase in the number of working women, large number of working young population. Today people look for better quality product at cheap rate, better service, better ambience for shopping and better shopping experience. Organized retail promises to provide all these. The Industry The various formats of organized retail are: Hypermarkets: They store products of multiple brands comprising food items and non-food items. Supermarkets: These are self service stores selling food and personal care products. E.g.: Subhiksha. Departmental stores: Retails branded goods in non-food categories. E.g.: Shoppers Stop. Specialty Chains : These stores focuses on a branded product or a product category. E.g.: Bata Convenience stores: These are small self service outlet located in crowded urban area. Malls: A huge enclosures which has different retail formats. e.g.: Nucleus Key players in organized retail are: Pantaloon Retail: It was started by Kishore Biyani- India's largest retailer. The various formats of pantaloon retail are: Pantaloons, Big Bazaar, Food Bazaar, Central etc. RPG Retail: Its various formats are: Food World, Music World, Health & Glow, Spencer's Tata Retail (known as TRENT): Its various formats are: CromaWestsideStar India Bazaar K Raheja Corp. Group: Shoppers' Stop, Hypercity, Crossword, InOrbit Mall Reliance Retail Job Opportunities: Retail accounts for 8% employment in the country. In the next 2 years the sector is set to provide 2.5 lakh job opportunities. 15

The types of jobs available in retail are: Retail sales, Store management, Stock management, Supply chain management, warehousing and operations. In organized retail the front liners like shop floor executives, sales executives etc are in great demand. The frontlines have to directly communicate with the customers. The other jobs are for store managers, store planners, cashiers, stockiest, logistics, operations, distribution, marketing, finance, HR, IT etc. Good communication skill, high interpersonal skills, convincing power, positive attitude and ability to handle stress is a prerequisite for these jobs. Fresh graduates who want to make career in retail can easily fill these jobs. Stock planners, Operations, logistics, cashiers have to deal with the numbers daily. Besides having good communication skills they also require numerical and analytical ability. Bharati retail is planning to invest $2.5bn by 2015 which will create employment opportunity for 60,000 people. Bharti Resources, a learning and development solutions subsidiary of Bharti Group, has tied-up with Global Retail School (GRS) to groom graduates and undergraduates in retail management and other sectors. They will provide 3-month and 6-month certificate courses for Rs 30,000 and Rs 15,000 respectively in Retail Sales and Marketing, Retail Visual Merchandising and Space Planning, Retail Supply Chain Management, for creating frontend manpower professionals. Indeed it is a fact that organized retail in India is all set to grow at an stupendous pace.

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UNORGANIZED RETAILING

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Unorganized retailing
Traditional or Unorganized retail outlets are normally street markets, counter stores, kiosks and vendors, where the ownership and management rest with one person only. This sector accounts for two thirds of the market and requires low skilled labor. These are highly competitive outlets, with negligible rental costs (unregistered kiosks or traditional property), cheap workers (work is shared by members of family) and low taxes and overheads. India is the only one country having the highest shop density in the world, with 11 outlets per 1000 people (12 million retail shops for about 209 million households). Rather we can see the democratic scenario in Indian Retail (because of low level of centralization, low capital input and due to a good number of self organized retail)

. India started its Retail Journey since ancient time. In Ancient India there was a concept of weekly HAAT, where all the buyers & sellers gather in a big market for bartering. It takes a pretty long times to & step to shape the modern retail. In between these two concepts (i.e. between ancient retail concept & the modern one there exist modern kirana/ mom and pop shops or Baniya ki Dukan. Still it is predominating in India So the Indian retail industry is divided into two sectors- organized and unorganized. Unorganized retailing, on the other hand, refers to the traditional formats of lowcost retailing, for example, hand cart and pavement vendors, & mobile vendors, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hardware shop at the corner of your street selling everything from bathroom fittings to paints and small construction tools; or the slightly more organized medical store and a host of other small retail businesses in apparel, electronics, food etc.

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Characteristics of unorganized retail------Small-store retailing has been one of the easiest ways to generate selfemployment, as it requires limited investment in land, capital and labor. It is generally family run business, lack of standardization and the retailers who are running this store they are lacking of education, experience and exposure. This is one of the reason why productivity of this sector is approximately 4% that of the U.S. retail industry. Unorganized retail sector is still predominating over organized sector in India, unorganized retail sector constituting 98% (twelve million) of total trade, while organized trade accounts only for 2%.

The reasons might be1. In smaller towns and urban areas, there are many families who are traditionally using these kirana shops/ 'mom and pop' stores offering a wide range of merchandise mix. Generally these kirana shops are the family business of these small retailers which they are running for more than one generation. 2. These kiran shops are having their own efficient management system and with this they are efficiently fulfilling the needs of the customer. This is one of the good reasons why the customer doesnt want to change their old loyal kirana shop. 3. A large number of working class in India is working as daily wage basis, at the end of the day when they get their wage, they come to this small retail shop to purchase wheat flour, rice etc for their supper. For them this the only place to have those food items because purchase quantity is so small that no big retail store would entertain this. 4. Similarly there is another consumer class who are the seasonal worker. During their unemployment period they use to purchase from this kirana store in credit and when they get their salary they clear their dues. Now this type of credit facility is not available in corporate retail store, so this kirana stores are the only place for them to fulfill their needs. 5. Another reason might be the proximity of the store. It is the convenience store for the customer. In every corner the street an unorganized retail shop can be found that is hardly a walking distance from the customers house. Many times customers prefer to shop from the nearby kirana shop rather than to drive a long distance organized retail stores. 19

