Evolution of Indian modern retail

Chia sẻ: Huỳnh Ngọc Toàn | Ngày: | Loại File: PDF | Số trang:14

Thêm vào BST

Báo xấu

13
lượt xem 2
download

Download Vui lòng tải xuống để xem tài liệu đầy đủ

In this paper an attempt is made to study the evolution of Indian retailing and factors contribution to development of Indian retailing, finally, it focuses on different retail format exist in the market.

Chủ đề:

Bình luận(0) Đăng nhập để gửi bình luận!

Lưu

Nội dung Text: Evolution of Indian modern retail

International Journal of Management (IJM) Volume 8, Issue 5, Sep–Oct 2017, pp. 67–80, Article ID: IJM_08_05_008 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=8&IType=5 Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication EVOLUTION OF INDIAN MODERN RETAIL G. Haritha Research Scholor, Department of Management Studies Sri Venkateswara University, Tirupati, India Prof. B. Amarnath Registrar, Rayalaseema University, Kurnool, India Dr. M. Sudheer Kumar Professor, Department of MBA, RGM Engineering College, Nandyal, India ABSTRACT Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. In other words, it is a network of similarly branded stores with an element of self-service.in this paper an attempt is made to study the evolution of Indian retailing and factors contribution to development of Indian retailing, finally, it focuses on different retail format exist in the market. Key words: Organised Retailing, Retail Chains, Retail Format and Retailing. Cite this Article: G. Haritha, Prof. B. Amarnath and Dr. M.Sudheer Kumar, Evolution of Indian Modern Retail. International Journal of Management, 8 (5), 2017, pp. 67–80. http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=8&IType=5 1. INTRODUCTION Retailing is the largest private sector industry in the world economy with the global industry size exceeding $6.6 trillion and a latest survey has projected India as the top destination for retail investors. India is currently the twelfth largest consumer market in the world. A McKinsey report, “The rise of Indian Consumer Market”, estimates that the Indian consumer market is likely to grow four times by 2025. A good talent pool, unlimited opportunities, huge markets and availability of quality raw materials at cheaper costs is expected to make India overtake the world‟s best retail economies by 2042, according to industry players. There are exciting times for Indian Retail. Markets in Asian giants like China are getting saturated, the AT Kearney‟s 2007 Global Retail Development Index (GRDI), for the third consecutive year placed India the top retail investment destination among the 30 emerging markets across the world. Commercial real estate services company, CB Richard Ellis‟ findings state that India‟s retail market has moved up to the 39th most preferred retail destination in the world in 2009, up from 44 last year. The recent growth spurt was achieved http://www.iaeme.com/IJM/index.asp 67 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar primarily through a surge in productivity and is sustainable. Similarly, the study undertaken by ICRIER estimates that the total retail business in India will grow at 13 per cent annually from US$ 322 billion in 2006-07 to US$ 590 billion in 2011-12. The Indian retail industry is the fifth largest in the world. With continued economic expansion and retail growth, India is set to become a US$ 450 billion retail market by 2015, comparable in size to Italy (US$ 462 billion) and much larger than Brazil (US$ 258 billion) today. The present value of the Indian retail market is estimated by the India Retail Report to be around Rs. 12,00,000 crores ($270 billion) and the annual growth rate is 5.7 percent. Furthermore, around 15 million retail outlets help India win the crown of having the highest retail outlet density in the world. Retail sector is the largest source of employment after agriculture, and has deep penetration into rural India. It is also believed that 21 million people are employed in the retail sector which is 7 per cent of the total national workforce whereas the global average is around 10-12 per cent. It is estimated that an additional eight million jobs will be generated through direct and indirect employment related to the retail sector. Table 1 gives the picture of India‟s retail trade as compared to the US and China. Table 1 Retail Trade- India, Us and China According to AT Kearney “Retail Study” the contribution of retail sector to Indian GDP was 10 per cent, while the contribution of retail sector in USA, China and Brazil was 10 per cent, 8 per cent and 6 per cent respectively, which was manifested below: Table 2 Country Retail Sector‟s Share in GDP COUNTRY RETAIL SHARE IN GDP (%) India 10 USA 10 China 8 Brazil 6 The above table states clearly that retailing in India is superior than those of its contenders. Retail sector is a sunrise industry in India and the prospect for growth is simply huge. The India Retail Industry is gradually inching its way towards becoming the next boom industry. India has the highest number of retail outlets in the world at over 15 million retail outlets, and the average size of one store is 50-100 square feet. It also has the highest number of outlets (11,903) per million inhabitants. The per capita retail space in India is among the lowest in the world, though the per capita retail store is the highest. Majority of these stores are located in rural areas. http://www.iaeme.com/IJM/index.asp 68 editor@iaeme.com
