Retailing:

Retailing includes all business activities that involve the sale of goods and services to the
consumers for personal family and household use. It is the final step in the distribution of these
goods and services.

Retail:
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.[1] 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.

Indian Retail story from Myths to Mall (August 11, 2007)

India's retail sector is going to transform and with a three-year compounded annual growth rate of
46.64 per cent, retail sector is the fastest growing sector in the Indian economy. Traditional markets are
transforming themselves in new formats such as departmental stores, hypermarkets, supermarkets and
specialty stores. Western-style malls have begun appearing in metros and near metro cities, introducing
the Indian consumer to a new shopping experience.
The Indian retail market is of enormous size about US$ 350 billion. But organized retail is not so huge
and it is at only US$ 8 billion. However, the opportunity for growth is huge—by 2010, organized retail is
expected to grow to US$ 22 billion. With the growth of organized retailing estimated at 40 per cent over
the next few years, Indian retailing is clearly at a tipping point.
This article is an attempt to analyze the areas where retail sector is growing and will grow, what will be
the target market segment for the retailers and how will they try to serve this segment. Overview
India is witnessing an unprecedented consumption boom. The economy is growing between 8 to 10
percent and the resulting improvements in income dynamics along with factors like favorable
demographics and spending patterns are driving the consumption demand. Indian Retail Industry is
ranked among the ten largest retail markets in the world. The attitudinal shift of the Indian consumer in
terms of "Choice Preference", "Value for Money" and the emergence of organized retail formats have
transformed the face of Retailing in India. The Indian retail industry is currently estimated to be a US$
200 billion industry and organized Retailing comprises of 3 per cent (or) US$6.4 Billion of the retail
industry. With a growth over 20 percent per annum over the last 5 years, organized retailing is projected
to reach US$ 23 Billion by 2010.
The Indian retail industry though predominantly fragmented through the owner -run " Mom and Pop
outlets" has been witnessing the emergence of a few medium sized Indian Retail chains, namely
Pantaloon Retail, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International. In the
last few years, Indians have gone through a dramatic transformation in lifestyle by moving from
traditional spending on food, groceries and clothing to lifestyle categories that deliver better quality and
taste. Modern retailing satisfies rising demand for such goods and services with many players entering
the bandwagon in an attempt to tap greater opportunities.
According to the report of American Management Consulting Firm A. T. Kearney's 2006 Global Retail
Development Index (GRDI), India is on the first position , continuing for two years (2005 and 2006),
among 30 countries as the world's most attractive market for mass merchant and food retailers seeking
overseas growth. On the other hand, China is loosing its attractiveness and making the way to India GRDI
helps retailers to prioritize their global development strategies by ranking emerging countries based on
a set of 25 variables including economic and political risk, retail market alternatives, retail saturation
level, and the difference between gross domestic product growth and retail growth. The study quotes:
"The Indian retail market is gradually but surely opening up, while China's market becomes increasingly
saturated."
The Growth Drivers
The Indian Retail growth can be attributed to the several factors including * Demography Dynamics:
Approximately 60 per cent of Indian population below 30 years of age. * Double Incomes: Increasing
instances of Double Incomes in most families coupled with the rise in spending power. * Plastic
Revolution: Increasing use of credit cards for categories relating to Apparel, Consumer Durable Goods,
Food and Grocery etc.* Urbanization: increased urbanization has led to higher customer density areas
thus enabling retailers to use lesser number of stores to target the same number of customers.
Aggregation of demand that occurs due to urbanization helps a retailer in reaping the economies of
scale.
Investment Opportunities * Potential for Investment: The total estimated Investment Opportunity in the
retail sector is around US$ 5-6 Billion in the Next five years. * Location: with modern retail formats
having made their foray into the top cities namely Hyderabad, Coimbatore, Ahmedabad, Mumbai, Pune,
Chennai, Bangalore, Delhi, Nagpur there exists tremendous potential in two tier towns over the next 5
years. * Sectors with High Growth Potential: Certain segments that promise a high growth are o Food
and Grocery (91 per cent)o Clothing (55 per cent)o Furniture and Fixtures (27 per cent)o Pharmacy (27
per cent) o Durables, Footwear & Leather, Watch & Jewellery (18 per cent). * Fastest Growing Formats:
Some of the formats that offer good growth potential are: o Specialty and Super Market (45 per cent) o
Hyper Market (36 per cent)o Discount stores (27 per cent)o Department Stores (18 per cent)o
