PROJECT ON GROWTH OF RETAIL

SECTOR IN INDIA

CHAPTER 1
INTRODUCTION OF THE PROJECT

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INTRODUCTION

Retail consists of the sale of goods or merchandise from a fixed location, such as a
department store, boutique or kiosk, or by mail, in small or individual lots for direct
consumption by the purchaser. Retailing may include subordinated services, such as delivery.
Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods or
products in large quantities from manufacturers or importers, either directly or through a
wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often
called shops or stores.
Retailers are at the end of the supply chain. Manufacturing marketers see the process of
retailing as a necessary part of their overall distribution strategy. The term "retailer" is also
applied where a service provider services the needs of a large number of individuals, such as
a public utility, like electric power.
Shops may be on residential streets, shopping streets with few or no houses or in a shopping
mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial
or full roof to protect customers from precipitation. Online retailing, a type of electronic
commerce used for business-to-consumer (B2C) transactions and mail order, are forms of
non-shop retailing. Shopping generally refers to the act of buying products. Sometimes this is
done to obtain necessities such as food and clothing; sometimes it is done as a recreational
activity. Recreational shopping often involves window shopping (just looking, not buying)
and browsing and does not always result in a purchase.

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OBJECTIVE OF THE STUDY

 To study the format of Retail Industry in India.

 To analyze the scope for growth and development in retail sector in India.
 To suggest measures and practical implications for the development of Indian retail
sector.

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SCOPE OF THE STUDY
The scope of the Indian retail market is immense for this sector is poised for the highest
growth in the next 5 years. The India retail industry contributes 10% of the country’s GDP
and its current growth rate is 8.5.
The organized retailing sector in India is growing 36% annually while growth of unorganized
retail sector is pegged at 6%. The retail business in India is currently at the point of
inflection. This proves that there is a tremendous scope for growth in the Indian retail market.
The growth of scope in the Indian retail market is mainly due to the change in the consumer’s
behavior. For the new generation have preference towards luxury commodities which have
been due to the strong increase in income, changing lifestyle, and demographic patterns
which are favorable.
The scopes of the Indian retail market have been seen by many retail giants and that’s the
reason that many new players are entering the India retail industry. The major Indian retailers
are:
 Pantaloons Retail India Ltd
 Shoppers Stop
 Bata India Ltd
 Music World Entertainment Ltd
Judging the scope for growth in the India retail industry many global retail giants are also
entering the Indian retail market. They are:
 Tesco
 Metro AG
 Wall- Mart

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 CHAPTER 2
INTRODUCTION TO THE INDUSTRY

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INTRODUCTION

The Indian retail industry has emerged as one of the most dynamic and fast-paced industries
due to the entry of several new players. It accounts for over 10 per cent of the country’s
Gross Domestic Product (GDP) and around 8 per cent of the employment. India is the
world’s fifth-largest global destination in the retail space.
Indian Retail Industry has immense potential as India has the second largest population with
affluent middle class, rapid urbanization and solid growth of internet.

MARKET SIZE

India’s retail market is expected to increase by 60 per cent to reach US$ 1.1 trillion by 2020,
on the back of factors like rising incomes and lifestyle changes by middle class and increased
digital connectivity. While the overall retail market is expected to grow at 12 percent per
annum, modern trade would expand twice as fast at 20 percent per annum and traditional
trade at 10 percent. Indian retail market is divided into “Organized Retail Market” which is
valued at $60 billion which is only 9 per cent of the total sector and “Unorganized Retail
Market constitutes the rest 91 per cent of the sector.

India’s Business to Business (B2B) e-commerce market is expected to reach US$ 700 billion
by 2020. Online retail is expected to be at par with the physical stores in the next five years
and has grown 23 per cent to $17.8 billion in 2017.

India’s total potential of Business to Consumer (B2C) is estimated to be US$ 26 billion, of

which $3 billion can be achieved in the next three years from 16 product categories,
according to a study by Federation of Indian Chambers of Commerce and Industry
(FICCI) and Indian Institute of Foreign Trade (IIFT).

India has replaced China as the most promising markets for retail expansion, supported by
expanding economy, coupled with booming consumption rates, urbanizing population and
growing middle class.

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India’s direct selling industry is expected to reach Rs 159.3 billion (US$ 2.5 billion) by 2021,
if provided with a conducive environment through reforms and regulation.
Indian exports of locally made retail and lifestyle products grew at a CAGR of 10 per cent
from 2013 to 2016.

India is expected to become the world's third-largest consumer economy, reaching US$ 400
billion in consumption by 2025.

Luxury market of India is expected to grow to US$ 40 billion by the end of 2020 from US$
33.8 billion 2019 supported by growing exposure of international brands amongst Indian
youth and higher purchasing power of the upper class in tier 2 and 3 cities, according to
Assoc ham.

The size of modern retail in India is expected to double to Rs 171,800 crore (US$ 25.7
billion) from Rs 87,100 crores (US$ 13 billion) in three years driven by Omni-channel retail.

MAJOR PLAYERS

 Aditya Birla Retail Group

Aditya Birla Retail Ltd is the retail arm of Aditya Birla Group, a US$ 41 billion corporation.
The company ventured into food and grocery retail sectors in 2007 with the acquisition of a
south-based supermarket chain. Subsequently, Aditya Birla Retail Ltd expanded its presence
across the country under the brand ‘more.’ with two formats ― Supermarket and
Hypermarket. Caters to the daily, weekly and monthly shopping needs of consumers. The
product offerings include a wide range of fresh fruits and vegetables, groceries, personal care,
home care, general merchandise and a basic range of apparels. Currently, there are over 485
more. supermarkets across the country.

MEGASTORE is a one-stop shopping destination for the entire family. Besides a wide range
of products across fruits and vegetables, groceries, FMCG products. MEGASTORE also has
a strong emphasis on general merchandise, apparels and CDIT. Currently, 16 hypermarkets
operate under the brand MEGASTORE.

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  Shoppers Stop
Shoppers Stop Ltd (SSL) is India’s prominent retail group and a pioneer in the organized
retail industry in India. From a single store in 1991, the company today is one of the largest
chains of department stores in the country. Shoppers stop offers customers an international
shopping environment and a world-class shopping experience with a wide assortment of
national and international brands across categories such as fashion apparel, accessories,
cosmetics, perfumes, home and kitchenware.
Over the years, Shoppers Stop has continued to introduce exciting new brands and collections
and has created a differentiator through its exclusive and non-exclusive retail arrangements
with world-class brands.