6. This unorganized stores are having n number of options to cut their costs. They incur little to no real-estate costs because they generally operate from their residences. Their labor cost is also low because the family members work in the store. Also they use cheap child labor at very low rates. As they are operating from their home so they can pay for their utilities at residential rates. Even they cannot pay their tax properly. Currently the value of the retail market is estimated at around $ 270 billion with a growth rate of 5.7 per cent per annum according to the Indian retail report which creates a big threat for the small unorganized retailers. The well established organized retail sector in India are Big bazaar Retail, Food bazaar, & newly emerging Reliance etc. Over 20,000 new retail outlets are expected to open within this segment. Major corporate retail like Wal-Mart and have started to try and take over the Indian retail sector. But in India the unorganized retail is a source foods and other necessities of millions of Indians , major link between rural and urban societies. Not only that it is also act like a convenience store for the customer offering right product at right time at right place. In a country with large numbers of people, and high levels of poverty, this model of retail democracy is the most appropriate So these unorganized retail sector need to be promoted so that they can organize & supply food to Indian consumer.

Now the question is how to promote this sectorThe suggestions might be(a) Establishment of Retailer co-operatives among retailers which is highly required for the sustenance of the unorganized retail sector (b) Merger and buy-out of weak retailers by a stronger one that would give a new horizon to the small retailer (c) Setting up of franchisee organization may also help in strengthening the position of the retailers. The franchiser can exert a tremendous control over the way retailing is done.

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(d) There must be good network connection between retail organizations, the suppliers and other channel members to use compatible technology so that they can build strong distribution set-up to satisfy the customers. (e) Setting up of more and more non-store retailing centers would also ensure a strong retailing organization. Non-store retailing makes implementation of modern principles easier and less costly. (d) Moreover there must be a change in the mindset of the unorganized retailer. They have to understand the pulse of the trend. They have to understand, come forward & lead this change management then only this sector not only can exist but flourish.

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Retail Theft Most in India

Its one of the most sought-after shopping markets that Wal-Mart and every other big retailer is desperate to get in to, but India is also the place where retailers are most prone to shoplifting and employee theft. The country tops the world in retail shrinkage rate at 3.2% of total sales, according to the Global Retail Theft Barometer 2009 that tracked retail loss and crime in 41 countries and regions including the US, China, India, Europe, Japan and Australia. Some of the countries retailers, however, said the study was unfair to India and that inventory loss was not a big issue here. The survey conducted by Centre for Retail Research and funded by Checkpoint systems covered 1,285 stores in India and more than 1.2 lakh stores around the world and reported $7.4 billion as the total value of shrinkage between July 2008 and June 2009. Retail shrinkage is basically the difference between the value of stock as per the book and the actual stock in a store and includes loss due to shoplifting, employee theft, supplier fraud and paperwork errors. Indias shrinkage loss of $2.6 billion was the highest among nine Asia Pacific countries covered in the survey. One retailer ET spoke to said that the situation was not grim. Though shrinkage is a concern in India, the situation is not of hand. Customer shrinkage is typically lesser than 1%, but in value terms the figures can be big, said the person, requesting anonymity. The most stolen merchandise by Indians included electronics, cosmetics, alcohol/food, clothing and jewellery as they are small, lightweight and easy to conceal and transport. Kumar Rajagopalan, president, Retail Association of India, said the survey is being unfair to India. In India, modern retail is only 5% of the total retail, and 95% is still non-modern retail, the survey is being unfair to the market. According to him, modern retailers who have been in the business for more than three to four year know how to handle shrinkage and have managed to put in place systems that take care of shoplifting and employee shrinkage. The actual shrinkage rate for modern retailers, he said, would be less than half of what the survey found. Major factors to worry about are accounting errors and stock loss because of dumps and wastage, he said. That is because the country still does not have a good inventory taking system or a robust IT system in place. And even if some retailers spend money on bringing in state-of-art systems, the lack of training facilities do not enable use of the systems to the optimum, said Mr. Rajagopalan. In spite of all this, international retailers looking at entering the country are still keen on coming in, he said. This is because only experienced retailers with 22

robust processes in place can reduce the menace of shrinkage in the retail business and help grow the overall market. In the Asia-Pacific region, China is at number two in terms of retails shrinkage. The survey puts the cost of crime-that is, shoplifting plus employee theft plus suppliers/vendors fraud plus loss prevention expenditure-at $2,190 million for India. While this is a big figure, only 29.7% of the 50 most-stolen product lines were covered by surveillance systems, leaving a large part of the merchandise still unprotected. The survey attributed 33.6% of shoplifting thefts around the world to economic recession as the perceived cause. Interestingly, only less than 20% of the retailers in the Asia-Pacific region plan to increase their investments in lossprevention solutions. So, it looks like shrinkage will remain a concern for some time to come.

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RATIONALE OF STUDY

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Rationale of study
This study is conducted to know about customer behavior and customer preference . The study is based on customer satisfaction for organized and unorganized retail industry. We know that organized retail industry is very booming sector and popularity of organized retailing is increasing day by day. So this study is only to know about few facts and figures about both retail sector. From the beginning of retail sector Unorganized retail sector was very famous. Now we know that 96% of retail market is captured by unorganized retail sector. Indian customers are still believe in unorganized retail. So by this study we come to know about booming organized retail and well established unorganized sector.  This study will help us to know about customer preference of Indore region.  Study will show us what significant difference between organized retail and unorganized retail.