Convenience Stores and E-Retailing (9 per cent) * Supply Chain Infrastructure: Supply chain
infrastructure in terms of cold chain and Logistics. * Rural Retail: Retail sector offers opportunities for
exploration and investment in rural areas, with Corporates and Entrepreneurs having made a foray in
the past. India's largely rural population has caught the eye of retailers looking for new areas of growth .
ITC launched the country's first rural mall 'Chaupal Sagar', offering a diverse product ranges from FMCG
to electronics appliance to automobiles, attempting to provide farmers a one-stop destination for all of
their needs. There has been yet another initiative by the DCM Sriram Group called the 'Hariyali Bazaar',
that has initially started off by providing farm related inputs and services but plans to introduce the
complete shopping basket in due course. Other corporate bodies include Escorts and Tata Chemicals
(with Tata Kisan Sansar) setting up agri-stores to provide products/services targeted at the farmer in
order to tap the vast rural market. * Wholesale Trading: wholesale trading also holds huge potential for
growth. German giant Metro AG and South African Shoprite Holdings have already made headway in
this segment by setting up stores selling merchandise on a wholesale basis in Bangalore and Mumbai
respectively. These new-format cash-and-carry stores attract large volumes from a sizeable number of
retailers who do not have to maintain relationships with multiple suppliers for all their needs. * Cheap
Consumer Credit
Major Formats of In-Store Retailing
Format
Description
The Value Proposition
Branded Stores
Exclusive showrooms either owned or franchised out by a manufacturer.
Complete range available for a given brand, certified product quality
Specialty Stores
Focus on a specific consumer need, carry most of the brands available
Greater choice to the consumer, comparison between brands is possible
Department Stores
Large stores having a wide variety of products, organized into different departments such as clothing,
house wares, furniture, appliances, toys, etc.
One stop shop catering to varied/ consumer needs.
Supermarkets
Extremely large self-service retail outlets
One stop shop catering to varied consumer needs
Discount Stores
Stores offering discounts on the retail price through selling high volumes and reaping economies of scale
Low Prices
Hyper- mart
Larger than a supermarket, sometimes with a warehouse appearance, generally located in quieter parts
of the city
Low prices, vast choice available including services such as cafeterias.
Convenience stores
Small self-service formats located in crowded urban areas.
Convenient location and extended operating hours.
Shopping Malls
An enclosure having different formats of in-store retailers, all under one roof.
Variety of shops available to each other. Indian Retail- expanding the number of formats
In modern retailing, a key strategic choice is the format. Innovation in formats can provide an edge to
retailers. Organized retailers in India are trying a variety of formats, ranging from discount stores to
supermarkets to hypermarkets to specialty chains.
Formats Adopted by Key Players in India
Retailer
Original formats
Later Formats
RPG Retail
Supermarket (Foodworld)
Hypermarket (Spencer's)Specialty Store (Health and Glow)
Piramal's
Department Store (Piramyd Megastore)
Discount Store (TruMart)
Pantaloon Retail
Small format outlets (Shoppe) Department Store (Pantaloon)
Supermarket (Food Bazaar) Hypermarket (Big Bazaar) Mall (Central)
K Raheja Group
Department Store (shopper's stop)Specialty Store (Crossword)
Supermarket (TBA) Hypermarket (TBA)
Tata/ Trent
Department Store (Westside)
Hypermarket (Star India Bazaar)
Landmark Group
Department Store (Lifestyle)
Hypermarket (TBA)
Others
Discount Store (Subhiksha, Margin Free, Apna Bazaar), Supermarket (Nilgiri's), Specialty Electronics Road
Ahead; Plans of Large Retailers * Reliance Retail: investing Rs. 30,000 crore ($6.67 billion) in setting up
multiple retail formats with expected sales of Rs. 90,000 crore plus ($20 billion) by 2009-10. * Pantaloon
Retail: Will occupy 10 mn sq.ft retail space and achieve Rs.9,000 crore-plus ($2 bn) sales by 2008.* RPG:
Planning IPO will have 450-plus Music World, 50-plus Spencer's Hyper covering 4 mn sq.ft by 2010. *
LIFESTYLE: Investing Rs.400 crore-plus ($90 mn) in next five years on Max Hypermarkets & value retail
stores, home and lifestyle centres. * Raheja's: Operates Shoppers' Stop, Crossword, Inorbit Mall, and
'Home Stop' formats. Will operate 55 "Hypercity" hypermarkets with US$100 million sales across India
by 2015.* Piramyd Retail: Aiming to occupy 1.75 million sq.ft retail space through 150 stores in next five
years.* TATA (Trent Ltd.): Trent to open 27 more stores across its retail formats adding 1 mn sq.ft of
space in the next 12 DLF malls. Titan industries to add 50-plus Titan and Tanishq stores in 2006.
Small is big for Indian retail
It's raining malls in small-town India. Whether it's Kanpur, Ahmedabad, Indore, Agra, Baroda or Surat,
the mall and multiplex culture has caught on in the country's smaller cities, powered by the burgeoning
purchasing power of India's middle-class. From a handful of malls in the mid '90s, India today has nearly
