Professional Documents
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Project Report On Vishal and Bigbazar
Project Report On Vishal and Bigbazar
&
SUBMITTED IN FULFILLMENT FOR DEGREE OF
M.B.A.
Under the Guidance of:
MR. Ajeet Verma
SUBMITTED BY: Rishabh Singh
INDEX
Sr No.
Contents
Pg. No.
Executive Summary
Introduction
Literature Review
11
14
17
Retail Model
19
20
23
10
Retailing In India
25
11
30
12
37
13
39
14
41
15
44
16
FDI in retailing
45
17
48
18
51
19
52
20
56
21
57
22
Data Analysis
58
23
Survey discussions
71
24
Recommendation
73
25
Conclusion
75
26
Appendix(Questionnaire)
79
27S
Bibliography
82
CERTIFICATE
..
Signature Guide
ACKNOWLEDGEMENT
It is high privilege for me to express my deep sense of gratitude to all those people
who helped me in the completion of the project, especially my guide Mr. Ajeet
Verma faculty management KCMT, Bareilly. who was always there at hour of
need.
My special thanks to KCMT staff and faculty for helping me in the completion of
project work and its report submission.
Finally, I would like to thank all the people, without whose insights and opinions, this
project would have been impossible.
Rishabh Singh
( MBA 2nd Year)
EXECUTIVE SUMMARY
So far, it has been seen that retailing is a vital and involuntary action
performed by the living structure of the market economy (as opposed to
the case in a barter economy). In a barter economy, bane; transactions
take place between consumers themselves. Consumers interact directly
whereas in a centralized market economy, transactions taking place at a
larger scale (both in terms of volume and variety) necessitate an
interface between the manufacturers and final consumers. Hence we
reinforce the fact that retailing is not a new deal. This industry is extant
as an interface between production and consumption, from times
immemorial, benefiting us - consumers or producers in the various ways
discussed above.
INTRODUCTION
Retailing consists of those business activities involved in the sale of
goods and services to consumers for their personal, family or household
use. It is the final stage in a channel of distribution, which comprises all
of the businesses and people involved in the physical movement and
transfer of ownership of goods and services from producer to consumer.
Any business that directs its marketing efforts towards satisfying the
final consumer based upon the organization of seiting goods and
services as a means of distribution"
Manufacture
Wholesaler
Retailer
Final Consumer
Over the last twenty years, retailing has changed as a result of following
developments:
The development of a 'motor car economy'. This has led to one
stop shopping where families buy all of their supplies at one shop.
Own branding- large retailers have developed brands of their own
made by large leading manufacturers,
New technology at the checkout and in the packaging and
preserving of food has been developed, which has speeded up the
checkout process and reduced the delivery times from suppliers.
Faster transport links across the world, which has made available
a wider range of goods.
The growing sophistication of the customers and a general rise in
the standard of living, which has led to the fierce competition in
the market.
New technology in the home, which may cause a revolution in the
shopping methods in the future.
Since the consumer is God, he has to be kept in mind when deciding on
a retailing strategy. Consumers do not want something to be sold to
them; it is enough to merely facilitate a sale. They want their retail
outlets to do more for them in terms of service and convenience. They
know what they wish to buy even before they enter a store, and, often,
even before they leave the house. So, despite whatever marketers say
about impulse-purchases, they are actually rare occurrences. The large
number of repeat customers in a store implies that customers are driven
more by their feelings towards the store than those towards the brand.
This presents super-retailers with an opportunity to build store-brands.
However, supermarkets would do well to start with non-store brands,
build a loyal customer-base through schemes similar to frequent-flier
programmes, and then, launch store-brands. Significantly, since the
expectations of most customers from super markets have not
crystallized yet, a super-retailer can, actually, drive expectations by
developing need- based retail formats.
There were 5.13 million retail outlets in 1996; today, the figure is closer
to 6 million. Most of them are either grocers or paan-plus stores that
stock everything from cigarettes to smuggled Scotch. But these figures
could be misleading. Just 3 per cent of the country's retail outlets can be
called large; 64 per cent are small.
7
10
LITERATURE REVIEW
Retail has played a major role world over in increasing productivity
across a wide range of consumer goods and services .The impact can
be best seen in countries like U.S.A., U.K., Mexico, Thailand and more
recently China. Economies of countries like Singapore, Malaysia, Hong
Kong, Sri Lanka and Dubai are also heavily assisted by the retail sector.
Retail is the second-largest industry in the United States both in number
of establishments and number of employees. It is also one of the largest
world wide. The retail industry employs more than 22 million Americans
and generates more than $3 trillion in retail sale annually. Retailing is a
U.S. $7 trillion sector.
Wal-Mart is the worlds largest retailer. Already the worlds largest
employer with over
1million associates, Wal-Mart displaced oil giant Exxon Mobil as the
worlds largest company when it posted $219 billion in sales for fiscal
2001. Wal-Mart has become the most successful retail brand in the
world due its ability to leverage size, market clout, and efficiency to
create market dominance. Wal-Mart heads Fortune magazine list of top
500 companies in the world. Forbes Annual List of Billionaires has the
largest number (45/497) from the retail business.
Retailing is the final step in the distribution of merchandise - the last link
in the Supply Chain - connecting the bulk producers of commodities to
the final consumers. Retailing covers diverse products such as foot
apparels, consumer goods, financial services and leisure.
A retailer, typically, is someone who does not effect any significant
change in the product execs breaking the bulk. He/ She is also the final
stock point who makes products or services available to the consumer
11
Rank
Retailer
No of stores owned
4178
8130
3445
1134
7150
Metro AG (Germany)
2169
2105
12
2231
2512
10
1307
Broadly the organized retail sector can be divided into two segments, InStore Retailers, who operate fixed point-of-sale locations, located and
designed to attract a high volume of walk-in customers, and the nonstore retailers, who reach out to the customers at their homes or offices.