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REVIEW OF LITERATURE

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1)As per the study of Meeta Punjabi1, Vijay Sardana2 UNFAO, New Delhi, Achievers Resources Pvt. Ltd. an Agribusiness Consulting Firm
ORGANIZED RETAILING IN FRESH FRUIT AND VEGETABLE MARKETING IN INDIA: EMERGING MODELS, KEY ISSUES AND WAY FORWARD

Organized retailing in Fresh Fruits and Vegetables (FFV) is gaining a lot of momentum in India with huge investment by leading Indian corporations in this area. Modern formats of supermarkets such as Reliance Fresh, Choupal Fresh, Food World, etc. promoted by different companies are emerging very rapidly in small and large towns around the country. Two of the major players in the supermarket sector in the country are Reliance Industries and Bharti- Walmart tie up. Other key players include ITC, Food World (JV of RPG Group of India and Dairy Farm International based in Hong Kong), Spencer, Godrej, Pantaloon (Big Baazar and Food Bazaar), Subhiksha and Aditya Birla Group. From the development perspective, literature review of the evolution of supermarkets in other developing countries suggests that these changes have strong implications for the small and marginal farmers. Experiences of these countries suggest that the development efforts in this area are based on three grounds: First, farmers associated with the modern value chains earn higher returns than selling to the traditional markets. Second, the modern supply chains have specific quality requirements which are easier to meet by the large and medium farmers and the small farmers tend to get left out of these markets. Third, there are several successful examples of linking small farmers to these modern value chains with effort from government agencies, NGOs and development agencies. This knowledge presents strong grounds for a closer look at the emerging sector in India.

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In the light of the ongoing changes in India, the objective of this study was to get a good understanding of the emerging changes at the ground level. Specific objectives are:

i) Understand the emerging models in organized sector what are the backward and forward linkages that have emerged? ii) Understand the issue faced by these organizations in setting up the supply chains iii) Understand the implications of these changes for the stakeholders small and marginal farmers and traders in wholesale markets iv) Identify areas of intervention by government and donor agencies 2) As per the study of Shushmul Maheshwari Dated: Aug 22, 2009

The retail industry in India is mirroring the rapid changes in the consumption patterns of the consumers. The clientele is clearly segregated with rural and urban bases bearing allegiance to unorganized and organized retailing. The large pool of emerging middle class, with population of more than 350 million lies at the center of big bets for the major retail industry players. The changing consumption patterns are raising the demand for lifestyle products. While organized retailer sector in India is targeted at high-income urban customers, unorganized retail sector primarily caters to traditional customer base of lower income sections in the rural pockets of India. This is probably why the two forms of retailing manage to co-exist in India. Organized Indian Retail Sector has undergone rapid changes and has metamorphed into a high-growth industry. With the mushrooming of malls, multiplexes, and supermarkets consumers are treated to a completely different shopping experience. With a gamut of services, freebies and bonanzas as addendum, organized retail sector are getting all the customer attention. The stature of the Indian Retail Industry is significant, with a whooping 5 million retail outlets spanning across the country. However most of these are self-styled 28

traditional units, with significant local presence, lacking anything close to a modern retailing industry. For this very reason, industry experts feel that opportunities in organized retailing are going to increase manifold. The market research report, India Retail Sector Analysis (20062007), accredits the Indian Retail Industry as a significant revenue churner, with a market size of Rs. 10 Trillion as per 2005. Organized Indian retail sector market size hovers around Rs 351 Billion and is rapidly gaining ground. An analysis Indian Retail Sector reveals that average growth rate for this segment stands at around 32% in comparison to a modest 8% in the unorganized sector. Rural India is the major revenue driver for unorganized retailing in India with a share of 76%. The overall Indian Retail Industry contributes 10% to the GDP and a source of employment for more than 41 million individuals. The research report presents a comprehensive picture of the overall Indian Retail Industry. About RNCOS: RNCOS, incorporated in 2002, provides Market Research Reports for your business needs and aims to put an end to your information pursuit. Our expertise in gathering global business information for industry research, corporate training, growth consulting, and business consulting, brings reputed companies and firms to us for business enhancement solutions. We can be your one-stop-shop for Industry research information and niche market analysis.

3) As per the study of September Economic Times 5, 2008

Retail biggies force to focus on destination malls Modern retailers have begun the first round of corrections in their retail strategies, after taking a beating from cost-efficient kiranas in the neighborhood format space. Losses from convenience store formats, which sell groceries (fruits, vegetables and FMCG), are mounting and retailers like Reliance Fresh, More, Indiabulls, Spencers and Subhiksha are either quickly shutting down unviable ones or going slow on expansion plans. Hyper City Retail recently exited this space. Industry officials said these formats are taking a hit from high dump rates (wastages in the supply-chain), tough