200 malls spread across large and small cities. And 700 new malls are coming up all over India-40% of
them concentrated in the smaller cities.
Small-town India is the next big thing in the retail business. Consider these numbers: in 2005, the
contribution of smaller cities to total organized retailing sales was 15%. By the end of this year, that
proportion is expected to grow to 25%. Organized retailing in small-town India is growing at a staggering
50-60% a year compared to 35%-40% in the large cities. The striking point is that it is the big names in
the organized retail business that are eyeing these new opportunities.
The Kishore Biyani-owned Future Group, India's largest retailer, plans to invest Rs 3,600 crore in 100
stores in 30 cities, increasing its retail space from 3.5 million square feet to 30 million sq feet. The RPG
group plans to open malls in all cities with a population of over 8 lakh.
Similarly, Wills Lifestyle, the garments and accessories retailing division of ITC Ltd, plans to increase its
footprint by doubling the number of stores from 50 to around 100 in the next two to three years, mostly
in smaller cities. Even Sunil Mittal's Bharti group has announced plans to get into food and farm
products retailing. All these plans, however, are dwarfed by Mukesh Ambani's ambitions to do a Wal-
Mart in India by investing $5.60 billion (Rs 25,000 crore) and covering 1,500 cities and towns.
The small-town retail boom could be considered a show-case of India's free-market prosperity. It is
being powered by healthy economic growth that is making more Indians more prosperous. Organised
retailers have understood this and are hoping to ride the wave, exploit the first-mover advantage and
establish strong brand loyalties in these relatively under-served markets.
Indeed, this is probably the most compelling example of the trickle-down impact of liberalisation in
India. Looking ahead, retail analysts suggest that the sustained success of the IT and ITeS industries in
small towns is expected to create more jobs and enhance spending power.
Typically, small cities offer a 15% to 30% cost advantage over larger cities, not just in terms of employee
costs but real estate costs as well, not to speak of the gains that accrue from reduced staff attrition
rates. This gap is expected to widen over the next few years, creating a pull for smaller towns that will,
in turn, power the small-town retail revolution.
At present, real estate costs present a major incentive for India's organized retailers. Average rental
values for ground-floor space are Rs 50-60 per square foot a month, against Rs 100-120 per sq foot a
month in the bigger cities. However, a strong demand for retail space has more than doubled rentals in
cities like Jaipur, Chandigarh, Surat and Lucknow. While in the metros, retailers are filling gaps by
increasing more stores, in small towns, these malls are way beyond the expectations of the consumers.
These cities are untapped markets and retailers find it important to establish their brands there.
Most smaller cities are seeing plenty of action. For instance, Ludhiana can already boast worldwide
restaurant chains like KFC, McDonald's, Pizza Hut, Domino's Pizza, Ruby Tuesday and Subway. A new
world-class, 25-acre commercial centre and some seven new shopping malls-cum-entertainment centres
are under construction.
The Indian retail market is estimated at $350 billion. But organized retail is estimated at only $8 billion.
However, the opportunity is huge—by 2010, organized retail is expected to grow to $22 billion. With the
growth of organized retailing estimated at 40% (CAGR) over the next few years, Indian retailing is clearly
at a tipping point. India is currently the ninth largest retail market in the world. It is names like
Dehradun, Vijayawada, Lucknow and Nasik that will power India up the rankings soon.
Small Local Stores / Kiranas
The small local stores have dominated Indian retailing over the decades and are present in every village
and local community, addressing the needs of the population in the area and being the point of contact
with the consumer. The distribution networks of brands extend right upto this point to stay in touch
with customer needs and preferences.
India like most other countries has a very large network of local stores. The retail industry in rural India
has typically two forms: "Haats" and "Melas". You will find these in almost every village and locality. A
lot of them function as paan and cigarette outlets with tea and coffee sometimes also offered. Besides
this these stores stock and offer small eats and soft drinks including biscuits, soft drinks, chocolate,
sweets, bread and baked products. Many of them also sell fruits like bananas and a range of toiletries
and cosmetics like soaps, shampoos, toothpastes and some creams. These small stores cater to the
needs of their own local population and travelers who stop by for a smoke or a snack. A little larger
format is the neighborhood grocery store that focuses on grains, foods, snacks and toiletries besides
other home essentials. Fruits and vegetables that are perishable are usually maintained and offered by
exclusive vegetable stores and not by the normal groceries. Every fair sized village is likely to have at
least one grocery store, a fruit and vegetable shop and a paan and cigarette shop. The new addition of