Evolution of Indian Modern Retail 2. EVOLUTION OF INDIAN MODERN RETAIL Traditionally, retail sector comprised of small retailers (kirana stores), with their shops being in the front and house at the back, where they would run their retail business to earn the family‟s livelihood. The emergence of organized retail in India dates back to the pre- independence era when the country‟s established business houses, mostly textile majors, ventured into the retail arena through company-owned or franchisee outlets. As such the on- going journey of organized retail in India can be broadly classified into four main phases (Cushman & Wakefield, 2010) (Figure 1.1):  Initiation (Pre-1990s)  Conceptualization (1990-2005)  Expansion (2005-2010)  Consolidation (2010 onwards) 2.1. Retail Initiation The initial evolution of modern retail in India primarily transpired through established textile majors‟ forward integration in retail. The key players during this era include Bombay Dyeing, the Raymond Group, the S Kumars Group and Bata to name a few. Central and State Government departments and co-operative bodies such as the Public Distribution System, Mother Dairy, Kendriya Bhandar, Super Bazaar, etc., played a key role as prominent retailers in the Indian Market. These early years also saw the emergence of regional chains, like Nilgiri‟s and Foodworld, primarily in the southern region and some of these chains later established a nationwide presence. These remained the only organized retailers in the country for quite a long period, till the post 1990 period saw a fresh wave of entrants in the retailing business. Figure 1 Evolution of India's Organized Retail Source: Cushman & Wakefield http://www.iaeme.com/IJM/index.asp 69 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar 2.2. Retail Conceptualization This phase saw the entry of pure-play retailers, and not the manufacturers, expanding pan- India rather than operate regionally. It is interesting to note that most new retailers like Pantaloons, Shoppers‟ Stop and Lifestyle, of this era focused mainly on apparel and other related fashion categories. With the opening of Indian economy during this phase, first generation international brands like Nike, Reebok, Adidas, Levi Strauss and McDonald‟s to name a few, made the Indian entry. 2.3. Retail Expansion As the name suggests, this is perhaps the most active phase in the Indian retail industry, in terms of growth, entry of new players and development of new entrants. A growing middle class, increasing disposable incomes as well as a large and young consumer market led to rapid growth in the Indian retail industry. Having realized the vast potential of the relatively untapped domestic market, large industrial conglomerates like Mahindra and Mahindra, Reliance, Tata, Aditya Birla and Essar entered the Pan-India retail arena during this period. Their success brought in global retailers such as Metro AG, Max Retail, Hypercity, etc. The period saw the emergence of new formats like cash and carry, large format discounters, food courts, multiplexes, children‟s play zones and gaming zones. On the real estate front, there was frenetic activity with a large number of malls were proposed/developed across major metros and upcoming tier-II cities. The size of the malls also went through rapid transformation from an average size of 150,000-200,000 sq. ft. to 500,000-1,000,000 sq. ft. The rapid growth soon attracted the luxury product segment in an environment of the economic liberalization along with rising purchasing power parity (PPP) index of domestic consumers. With the FDI policy 2005-2006 allowing single–brand foreign retailers to take up to 51 per cent stake in joint venture with a local firm, the intervening years saw the entry of several premium brands (Giogio Armani, Versace, Gucci, etc.) mostly through joint ventures. 2.4. Retail consolidation Considering the challenges faced by the industry at present, retail chains are likely to focus on consolidations to cut costs and survive in the market. In the present scenario, companies are increasingly concentrating on strengthening existing operations while assessing growth options through consolidation. 