With a strong business model, the company is well equipped for a stable growth trajectory. In
FY 2014–15, Shoppers Stop Ltd achieved a gross retail turnover of Rs 34.05 billion (US$
544 million).

 Trent
Trent is a retail Operations Company established in 1998 that owns and manages a number of
retail chains in India. The company runs lifestyle chain Westside, one of India’s largest and
fastest growing chains of lifestyle retail stores; Star Bazaar, a hypermarket chain; Landmark,
a books and music chain; and Fashion Yatra, a complete family fashion store.

Westside is the mainstay of the retailing business of Trent. It has a number of stores in India,
which offer clothes, footwear and accessories for men, women and children, along with
furnishings, artifacts and a range of home accessories. Star Bazaar offers a wide choice of
products, including staple foods, beverages, health and beauty products, vegetables, fruits,
dairy and non-vegetarian products. Landmark has a range of over 100,000 titles in books and
music, and also stocks movies, toys, gift items and stationery. Fashion Yatra represents the
stores that bring quality fashion at low prices to value conscious customers in towns across
India.

 Future Retail Ltd.

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As India’s leading retailer, Future Retail Ltd inspires trust through innovative offerings,
quality products and affordable prices that help customers achieve a better quality of life
every day. It serve customers in 95 cities across the country through around 10 million square
feet of retail space.

Future Retail is the flagship company of Future Group, India’s retail pioneer catering to the
entire Indian consumption space. Through multiple retail formats, it connect a diverse and
passionate community of Indian buyers, sellers and businesses. The collective impact on
business is staggering: Around 300 million customers walk into the stores each year and
choose products and services supplied by over 30,000 small, medium and large entrepreneurs
and manufacturers from across India.

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  Provogue

Provogue is a fashion and lifestyle retail business owned by Provogue (India) Limited, a
public company listed on the Mumbai and National stock exchanges. The Provogue Brand
was developed and launched in 1998 as a Menswear fashion range of contemporary clothing
with a styling that made it relevant for the Indian market and quickly established leadership.

The Provogue brand continues its heritage as India's leading fashion label, by continuously
evolving garment designs, introducing new categories, enhancing its retail environments and
extending its reach through new locations across the country. The Provogue fashion
collections are available through more than 350 doors across 73 cities pan-India.

 Reliance Fresh

Reliance Fresh is the convenience store format which forms a part of Reliance Retail Ltd
(RRL) of its parent company, Reliance Industries Ltd (RIL). RRL was set up in the year 2006
to lead Reliance Group's foray into organized retail.

Presently, it has grown into an organization that caters to millions of customers, thousands of
farmers and vendors. Based on its core growth strategy of backward integration, RRL has
made rapid progress towards building an entire value chain starting from the farmers to the
end consumers.

Reliance Fresh now operates 1,691 stores across the country. These stores sell fresh fruits and
vegetables, staples, groceries, fresh juice, bars and dairy products. In addition, RRL has also
ventured into the retail optics business and has opened about 100 stores in India in a
partnership with Grand Vision and it also owns the iStore, which is a one-stop-shop for all
Apple products and services.

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NON-STORE RETAILING

It is another type of retail marketing. Different types of non-store retailing are given below:

 Direct Selling

Direct selling which started centuries ago with itinerant peddlers has burgeoned into a $9
billion industry, with over 600 companies selling door to door, office to office, or at home
sales parties. A variant of direct selling is called multilevel marketing, whereby companies
such as Amway recruit independent businesspeople who act as distributors for their products,
who in turn recruit and sell to sub distributors, who eventually recruit others to sell their
products, usually in customer homes.

 Direct Marketing

Direct marketing has its roots in mail-order marketing but today includes reaching people in
other ways than visiting their homes or offices, including telemarketing, television direct
response marketing, and electronic shopping.

 Automatic Vending

Automatic vending has been applied to a considerable variety of merchandise, including

impulse goods with high convenience value (cigarettes, soft drinks, candy, newspaper, hot
beverages) and other products (hosiery, cosmetics, food snacks, hot soups and food,
paperbacks, record albums, film, T-shirts, insurance policies, and even fishing worms).

 Organized Retail Formats in India

Each of the retail stars has identified and settled into a feasible and sustainable business
model of its own.

 Shoppers' Stop - Department store format

 Westside - Emulated the Marks & Spencer model of 100 per cent private label, very
good value for money merchandise for the entire family
 Giant and Big Bazaar - Hypermarket/cash & carry store
 Food World and Nilgiris – Supermarket format
 Pantaloons and The Home Store - Specialty retailing

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 Tanishq has very successfully pioneered a very high quality organized retail business
in fine jewellery.

Structure of the retailing industry according to ownership patterns:

 An unaffiliated or independent retailer

 A chain retailer or corporate retail chain
 A franchise system
 A Leased Department (LD)
 Vertical Marketing System (VMS)
 Consumer Co-operatives

A new entrant in the retail environment is the 'discounter' format. It is also is known as cash
and-carry or hypermarket. These formats usually work on bulk buying and bulk selling.
Shopping experience in terms of ambience or the service is not the mainstay here. RPG group
has set up the first 'discounter' in Hyderabad called the Giant. Now Pantaloon is following
suit.

Two categories of customers visit these retail outlets.

1. The small retailer. For example, a customer of Giant could be a dhabawala who needs to
buy edible oil in bulk.

2. The regular consumer who spends on big volumes (large pack sizes) because of a price
advantage per unit.

Retailing in India is still evolving and the sector is witnessing a series of experiments across
the country with new formats being tested out; the old ones tweaked around or just discarded.
Some of these are listed in Table below.

Retailer Current Format New Formats

Shoppers' Stop Department Store Quasi-mall
Ebony Department Store Quasi-mall, smaller outlets, adding food retail
Crossword Large bookstore Corner shops
Pyramid Department Store Quasi-mall, food retail
Pantaloon Own brand store Hypermarket

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Subhishka Supermarket Considering moving to self service
Vitan Supermarket Suburban discount store
Food world Food supermarket Hypermarket, Food world express
Glob us Department Store Small fashion stores
Bombay Bazaar Super market Aggregation of Kiranas
Efoodmart Food super market Aggregation of Kiranas
Metro Departmental store Cash and carry
S Kumar's Departmental store Discount store

• Department stores
Department stores very large stores offering a huge assortment of "soft" and "hard goods;
often bear a resemblance to a collection of specialty stores. A retailer of such store carries
variety of categories and has broad assortment at average price. They offer considerable
customer service.