Apart from using the internet for communication (commonly called etailing), non-store retailers did business by broadcasting of infomercials,
broadcasting and publishing of direct-response advertising publishing of
traditional and electronic catalogues, door-to-door solicitation and
temporary displaying of merchandise (stalls).
13
Format
Description
Speciality
Stores
Focus
on
a
specific Greater choice to the
consumer
need,
carry consumer,
comparison
most
of
the
brands between brands possible
available.
Department
Stores
Supermarkets
Extremely
large
self- One stop shop catering to
services retail outlets.
varied consumer needs.
Hyper-mart
Larger
than
a Low prices, vast choice
Supermarket, sometimes available
including
with
a
warehouse services as cafeterias.
appearance,
generally
located in quieter parts of
the city
14
Convenience
Stores
Shopping Malls
An
enclosure
having Variety of shops available
different formats of in- close to each other.
store retailers, all under
one roof.
15
Even after adjusting for inflation, the per Capita Expenditure in 1999,
was more than double of that in 1959.
Dual income families
Advent of dual income families also helped in the growth of retail sector.
A dual family can spend more but has very little time available for
shopping. Thus, convenience and speed of service became crucial
parameters.
Urbanization
Increased urbanization has led to high customer density areas thus
enabling retailers to use lesser number of stores to target the same
number of customers. Aggregation of demand that occurs due to
urbanization helps a retailer in reaping the economies of scale.
Covering distances has become easier
With increased automobile penetration and an overall improvement in
the transportation infrastructure, covering distances has become easier
than before. Now a customer can travel miles to reach a particular shop,
if he/she sees value in shopping from there.
From the supply side also, a number of developments fueled the growth
of the retail industry. Retailers understood the needs of the customers
and
realized efficiencies
through
investments in Technology
Infrastructure and Employees. The outcomes were improved supply
chains, increased service levels and satisfied customers.
16
17
Country
India
Mexico
Brazil
United States
Argentina
Malaysia
Hong Kong
Retail Statistics
Worldwide retailing is the single biggest industry. It has an annual sales figure
of $6.6 trillion.
In US alone the industry employs 17% of the total work force of the country. In
Poland it is 15%, in China it is 12% while in tndia it is just 6% of the total work
force.
Indian market is worth $180bn annually and it contributes to 6% to 8% of the
total workforce employed. The industry is expected to grow to more than
$300bn by 2010.
In US there are 44000 malls serving a population of 273mn, in EU there are
3600 malls serving 380mn while in India there are just 3-4 shopping malls
catering to a population of 65-70mn across 6 metros in the country.
18
RETAIL MODEL
On a basic level, retail is a combination of three components; Product, Process and
People. Within these components are elements that when put together form a retail
model. Here are the model's main components and elements.
1. Product Selection
Product selection is made up of three elements:
Market segment-this determines the type of products to be sold
Scope-the range of the segments
Quality-the characteristics of the segment and scope.
2. Price
The price the consumer pays for the goods offered by the retailer.
Process
3. Operational activity
Includes inventory procurement, inventory management, and all necessary
administrative activity
4. Structure
The organizational structure is necessary to operate the retail enterprise.
8. Services
Services such as delivery, installation, in home sales, and personal shoppers are just
a few examples. Services are considered a people component as they are most
19
often performed by people and their quality is determined as such share of the
market, its image and status and finally its survival.
21
22
As seen, the role of the intermediary is being diminished gradually, which has
obvious Implication of backlash of the trade channel upwards towards the suppliers.
This is more severe in countries such as India, where the channel economics in
favor of the middlemen is still strong enough given the segmentation of the retail
sector. Therefore when Food World, the largest grocer in India has a "direct supply"
contract with over 20% of its key suppliers, it gives rise to conflict of interest with the
distribution infrastructure that suppliers have painstakingly built over the years. Thus
companies like HLL have evolved a distinct distribution channel altogether (called
"Modern Trade") to service the needs of such large grocers. Even the mom and
Manufacturer pop stores (known as kirana shops) are affected due to this "unfair"
back-end advantage extended by the supplier to its leading accounts (the emerging
supermarket chains).
23
The strategies adopted by the retailer to compete with branded goods are illustrated
in the diagram above. Branding the store and following a private label strategy is the
key strategy which helps the retailer to compete with branded products.
24
Retailing in India
The retail market size in India is estimated to be around $180 billion.
Retailing provides jobs to almost 15 percent of employable Indian adults
and it is perhaps the largest contributor to India's GDP.
But the flip side of the coin is that the average size of each of the retail
outlets in India is only 50 square feet and though a large employer, the
industry is very unorganized, fragmented and with a rural bias.
The Indian retail industry is unorganized
There are nearly twelve million retail outlets in India and the number is
growing. Two thirds of these stores are in rural location. The vast
majority of the twelve million stores are small "father and son" outlets.
According to the "Retailing in India" report published by the PwC Global
Retail Intelligence Program, share of the unorganized sector is 98%.
Some Key Facts about Indian Retail Industry
INDIA A Vibrant Economy & Resplendent Market
4th Largest economy in PPP terms after USA, China & Japan.
To be the 3 rd largest economy in terms of GDP in next 5 years.
2nd fastest growing economy in the world.
The US $ 580 billion economy grew 8.2 percent in the year 03-04
Among top 10 FDI destinations
Stable Government with 2 nd stage reforms in place
Growing Corporate Ethics (Labour laws, Child Labour regulations,
environmental protection lobby, intellectual and property rights, social
responsibility).
Major tax reforms including implementation of VAT.
2nd Second most attractive developing market, ahead of China
5th among the 30 emerging markets for new retailers to enter
25
With over 600 million effective consumers by 2010 India to emerge as one of the
largest consumer markets of the world by 2010.