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competition from low-cost kiranas and unviable operational costs in the lowmargin food and grocery business. Industry experts say players may be forced to exit this space and focus on destination malls or big-box formats, where margins are significantly higher. The thru put (sales) for the modern neighborhood formats currently stands at Rs 16-Rs 20 per sq ft per day as against Rs 35-Rs 40 per sq ft per day, which industry experts reckon is the minimum required for viability. There is a huge mismatch between the rents paid and the actual sales that take place in the formats. There are a lot of learning that are taking place and it is a tough place to operate. India is such a heterogeneous country and everyone will have to figure out the right differentiator to exist in the space, said a top Reliance Retail official on condition of anonymity. Most of the large business groups, which moved into this space, did not bargain for the kind of unmanageable losses and are now back to the drawing boards, it is learnt. Traditional grocers have protected their turf by leveraging their strengths like customer relationships, home delivery, credit facilities and by expanding their product portfolio. After the initial hype, the new formats have begun losing steam with consumers turning back to local kiranas for regular purchases. Burdened by consumer expectations of more frills compared to the no-frills kirana formats, the new convenience formats are shelling out 30% higher costs on rent, energy and other overheads like security guards, bar codes, ACs and bright lights. The thruput per sq ft does not justify the expenses involved, said an industry official. Spencers Retail, the retail arm of RPG Enterprises, recently announced plans to close 40 shops across the country, citing losses because of lower revenue, high rentals and bad hinterland. The Indian consumer is already exposed to far too many conveniences in the traditional structure. "What kind of conveniences can modern retailers now offer with an inevitable high-cost structure. It makes no sense to be in this space says Andrew Livermore of Hyper City Retail. Most of the existing convenience formats, including Subhiksha, Reliance Fresh and Spencers, are struggling with the challenges of operating a low-margin grocery business in the face of spiraling real estate costs, high supply-chain costs and tough competition from the traditional formats. Although we had a lead entry into the space, we knew that the neighborhood formats will never be viable. Even if consumers have the money why will they 30

spend extra in air-conditioned formats to make daily purchases. The local kiranas are already far too efficient in the space said Future Group CEO Kishore Biyani. Kirana stores continue to perform well, despite the increase in competition from modern retail chains, owing to their excellent customer service, and low-cost operations. In comparison, the mom-and-pop store formats are not just doing well, but are also bullish about their expansion plans. Bhartiya Udyog Vyapar Mandal (BUVM), the biggest national-level association of mom- and-pop stores or kirana stores that comprises 17,000 state- and districtlevel associations across 27 states is planning to roll out 100 stores in three different cities by Diwali. Speaking to ET, Vijay Prakash Jain, secretary general, BUVM, said: We are starting 100 stores in New Delhi, Bangalore and Kolkata by Diwali. These stores would not only buy collectively but would be marketed under one brand name, CARE. The 100 stores would also share logistics. Even without the common branding the mom-and-pop stores have been putting up a stiff challenge to the organized players. Says Kishore Kharawala, Secretary for the Federation of Association of Maharashtra (FAM), There are several points where the small stores score over the big retailers. The mom-and-pop stores are passing their benefits to the consumers, this was not so before a year ago. The current crop of neighborhood formats are merely air-conditioned kiranas. It makes no sense to compete with the supremely customer-friendly kiranas, which offer credit and a great service system. The merchandising will have to be different to bring back the consumers, says Gibson Vedhamani, president of the Retailers Association of India. The mom-and-pop stores are swifter in merchandising and understanding local nuances and requirements, something which the modern formats with their regional and national sourcing structures are unable to compete with. Currently, traditional retail, both grocers & chemists, constitute over 95% of total sales in the country. Modern trade is currently just 3-5% of the total national industry sales. Despite the losses modern growing aggressively at over 35-40%, modern formats have begun contributing to over 25% sales for most consumer goods companies. Modern trade penetration is now 15% in tier I cities at a time when overall retail is growing at 810%.

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4) As per the study of Saurabh Kothari Dated: Aug 22, 2009 M.tech IIT Kanpur Deloitte in Mumbai

Unorganized retail will have to get organized in India Now lets have a look at what the unorganized sector has to do to counter the attack. With the onslaught of organized retail in India, the Indian press and the Left front are devoting endless articles and speeches about how to safeguard the local kirana store owner. The usual points are: 1. 2. 3. 4. Give personalized services Home delivery Short term credit to customers Providing added services like P.C.O. and Bill payment.

In my opinion, all these things they already did. As far as I can remember whenever I asked my grocer to give me bathing soap, without fail, he always gave me Pears (which happens to be our family bathing soap) and after I have left, dutifully enters its cost under our family credit account. Of course whenever we purchased bulk items like sugar, ghee etc. he would deliver it to our doorstep. No doubt that with the kind of money currently being put in organized retail in India, the share of organized retail is bound to increase from the current pittance of 3-4%. Its increasing share can be delayed but cannot be averted. Though with a CAGR of 50% or so, still the share of organized retail will reach only to 10 15% by 2010. That leaves the unorganized players with ample time to get their act together or perish. Where the organized players score against local retailers is in bulk purchase of goods. To counter that the local retailers will have to form certain organization at city level so that they can pressurize the FMCG majors into giving them better prices.

