The Indian Retail Sector

Retailing
Retail Emergence Video Clip

 Kirana Store
 Departmental Store
 Super Market
 Hypermarket
Total Retail Market
Evolution of Retailing

The emergence of retailing in India now has more to do with the

increasing purchasing power of buyers, especially post-
liberalization, increase in product variety, and the increasing
economies of scale, with the aid of modern supply and distribution
management solutions.
Activity:
Name a few existing retailers in India who you feel, are quite
successful.
Evolution of Retailing
Important Stores opened in the Q4 FY 06
Particulars City Month
Lifestyle 7500 sq.ft Chennai March
Raymond Fashion outlet Kunnur March
Raymond Fashion outlet Chennai March
Landmark 22000 sq.ft Chennai March
Spinach Retail food & Mumbai March
(From WFRL) grocery store
Allukas Jewellery store Store March
 Indian Retail Scenario At A
Glance
 The contribution of retail industry to India’s GDP is more than 13%.
 Indian retail industry (organized as well as unorganized) spreads over more than 6
million outlets (2.4 million urban and 3.6 million in rural).
 Even though India has well over 6 million retail outlets of all sizes and styles, the
country sorely lacks anything that can resemble a retailing industry in the modern
sense of the term. This presents organized retailing with a great opportunity.
 It was only in the year 2000 that the global management consultancy AT Kearney put
a figure to Indian retail Industry – Rs. 400,000.
 Retailing in India is still thoroughly unorganized. There is no supply chain
management perspective.
 Indian Retail Scenario At A
Glance

 As much as 96 per cent of the 6 million-plus outlets are smaller than 500 square feet in
area. This means that India per capita retailing space is about 2 square feet
(compared to 16 square feet in the United States). India’s per capita retailing space is
thus the lowest in the world.
 Just over 8 per cent of India’s population is engaged in retail (compared to 20 per cent
in the United States). India’s per capita retailing space is thus the lowest in the world.
 Given the size, and the geographical, cultural and socio-economic diversity of India,
there is no role model for Indian suppliers and retails to adapt or expand in the Indian
context. Hence Indian retailers have to find a suitable model and adopt it to the Indian
context.
 Indian Retail Scenario At A
Glance

 India’s first true shopping mall – complete with food courts, recreation facilities and
large car parking space – was inaugurated as lately as in 1999 in Mumbai. (This mall
is called “Crossroads”).
 An FDI Confidence Index survey done by AT Kearney, showed that the retail industry
is one of the most attractive sectors for FDI (foreign direct investment) in India and if
allowed, foreign retail chains would make a great impact on Indian retailing.
 In India still, more than 60% sales in retail comes from food items only.
 A Few Indian Retailers:
Pantaloons – The different formats of Pantaloons are
1. Big Bazaar – The Discount Hypermarket
2. Pantaloons - The Family Store
3. Central Mall – One point shopping
4. Food Bazaar – Food & Grocery Super Market
5. God Bazaar – specialty store
RPG – The different retail formats of RPG group are:
1. Spencer’s (earlier known as Food World) – Super Market
2. Spencer’s Hypermarket
3. Health and Glow
4. Music World
 Industry Evolution
 Traditionally retailing in India can be traced to
– The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the
consumers
– Era of government support for rural retail: Indigenous franchise model of store
chains run by Khadi & Village Industries Commission
 1980s experienced slow change as India began to open up economy.
 Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and
Grasim first saw the emergence of retail chains
 Later Titan successfully created an organized retailing concept and established a
series of showrooms for its premium watches
 The latter half of the 1990s saw a fresh wave of entrants with a shift from
Manufactures to Pure Retailers.
 For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music
World in music; Crossword and Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers,
– mainly in urban areas, with facilities like car parking
– targeted to provide a complete destination experience for all segments of
society
 Emergence of hyper and super markets trying to provide customer with 3 V’s - Value,
Variety and Volume
 Expanding target consumer segment: The Sachet revolution - example of reaching to
the bottom of the pyramid.
 At year end of 2000 the size of the Indian organized retail industry is estimated at Rs.
13,000 crore
 Retailing formats in India
 Malls:
The largest form of organized retailing today. Located mainly in metro cities, in proximity
to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an
ideal shopping experience with an amalgamation of product, service and entertainment,
all under a common roof.Examples include Shoppers Stop, Piramyd, Pantaloon.
 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.
 Discount Stores:
As the name suggests, discount stores or factory outlets, offer discounts on the MRP
through selling in bulk reaching economies of scale or excess stock left over at the
season. The product category can range from a variety of perishable/ non perishable
goods
 Department Stores:
Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer
needs. Further classified into localized departments such as clothing, toys, home,
groceries, etc.
 Department 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!.
 Hypermarts/Supermarkets:
Large self service outlets, catering to varied shopper needs are termed as
Supermarkets. These are located in or near residential high streets. These
stores today contribute to 30% of all food & grocery organized retail sales.
Super Markets can further be classified in to mini supermarkets typically 1,000
sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000
sq ft. having a strong focus on food & grocery and personal sales.
 Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located near residential
areas. They stock a limited range of high-turnover convenience products and
are usually open for extended periods during the day, seven days a week.
Prices are slightly higher due to the convenience premium.
 MBO’s :
Multi Brand outlets, also known as Category Killers, offer several brands across
a single product
category. These usually do well in busy market places and Metros.
Types