3. INDIAN UNORGANISED RETAIL MARKET According to the National Accounts Statistics of India the „unorganised sector‟ includes units whose activity is not regulated by any statute or legal provision and/or those, which do not maintain regular accounts. Thus, unorganised retailing refers to the traditional formats of low- cost retailing, for example, the local kirana shops, owner managed general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. Unorganised retailing is characterized as unstructured and high degree of fragmentation with street markets constitutes form peddlers, vegetable vendors, neighbourhood stores and consumer durable stores to manufacturer owned retail outlets. Unorganised retail sector covers all those forms of trade which sell an assortment of products and services ranging from fruits and vegetables to shoe repair. These products and services may be sold or offered out of a fixed or a mobile location and the number of people employed could range between 10-20 people. Thus, the neighbourhood baniya, the paanwala, the cobbler, the vegetable, fruit vendor, etc. would be termed as the unorganized sector. Traditionally three factors have plagued the Indian retail industry: http://www.iaeme.com/IJM/index.asp 70 editor@iaeme.com
Evolution of Indian Modern Retail Unorganized: India is known as nation of shopkeepers where vast majority of the retail stores are small “father and son” outlets. Traditionally it is a family‟s livelihood, with their shop in the front and house at the back, while they run the retail business. Fragmented: India has some 15 million retail outlets; however, a disturbing point is that 96 per cent of them 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. Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry has typically two forms: “Haats” and “Melas”. Haats are the weekly markets: serve groups of 1050 villages and sell day-to-day necessities. Melas are larger in size and more sophisticated in terms of the goods sold (like TVs). The unorganized retail sector is expected to grow at approximately 10 per cent per annum with sales rising from US$ 309 billion in 2006-07 to US$ 496 billion in 2011-12. It is a low- cost structure, mostly owner-operated, has negligible real estate and labor costs and little or no taxes to pay. According to a survey by AT Kearney, an overwhelming proportion of the Rs. 4,00,000 crore retail markets are UNORGANISED. Consumer familiarity that runs from generation to generation is one big advantage for the traditional retailing sector. 4. INDIAN ORGANISED RETAIL MARKET Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. In other words, it is a network of similarly branded stores with an element of self-service. Organised retail in India today holds only a fraction of the market share potential in India. In 2001, organized retail trade in India was worth Rs 11,228.7 billion. It has risen from ZERO to 6 per cent in a very short period mainly on volumes and not a value-driven growth. The organized retail sector is catching up very fast and by the year 2013, it is expected to grow at a CAGR of 40 per cent. Associated Chambers of Commerce and Industry (ASSOCHAM) reported that the organized retail sector is recording phenomenal growth and will completely revolutionize retailing over next 3-4 years. As per estimates made by ASSOCHAM, the organized retail in urban market is expected to grow at the rate of 50 percent to reach a value of 30 percent of the total retail market in India. It added that currently, the rural organized retail in India, which is at nascent stage at present with hardly a value of 2 percent of total organized retail, is expected to grow over 10 percent by 2013. According to McKinsey & Company report titled „The Great Indian Bazaar: Organised Retail Comes of Age in India‟, organised retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach US$ 450 billion by 2015 (figure 2). http://www.iaeme.com/IJM/index.asp 71 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar Figure 2 Share of Organised Retail in Total Retail Furthermore, according to a report titled „India Organised Retail Market 2010‟, published by Knight Frank India in May 2010, around 55 million square feet (sq ft) of retail space will be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft. The share of organised retail in developed countries is much higher than developing countries like India. Among the BRIC countries only in India the share of organised retail is low. The share of other BRIC countries is Brazil (36 per cent), Russia (33 per cent), and China (20 per cent). In 2008, the share of organised retail in the US was around 85 per cent, in Japan it was 66 per cent, and in the UK it was 80 per cent, while in developing countries like China and Russia it was 20 per cent and 33 per cent respectively. It is seen that the organised sector in India is still has a long way to go because the unorganised retail still continues to dominate the retail market. Figure 3 Organised Retail as a % of Total Retail Sales – 2008 Source: ICRIER Retail Report, 2008 Exhibit 3 shows that the growth in retail sector is assured and inevitable. In this sense, the retail industry does indeed spread its benefit to all. India is perhaps the last „virgin‟ BRIC (Brazil, Russia, India, China) market for organised retailers. The game here has just begun. http://www.iaeme.com/IJM/index.asp 72 editor@iaeme.com