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Or maybe some of the local retailers can transform themselves into supermarkets with some loan. It is a necessity in urban areas where organized retailers are fast setting shops and with changing shopping habits more and more urban Indians are going for shopping in Hypermarkets. The threat of organized sector to local retailers is definitely there in the long run, but in short run they wont feel much of a difference. And those who wont change on this slight difference will have a hard time, not now, but may be in

5)By Shanker Domodaran Retail in India - The Past, Present and Future Before the decade of eighties, India with hundreds of towns and cities was a nation striving for development. The evolution was being witnessed at various levels and the people of India were learning to play different roles as businessmen and consumers. Retail-which literally means to put on the market, is a very important aspect of every city. Without a well organized retail industry we would not have our necessities and luxuries fulfilled. Be it our daily groceries or fashion accessories and everything in between, retail industry brings us the blissful experience of shopping. Though organized retailing industry began much earlier in the developed nations, India had not actively participated. However with its vast expanse and young population, India in the 21st century emerges as a highly potential retail market. The journey of retailing in India has been riveting and the future promises further growth. Here is a complete picture deciphering the past, present and future trends of Indian Retail Market. Retail in India - Past Before the decade of eighties, India with hundreds of towns and cities was a nation striving for development. The evolution was being witnessed at various levels and the people of the nation were learning to play different roles as businessmen and consumers. The foundation for a strong economy were being laid, youth were beckoning new awareness in all spheres. And this brought in an opportunity for retail industry to flourish. First in the metros and major cities later to impact sub urban and rural market as well. 33

A great shift that ushered in the Indian Retail Revolution was the eruption of Malls across all regional markets. Now at its peak, the mall culture actually brought in the organized format for Retailing in India which was absent earlier. Though malls were also initially planned for the higher strata, they successfully adapted to cater to the larger population of India. And it no wonder, today Malls are changing the way common Indians have their shopping experience. However there is still great scope for enhancing Indian mall culture as other than ambience and branding many other aspects of Retail Service remains to be developed on international standards. To your surprise there was not a single mall in India a decade before and just a few years ago only a handful of them were striving, today there are more than 50 malls across different cities and 2 years from now around 500 malls are predicted to come up. Indeed this shows a very promising trend ahead, however before taking a leap into the future of Retail in India, let's see what the Indian retail Industry is currently occupied with. Retail in India - Present At present the Retail industry in India is accelerating. Though India is still not at an equal pace with other Asian counterparts, Indian is geared to become a major player in the Retail Market. The fact that most of the developed nations are saturated and the developing ones still not prepared, India secures a great position in the international market. Also with a highly diverse demography, India provides immense scope for companies brining in different products targeting different consumers. According to the Global Retail Development Index, India is positioned as the foremost destination for Retail investment and business development. The factor that is presently playing a significant role here is the fact that a large section of Indian population is in the age group of 20-34 with a considerably high purchasing power; this has caused the increase in the demand in the urban market resulting in consistent growth in the Retail business. And though the metros and other tier 1 cities continue to sustain Retail growth, the buzz has now shifted from these great cities to lesser known ones. As the spending power is no longer limited to metros, every tier 2 city in the country has good market for almost every product or service. Due to this, tier 2 cities like Chandigarh, Coimbatore, Pune, Kolkata, Ahmadabad, Baroda, Hyderabad,

34

Cochin, Nagpur, Indore, Trivandrum etc. provide a good platform for a brand to enter Indian market. However there are a few precautions for every brand that explores Indian market. As Indian consumers are very curious and have a broad perspective, they respond well to a new product or concept and there are very fair chances of a brand surviving well, but every Indian consumer be it an urbanite or a small town dweller needs a feeling of value for money. Although labeled as tight fisted, Indian consumers are great spenders once they realize that they are getting value for their money. Also new product /service concepts from the western world are better adopted first by the urban Indians, the smaller markets respond well to the need based retailing rather than luxury concepts. As the Indian retailing is getting more and more organized various retail formats are emerging to capture the potential of the market.
y y y y y

Mega Malls Multiplexes Large and small supermarkets Hypermarkets Departmental stores are a few formats which flourishing in the both big and small regional markets

As the major cities have made the present retail scenario pleasant, the future of the Indian Retailing industry lies in the rural regions. Catering to these consumers will bring tremendous business to brands from every sector. However as the market expands companies entering India will have to be more cautious with their strategic plans. To tap into the psyche of consumers with different likes and dislikes and differing budgets a company has to be well prepared and highly flexible with their product and services. In this regard focusing on developing each market separately can save a brand from many troubles. Retail in India - The Future According to a study the size of the Indian Retail market is currently estimated at Rs. 704 crores which accounts for a meager 3 % of the total retail market. As the market becomes more and more organized the Indian retail industry will gain greater worth. The Retail sector in the small towns and cities will increase by 50 to 60 % pertaining to easy and inexpensive availability of land and demand among consumers.

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Growth in India Real estate sector is also complementing the Retail sector and thus it becomes a strong feature for the future trend. Over a period of next 4 years there will be a retail space demand of 40 million sq. ft. However with growing real estate sector space constraint will not be there to meet this demand. The growth in the retail sector is also caused by the development of retail specific properties like malls and multiplexes. According to a report, from the year 2003 to 2008 the retail sales are growing at a rate of 8.3% per annum. With this the organized retail which currently has only 3% of the total market share will acquire 15-20 % of the market share by the year 2010. Factors that are playing a role in fuelling the bright future of the Indian Retail are as follows:
y y y y y

The income of an average Indian is increasing and thus there is a proportional increase in the purchasing power. The infrastructure is improving greatly in all regions is benefiting the market. Indian economy and its policies are also becoming more and more liberal making way for a wide range of companies to enter Indian market. Indian population has learnt to become a good consumer and all national and international brands are benefiting with this new awareness. Another great factor is the internet revolution, which is allowing foreign brands to understand Indian consumers and influence them before entering the market. Due to the reach of media in the remotest of the markets, consumers are now aware of the global products and it helps brands to build themselves faster in a new region