the past decade is to have a telephone booth that lets locals and travelers make national and
international telephone calls. This network is very large and spread all across India. It is not really a
network since each store is individual or family owned and has no connection with the other. It does
however represent a network since large consumer product companies like Unilever, Procter & Gamble,
Colgate-Palmolive, Cadbury, Coca Cola, Pepsi and ITC uses them as their final point of retail to the
consumer. While it is commonly believed that the new retail chains will drive these small stores out of
business, reality points the other way and it is likely that these stores will continue even in the next two
decades of growth. These small stores are very personal and have strong relationships with the local
population. They are points of news and connection. They offer credit to the local population and help
out in times of crisis. They also have a very good understanding of requirements of the local population
and have very low overheads enabling them to offer the best price for their products.
Shopping Malls
The new shopping malls that have been expanding their footprint across Indian cities are well designed,
built on international formats of retailing and integrated with entertainment and restaurants to provide
a complete family experience. Over 300 malls are expected to be built over the next two years and most
Indian cities with over a million population will be exposed to this modern method of retailing.
Shopping malls have existed in India since several decades but were designed and built to house several
shops in a single facility. These malls also known as Shopping Arcades offered only rows of shops, most
of which were small stores that promised bargains for their various wares. These Shopping Arcades tried
to maximize on their store space and did not offer any areas for recreation and entertainment. The
present day malls are a creation of the past few years post 2000. They are designed professionally using
a lot of international experience and combine shopping with a lot of brand building, recreation, food and
entertainment. Malls also have a large format store that serves as their anchor for shopping and a
prominent restaurant that anchors the food needs of visitors. Most malls also feature a multiplex
cinema that offers entertainment to the visitors of the mall. Finally the mall has large atria and open
spaces to allow visitors and families to hang-out.
These new format malls are coming up in all the major cities of India. The cities that are seeing the first
rush of malls are New Delhi, Noida, Gurgaon, Chandigarh, Mumbai, Pune, Bangalore, Ahmedabad,
Chennai, Kochi, Hyderabad, Kolkata
The next run-up of the malls will be the second level cities of India that includesVisakhapatnam,
Coimbatore, Trivandrum, Raipur, Bhopal, Surat, Jaipur, Kanpur, Lucknow, Ranchi, Cuttack, Dehra Dun.
The new malls are air-conditioned and have spacious areas and accesses which make them a true breath
of fresh-air from the earlier arcades and shop line streets that used to be the available options for Indian
customers.
Malls: The new face of retail market
Robust GDP growth, stronger currency reserves and ever-improving market and operating environments
are propelling the Indian market through a period of stellar growth - and the retail community is
responding with newer formats and innovative products. The economy of India has shown a remarkable
increase driven by overall political and social stability.
The decade-old economic reforms have engendered a new, shop-till-you-drop breed of middle class
Indians who, having tasted the shopping experience of big cities overseas, have fuelled a demand that
was inevitable -- the rise of the shopping malls. Centrally air-conditioned malls with piped music, high-
speed lifts and escalators, underground parking space, a multiplex movie theater, multi-cuisine
restaurants and a host of national and international brands, these malls generates approximately 25,000
footfalls each, per day, with figures doubling on weekends.
Sobha Group has set its eyes on launching the largest retail mall in the country. Retail Biz tracks this
unprecedented move that is ready to add a new chapter in the history of Indian retailing.It is estimated
that there are 450 malls in various stages of development across India, 60 in the greater Delhi area
alone. This trend has attracted several major global retail players to India. International style shopping
has finally come to India - and with a splash.
Conclusion
After analyzing the retail industry, we can conclude that the organized retail has opportunities to grow
in India in spite of the kirana stores because these kirana shops will also get benefit of the growing
economy. The argument that the kirana shops will be affected by these malls is only myth. The
organized retail is attracting more and more Indian as well as foreign players of the retail industry. As
our study shows that a major portion of the organized retail will be developed in small cities and towns,
this opportunity has not been encashed by kirana stores and they are unable to meet the requirements
of the customers. Therefore both the malls and kirana stores can play simultaneously in India so no need
get afraid due to the malls.