Evolution of Indian Modern Retail By 2015, around 65 million households will patronise organised retail, amounting to over 300 million shoppers, almost equivalent to the population of the US today. Figure 4 Comparative Penetration of Organised Retail The Organized Retail Penetration (ORP) is the highest in footwear with 22 per cent followed by clothing with 12 per cent. Though food and grocery account for largest share of retail spend by the consumer at about 76 per cent, only 1 per cent of this market is in the organized sector (Exhibit 4). However, it has been estimated that this segment would multiply five times taking the share of the organized market to 30 percent in the coming years. Figure 5 Organised Retail Penetration Across Categories The food and grocery constitute the highest retail volume and this share has shown a tremendous growth over the years. According to NSSO 60th round, 54 per cent of the rural and 42 per cent of urban expenditure was on food. The second largest share is commanded by the apparels. Clothing and textile is the largest organised market and is dominated by retailers like Pantaloon, Westside, Globus, Koutons. This owes to the increasing disposable incomes and changing lifestyles. Industry trends for retail sector indicate that organized retailing has major impact in controlling inflation because large organized retailers are able to buy directly from producers at most competitive prices. World Bank attributes the opening of the retail sector to FDI to be beneficial for India in terms of price and availability of products as it would give a boost to food products, textiles and garments, leather products, etc., to benefit from large-scale procurement by international chains; in turn, creating jobs opportunities at various levels. http://www.iaeme.com/IJM/index.asp 73 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar 5. GROWTH FACTORS IN INDIAN ORGANISED RETAIL SECTOR At present organised retail in India is at a blossoming stage buts it growth is at a scorching pace. The key drivers that will sustain this growth can be categorized as:  Consumer or Demand-side drivers  Retailer or Supply-side drivers 5.1. Consumers or Demand-Side Drivers Rising disposable income of Indian middle-class: The Indian middle-class can be categorised into seekers and strivers, which is the consuming class and the prime target segment for retailers in India. In 2005, these two categories together constituted around 6.4 per cent of total households in India but accounted for 20 per cent of the disposable income. By 2015, the middle class is expected to constitute around 25 per cent of total households and account for 44 per cent of the total disposable income, and by 2025, the respective figures are likely to go up to 46 per cent and 58 per cent. The Indian middle-class population and their growing disposable income levels will drive the future growth of organised retail in India. Personal consumption as a percentage of GDP: Personal consumption as a percentage of GDP India is second only to Vietnam in Asia and a close fourth globally. Robust growth of Indian economy will result in increase in personal consumption as a percentage of GDP. According to IMA, Asia, India had one of the highest personal consumption as a percentage of GDP in Asia at around 55 per cent in 2007. This portends well for Indian retail as with per capita income growing, this personal consumption would translate into higher retail sales. Plastic money becoming a greater pie of credit: The higher penetration of credit cards in India has also boosted the growth of the organised retail sector; in fact, the young population‟s increasing fancy for plastic money has further fueled their purchasing power. Even though the organised retail sector is at a nascent stage, it is growing at a rapid pace. Moreover, the spurt in issuance of credit cards and loans by both Indian as well as foreign banks has further boosted the segment‟s growth. According to the RBI, as on FY09, the total number of outstanding credit and debit cards in India was 24.7 million and 137.4 million respectively. Figure 6 Credit Card Transactions Growth FY04-FY09 Internet drives awareness and online purchases: There has been a substantial increase in the number of Indians who use the Internet and a concomitant increase in the number of online purchases. Indians have started using the Internet not only for increasing awareness but also to shop online, which has opened a whole new channel of retailing in the Indian retail scenario. Online retailing offers consumers the convenience of ordering merchandise to their http://www.iaeme.com/IJM/index.asp 74 editor@iaeme.com