However despite these factors contributing to the growth of Indian retail Industry, there are a few challenges that the industry faces which need to be dealt with in order to realize the complete scope of growth in Indian market. Foreign direct investment is not allowed in retail sector, which can be a concern for many brands. But Franchise agreements circumvent this problem. Along with this regulations and local laws and real estate purchase restrictions bring up challenges. Other than this lack of integrated supply chain and management and lack of trained workforce and flux of the market in terms of price and product choice also need to be eliminated. Despite these challenges many international brands are thriving in the Indian market by finding solutions around these challenges. A company that plans to

36

enter Indian market at this time can definitely look forward to great business if it analyzes and puts efforts on all parameters. And with Good Planning, Timely Implementation and a media campaign that touches Indian consumers any brand can go far ahead in the Indian Retail Revolution.

6) By Dr. M. Dhanbhakyam

Dpt. Of commerce Bharathiar university

This paper provides detailed information about the growth of retailing industry in India. It examines the growing awareness and brand consciousness among people across different socio-economic classes in India and how the urban and semiurban retail markets are witnessing significant growth. It explores the role of the Government of India in the industrys growth and the need for further reforms. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. The paper includes growth of retail sector in India, strategies, strength and opportunities of retail stores, retail format in India, recent trends, and opportunities and challenges. This paper concludes with the likely impact of the entry of global players into the Indian retailing industry. It also highlights the challenges faced by the industry in near future. The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the countrys GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry.

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7) By Gaurav Doshi

Business analyst
opportunities. The retail market in India is anticipated to grow to 427 billion USD by the year 2010. However, the face of the Indian retail industry is changing. India is passing through a retail boom today. A number of changes have taken place on the Indian retail front such as increasing availability of international brands, increasing number of malls and hypermarkets and easy availability of retail space. With the Indian government having opened up the doors for FDI, the entry of foreign retailers into the country has become easier. India has come a long way from the traditional Kirana stores and is on its way to becoming a 'mall country'. The emphasis has shifted from reasonable pricing to convenience, efficiency and ambience. The major factors fuelling this change are the increase in disposable income of the people, improving lifestyles, increasing international exposure and increasing awareness among the customers. India has a large middle class as well as youth population, which has contributed greatly to the retail phenomenon. The middle class is considered to be a major potential customer group. The youth are perceived as trend setters and decision makers. Tourist spending in India is increasing, which has also prompted the retail boom.

8) By book of ICRIER

Impact Of Organized Retailing On Unorganized Retailing In India INTRODUCTION: Retailing is playing a major part in Indian business emergence. There are many modern business systems taking place in Indian market because of Globalization. But retailing is the foremost part of them which is predicted to have a better growth. When it was said retailing, organized and unorganized retailing will come in to picture to debate. Unorganized retailing is the tradition of India and organized retailing was on track from early 90s. In this context organized retailing is successively grown in recent years. Concerns are raised by many unorganized retailers that emergence of organized retailing is showing an adverse affect on unorganized retail. The book Impact of Organized Retailing on Unorganized Sector discussed about the existence of adverse affect of organized retailing on unorganized sector. . This book also enlightened if there exist an adverse affect, how much does organized retailing is affecting unorganized sector.

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9) By Govt. Studies New Delhi, Apr 30 : Commerce and Industry Minister Kamal Nath told the Rajya Sabha today that the Government has instituted a study through Indian Council for Research on International Economic Relations to assess the impact of organized retailing on unorganized retail trade. Nath said, "The government has also commissioned a study to the Nation Council of Applied Economic Research on growth linkages of Foreign Direct Investment (FDI) in India." The study will also focus on the impact of FDI on the rural economy. The government has received a number of representations against permitting FDI in retail trade from various industry associations, including small scale industry and retail traders. Almost 97 per cent of the retail business was in the unorganized sector. "Nothing would be done that could lead to job loss or have an adverse impact on those involved in this sector," he said.

10) By Ernst &Young, The Great Indian Retail Story, 2006),

Indian Retail Sector Analysis 2006-2007

Two of the current innovation projects I am working on involve an Insight study of the unorganized business sector in India. We are seeking first-hand Insights into this sector that can help us design new business models, new products and a host of new solutions Primarily this involves studying unorganized retail. These include your neighborhood convenience store (popularly called the Kirane-ki-dukan in north India); or the hardware shop at the corner of your street selling everything from bathroom fittings to paints and small construction tools; or the slightly more organized medical store and a host of other small retail businesses in apparel, electronics, food etc. With retail growing in India at a breakneck speed, there are plenty of statistics available on this sector:

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RESEARCH METHODOLOGY

40

Objectives:
1. To compare non organized retail shops and organized retail shops, 2. To know about customers choice and to predict the future of both retail stores. 3. To find out customer perception for both retails. 4. To find out increasing popularity of organized retail in Indore city. 5. To find out customer preference in urban area.

Hypothesis
1. There is a significance difference between organized and unorganized retail. 2. Unorganized retailers are not so brand conscious. 3. There is a big challenge for organized retailers to compete unorganized retailers. 4. Popularity of Organized retailing is going high day by day. 5. Customer are getting price benefits in organized retailing.