• Discount stores –
Discount stores tend to offer a wide array of products and services, but they compete mainly
on price offers extensive assortment of merchandise at affordable and cut-rate prices.
Normally retailers sell less fashion-oriented brands. However the service is inadequate.

• Warehouse stores –
Warehouses that offer low-cost, often high-quantity goods piled on pallets or steel shelves;
warehouse clubs charge a membership fee.

• Demographic –
Retailers that aim at one particular segment (e.g., high-end retailers focusing on wealthy
individuals).

• Mom-And-Pop or Kirana Stores:

Mom-And-Pop or Kirana Stores is a retail outlet that is owned and operated by individuals.
The range of products are very selective and few in numbers. These stores are seen in local
community often are family-run businesses. The square feet area of the store depends on the
store holder.

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• Specialty Stores:
A typical specialty store gives attention to a particular category and provides high level of
service to the customers. A pet store that specializes in selling dog food would be regarded as
a specialty store. However, branded stores also come under this format. For example if a
customer visits a Reebok or Gap store then they find just Reebok and Gap products in the
respective stores.

• Convenience Stores:
Convenience Store is essentially found in residential areas. They provide limited amount of
merchandise at more than average prices with a speedy checkout. This store is ideal for
emergency and immediate purchases.

• Hypermarkets:
A hypermarket provides variety and huge volumes of exclusive merchandise at low margins.
The operating cost is comparatively less than other retail formats. A classic example is the
Metro™ in Bangalore.

• Supermarkets:
Supermarkets are a self service store consisting mainly of grocery and limited production non
food items. They may adopt a Hi-Lo or an EDLP strategy for pricing. The supermarkets can
be anywhere between 20,000-40,000 square feet. Example: SPAR™ supermarket.

• Malls:
Mall has range of retail shops at a single outlet. They endow with products, food and
entertainment under a roof. Example: Sigma mall and Garuda mall in Bangalore, Express
Avenue in Chennai.

• Category Killers or Category Specialist:

Category Killers or Category Specialist by supplying wide assortment in a single category for
lower prices a retailer can "kill" that category for other retailers. For few categories, such as
electronics, the products are displayed at the centre of the store and sales person will be
available to address customer queries and give suggestions when required. Other retail format
stores are forced to reduce the prices if a category specialist retail store is present in the
vicinity. For example: Pai Electronics™ store in Bangalore, Tata Croma.
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• E-tailors:
The customer can shop and order through internet and the merchandise are dropped at the
customer’s doorstep. Here the retailers use drop shipping technique. They accept the payment
for the product but the customer receives the product directly from the manufacturer or a
wholesaler. This format is ideal for customers who do not want to travel to retail stores and
are interested in home shopping. However it is important for the customer to be wary about
defective products and no secure credit card transaction. Example: Amazon and Epay.

• Vending Machines:
This is an automated piece of equipment wherein customers can drop in the money in
machine and acquire the products. For example: Soft drinks vending at Bangalore Airport.
Some stores take a no frills approach, while others are "mid-range" or "high end", depending
on what income level they target. Other types of retail store include:

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ORGANIZED RETAILING IN INDIA
Organized sector refers to the sectors undertaken by licensed retailers, that is, those who are
registered for sales tax, income tax, etc. These include the corporate retail formats of the
exclusive brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls.
According to Euro Monitor International, a leading provider of global consumer marketing
intelligence, sales from large format stores (supermarkets and hypermarkets) is expected to
increase by 30% in 2005. In the year 2002, food-related items accounted for nearly 71% of
retail sales in India. However, it was interesting to note that there had been a decline in the
purchase of food-related items. These had earlier registered a 73% sale in 1999. In recent
years, there has been higher spending on non-food items.

The main factors for this change are:

• Better infrastructure.
• Rise in consumer awareness.
• Consumer keenness to buy branded products.
• Consumer desire to purchase quality products and services...

Organized Retail in India refers to the modern retail formats like supermarkets and
hypermarkets prevalent in most developed countries. This form of retail accounts for a
painfully low 2 per cent of the retail industry, but is growing at a healthy 35 per cent and is
expected to cross the INR 1000 billion mark by 2010. Organized retail remained a dormant
sector largely due to the lack of infrastructure for large-scale retail, absence of product
variety and a conservative Indian consumer. Today the flood of products in the market
coupled with a wealthier, more informed Indian consumer have created the atmosphere for
the entry of organized retail to tap into the $320 billion Indian retail industry.
Current and Future Players Organized retail in India is currently dominated by players that
have been in the market for at most two decades. Pantaloon Retail is the market leader with
its Wal-Mart-segue multipurpose low cost stores as well as specialized clothing retail outlets.
Shopper’s Stop operates multi-storey malls in the major metros and is the equivalent of a
Macy’s in the U.S.A number of other individual brand retailers like Haldiram, Raymond and
Titan also represent organized retail in India. Today, a number of major business houses in
India are launching massive organized retail ventures like Reliance, Bharti (in a Joint-
Venture with Wal-Mart) and The Aditya Birla Group. They are leveraging their enormous