Five Reasons why Indian Organized Retail is at the brink of Revolution:
Scalable and Profitable Retail Models are well established for most of the
categories
Rapid Evolution of New-age Young Indian Consumers
Retail Space is no more a constraint for growth
Partnering among Brands, retailers, franchisees, investors and malls
India is on the radar of Global Retailers Suppliers
Looking Ahead
Many strong regional and national players emerging across formats and product
categories Most of these players are now geared to expand far more rapidly than the
initial years of starting up Most have regained / improved profitability after going
through their respective learning curves.
Malls in India
A decade ago not a single mall
A year ago less than half a dozen
Today 40 malls
2 years from now 300 malls
26
27
28
Segment
4050
Jewellery
2,000-2,500
Consumer Durables
1500
Footwear
1,300-7,500
1000
Non-Store retail
900
500
390
29
example. In malls like these, the combined brand pull of all outlets is
used to create a pull for the mall.
Branded Stores
Exclusive showrooms run by premium brands have been the catalysts in
pushing up the Indian retail scenario. This concept is now being used to
introduce organized retailing to the second rung towns. Madura
Garments has started setting up exclusive outlets in cities like Trichy
and Thanjavur.
Departmental Stores
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!.
Specialty Stores
Chains such as the Bangalore based Kids Kemp, the Mumbai books
retailer Crossword, 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. Absence of discounting as
a dominant format of retailing in India is a glaring peculiarity. The reasons are
two-fold. Unlike most Western countries, Indian retailers have much less
bargaining power. They thrive as small store and don't have the clout to
negotiate terms with the manufacturers. The other reason is that the retailers
themselves have no economies of scale to offer discounts on their own.
However, the scenario is now changing. Increased investments and the entry
of big business houses in retailing is leading to the emergence of bigger
retailers, who can both bargain with the suppliers, as well as, reap economies
of scale. Hence, discounting is becoming an accepted practice.
30
than 6,00,000 villages. About 350 million people live, within one-minute
walk of these retail shops. According to retail census conducted by
market researcher ORG-MARK, Rs.4,79,568 crore worth of products
were sold through theses million retail outlets Manufacturers owned and
retail chain store are springing up in urban areas to market consumer
goods to the middle class in a much similar style as malls around the
globe. At present about 8% of the Indian population is employed in the
retailing industry as against 20% in USA. As India moves towards the
service oriented economy, a rise in this percentage is expected. The
number of the retail outlets is growing at about 8.5% annually in the
urban areas and in towns with population between 1, 00,000 to I million;
the growth rate is about 4.5%.
Retailing in India is at a nascent stage of is evolution, but within a small
period of time certain trends are clearly emerging which are in line with
the global experiences. Organised retailing is witnessing a wave of
players entering the industry. These players are experimenting with
various retail formats. Yet, Indian retailing has still not been able to
come up with many successful formats that can be scaled up and
applied across India. Some of the notable exceptions have been
garment retailers like Madura Garments & Raymonds who was scaled
their exclusive showroom format across the country.
According to Kurt Salmon Association, a global management consulting
firm, organized retailing seems all set to power ahead from Rs. 5000
crore currently to about Rs.30,000 crore in next live years. A. T. Kearney
reports that organized retailing will account for about 20% of the total $8
trillion retail market in India in the next 5-7 years as against 1-2% today.
Format Of Retailing
Organized Retailing
5,956
31
Non food
23,886
Source: Shah, Jindal Shop at Leisure Economic Times (4th Feb 2000)
Retailer
Current Format
New Formats.
Experimenting With
Shoppers' Stop
Department Store
Quasi-mall
Ebony
Department Store
Quasi-mall, smaller
outlets, adding food retail
32
Crossword
Large bookstore
Corner shops
Piramyd
Department Store
Pantaloon
Hypermarket
Subhiksha
Supermarket
Considering moving to
self service
Vitan
Supermarket
Foodworld
Food supermarket
Hypermarket, Foodworld
express
Globus
Department Store
Bombay Bazaar
Aggregation of Kiranas
Efoodmart
Aggregation of Kiranas
Metro
S Kumar's
Discount store
33
Hypermarkets
Large supermarkets, typically (3,500 - 5,000 sq. ft)
Mini supermarkets, typically (1,000 - 2,000 sq. ft)
Convenience store, typically (7,50 - 1,000 sq. ft)
Discount/shopping list grocer
Traditional retailers trying to reinvent by introducing self-service formats as
well as value-added services such as credit, free home delivery etc.
34
35
designers while developing a new property. And, that is why retail chains
like MusicWorld, Barista, Pyramid and Globus and laying major
emphasis & investing heavily in store design.
MusicWorld spent three months in college campuses and metros
studying the market and talking to youngsters before starting work. The
brand identity was created after extensive research: a logo was
designed and the look of the stores across the country was decided
upon. Apart from the visual impact, the functionality of the store design
was also taken care of. Listening posts have been created for people to
listen to their favorite album and an area in the center of the stores has
been earmarked for celebrity visits and promotions.
Emergence of Discount Stores
What does Subhiksha In Chennai, Margin Free in Kerala and recent
entrants like Bombay Bazaar in Mumbai, RPG's - Giant in Hyderabad,
Big Bazaar in Kolkata, Hyderabad and Bangalore have in common?
Their products are below MRP.
Discount stores have finally arrived in India and they are expected to
spearhead the revolution in organization retailing. Though this segment
is growing, it is small compared to international standards where around
60 per cent of the business comes from this format. Internationally, the
largest retailer in the world Wal-Mart is a discounter. These discount
stores have advantages of price, assortment dominance and quality
assurance and have the ability to quickly build scale and pass on the
benefits. However, the success would be for retailers who are able to
build the scale fast and manage their operations efficiently while offering
value to the customer consistently.