Research Methodology
Exploratory research methodology applicable at preliminary stage after data collection descriptive research methodology is applicable.

Introduction to the Study & Research design

The study will be conducted to study and measure the satisfaction level of customer. Secondary as well as primary sources of data will be used to arrive at findings and analyze the results. Secondary sources of data like internet and books will used to do exploratory studies. Relevant variables will be generated and developed questionnaire to obtain primary data 41

from the market. 75-200 respondents will selected necessarily retail customers and based on convenience. Study will be based on the following points. - Scope - Research Design - Sampling Design - Data Sources - Research Instrument - Mode of Survey - Identification of Problem

Findings based on questionnaire filled will be analyzed. Requisite conclusions will be developed and recommendations made. The research had limitations like:

1. Time constraint 2. Sample size 3. Respondent biasness

Sample design
The respondents will be necessarily buyer of FMCG products. The sample would be selected from residential areas house wives, other customers who arrive at retail shops and organized retail stores of Indore. It is a non-probability based sampling based on convenience.

Sample size

Sample size will be 75 to 200 respondent including customers and retailers.

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Respondent
Respondent would be four types 1. Non-organized retailers 2. Organized retailers 3. Customer of unorganized 4. Customer of organized retail store

Tools for data collection

There is insufficiency of secondary data so survey is conducted. Data has been collected from related people to organized and unorganized retail industry. Interview questionnaire are based on responded there are three types of questionnaires which are mention below in annexure section.

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ANALYSIS AND INTERPRETATION OF DATA

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Number of responded - 20
Retail customer ratio on the basis of gender

70% 60% 50% 40% 30% 20% 10% 0% MALE FEMALE MALE FEMALE

Retail customer ratio on the basis of gender

There are 60% of male and 40% of female are arrived at retail store to shop. 2) Which kind of store you prefer

Customer preference
organized 20%

both 60%

unorganized 20%

Customer preference
 20% of customer prefer only organized retail store.  20% of customer prefer only Unorganized retail store.  60% of customer prefer both retail sotre. 45

3) in which store all brands are available?

60% 50% 40% 30% 20% 10% 0% Organized Unorganized Both

Availability of all brands in retail store

60% customer think that in organized retail all brands are available. 15% customer think that all brands are available at Unorganized retail store. 25% of customer think that in both retail store all brands are available.

4) Where do you get seasonal and weekend offer?

80% 60% 40% 20% 0% Organized Unorganized

Seasonal and Weekend offers

80% of customer get attracted by seasonal and weekend offer provided by organized retail only 20% attracted by unorganized retail stores

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5) What do you like in un organized retail

25% 20% 15% 10% 5% 0% Easy to reach familiar sales man Credit facility Time saving

Good things in Unorganized retail

25% customer like unorganized retail because it is near to home and also 25% like it due to familiarity of sales man, 20% like credit facility provided by unorganized retailer and also 20% like to due to time saving shopping.

6)What kind of changes you want in Unorganized retail store?

25% 20% 15% 10% 5% 0% Home delevery Self service Professionalism Air conditionar Huge space

According to customer changes needed in unorganized retail store

20% want home delivery, 20% want self service also 20% want professionalism, 25% want AC store and 15% customer want huge space in unorganized retail.

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7) What is good thing in organized retail store?

30% 25% 20% 15% 10% 5% 0% Home delevry Self service professional AC store Huge space

Specialty of organized retail

30% like Home delivery 15% self service also 15% like professionalism 10% like AC store and 30% of customer like Huge space in Organized retail.

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8) Customer satisfaction level..

neither satisfied nor dissatisfied 15%

Organized Retail
satisfied 65%

highly satified 20%

Customer satisfaction level

Retailer type Organized Satisfied 65% Highly satisfied 20% Neither satisfied nor dissatisfied 15%

Unorganized Retail
Neigther satisfied nor dissatisfied 39%

Satisfied 50%

Highly Satisfied 11%

Customer satisfaction level

Retailer type Unorganized Satisfied 45% Highly satisfied 10% 49 Neither satisfied nor dissatisfied 7% Dissatisfied 10%

9) Customer care rating.

Customer care
60% 50% 40% 30% 20% 10% 0% Fair Good Excellent Bad Poor Very poor organized Unorganized

Customer care rating

Retailer type Fair Organized 15% Unorganized 35% Good 55% 30% Excellent 30% 25% Bad 00% 00% Poor 00% 2.5% Very poor 00% 2.5%

15% Customer customer care of organized retail is fair 55% think its good 30% think its excellent no one think it is bat at all. 35% respondents think customer care by unorganized retail is fair 30% think its good and 25% think it is excellent 2.5% - 2.5% think poor and very poor.

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DISCUSSION OF RESULT

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Findings

 Popularity of Organized retail industry is increasing in India.  Customers are moving towards organized retail.  Maximum customer used to shop on both retail stores.  Unorganized retail store are on walking distance so to shop in store retail is easy.

 Maximum customer think all brands are available in organized retail store.  Selection of store is not depend on income of customer its depend on their nature.

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Limitations

 No of questionnaire for customer are 150 for retailers are 5 each.  Respondents are those people who arrived at retail store.  There were many customer refuse to respond so all customers are not gave their feedback.  Many respondents did not show their income group.  In the condition of hurry respondents can give wrong information.  Research is based on sample of customers of Indore region.