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cash reserves and decades of experience of doing business in the Indian economy and
reaching out to the Indian consumer to launch a number of multi-store retail chains. Learning
from U.S.A. and China As the counter-stores and street vendors of unorganized retail are
converted to the supermarkets and malls of organized retail, comparisons with countries that
have already undergone this evolution draws some important revelations about the future of
organized retail in India. U.S.A and U.K. are the pioneers of organized retail. Beginning in
the 1950’s it took four decades of experimentation with a variety of retail formats before the
U.S. completed the evolution of its organized retail sector into a giant multi-billion dollar
industry .20 As a result, the U.S. pretty much wrote the book on organized retail. Countries
like China that had access to the U.S. example, could accelerate their experimentation and
developmental phase to bring their organized retail sector to maturity in only about two
decades. Today, the organized retailers in India with their supermarkets, hypermarkets, malls,
departmental stores and boutiques are simultaneously Experimenting with all the possible
formats of retail that were developed sequentially in the U.S. With the U.S. and Chinese
experience to draw from, organized retail will likely mature at a rate even faster than that
witnessed in China.
Organization of the telecom sector was integral to tap into the unrealized potential of the
giant but unrecognized Indian consumer market. Organization in the retail sector is likely to
have the same effect. The industry has enough room for foreign competition as well. With
diverse brands like Nike, Tropicana, Guess having already entered the market and chains like
Wal-Mart planning their entry, domestic organized retail in India should be excited rather
than afraid. The Indian automobile industry has already shown how foreign competition
accelerated development of the industry and increased productivity across the board of
automobile manufacturers.
Tata motors, today one of the biggest and most successful automobile manufacturers in India
suffered tremendous losses after the liberalization of the Indian economy in the early nineties
that brought foreign competition to take advantage of the growing Indian automobile market.
However, it was this competition which made the company realizes the cost inefficiencies of
its production process and low productivity compared to the global average that had gone
unnoticed in the insulated Indian economy of the past. Ingenious cost-cutting measures and
a360 degree change in operations brought the company back on the profit track. Today it is
one of the most successful automobile manufacturers in the one of the world’s fastest
growing automobile industries. The infusion of capital, introduction of foreign competitors,
implementation of best-practices and a more attractive Indian consumer all led to the
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development and growth of the Indian automobile industry. With the same factors in place
for organized retail, the Indian retail industry has already been touted as one of the fastest
growing in the world. The government too has recognized the potential of the organized retail
sector and is beginning to make changes the will remove the barriers to entry in this sector
and open it up for expansion. Through the implementation of Value Added Tax (VAT),
sanction of large plots of land for retail development, permission of Foreign Direct
Investment (FDI) in real-estate and partial FDI in retail, the government has initiated the
changes needed in the organized retail sector. Critical Policy Improvements Required Yet,
despite all the optimistic projections of organized retail in India, a number of improvements
in a number of areas will be required for organized retail in India to truly live up to its
enormous potential. With the current status-quo, organized retail is a large market in India but
with certain improvements, organized retail in India can be one of the biggest sectors in the
world.
1) Currently, the government permits 51% FDI by a single-brand retailer. The retail market
needs to be opened up to 100% FDI to invite significant foreign competition that will
introduce best practices, improve productivity in the industry and accelerate its development
and penetration.
2) The government must also reduce the amount of bureaucracy that an organized retailer has
to deal with. Currently, a large organized retailer’s needs to obtain a variety of permits from
different departments to open each outlet. This creates significant barriers to entry and
increases administrative costs. The government must set up a one-stop department that caters
to the requirements of organized retail given the potential of this sector in bringing gains to
the economy.
3) The government must give the retail sector industry status to allow it to enjoy the benefits
that come with this status. The government needs to introduce a number of policies to
accelerate the growth of the Indian retail industry. The dormancy of the government,
challenges posed by inadequate infrastructure together with a lack of exposure to best-
practices have been responsible for low productivities experienced by the few organized
retailers that have been present in the sector. Organized retailers that entered the sector before
the current boom were plagued with a number of problems that were responsible for their
poor performance. It is critical for new entrants to learn from their mistakes in order to
succeed in the industry.
Productivity Performance of the Organized Retail Sector This section tries to outline the
challenges which need to be overcome by retailers thinking about entering the organized
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retail sector. The labor productivity of retail in India stands at allow 6% of US levels
according to a McKinney Global Institute’s report on Indian Retail Sector. This 6% per cent
is distributed unevenly with 5 per cent for food retailing and 8 percent for non-food retailing.
In comparison, the food retailing productivity in Brazil is 14 percent and non-food retailing in
Poland is 25 percent. The rural retail employment accounts for about 60 per cent28 of the
total employment in the sector. Rural productivity in retail is about 60-65 per cent that of
urban centers. There are certain clear cut reasons why this should be the case. The average
sales, in terms of rupees per day, in a rural store are close to Rs. 1000 compared to Rs. 7000
per day for a store in an urban area. Some of the reasons for this can be attributed to lower
purchasing power in the rural areas, self-consumption of agri-produce and a tendency of
villagers to purchase from cities. Because of these reasons, people in the villages generally
stock consumables such as tea, sugar, bulbs, wires, stationery, and a few items of clothing.
Low opportunity cost of the labor entails longer work hours in this rural setting.
Reasons for Low Productivity some of the reasons that have been outlined for the poor
productivity performance are – a format mix which skews towards transition formats, and
poor operational efficiency of modern formats. Vicious Circle At any place, big supermarkets
and specialty stores leverage their volumes to drive costs down and possess superior skills
(especially in managing inventory and marketing) to market them more productive than
counter stores. A key factor behind the miniscule growth share of supermarkets in India,
especially in food retail is the under-developed nature of upstream industries. This results in a
relatively higher pricing in the supermarkets when compared with counter stores, giving
counter stores or the unorganized sector an edge over the organized sector in retail. A
fragmented supply chain, a sub-scale processing sector and lack of proper cold storage
facilities are some of the problems which plague the organized retail sector, especially in
food. The current government policies are also favorable to counter stores in the form of
relaxed labor and tax regulations. Poor Productivity in modern formats Supermarkets in India
have to operate in face of productivity hassles which can be attributed to some of the
following operational aspects of this sector:
1. Scattered and inefficient supply chain which inflates procurement costs (lack of focus in
having a few nationwide suppliers and instead having up to 400 per region30 needs a huge
sourcing and quality control team raising costs of procurement).
2. The supply chain for food in India has two or three additional intermediaries on an
average compared with supply chains in the US. This can, in part, be attributed to the market
regulations such as constraints in food grain movement across states, inability to purchase
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directly from farmers, etc. This in turn slows down the growth of large processors. on-level
playing field in the retail sector Counter stores in India take advantage of some of the
following benefits accorded to them by the government:
1. Tax Vacation: The government policy enforces higher tax rates for organized retailers,
with making them pay at corporate rates, while counter stores still pay at individual income
tax rates. Tax evasion is rampant among small counter stores owners, in fact so few of the
small mom and pop store owners pay taxes, that most of them could be thought of being on a
tax vacation with the government conveniently looking the other way.
2. Uneven tax rates across states: The present tax structure necessitates the imposition of
tax on retail chains operating in a non-localized fashion. The sales tax structure has
differences in rates across states, in addition to the imposition of a central levy on inter-state
sales. It doesn’t end there; another tax (octroi) is levied on the movement of goods from one
district to another.313. Labor laws: Developing countries in general have generous labor
laws.
The labor laws in India ask that work for a retail employer is limited to 8 hours, and also
require that the shop be shut for one day in a week. Though organized retailers adhere to
these laws, the counter stores remain open throughout the year, making labor work for over
12 hours a day.4. Non-payment of market rates for inputs: Lower rent and nominal power
cost (if any) characterizes the counter stores in India, as opposed to extremely high land and
property rent paid by the organized sector.
Organized retail represents a large untapped market in India that is likely to see tremendous
growth in the coming years. New entrants are bound to see large returns. However, they must
adapt themselves to the unique state of retail in India where infrastructure and regulations
provide little support. They must also understand the tastes of the Indian consumer who has
only recently started treating retail as a form of leisure. Meanwhile organized retail will
continue to displace many unorganized retailers who are no competition for the large-scale
corporations. Those street-vendors of the bottom or unorganized retail will be forced to turn
back to agriculture or some other form of livelihood. Yet, corner-stores and hawkers will
continue to be a part of the Indian retail experience. These retailers have always survived on
small, diverse sales with small margins. In that regard, they do not compete in the same
market as organized retail. The Indian consumer may have undergone a transformation, but
the transformation is only partial. His higher income, increased exposure and greater
willingness to spend will spur the organized retail sector. Meanwhile the conveniences of
home-delivery, purchases on credit and proximity offered by the unorganized sector will
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drive him to the nearest corner-store or street vendor for his small, just-in-time purchases.
Organized retailers have not are and are unlikely to worry about the threat of unorganized
retail as both forms of the retail business cater to different preferences. Organized retail in
India is simultaneously a promising and challenging prospect. New entrants can learn a lot
from those currently operating in the Indian organized retail sector. This comprehensive case-
study of a domestic organized retailer provides an in-depth view of the levels of adaptation
required to succeed in the Indian retail sector. If there is one organized retailer in India that
has recognized the potential of Indian retail early, understood the unique characteristics of
retail in India and built up itself to counter any competition, both domestic and foreign, it is
without a doubt, Pantaloon Retail.
What started as a small men’s wear retailer has become one of the largest organized retail
chains in India with a presence in every retail sector imaginable and more! Growth of
Organized retail in India. Indian organized retail market is growing at a fast pace due to the
boom in the India retail industry. In 2005, the retail industry in India amounted to Rs 10,000
billion accounting for about 10% to the country’s GDP. The organized retail market in India
out of this total market accounted for Rs 350 billion which is about 3.5% of the total
revenues. Retail market in the Indian organized sector is expected to cross Rs 1000 billion by
2010.Traditionally the retail industry in India was largely unorganized, comprising of drug
stores, medium, and small grocery stores. Most of the organized retailing in India have
started recently and is concentrating mainly in metropolitan cities. The growth in the Indian
organized retail market is mainly due to the change in the consumer’s behavior. This change
has come in the consumer due to increased income, changing lifestyles, and patterns of
demography which are favorable. Now the consumer wants to shop at a place where he can
get food, entertainment, and shopping all under one roof. This has given Indian organized
retail market a major boost. Retail market in the organized sector in India is growing can be
seen from the fact that 1500 supermarkets, 325 departmental stores, and 300 new malls are
being built.
Many Indian companies are entering the Indian retail market which is giving Indian
organized retail market a boost. One such company is the Reliance Industries Limited. It
plans to invest US$6 billion in the Indian retail market by opening 1000 hypermarkets and
1500 supermarkets. A pantaloon is another Indian company which plans to increase its retail
space to 30Million square feet with an investment of US$ 1 billion. Bharti Telecoms an
Indian company is in talks with Tesco a global giant for a £ 750 million joint venture. A
number of global retail giants such as Wal-Mart, Carrefour, and Metro AG are also planning
21
to set up shop in India. Indian organized retail market will definitely grow as a result of all
this investments. Indian organized retail market is increasing and for this growth to continue
the Indian retailers as well as government must make a combined effort.
Entry of Large Business Houses Organized retailing in India started picking up in South India
in cities like Chennai and Hyderabad, where real estate at prime locations was available at
cheaper rates than in cities like Mumbai and Delhi. In the early 1990s, leading Indian
business houses started taking a keen interest in the retailing sector...A Profile of Major
Indian Retailers Pantaloon Retail India Limited (PRIL)Headed by Kishore Biyani (Biyani),
Pantaloon Retail India Limited (PRIL) is one of the leading retail outlets in India. The retail
chains which are a part of PRIL include Pantaloons, Big Bazaar, Food Bazaar, Gold Bazaar
and the Central Mall.PRIL was incorporated in October 1987 as Manz Wear Private Limited.
It became a public limited company in September 1991. The company sold products under
the Bare, Pantaloons and John Miller brand names. The first menswear Pantaloons Shoppe
outlet was set up in1993...RPG Group the Rama Prasad Goenka or RPG Group registered a
turnover of Rs. 84 billion in the fiscal 2004-05. The group has more than 20 companies in
seven different industries - Power, Tyres, Retail, Transmission, Entertainment, Technology
and the Specialties sectors (Refer ExhibitXIII for contribution of business sectors to Group’s
turnover)...
Tata Group-
The Tata group is one of India’s largest business houses. In 2005, the group owned
93companies in seven business sectors, namely information systems and communications;
engineering; materials; services; energy; consumer products; and chemicals, and employs
nearly 220,000 people. In 1997, the Tata’s sold their Lakme business to Hindustan Lever
Limited (HLL) . The group started its retail business in 1998 with the purchase of the
Littlewoods retail stores, originally owned by a UK-based firm, in Bangalore...Raheja Group
The K. Raheja group of companies is among India’s largest real estate players. They
launched Shoppers Stop way back in October 1991. This was the first mega apparel retail
outlet to be established in India. Shoppers Stop is projected as a Fashion & Lifestyle store for
the family. From a single store in 1991, Shoppers Stop has today grown into a 16 store retail
chain in major metropolitan cities across India...