Unorganized Retailing is getting Organized
To meet the challenges of organized retailing that is luring customers
away from the unorganized sector, 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 have also been formed which are aggregations of Kiranas.
In a novel move, six Delhi based restaurants have come together and
formed a consortium: NFC, to promote New Friends Colony, a posh
locality in the Capital, as a branded place in town. The aim is to
increase footballs in the area, which is fast losing its sheen to its closest
and upcoming destinations such as large Cineplexs, and malls, which
are backed by the corporate house such as 'Ansals' and 'PVR'.
36
Major players:
FoodWorld
37
Shoppers' Stop
Subhiksha
Westside
Big Bazzar
Planet M
Nilgris
Vishal Mega Mart
Lifestyle
Music World
Adani-Rajiv's
Piramyd Crossword Nirma-Radhey
Globus
Lifespring Ebony
Pantatoon
38
39
40
41
a) The unorganized
The first and major challenge facing the organized retail industry in India is
competition from the unorganized sector. Traditional retailing has been established in
India for many centuries. The local kirana shop or the street grocer still commands
the business. Estimates show that this unorganized sector accounts for nearly 95 to
99 percent of the total retail business in the country. This sector has a low cost
structure; is mostly owner-operated; and little or no taxes to pay. Consumer
familiarity that runs from generation to generation is a major advantage for this
traditional retailing sector.
In contrast, players in the organized sector have big expenses to meet, and yet need
to keep prices low enough to be able to compete with the traditional sector. High
costs for the organized sector arise from higher real estate costs (as most of these
retail stores are located on prime real estates in big cities), high labour costs, costs
for providing comfort facilities such as air-conditioning, value added services like
home delivery, back-up power supply, high inventory costs, taxes etc.
c) Sourcing economics
The absence of large retail chains does not allow large purchases, and hence no
sourcing economies are possible.
d) Automobile ownership
In India, automobile owners are limited to around 1 percent of the population. This
makes difficult, the development of out-of town shopping malls and superstores. This
also limits the ability of customers to make large purchases; while large shopping
baskets from the very essence of shopping in retail superstores.
Thus the retailers have to establish its store at the center of the town i.e. Main
markets which are very costly areas and thus add to high initial cost.
e) Infrastructure
42
g) Large-scale diversity
India is a large country with a wide diversity in language, culture, religion etc. The
preferences of people evening neighboring town/cities may vary significantly. This
difference in life-styles and preferences also exist between neighborhoods within the
same town. This diversity increases dependence on local suppliers for goods to
match the preferences of the local customers, while hindering large-scale purchases
from consolidated sources. The above drawbacks, while discouraging setting up of
large retail chains, also presents a unique opportunity to international and/or
professionally managed Indian corporations to pioneer a currently non-existent
modem retailing industry in India, and subsequently benefit from it.
h) Timing
Another major pitfall for the retail Industry is Timings. According to shop Act, each
shop has to keep a day of as per Market Norms and also we are require to work
strictly under 9A.M to 8 P.M norm.
This restriction does not allow the retailer to draft the suitable time as per the
consumer as they would prefer to shop on Sundays and also late hours
43
44
In a bid to provide a guideline to those who might be considering starting a new retail
business, we present a checklist to be followed by them:
C. Financial Plan
Decide the level of funds you will need to get started and to get through the
first year and where they will come from.
Determine the first year profit and return on investment.
Project monthly cash flow and profit-and-loss statements for the first two
years
Find out the amount of sales needed to breakeven in the time you stipulate.
Decide upon the contingency plan if these sales are not reached in the
specified time period.
45
FDI IN RETAILING
In the current investment regime, no foreign investment is allowed in domestic retail
trading. This is based on the perception that opening up retail trading for FDI
investment could impact local Venders and lead to job losses. However,
manufacturing companies are allowed to carry out wholesale trading of high value
items purely to institutional customers or wholesale distributors on a cash and carry
basis.
Indian retail trade is of enormous size ($180 billion), nearly 10 per cent of GDP,
employing 21 million persons, which is about 7 per cent of the labour force. It is six
times bigger than Thailand and five times larger than South Korea and Taiwan.
China's retail trade is 8 per cent of GDP and 6 per cent of employment. But the trade
in India is fragmented, unorganized, un-networked, and individually small.
The 12 million kirana shops are mostly family or 'ma-pa' owned, with little capital for
expansion or credit to receive or to extend to consumers. About 96 per cent of these
shops have 500 sq ft or less of space with limited stock or choice to offer. During all
these years, instead of shedding tears for indigenous trade and resisting FDI, had
the government declared it an industry, it would done the trade a world of good
Modern retailing is designed not only to provide consumers with a wide variety of
products under one roof, but also of assured home delivery and information
feedback between consumers and producers. A modem retail outlet will also make it
easy to buy on credit and provide for servicing and repair of products sold. With IT
application, the modem retail store can cut transaction costs such as due to
inventory, delivery and handling. That is precisely how the US based Wal-Mart grew
to be a giant because it reduced its distribution costs to 3 per cent of sales compared
to 4.5 per cent of others.
Wal-Mart had entered the Chinese market a few years ago (in 1996). Now it wants
to enter India and bring FDI to set itself up to network. India is today the only major
economy that still does not permit FDI in retail trade. In China, 35 of the world's top
70 retailers have already entered and set up business. They have helped in boosting
their exports. Wal-Mart alone exported in 2002 about $12 billion worth of goods.
These retailers source their goods from inside China.
India is targeting for its GDP to grow by 8 to 10 per cent per year. This requires
raising the rate of investment as well as generating demand for the increased goods
and services produced. Exports are one way of generating that demand.