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Suggestions

 Unorganized retail shop should be with huge space.  Unorganized retailer should be brand conscious.  Organized retail shop should be in walking distance.  Organized shop should have to time saving.  Unorganized retailer should start Home Delivery.  Both retailer have specific specialty.

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Conclusion
Before the decade of eighties, India with hundreds of towns and cities was a nation striving for development. The evolution was being witnessed at various levels and the people of India were learning to play different roles as businessmen and consumers. The Indian retail industry is now beginning to evolve in the line with the transformation that has swept other large economies. There is a change a foot in Indian retail too, the liberalization of the consumer goods industry initiated in the mid-80s and accelerated through the 90s has begun to impact the structure and conduct of the retail industry. The concept retail, which includes the shopkeeper to customer interaction, has taken many forms and dimensions, from the traditional retail outlet and street local market shops to upscale multi brand outlets, especially stores or departmental stores. Both retail store have their own specialty and quality. Customer prefer both sore on their priority. Now customer are very time conscious they have not enough time to think about choosing type retail store, they choose according to their priority. Many time customer arrive at organized retail store due to seasonal and weekend offers, so at the time of festival customer prefer shop from organized retailing. Female retail customer generally like self service so they prefer organized retail more. Housewife which have free time they used to shop from organized retail. But due to time consuming and limited shop busy people like to shop from nearest unorganized retail store.

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REFERENCE AND BIBLIOGRAPHY

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Reference & Bibliography

www.wikipedia.org www.articlesbase.com www.glgroup.com www.outlookindia.com www.fibre2fashion.com www. skot.wordpress.com www.scribed .com Marketing Research Malhotra Marketing Management Philip Kotler Research Methodology Methods & Tech- Kothari Research Methodology- Yogesh kumar singh

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ANNEXURE

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ANNEXURE

In review with retail customers

1) Personal detail Name-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age/ Sex -. . . . Occupation- . . . . . . . . . . . . . . Incomea. Below 1,00,000. b. 1,00,000 - 2,00,000. c. 2,00,000 - 3,00,000. d. 3,00,000 - 4,00,000. e. above 4,00,000.

2) Do you go to purchase FMCG product in retail shop? Yes 3) Which kind of store you prefer? Organized Unorganized Both

No

4) do you think Popularity of Organized retailing is increasing? Yes 5) How frequently do you shop? a. Once a day e. Once a month b. Twice a day f. Twice a month c. Once a week

No

d. Twice a week

6) Why do you like to shop from Organized/Unorganized retail store? a. Easy shop b. Variety c. Offers d. other

7) What is the reason of preference of Organize/Unorganized retail store? a. Near to home b. Good service c. Discount Organized d. Credit facility Unorganized No Unorganized e. other

8) In which store all brands are available?

9)Do you like self service in Organized retail store? Yes 10) Where do you get seasonal and weekend offers? Organized 11) Are these offer attract you? Yes No

(Multi option question..12-15)

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12) what is the good thing in Unorganized retail store? Sales service Easy to reach Familiar sales man Credit facility Time saving

13)What kind of changes you want in Unorganized retail store? Home delivery Self service Professional Should be AC Huge space

14) what is the good thing in Organized retail store? Home delivery Self service Professionalism AC store Huge space

15)What kind of changes you want in Organized retail store? Easy to reach Credit facility Familiar sales man Time saving

(Single option question..16 & 17) 16)Rate the customer care level on following scale Fair Organized Unorganized Good Excellent Bad Poor Very poor

17) Rate the performance on following scale Satisfied Highly Satisfied Neither satisfied nor dissatisfied dissatisfied Highly dissatisfied

Organized Unorganized

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Interview with unorganized retailers

1) Personal detail Name-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retail store name- . . . . . . . . . . . . . . 2) Do you know popularity of organized retail is increasing? 3) Is organized retail making any effect on your business? Yes Yes Age/ Sex -. . . .

No No

4) Are you trying to update your old retail style? 5) Which kind of additional facility you are providing?

Yes

No

Good Sales service

Easy to shop

Familiar sales man

Credit facility

Time saving

6) Do you provide home delivery service? 7) Do you have seasonal and festival offer scheme for customers? 8) Do you have any idea about your customers income group?

Yes Yes Yes

No No No

(Ask question no. 9 if Yes in 8th answer) 9)Income group arrive most

A. Max. no. of lover class

B. Max. no. of middle class

C. Max. no. of high class

A & B Both

All

10) Are all brands available in your store?

Yes

No

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Interview with Organized retailer

1) Personal detail Name-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retail store name- . . . . . . . . . . . . . . Age/ Sex -. . . .

2) Do you know unorganized retail is well establish in India? 3) Is Unorganized retail making any effect on your business?

Yes Yes

No No

4) Are you trying to overtake them? 5) Which kind of additional facility you are providing? Good Sales service Easy Familiar to sales shop man Credit facility

Yes

No

Time Home Self Professionalism AC Huge saving delivery service store space

6) Do you provide home delivery service? 7) Do you have seasonal and festival offer scheme for customers? 8) Do you have any idea about your customers income group?

Yes Yes Yes

No No No

(Ask question no. 9 if Yes in 8th answer) 9)Income group arrive most A. Max. no. of lover class B. Max. no. of middle class C. Max. no. of high class A & B Both All

10) Are all brands available in your store?

Yes

No

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