22
INDIAN UNORGANIZED RETAIL SECTOR
Retail in India is essentially “unorganized.” 98% of the retail industry is made up of counter-
stores, street markets, hole-in-the-wall shops and roadside peddlers (See Exhibit 11 for
sector-wise break-up of Unorganized Retail. The term “unorganized retail” is better
understood when comparing this form of retail to the organized retail that one is familiar
within developed countries. Unorganized retail is characterized by:1) Family-run stores2)
Lack of best practices when it comes to inventory control and supply-chain management3)
Lack of standardization4) Essentially a sector populated by anyone who has something to sell
Unorganized Retail is essentially the next-step above agriculture for those seeking to climb
the ladder of affluence in search of a higher income. Combine this with very few barriers to
entry in the retail sector and “Winning the Indian Consumer.” McKinsey Quarterly, 2005
Special Edition. “Winning the Indian Consumer.” one gets an industry run by people
commonly referred to as “Baniyas”(See exhibit), with a lack of education, experience and
exposure. This is the major factor responsible for the manner in which the retail industry
functions. It is no surprise then that the productivity of this sector is approximately 4% that of
the U.S. retail industry.
Causes of Low Productivity in Unorganized Retail
1) Labor intensity:
Counter-stores in India have a very low output to labor consumption ratio. Low labor costs,
failure to employ part-time labor and the absence of multitasking are the mainly responsible
for the unusually high consumption of labor. This has driven down the productivity in the
sector.
2) Inventory and Supply Chain Management:
Unorganized retailers in India rarely track consumer behavior and sales data to improve their
inventory management practices. Even among the handful of retailers that employ
experience-based improvements in their business, their efforts are largely met with no
support from their suppliers. Counter stores and street vendors do not have the infrastructure,
exposure or credibility to form lasting relationships with suppliers. As a result retailers
usually use different suppliers every time they purchase inventory. This leaves them largely
incapable of strategically managing their business.
With 700 million agricultural labor18 looking to move into retail, low barriers to entry and
the absence of regulation in this sector have made it a largely over-supplied sector. The