Encouraging private consumption expenditure is another way. Both these can be
facilitated by allowing market-savvy, market-intelligent and best management
practices, through corporations such as Wal-Mart, Carrefour, Ahold, JC Penny to
enter India.
These retail giant houses can bring their better managerial practices and IT-friendly
techniques to cut wastage and set up integrated supply chains to gradually replace
the presented disorganized and fragmented retail market. As India's urbanization grows,
these modem food delivery systems are required. Foreign companies want to come
46
in, and we need their money and techniques to prepare our transition to the
inevitable globalised market of the future.
The status of organized retailing in some South East Asian countries that allowed
FDI in retailing has been given in below:-
Country
Traditional Retailing
Malaysia
50%
50%
50%
50%
Thailand
Philippines
Indonesia
South Korea
China
India
Organized Retailing
Traditional Retailing
50%
50%
50%
35%
25%
15%
10%
2%
50%
65%
75%
85%
90%
98%
In view of the demands made by industry and the need to boost the retail trade, the
Government is actively considering removing the restrictions. A recent note
circulated by the Ministry of Commerce has proposed permission for FDI up to 100
per cent in retail trade subject to Government approval on a case-to-case basis.
However, this permission, if it is given, will be with lots of strings attached. Besides
following rules on minimum capitalization, the foreign entrants will be expected to
neutralize the outflow of foreign exchange (repatriation of dividends) by way of
export earnings on a year-to-year basis.
FDI in retail sector has been a key driver of productivity growth in Brazil, Poland and
Thailand. This has resulted in lower prices to the consumer, more consumption and
higher profit for the producer. FDI in retail trade has forced the wholesalers and food
processors to improve, raised exports, and triggered growth by outsourcing supplies
domestically. The availability of standardized products has also boosted tourism in
these countries.
The biggest opposition to allowing l00% FDI is the feared exit of the small retailers.
Currently, moves are on to counter these apprehensions and the players are keenly
awaiting the final decision from the Government.
47
&
48
Pantaloon Retail (India) Ltd. The Company's principal activity is to operate chain
retails stores in names of Big Bazaar, Food Bazaar, Central and Pantaloons. The Big
Bazaar is the discount store which offers a wide range of products under one roof.
The products include apparels and non-apparels such as utensils, sports goods and
footwear. The Company also has its presence into gold retailing by launching Gold
Bazaar. The Company's Food Bazaar provides a range of food and grocery products
ranging from fresh fruits and vegetables, staples, FMCG products and ready-to-cook
products. The Central offers a chain of stores including books and music stores,
global brands in fashion, sports and lifestyle accessories grocery store and
restaurants. The Pantaloon retail stores focus largely apparels and accessories.
49
Bazaar. Close to two lakh products are available under one roof at prices lower by 2
to 60 per cent over the corresponding market prices. The high quality of service,
good ambience, implicit guarantees and continuous discount programmes have
helped in changing the face of the Indian retailing industry. A leading foreign broking
house compared the rush at Big Bazaar to that of a local suburban train.
Big Bazaar is both big and a bazaar. It is unlike, say, a Wal-Mart or even a Food
world. Big Bazaar is almost an aircon8itioned version of any Indian bazaar. It is a
slightly orderly and organized version of, say Chickpet for Bangalore guys or Dadar
for Mumbaiites. There is a huge crowd which can move in almost any direction. You
can buy anything (pretty much everything is available at Big Bazaar). It is not a place
where you can browse through at leisure and pick up a few things here and there.
This is a place if you are serious about your shopping.
Life at Big Bazaar is pretty self-sufficient. If you were trapped in there for a week, you
could live a good life. But to appreciate the nuances of home economics, one should
try comparing prices. The clothes especially deserve an independent feature of their
own.
Particularly designed for the regular middle-class family that requires clothing that
lasts and doesnt burn holes into the pockets of existing clothing, this store offers
good bargains. What you won't get here is designs your friends will drool over.
50
Checks and stripes are like the far end of the creative exercise here, and the best
bet for the fashion conscious would be the plain colors on display.
Choice is one factor that suffers here, as there is immense quantity but hardly any
variety. If you want to clothe an entire troupe of extras in executive stuff for a dance
number, this is the place! You get hordes of stuff, but it's all the same. If you are
looking for anything in particular, then this is really not such a hot place.
The accessories are good, though predictable. Brands make an appearance here as
watches of Casio and Titan are displayed, and the prices range from 300 to some
really heart-in-mouth figures
The rest of the stuff is not really very interesting as the prices are just a shade below
the MRP. Groceries, home appliances, plastic goods, luggage, stationery,
cosmetics... you name it, this place has it. Again, choice may suffer and you may not
get that particular deo of yours which has the opposite sex going randy.
There are small sub-departments for footwear, music cassettes and even
consumables. There is an in-house cafeteria that offers pretty good chow at
reasonable rates. And now that the bazaar is spread over only two floors as opposed
to the earlier four floors, I guess the intimidation factor stands reduced too.
Big Bazaar has an exchange offer where you can get rid any old item and get
yourself a new one. The offer is applicable to products like utensils, plastics,
footwear, luggage accessories, garments, toys, Watches, glass, electronics items,
and so on. Customers can get their old household items valued. Big Bazaar says it
offers better value because old, broken utensils and plastics can be exchanged for
as much as Rs. 40 a kilo.
What is more, consumers need not exchange their old items for similar items. They
can bring in an old piece of luggage and walk off with a salwar kameez instead.
Similarly, old shoes and can exchanged for an electric rice cooker.
Food Bazaar had announced a special shopping offer which attracted around 20,000
shoppers. On a normal day, Center One's. Food Bazaar has 10 security guards.
However, on July 26 the management had to call in around 30 guards on special
duty.
In the last week of February 2006, Big Bazaar, through a television commercial,
announced an exchange offer in which customer can bring junk and get discount on
certain items.