 Food
 General Merchandise
 Service
Food Retail
  
 Indian Market Features favorable to Food Retail:
 Food and food products account for 53% of the value of final private consumption estimated at INR 8600bn (2003-04 at current prices).
(Source: Ministry of Food Processing Industry, Govt. of India, Vision 2015 Report)
 Rising incomes ( Over 40 % of Indian households in rich and consuming class segment by 2006-97)
 Young population (75% below 35 yrs age)
 Increasing number of women in workforce (Female work participation has increased from 11.5 % in 1991 to 31.0 % in 2001 in Urban area)
 Focus on enjoying life in Urban India( Percentage share of final consumption expenditure on Eating Out has increase from 8.0 % in 1999
to 12.2% in 2002)

(Source: FAIDA Revisited , 2005)

Profile of Retailers

 R1. Food Bazzar

 R2. Subhiksha
 R3. Margin Free – The franchise model discount chain
 R4. Sabka Bazaar - Your Neighborhood store
 R5. Nilgiris
 R6. FoodWorld
 R7. Spencers’ Retail
 R8. Apna Bazaar
 R9. Trinethra
 R10. FieldFresh Foods (P) Ltd
 R11. Reliance Retail
 R12. Bharti Retail (Pvt.) Limited
 R13. ITC Choupal Fresh
 R14. Carrefour
 R15. METRO Cash & Carry India Pvt. Ltd
 R16. Trent
 R17. TESCO
 
General Merchandise Retail
General Merchandise

 Fashion
 FMCG
 Consumer Durables
 Jewellery
 Electricals
 Footwear
 Lifestyle
Video Clip - Savings

 Subhiksha
Service Retail
Merchandising
 VISUAL MERCHANDISING AND RETAIL COMMUNICATIONS
 Visual Merchandising (VM) is the art of presentation, which puts the merchandise in focus
and in perspective too. It educates the customers, creates desire and finally augments the
selling process.
 • Educates the customers about the products and services offered creatively and
effectively.

• Enables a successful selling process, from browsing to buying.

• Establishes a creative medium to present merchandise in a lifelike 3-D environment, thus

creating a strong impact and recall value.

• Sets the context of the merchandise.

• Establishes the linkage between fashions, product design and marketing by keeping the
focus on the product.

• Draws the attention of the customers and help them match their needs with the visually
merchandised product.
Visual Merchandising
Layout