23
excess supply of counter-stores and street vendors represents a tremendous decrease in the
productivity of this sector.
3) The absence of any real competition-
Almost all retailers find a way to make ends meet or change their merchandise till they make
ends meet-is also responsible for a form of status quoin the sector where little to no
improvements in efficiency, management and by extension productivity are seen. In fact, this
sector is so stagnant with respect to operational changes that no improvement in productivity
is expected in the near future.
However, low productivity is only an indication of under utilization and/or over allocation of
resources. It does not reflect the market share or potential of the unorganized retail sector
when it comes to catering to the Indian consumer. The unorganized retail sector competes on
the basis of a number of factors that give it a leg up on organized retail. Much of the reason
why unorganized retail has dominated the retail market is the unique ways in which it
operates when it comes to serving the consumer. Corner-stores have catered to the traditional
Indian consumer psyche and are partially responsible for shaping it. For unorganized retail in
India the market mantra is “convenience”
1) Home-Delivery:
Corner-stores and street vendors do their best to cater to the local population in the area in
which they operate. As a result most of them provide home-delivery services, for any and all
order sizes, at no extra charge. Shopping is as simple as making a phone call and narrating
the shopping list to the store owner. Within minutes, the entire list of groceries with an
itemized, hand-written bill reaches your doorstep. The absence of product variety, brand
diversity, marketing and exposure had made shopping in stores almost unnecessary for the
Indian consumer. Retailers unconstrained by labor costs had no problem in understanding this
dynamic and adapting to the needs of the Indian consumer.

2) Credit:
Unorganized retailers enjoy a loyal and limited clientele. The personal nature of transactions
coupled with small transaction sizes allows unorganized retailers to sell goods on credit often
settling bills with clients at the end of the month.

3) Proximity:
Unorganized retailers like corner stores are almost always located at a few minutes walking
distance from their clients. Street vendors will go door-to-door selling their goods. This has
24
provided a number of advantages to the Indian consumer. Finally, the proximity of
unorganized retailers caters to the just-in-time mentality of Indian consumers who prefer to
buy goods when needed for immediate use rather than making bulk purchases in advance.
Cutting Costs in Any Possible Way: Legal and Illegal Convenience is not the only aspect of
unorganized retail that has allowed it to dominate the industry. The unorganized nature of this
sector has also allowed it to survive price competition with large-scale organized retailers
with efficient supply management, inventory control and bulk purchasing.
Unorganized retail with their small inventory, high purchase costs and relatively small size
have been able to save on a number of other fixed and variable input costs to offer goods at
competitive prices:
1) Real-Estate:
Unorganized retailers usually operate from their residences that double-up as counter stores
or like street-vendors carry their merchandise with them. As a result, they incur little to no
real-estate costs.

2) Labor Costs:
Unorganized retailers usually staff their stored with family members who have no other
source of employment than to work in the family store. As a labor costs are low.
Additionally, the lack of regulation in the sector as well as high unemployment levels in India
Allow unorganized retailers to higher labor at very low rates.

3) Utilities:
Corner stores operating out of homes usually pay residential rates for utilities like electricity
and water. With the large disparity between commercial and residential utility rates,
unorganized retailers do not have to worry about these inputs eating into their profits.

4) Tax:
Unorganized retailers rarely pay taxes due to the absence of regulation and supervision in this
sector. This also allows them to reduce price. Unorganized retail has dominated the Indian
market for decades. The small scale of each vendor was perfect to cater to the reluctant
Indian shopper while the large number of players kept several people employed. In this
situation there was little motivation to bring organization into the sector. It took strong
economic growth, liberalization of the economy and change in the Indian mind-set to realize
the advantages of bringing organization to India’s retail industry. Organized retail has a
25
bright future in India, but not one that will be easy to achieve. The country’s lack of
supporting infrastructure will pose a unique challenge to organized retailers who must strike a
delicate balance between adaptation and innovation in order to succeed in the industry. The
next section describes the Indian organized retail sector in detail. Characteristics of
unorganized retail Small-store (kirana) retailing has been one of the easiest ways to generate
self-employment, as it requires limited investment in land, capital and labour. 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 reasons 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 91% (twelve million) of total trade, while organized trade accounts only for 9%.
The reasons might be-
1. 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 kirana 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 doesn’t 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 the
employment 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

26
walking distance from the customer’s house. Many times customers prefer to shop from the
nearby kirana shop rather than to drive a long distance organized retail stores

.6. These 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 labour
cost is also low because the family members work in the store. Also they use cheap child
labour 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 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 Pantaloon
Retail, Shoppers’ Stop, Spencers, Hypercity, Lifestyle, Subhiksha & 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 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 sector-

The 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.
(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.

27
(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.
Indian unorganized retail sector & its challenge 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. Organized retail
sector refers to the sectors undertaken by licensed retailers, that is, those who are registered
for sales tax, income tax, etc. These include the corporate retail formats of the exclusive
brand outlets, hypermarkets, supermarkets, departmental stores and shopping malls.
Unorganized retailing, on the other hand, refers to the traditional formats of low-cost
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.
"Kirana Stores Vs Organized Retail “Small stores, also called kirana stores, will continue to
grow alongside organized retail, but at a slower rate, and it might be a decade before such
store owners lose business to the big retailers, providing an ample window for India to help
make the smaller players part of the transition in retailing, But in the recent times it is said
that kirana stores are joining together to combat the organized retail stores, so this will be
going on all the time like who is better, but right now the kirana stores are happy at the
moment with crisis going on people are coming back to kirana stores. 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 world’s consumer markets by 2025,
28
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 sector.
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.
The face of Indian consumerism is changing: not Indian consumerism is evolving from
“Bajaj Scooter family man” to “Bajaj Pulsar trendy youngster”. This changing consumer’s
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.