January, the bazaar had offered massive discount on a particular day called Sabse
Sasta Din. "About 2 million people showed up that day, which is almost four
times than those visited the shop on Sunday before Diwali.
Meanwhile, sales at Big Bazaar have been growing steadily. In January 2005 the
sales were of Rs 56.21 crore but in January 2006, it rose to Rs 129.61 crore.
51
Strengths
Weaknesses
Large scale of operations sometimes acts as a barrier to personalized
customer relations
Large scale operations lead to reduced flexibility by increasing the amount
of overheads and a huge commitment in terms of fixed costs
Sometimes its discount & exchange schemes lead to hamper its brand
image.
Employees are unable to cater to the large customers especially on
exchange schemes days like on 26th of January etc.
Opportunity
In India Retailing is still a new concept. Hence there is still much of untapped
market left out.
According to the Consumer Outlook study, consumers are generally satisfied
with the service that organized retailers extend to them. More importantly,
they are increasingly regarding these organized retailers as providing 'valuefor-money', These findings indicate that large retailers will capture most of the
higher consumer spending.
Threat
Many new retailers are coming up. Retailers like Subhiksha are
adopting the same pattern of Big Baazar. Therefore Big Baazar will
52
What started as a
humble one store
enterprise
in
1986
in
Kolkata(erstwhile,
Calcutta) is today
a conglomerate
encompassing 46
showrooms in 34
cities. Indias first
hyper-market has
also been opened
for the Indian
consumer
by
Vishal. Situated
in the national
capital Delhi this
store boasts of
the singe largest
collection
of
goods
and
commodities sold
under one roof in
India.
The Group has a turnover of Rs 150 crore for 2004-05. Under the dynamic
leadership of Mr. Ram Chandra Agarwal the group is expecting to touch the
turnover of Rs 300 crore by the end of March 2006 and Rs 650 crore for the
period2006-07.
The groups prime focus is on retailing. The Vishal stores offer affordable family
fashion
at
prices
to
suit
every
pocket.
The groups philosophy is integration and towards this end has initiated
backward integration in the field of high fashion by setting up a state of the art
53
manufacturing
facility
to
support
its
retail
endeavors.
Vishal is one of fastest growing retailing groups in India. Its outlets cater to
almost all price ranges. The showrooms have over 70,00 products range which
fulfills all your household needs, and can be catered to under one roof. It is
covering more than 11 Lacs of sq. ft. in retail space and more than 5 Lacs sq.ft.
under construction. Each store gives you international quality goods and prices
hard to match. The cost benefits that is derived from the large central purchase
of goods and services is passed on to the consumer.
The Founders
54
55
56
Vishal Mega Mart inks pact with SBI for co-branded card
SBI Card announced the launch of its co-branded card in association with retail
chain Vishal Mega Mart to tap the booming organized retail market.
``SBI Vishal Mega Mart Card is one of the best co-branded credit card that offers
reward points and other benefits to frequent shoppers and would be free for those
who spend above Rs 7,500 per annum,'' SBI Card CEO, Mr Roopam Asthana, said.
``By partnering with the SBI Card, we are not just offering customers a convenient
payment mechanism but a unique consumer loyalty programme that rewards them
every time they shop,'' Vishal Retail Managing Director, Mr Ram Chandra Agarwal,
said.
Some of the features of the co-branded card include Rs 250 discount voucher
on signing up for the card and a process by which the cardholder earns five
reward points on every Rs 100 spent.
The retail chain has been planning to expand its number of stores. "We intend to
open around 40 stores by the next year," Mr Agarwal said. The company is also
planning an initial public offer to raise Rs 125 to Rs 150 crore. Mr Agarwal said, "The
company has appointed merchant banker Enam Financial Services to advise it on
the proposed issue that is due in four to six months."
The retail store has posted a turnover of Rs 150 crore in 2004-05 and
expects the figure to cross Rs 300 crore in 2005-06.
57
Strengths
Prime location
Large floor space allowing for better visual merchandising
Large area also allows to stock a large variety of products under one roof
Financial backing
Highly trained and motivated sales force.
Brand equity
Large scale operations in various cities throughout the country allows them to
reap the benefits of "economies of scale"
Weaknesses
Large scale of operations sometimes acts as a barrier to personalized
customer relations
Large scale operations lead to reduced flexibility by increasing the amount
of overheads and a huge commitment in terms of fixed costs
A large organization structure leads to delayed decisions. This can prove
fatal for a business in the dynamic fashion industry. Vishal Mega Mart has
a centralized purchasing department in Delhi, this fact sometimes results
in delayed decisions in adapting to changing market tends
Opportunity
Apart from the metro cities, cities like Ahmedabad, Pune, Lucknow, Indore
and Coimbatore have shown substantial retail presence. These markets are
expected to show exponential growth in the next few years. Thus Shoppers
Stop has the opportunity to explore new markets
According to the Consumer Outlook study, consumers are generally satisfied
with the service that organized retailers extend to them. More importantly,
they are increasingly regarding these organized retailers as providing 'valuefor-money', These findings indicate that large retailers will capture most of the
higher consumer spending.
Increasing penetration of the Internet into Indian homes has provided Vishal
Mega Mart to break the geographical barriers and to increase their customer
base. The entry into online retailing, would, in fact, expand the product
categories available to the consumer. The choices open to the consumer
would not be restricted to those available in Vishal Mega Mart.
Threat
The time when retailers had to worry about competition only from their
peers down the street has come to an end, Vishal Mega Mart is now
facing increased competition in the form of international retail chains
that are making a beeline towards the highly potential Indian markets.
Moreover many big Indian business houses are also trying a space in
the Indian retail scene.