Evolution of Indian Modern Retail doorstep. Recently, Future Group, which owns Pantaloon, has initiated a measure to capitalise on the online opportunity through futurebazaar.com. A similar venture flipkart.com is also proving the new channel to be highly viable, especially since it eliminates the biggest cost of the physical store. Population as a growth driver (increase in working population, spurt in urbanisation, rise in MPCE level in urban areas): Increase in working population: India is the second-largest country in the world in terms of population, and is the largest consumer markets in the world owing to its favourable demographics. In 2008 India‟s working population (in the 15-49 years age group) constituted around 53 per cent of the population as compared with 48.6 per cent in the UK, 49 per cent in the US, and 53 per cent in Russia. Further, the increase in the number of working women has fueled the growth in sales of discretionary items. There has been a 20 per cent increase in the number of working women in the last decade. Figure 7 Indian Population Pyramid 2008-2020 Spurt in urbanisation: Historically cities and towns have been the driving force of overall economic and social development. Currently over 335 million people of India reside in cities and towns, which translates to around 30 per cent of the total population. The rapid growth in urbanisation has facilitated organised retailing in India, and has caused the speedy migration of population into major tier I and tier II cities, which have a significant share in the retail sales of the country. Figure 8 Percentage of Urban To Total Population http://www.iaeme.com/IJM/index.asp 75 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar The urban population‟s contribution in India‟s GDP shot up from 29 per cent in 1951 to 60 per cent in 2001 and increased to 70 per cent in 2011, as migration to cities and towns grows rapidly in anticipation of higher income opportunities provided by these epicenters. Moreover, the continuous development in urban areas has invariably attracted substantial inflows of capital both from domestic and foreign investments have led to the transition of urban areas. As the Indian organised retail is mainly concentrated in the urban areas, its growth (urban areas) is imperative for the organised retail in the country. Rise in MPCE level in urban areas: The aggregate urban consumption in India has been growing steadily over the past few years as the economy has been continuously flourishing during this period, owing to a rise in urban population as well as a rapid per capita income growth. In FY05, 56 per cent of the urban population was below the MPCE level of Rs 930, while in FY07 the percentage of population under the MPCE level of Rs 930 decreased to 46.1 per cent. The average MPCE for the urban population in FY07 was Rs 1,312 up from Rs 1,105 in FY05, on the other hand, the average MPCE for rural population in FY07 was Rs 695 up from Rs 579 in FY07. The NSS report clearly suggested that the consumption pattern in urban areas differed from the rural areas. While the food items constituted 52.2 per cent of the rural area‟s consumption in FY07 and the non-food items accounted for the remaining share, in the urban areas, the share of food items in consumption was 39.4 per cent and the non-food items accounted for the rest. Figure 9 Percentage of Urban Population Below Different Levels of MPCE During FY05-FY07 5.2. Retailer or Supply-Side Drivers Increased investments in retail: Investments in the retail sector have improved since FDI has been allowed in single-brand and cash-and-carry formats. According to the Technopak estimates, investments in the organised retail will touch US$ 35 billion in the next five years or so. Investments allow organised players in retail to expand at a very high rate. All key retailers in India have expansion plans over the next 3-4 years; for instance, Pantaloon has an ambitious expansion plan to take its retail space up to 30 million square feet by 2011. Likewise, Vishal Retail is expected to take its total store count to 500 with an estimated retail space of around 10 million square feet by 2011. Tier-II and III cities to fuel future growth of modern retail: Initially the retail revolution began in the big tier I cities in India; however, as tier I cities are relatively saturated now, http://www.iaeme.com/IJM/index.asp 76 editor@iaeme.com
Evolution of Indian Modern Retail retailers, especially value retailers, are finding their way to smaller tier II and tier III cities as well. The changing landscape of the Indian retail segment and the increasing competition has also forced retailers to tap growth opportunities in tier II and III cities in India. Availability of quality real estate: According to industry sources, mall space in India has grown from a meagre 1.0 million square feet in 2002 to about 57.3 million square feet by the end of 2008; tier I cities are expected to account for around 73 per cent of the mall space and the rest is likely to be equally divided between tier II and tier III cities. Shortened supply chain benefits consumers: A traditional supply chain in India comprises 5-6 levels from Wholesaler to Sub-Wholesaler to the Distributor to the local Mom and Pop stores to the Consumers. Two major disadvantages of this supply chain are as follows:  Cost of the product increases at every stage of the Supply Chain resulting in increase in the price of the products due to cascading effect.  