29
 CHAPTER 3
LITERATURE REVIEW

30
INDIAN BRAND EQUITY FOUNDATION
March, 2018

The Indian retail industry is one of the fastest growing in the world. Retail industry in India is
expected to grow to US$ 1,100 trillion by 2020 from US$ 672 billion in 2017.

India is the fifth largest preferred retail destination globally. The country is among the highest
in the world in terms of per capita retail store availability. India’s retail sector is experiencing
exponential growth, with retail development taking place not just in major cities and metros,
but also in Tier-II and Tier-III cities. Healthy economic growth, changing demographic
profile, increasing disposable incomes, urbanization, changing consumer tastes and
preferences are the other factors driving growth in the organized retail market in India.

India’s population is taking to online retail in a big way. The online retail market is expected
to grow from US$ 17.8 billion to US$ 60 billion between 2017 and 2020. It is forecasted to
grow at a CAGR of over 30 per cent from 2016 to 2021, on the back of shift from traditional
retail to online channels by millennia’s. Organized retail penetration is expected to increase
from 7 per cent in FY 2016-17 to 10 per cent in 2020. India is expected to become the world's
third-largest consumer economy, reaching US$ 400 billion in consumption by 2025.

Increasing participation from foreign and private players has given a boost to Indian retail
industry. India’s price competitiveness attracts large retail players to use it as a sourcing base.
Global retailers such as Wal-Mart, GAP, Tesco and JC Penney are increasing their sourcing
from India and are moving from third-party buying offices to establishing their own wholly-
owned/wholly-managed sourcing and buying offices.

The Government of India has introduced reforms to attract Foreign Direct Investment (FDI)
in retail industry. The government has approved 51 per cent FDI in multi-brand retail and 100
per cent in single brand retail under the automatic route which is expected to give a boost to
ease of doing business and Make in India, and plans to allow 100 per cent FDI in e-
commerce. India will become a favorable market for fashion retailers on the back of a large
young adult consumer base, increasing disposable incomes and relaxed FDI norms.

31
32
The Indian retail trading has received Foreign Direct Investment (FDI) equity inflows totaling
US$1.09 billion during April 2000–September 2017, according to the Department of
Industrial Policies and Promotion (DIPP).

With the rising need for consumer goods in different sectors including consumer electronics
and home appliances, many companies have invested in the Indian retail space in the past few
months.

 Department of Industrial Policy and Promotion (DIPP) approved three foreign direct
investments (FDI), Mountain Trail Food, Kohler India Corporation, and Merlin
Entertainments India in the single brand retail sector and two FDI proposals of over Rs
400 crore (US$ 62.45 million) within the retail sector.
 With 2017 being a successful year for herbal-ayurvedic brands, new Indian organic labels
in hair care, cosmetics, food and apparel are belting up to carve an organic niche in the
growing herbal segment.
 Investments by private equity firms in Indian retail sector reached US$ 200 million in the
first half of 2017, with seven new global brands entering India during the period.
The Government of India has taken various initiatives to improve the retail industry in India.
Some of them are listed below:

 The Government of India may change the Foreign Direct Investment (FDI) rules in food
processing, in a bid to permit e-commerce companies and foreign retailers to sell Made in
India consumer products.
 Government of India has allowed 100 per cent Foreign Direct Investment (FDI) in online
retail of goods and services through the automatic route, thereby providing clarity on the
existing businesses of e-commerce companies operating in India.
E-commerce is expanding steadily in the country. Customers have the ever increasing choice
of products at the lowest rates. E-commerce is probably creating the biggest revolution in the
retail industry, and this trend would continue in the years to come. Retailers should leverage
the digital retail channels (e-commerce), which would enable them to spend less money on
real estate while reaching out to more customers in tier-2 and tier-3 cities.

Both organized and unorganized retail companies have to work together to ensure better
prospects for the overall retail industry, while generating new benefits for their customers.

33
Nevertheless, the long-term outlook for the industry is positive, supported by rising incomes,
favorable demographics, entry of foreign players, and increasing urbanization.

34
 CHAPTER 4

RESEARCH METHODOLOGY

35
Objectives of study
 The overall purpose of this endeavor is to investigate empirically customers’
preference towards exclusive and multi brand retail outlets and to determine the
factors that influence the satisfaction level of customers’ in retail sector especially in
Mumbai city.
 This study is also aimed at finding out the relation between major demographic
variables and satisfaction level of customers’ and preference of retail formats.
 To study the preference given by consumers in term of quality, ambience, service,
scheme and location for retail purchase.
 What are the factors affects for the purchase?

Research Design:

Descriptive research design will be used.

 Type: Descriptive Study
 Scope: combination of theoretical study as well as Statistical Study
 Environment: Field Research

Data Sources:

 Primary Data - Survey of Customers in Mumbai.

It will be collected with the help of Questionnaire Method and Survey Research.

As well as unstructured observation will also come in use at some part (topic) of study.

 Secondary Data - It will be collected with the help of Internet, books, journals,
articles of newspapers & magazines and research papers related to booming organized
retail sector.

36
Data Analysis:

Data will be analyzed with the help of certain statistical tools.

1. Questionnaire method

2. Method of observation

Sampling Design:

 Population: Consumers of Mumbai city.

 Survey area: Consumer located in different area of Mumbai city.
 Sampling method: Non-Probability Convenient sampling plan.
 Sample size: 67 consumers from Mumbai city.

Significance of the Study:

 To know the awareness of people about different brands of retail sector.

 Result will be the knowledge about customer’s preference towards exclusive and
multi-brand retail outlet that will be helpful to find out the factors that influence the
satisfaction level of customer.

 It will be helpful to know the connection between demographic factors of consumer

like age, income, education and choice of people for different types of product.

Limitations of the Study:

The researcher has based this study upon the information got from secondary sources.
 It is only for short period of time.
 Lack of professional approach since researcher is a student.
 The present study is limited to the growth of retail sector in india only.
 The bias of respondents while responding cannot be eliminated.
 The study was limited to only in Mumbai city.

37
Delivery Method:

Two hard copies in form of booklets and two softcopies in form of CDs.

 First copy of project report will be submitted to project guide.

 Second copy is participant’s own copy.

RESEARCH ANALYSIS
This research analysis is based on the answers given by the sample customers of Mumbai
city. in the above given consumer survey questionnaire.