58
RESEARCH METHODOLOGY
Sources of data:
1. Primary data was collected through questionnaires, which were filled
by customers
2. Secondary Data sources comprised of newspapers, books from the
library, other periodicals as well as the Internet.
Sample size:
Number of consumers
75 (selected at random)
Sample Chosen:
Vishal Mega Mart (IN Bareilly)
Big Baazar(In Bareilly)
59
AN OVERVIEW
60
The total sample for the survey was 75 across the city of Delhi. The response
was as follows:-
SEX RATIO
In the survey conducted among 75 people, 49 respondents were male & 26
were female.
Sex
No. Of Respondents
Male
49
Female 26
INTERPRETATION
The study clearly shows that the sample taken were most of them were Male.
Age Group
61
Age
Group
Total No. Of
Respondents
Vishal Mega
Mart
Big
Baazar
15-25
25-35
35-45
Above 45
24
20
15
16
16
13
6
6
8
7
9
10
INTERPRETATION
From the above bar graph it is clear that Vishal Mega Mart caters to the needs
of younger part of consumers that is between 15-25 yrs & 25-35 yrs, whereas
Big Baazar caters to the needs of the elder part of the consumers that is above
35 yrs.
62
No. Of Respondents
5
35
25
10
INTERPRETATION
The survey clearly shows that there are more number of people in the income
group of Rs. 10,000 to Rs. 20,000 as compared to the other groups of income.
Hence it clearly shows that both the retail stores cater to the needs of the
middle class segment as compared to the other class of segment
63
PREFERENCE OF SHOPPING
Retail Outlet
Vishal Mega Mart
Big Bazaar
Any Other
No. Of Respondents
24
37
14
Interpretation
It is clear from the above pie chart that out of 75 consumers surveyed Big
Baazar caters to more consumers & hence is more popular as compared to
Vishal Mega Mart & other retail stores.
64
FREQUENCY OF VISIT
Frequency
Big Bazaar
(37)
Others
(14)
Once in two
months
Once a month
12
Twice a month
Once a week or
more
Interpretation
The above diagram clearly shows that consumers visited the retail store at
least once a month. Otherwise they had their own pattern of visits. This means
that they do not have any particular pattern to follow but they visited the retail
store according to their own choice.
65
Type of Visit
Alone
With Family
With Friends
No. Of Respondents
11
23
41
Interpretation
Consumers visited the retail stores mostly with their friends. Then the second
was with their family members & then alone.
66
Frequency
Vishal
Mega Mart
(24)
In %
Big Bazaar
(37)
In %
Others
(14)
Most of the
time
33.33
16
43.24
Quiet often
25
21.62
Sometimes
29.16
16.21
Rarely
03
12.5
03
8.10
Interpretation
We can clearly observe that Big Baazar was more effective in delivering the
goods as when a consumer entered the Big Baazar retail store 43.24 % of the
37 consumers surveyed, bought some or the other commodity as compared to
Vishal Mega Mart where it was 33.33% only.
Time of Visit
Time of visit Vishal
In %
Big Bazaar
In %
Others
67
Mega Mart
(24)
(37)
(14)
10AM-1 PM
12.5
13.51
1 PM-4 PM
20.83
16.21
4 PM-7PM
10
41.66
16
43.24
7PM-10PM
25
10
27.02
Interpretation
It is quiet clear from the above graph that the retail stores had sales more in
evening and that too in 4 PM- 7 PM slot & the second being 7 PM- 10 PM. Big
Baazar attracted 43.24 % of consumers & Vishal Mega Mart attracted 41.66 %
of consumers in 4 PM 7 PM of slot time.
Vishal
Mega Mart
(24)
In %
Big Bazaar
(37)
In %
Others
(14)
68
Less than
1000
29.16
15
40.54
1000- 2000
33.33
24.32
2000-3000
16.66
16.21
3000-4000
12.5
10.81
Above 4000
8.33
8.10
Interpretation
The money spend by the consumer when he or she visited Vishal Mega Mart
was between the slot of 1000 to 2000 whereas in the case of Big Baazar it was
between the slot of les than 1000.
Vishal
Mega
Mart
(24)
8
6
4
2
In %
Big Bazaar
(37)
In %
33.33
25
16.66
8.33
3
3
4
13
8.108
8.108
10.81
35.13
69
Cosmetics
Consumer
Durables
3
1
12.5
4.16
8
6
21.62
16.21
Interpretation
The above graph states that Big Baazar had 35.13% of income from the sale of
grocery whereas Vishal Mega Mart has major portion of income from the sale
of apparels which is 33.33 %.Hence both the above retail store deal to the
different category of customers.
Various
Parameters
Vishal
Mega
Mart
Big
Baazar
70
Attractive
Discount,scheme
s
30
45
Display
42
33
Location
36
39
Parking space
44
31
Ambience
38
37
Sales Personnel
37
38
Membership
privilege
43
32
Returns &
exchanges
39
36
High quality
merchandise
35
40
Layout of store
38
37
Reasonable price
for its
merchandise
31
44
Stores operating
hours
37
38
71
Interpretation
On the basis of the above parameters when a comparison was done between
Vishal Mega Mart & Big Baazar, it was found that big Baazar was more popular
for its schemes and discount offers whereas Vishal Mega Mart was more
popular for its parking space and its display of its products.
Survey discussion
Findings in Vishal Mega Mart: Consumers in Vishal Mega Mart were mostly in the age group of 15 25 yrs and 25
- 35. The sales of the retail store were mainly from apparel. The average spending
was in the store between Rs 1000 2000.The store had maximum sales between
the time slot of 4 PM to 7 PM.
CONSUMER BUYING BEHAVIOR IN VISHAL MEGA MART
Consumers usually spend their money on Apparels accessories and utility items.
1.
2.
Consumers in the store come to the store either once in a month or once in
two months.