Increase in shrinkage at every stage of the Supply Chain results in loss of goods for consumption. Figure 10 Traditional V/S Modern Supply Chain 6. FORMATS IN INDIAN ORGANISED RETAIL SECTOR Formats new to the Indian marketplace have emerged rapidly over the past five years. The impact of the alterations in the format of the retail sector changed the lifestyle of the Indian consumers drastically. The evident increase in consumerist activity is colossal which has already chipped out a money-making recess for the retail sector of Indian economy. These modern retail formats are encouraging development of well-established and efficient supply chains in each segment ensuring efficient movement of goods from farms to kitchens, which will result in huge savings for the farmers as well as for the nation. http://www.iaeme.com/IJM/index.asp 77 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar The Indian retail industry is categorised into different retail formats on the basis of the retail operation. The formats are basically defined on the basis of the size of the outlet, the pricing strategy followed, the type of merchandise sold, and also the location. Shopping malls: the biggest form of retail in India, malls offer customers a mix of all types of products and services including entertainment and food under a single roof. Malls are located mainly in metro cities, in proximity to urban outskirts and 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 Ambience Mall, Ansal Plaza, Shipra Mall etc. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. The stores are basically small in size (500-3,000 square feet), which allows quick shopping and fast checkouts. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Convenience stores offer easy purchase experience through easily accessible store locations. Subhiksha and Reliance Fresh are some major players in this format. E-trailers: are retailers providing online buying and selling of products and services. Etailing is slowly making its presence felt in India. 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 focus of these stores is to offer merchandise at a price that is lower than the market price, and to gain profit from volumes. These stores keep merchandise mainly on the basis of its salability. Usually these are no-frill stores with simple surroundings and less service. The product category can range from a variety of perishable/ nonperishable goods. Big Bazaar and Subhiksha are some famous examples. Vending: it is a relatively new entry, in the retail sector. Here beverages, snacks and other small items can be bought via vending machine. Specialty stores: are retail chains dealing in specific categories and provide deep assortment. These stores usually „specialise‟ in one line/category of merchandise. As these stores are concerned with only one type of merchandise, they are able to offer a wider range of products at a lower price. 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. Departmental stores: are general retail merchandisers offering quality products and services. Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. These stores are typically lifestyle stores where most of the merchandise constitutes apparels and products other than food and grocery. These stores offer high quality service to consumers. These stores stock lesser merchandise than other formats since the merchandise is stored in a presentable manner. 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! http://www.iaeme.com/IJM/index.asp 78 editor@iaeme.com
Evolution of Indian Modern Retail Table 3 Share of Formats in Organised Retail Space in India Hypermarts: big-box formats with an average size that ranges between 60,000-120,000 square feet, and they stock multiple lines of products such as food and grocery, general merchandise, sports goods, and apparels. These are located in or near residential high streets. Hypermarkets are mammoth outlets that are fewer in number but cater to a larger area (3-5 kilometre). HyperCITY, Big Bazaar, RPG Spencer‟s and Shoprite Hyper are some major players in this format. Supermarkets: The average size of supermarkets range from 10,000-30,000 square feet. They are a smaller version of hypermarkets that holds multiple lines of merchandise but is limited in number when compared with supermarkets. Supermarkets are spread across the city, are greater in number, but cater to a smaller area (1-2 kilometer). Foodworld, Food Bazaar and Spinach are some major players in this format. MBO’s (Multi Brand Outlets): offer several brands across a single product category. These usually do well in busy market places and Metros. They are also known as category killers as they focus on specific categories, such as electronics and sporting goods. Ezone, which specializes in electronics, and