 Average Monthly Shopping Budget of Consumers:

The below given was the interpretation of the average monthly shopping budget for the
sample size in the project survey. In the sample size most of the people (i.e. 38%)were
able to do shopping between Rs. 2000-5000.

0-2000

7% 1% 2000-5000
12%
23% 5000-10000
38%
10000-20000
19%
20000-50000

50000 & More

 Awareness about different brands of Retail Sector:

The store location, its customer services, discount schemes and offers, its quality are the
important factors for the awareness of the any retailing company or brand but apart from
all these the most important thing which influence the awareness of any particular brand
is it’s advertising and other promotional activities. Big Bazaar of future group in
Mumbai’s very well know brand among the people of sample because of it’s pricing,
attractive offers and discounts and its very good promotional and marketing activities.
The D Mart is also famous because of its reach in the various areas of the city.

38
 120
100
80
60
40
20
0
Big Bazar D Mart Shoppers Hypercity West Side
Stop

 Which Retail chain Customers like to visit often:

Because of it’s attractive pricing and good schemes and offers people like to visit Big
Bazaar most often. D Mart is also giving attractive discount on formal wear so it is also
known for good footfall. Shoppers stop do not have discount offers and schemes but it
still likes of some of people in sample size because of its ambience, shopping comfort and
good customer services.

West Side
Hypercity 9%
11%

Shoppers Big
Stop Bazar
17% 36%
D Mart
27%

 Customer Preferences for shopping from Retail chains:

The consumers of sample size were visiting the big retail outlets most because of their
good pricing and for their attractive schemes and discounts offers. After that they also
going there for the quality experience. The location of the store is also a big concern for
the consumers. Thereafter they are also looking for good customer services. They want to
get well treated by the sales persons of the stores. Ambience came in last for all of them.

39
 Discount Schemes

Quality

Location

Customer Service

Ambience

APPENDIX

CONSUMER SURVEY QUESTIONNAIRE RETAIL CHAINS

The objective of this survey is to collect tangible information about shopping in

Retail Chains. This questionnaire is being administered to people like you who have
visited and bought products in Retail Chains. Please let us know your spontaneous
response to the questions that pertain to your shopping experience in Retail Chains.
All information provided by you shall be kept confidential and we shall only be
publishing the outcomes. Please provide us your unbiased and frank opinions.

1. What is your monthly shopping budget?

0-2K 2-5K 5-10K 10-20K 20-50K >50K

2. Which retail chains did you visit ?

Big Bazaar
Shoppers Stop
Westside
Hypercity
D mart
Any other (Please specify) ________________________________

3. Which retail chains do you visit often?

Big Bazaar
Shoppers Stop
40
 Westside
Hypercity
D mart
Any other (Please specify) ________________________________

4. Which retail chain did you like most?

Big Bazaar
Shoppers Stop
Westside
Hypercity
D Mart
Any other (Please specify) ________________________________

5. Why did you like that particular retail chain?

Ambience
Attractive Prices
Wide range of choices
Discount Schemes
Free Offers
Customer Service
Any Other (Please Specify) ___________________________________

41
 6. Mark on a scale of -3 to +3 your perceptions about your shopping experience in the
following retail chains (where -3 indicates inferior and + 3 indicates superior) :

Feature Big D Mart Westside Shoppers Hypercity

Bazaar Stop

Ambience 15
Attractive Prices 70
Range of Choices 65
Price Discounts 80
Freebies 60
Salespeople Behavior 50
Parking Facilities
Convenience
Home Delivery

42
CHAPTER 5
CONCLUSIONS & SUGGESTIONS
Conclusion
The consumer’s preferences are changing rapidity and becoming highly diversified. It is
difficult for the retail stores to satisfy all the needs of the customers. The most of the
consumer’s want to get some attractive prices, good schemes and offers on every purchases
and a shopping comfort as well. Those who are able to purchase their needs and want for a
month in a bulk prefers to go to the retail chains. Because of competitions in the market the
branded formals are also became cheaper so the younger generation prefers to purchase from
the retail outlets of the brand the city. Only the big retail chains are able to satisfy all these
needs of the new age consumers whereas there is still some consumers mostly of the old age
are willing to purchase from the local kirana store. Some of them have perception that these
big stores are too costly to afford and some of them are not able to make purchases in a bulk
so they do not want to waste their time to go especially to the big store for 2-3 items
purchase. In the case of other items like wristwatches, branded jewelry, mobiles, gift items
and other, they prefer to take it from where they are getting cheap prices, good after sales
services and the goodwill of the store.

After studying the customer survey questionnaire statistically and theoretically as well and
after observing the consumer’s mood and their preferences I can say that Big Retail is here to
stay. Assuming that improvements in infrastructure and lower real estate costs become a
reality, Big Retail still has a long way to go before satisfying the highly diverse needs of the
Indian population. As a result, there will be a steady state where Big Retail will co-exist with
Small Retail.

43
SUGGESTIONS

• Unorganized retail sector should adopt better marketing strategies so that more &more
customers can attract towards it.
• As organized retailers are using the marketing strategies unorganized sector should also
concentrate on their marketing strategies so that customers could attract towards them
• Customers generally prefer Multi brands counter because lots of products can be seen at on
one place, so unorganized could also adopt this technique
• Unorganized retailers should also concentrate towards the needs & satisfaction of the
customers. More intense research works should be initiated, studying the specific needs and
attributes sorted by the customer for different kinds of product categories.

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CONCLUSION

Finally, it is important to note that these strategies are not strictly independent of each other;
value is function of not just price, quality and service but can also be enhanced by
Personalization and offering a memorable experience.
In fact, building relationships with customers can by itself increase the quality of overall
customer experience and thus the perceived value. But most importantly for winning in this
intensely competitive market place, it is critical to understand the target customer’s definition
of value and make an offer, which not only delights the customers but also is also difficult for
competitors to replicate.

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WEBLIOGRAPHY

www.relianceindustry.com
www.bigbazar.com
www.raheja.com
https://www.ibef.org/industry/indian-retail-industry-analysis-presentation
http://bwdisrupt.businessworld.in/article/Top-Five-Retail-Trends-in-India-for-the-Year-
2018/18-12-2017-135002
http://www.business-standard.com/budget/article/budget-2018-from-fdi-to-unified-market-
challenges-ahead-for-retail-sector-118011200040_1.html
http://www.indiaretailing.com/2017/12/27/retail/future-retail-2018-5-industry-trends-
predictions/

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