3.
The best features that were liked by the consumers was its Display, parking
space and its membership. For example features that were liked the consumers
was its Display, parking space and its membership. For example the recently
launches membership scheme in collaboration with SBI Bank..
FINDINGS IN BIG BAAZAR
Consumers in Big Baazar were mostly in the age group among 35- 45 and 45
years and above. The sales of the retail store are from grocery, cosmetics and
consumer durables. The average spending was less than Rs 1,000.The store had
maximum sales between the time slot of 4 PM to 7 PM.
Consumers in the store come to the store either once in a month or twice in a
month.
73
RECOMMENDATIONS
Customer experience should be enhanced by focusing on all the four aspects:
communication, store experience, customer interaction and post purchase
experience.
In case of Vishal Mega Mart store experience is at the satisfactory level and
the communication is also good, whereas Big Baazar was lacking in post
purchase experience. Hence it should pay special attention on the consumers
post purchase experience.
The retailer should take care of all the activities in a retail store right from
speed of the checkout process, availability of information, friendliness of the
staff, availability of products on the shelf, ability to handle special orders and
special needs, hours of operation.
74
75
Conclusion
The organized retail in India is expected to cross INR 1000 billion mark by
2010 .Ten years ago, there wasn't a single mall in India (not, at least, as
the rest of the world saw them). By end 2006, India is expected to
have more than 100 operational malls. According to Cushman &
Wakefield Retail Research estimate, approximately 70 million square
feet of retail space is under development, of which 41 million square
feet happens to be in seven major cities (Mumbai, Delhi, Bangalore,
Chennai, Hyderabad, Pune and Ahmedabad).
Eager to avail of first-mover advantages, retailers are fanning out to
unexplored Tier-2 cities in search of broad-based visibility and brand
loyalty. In the process, they are introducing new concepts, identifying
properties to be developed and exploring new formats
In the more mature markets of metros, retailers are beginning to
realise that merely air-conditioning enclosed spaces and offering
branded merchandise may not be enough to draw additional footfalls
(or even to sustain them, once the element of novelty has worn off).
The need has been felt for a greater degree of specialization.
76
77
positive changes in the quality of life in the metros and bigger towns, is
also introducing change in lifestyles of the smaller towns.
The learning curve for developers and retailers is still a steep one.
While we have first-generation malls in metros, the second-generation
ones are opening doors to a wider base of consumers, offering evolved
layouts and bigger floor plates. Through this evolution, retailers and
mall developers are progressively working on what will be the thirdgeneration in malls. Built over a million square feet or more, these
malls will offer consumers an international shopping experience,
branded merchandise, restaurants with the best cuisine and a wide
array of entertainment options (Cineplexs, game parlors and the like).
Everything about these outlets will revolve around customer
interactivity.
Shopping as an activity has evolved beyond what it was even as
recently as a decade ago (a need-driven activity) to an indulgence
based on leisure and a quality experience. This, at once, is an
opportunity and a challenge for retailers looking at the Indian market.
As consumer expectations rise, loyalties tend to shift if the results don't
match up. In such a dynamic environment, the developers and retailers
have to measure up and work towards making shopping much more of
an entertaining experience for customers. Specialization is the new
mantra, and developers are hiring consultants to improve quality of real
estate offering
The past 4-5 years have seen increasing activity in retailing.
Various business houses have already planned for few
investments in the coming 2-3 years. Though the retailers will
have to face increasingly demanding customers and intensely
competitive rivals, more investments will keep flowing in and the
share of organized sector will grow rapidly.
Organized retailing in India is surely poised for a takeoff and will
provide many opportunities both to existing players as well as new
entrants.
Analysts have compared the socio-economic changes in India to the ones that
occurred in the US and they argue that the way malls and big retailers
became a common phenomenon in the US the same would happen in India.
The fact however remains that while the socio-economic changes have taken
time to trickle down the technological changes especially in terms of internet
etc. have been faster, which therefore may lead to a totally new scenario in
India.
78
79
QUESTIONNAIRE
Dear Sir/Madam,
I am currently engaged in a study on Comparative study on Vishal
Mega Mart & Big Bazaar. In this connection I request you to read the following
items carefully & answer them .The answers you give will be held confidential & used
purely for academic purposes.
Indicate your response by tick marking when applicable.
1.)
Name:-
2.)
Sex:-
Male
Female
3.)
Age:-
15-25 years
25 35 years
35 45 years
40 and above.
4.)
Rs 10,000-Rs 20,000
Above Rs 30,000
80
5.)
6.)
Big Bazaar
Any other
Frequency
Big Bazaar
7.)
8.)
With Family
With Friends
Frequency
Big Bazaar
9.)
What are the timings during which you usually make these visits?
Time of visit
Big Bazaar
10AM-12 PM
12 PM-3 PM
81
3 PM-6PM
9PM-11PM
10.)
How much do you usually spend while shopping in the retail outlet?
Time of visit
Big Bazaar
Accessories
Utility
Grocery
Cosmetics
Consumer
durables
Vishal
Mega
Mart
Big
Bazaar
B.)
Please rate the factors given below that influence your visit to at the
retail outlet.
2-Somewhat important,
Vishal Mega
Mart
3-Important,
4-Extremely
Big Bazzar
Attractive
Discount,scheme
s
Display
Location
Parking space
Ambience
82
Sales Personnel
Membership
privilege
Returns &
exchanges
Entertainment
center for children
High quality
merchandise
Layout of store
Acceptance of
credit cards
Reasonable price
for its
merchandise
Stores operating
hours
BOOKS
MAGAZINE
83
JOURNAL
Times Of India
WEBSITES
www.google.com
www.businessworld.com
www.vishalmegamart.net
www. bigbazaar.com
www.retailindustry.com
www.knowthis.com
84