Staples, which specialises in office stationery, are examples of category killers. Cash-and-carry outlets: cash-and-carry outlet is strictly not a retail format, but considering the business dynamics it follows it can qualify for a retail format. In a retail business, usually a consumer has to purchase one or more products but under this format, the consumers have to buy a minimum volume of products or value specified by the cash-and-carry retailer. In this format, the buyers are basically small retailers or catering service providers who purchase in bulk quantities. This stores‟ size ranges from 1,00,000 square feet to 3,00,000 square feet. At present, Metro is a major player that falls under this format. Wal-Mart‟s alliance with Bharti and Tesco‟s with Trent will also come under the cash-and-carry format. 7. CONCLUSIONS An increasing number of people in India are turning to the services sector for employment due to the relative low compensation offered by the traditional agriculture and manufacturing sectors. The organized retail market is growing at 3.5 percent annually while growth of unorganized retail sector is pegged at 6 percent. The Retail Business in India is currently at the point of inflection. Rapid change with investments to the tune of US $ 25 billion is being planned by several Indian and multinational companies in the next 5 years. It is a huge industry in terms of size and according to management consulting firm Techno park Advisors Pvt. Ltd., it is valued at about US $ 350 billion. Organized retail is expected to garner about 16-18 percent of the total retail market (US $ 65-75 billion) in the next 5 years http://www.iaeme.com/IJM/index.asp 79 editor@iaeme.com
G. Haritha, Prof. B. Amarnath and Dr. M. Sudheer Kumar REFERENCES [1] Anderson, E., & Sullivan, M. (1993). The Antecedents and Consequences of Customer Satisfaction for Firms. Marketing Science, 12(2), 125-143. [2] Anderson, E., Fornell, C., & Lehmann, D. (1994, July). Customer Satisfaction, Market Share and Profitability: Findings from Sweden. Journal of Marketing, 58, 53-66. [3] Ang, S., Leong, S., & Lim, J. (1997, January). The Mediating Influence of Pleasure and Arousal on Layout and Signage Effects: Comparing More and Less Customized Retail Services. Journal of Retailing and Consumer Services, 4(1), 13-24. [4] Areni, C., & Kim, D. (1993). The Influence of Background Music on Shopping Behaviour: Classical vs Top Forty Music in a Wine Store. Advances in Consumer Research, 20, 336-340. [5] Budisantoso, T., & Mizerski, K. (2005). Shopping Motivation, Optimum Stimulation Level, The Perception of Store Atmosphere and Store Patronage Satisfaction: A Case of Indonesia. ANZMAC 2005: Broadening the Boundaries (pp. 18-24). Fremantle, Western Australia: ANZMAC. [6] Burke, R. (2009, June). Behavioral Effects of Digital Signage. Journal of Advertising Research, 180-185. [7] Cardozo, R. M. (1965, August). An Experimental Study of Customer Effort, Expectation and Satisfaction. Journal of Marketing Research, 2, 244-249. [8] Carman, J. (1990). Consumer Perceptions of Service Quality: An Assessment of the SERVQUAL Dimensions. Journal of Retailing, 66(1), 33-55. [9] Donovan, R., & Rossiter, J. (1982). Store Atmosphere: An Environmental Psychology Approach. Journal of Retailing, 58(1), 34-57. [10] Du Plessis, P., Rousseau, G., & Blem, N. (1991). Consumer Behaviour: A South African Perspective. Pretoria: Sigma. [11] Economist intelligent Unit. (2008, November 11). India: Consumer Goods and Retail Report. [12] Ennew, C., & Bink, M. (1999). Impact of Participative Service Relationships on Quality, Satisfaction and Retention: An Exploratory Study. Journal of Business Research, 46, 121- 132. [13] Erasmus, A., Boshoff, E., & Rousseau, G. (2001). Consumer Decision-making models within the Discipline of Consumer Science: A Critical Approach. Journal of Family Ecology and Consumer Sciences, 29, 82-90. [14] Prof. Prashant Kotasthane and Prof. (Dr.) Dhananjay Mandlik, A Study on Adequacy of Pro motion Efforts of Furniture Retail Outlets For Household Furniture In Pune Region. International Journal of Advanced Research in Management, 6 (3), 2015, pp. 135-142. [15] K.Venkateswara Raju, Dr. Svss Srinivasa Raju and Dr. D.Prasanna Kumar, Benefits o f FDI In Indian Retail Sector and Customer Perception o f Organized Retail Outlets In Hyderabad. International Journal of Management, 4 (4), 2013, pp. 180 - 192. [16] Dhivya Sathish, Dr. D. VenkatramaRaju, Satisfaction of Buyers towards Retail Outlets. International Journal of Management, 3 (1), 2012 , pp. 115-120. [17] Swati Vijay. A study of Economical impact of Entry of organized retailers on unorganized retailers with special reference to Maharashtra state. International Journal of Management, 7 (4), 2016, pp. 01–16. [18] Vijay.R.Kulkarni, A Comparative Study of Customer Perceptions of Store Atmospherics of Spencer‟s Vs Reliance Fresh. International Journal of Management, 3 (2), 2012 , pp. 370–380 http://www.iaeme.com/IJM/index.asp 80 editor@iaeme.com