Types of retail outlets

A marketplace is a location where goods and services are exchanged. The traditional market
square is a city square where traders set up stalls and buyers browse the merchandise. This kind
of market is very old, and countless such markets are still in operation around the whole world.

In some parts of the world, the retail business is still dominated by small family-run stores, but
this market is increasingly being taken over by large retail chains.

Retail is usually classified by type of products as follows:

 Food products
 Hard goods ("hardline retailers"): Appliances, electronics, furniture, sporting goods,
etc.
 Soft goods: Clothing, apparel, and other fabrics.

There are the following types of retailers by marketing strategy:

 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: 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.
 Supermarkets: sell mostly food products;
 Warehouse stores - warehouses that offer low-cost, often high-quantity goods piled on
pallets or steel shelves; warehouse clubs charge a membership fee;
 Variety stores or "dollar stores" - these offer extremely low-cost goods, with limited
selection;
 Demographic: retailers that aim at one particular segment (e.g., high-end retailers
focusing on wealthy individuals).
 Mom-And-Pop (or Kirana Stores as they call them in India): 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.
 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.
 General store: a rural store that supplies the main needs for the local community;
 Convenience stores: 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: 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: is a self-service store consisting mainly of grocery and limited products
on nonfood 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: has a 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: 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 center 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 Electronic store in Bangalore, Tata
Croma.
 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 non-secure credit card transaction.
Example: Amazon and EBay.
 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.

Retailing in India:

Retailing is one of the pillars of the economy in India and accounts for 13% of GDP.[1]

The retail industry is divided into organized and unorganized sectors. Over 12 million outlets
operate in the country and only 4% of them being larger than 500 sq. ft. (46 m2) in size.
Organized 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. Unorganized retailing, on
the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana
shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and
pavement vendors, etc. In India, a shopkeeper of such kind of shops is usually known as a
dukandar.

Most Indian shopping takes place in open markets and millions of independent grocery shops
called kirana. Organized retail such supermarkets accounts for just 4% of the market as of 2008.
Regulations prevent most foreign investment in retailing. Moreover, over thirty regulations such
as "signboard licenses" and "anti-hoarding measures" may have to be complied before a store
can open doors. There are taxes for moving goods to states, from states, and even within states.
Growth

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 35 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 Technopak 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.

India has topped the A.T. Kearney’s annual Global Retail Development Index (GRDI) for the
third consecutive year, maintaining its position as the most attractive market for retail
investment. The Indian economy has registered a growth of 8% for 2007. The predictions for
2008 is 7.9%. The enormous growth of the retail industry has created a huge demand for real
estate. Property developers are creating retail real estate at an aggressive pace and by 2010, 300
malls are estimated to be operational in the country.

With over 1,000 hypermarkets and 3,000 supermarkets projected to come up by 2011, India will
need additional retail space of 700,000,000 sq. ft. (65,000,000 m2) as compared to today. Current
projections on construction point to a supply of just 200,000,000 sq. ft. (19,000,000 m2), leaving
a gap of 500,000,000 sq. ft. (46,000,000 m2) that needs to be filled, at a cost of US$15–18
billion.

The retail business in India is estimated to grow at 13% from $322 billion in 2006-07 to $590
billion in 2011-12. The unorganized retail sector is expected to grow at about 10% per annum
with sales expected to rise from $ 309 billion in 2006-07 to $ 496 billion in 2011-12.

The Indian Retail Market

Indian market has high complexities in terms of a wide geographic spread and distinct consumer
preferences varying by each region necessitating a need for localization even within the
geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail
space per capita at 2 sq. ft. (0.19 m2)/ person is lowest in the world Indian retail density of 6
percent is highest in the world. 1.8 million Households in India have an annual income of over
45 lakh (US$99,900).

Delving further into consumer buying habits, purchase decisions can be separated into two
categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators, washing
machines, dishwashers, microwave ovens and DVD players fall in the status category.
Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems, iPods,
high-end digital cameras, camcorders, and gaming consoles. Consumers in the status category
buy because they need to maintain a position in their social group. Indulgence-oriented buying
happens with those who want to enjoy life better with products that meet their requirements.
When it comes to the festival shopping season, it is primarily the status-oriented segment that
contributes largely to the retailer’s cash register.

While India presents a large market opportunity given the number and increasing purchasing
power of consumers, there are significant challenges as well given that over 90% of trade is
conducted through independent local stores. Challenges include: Geographically dispersed
population, small ticket sizes, complex distribution network, and little use of IT systems,
limitations of mass media and existence of counterfeit goods.

Major Indian Retailers

Indian apparel retailers are increasing their brand presence overseas, particularly in developed
markets. While most have identified a gap in countries in West Asia and Africa, some majors are
also looking at the US and Europe. Arvind Brands, Madura Garments, Spykar Lifestyle and
Royal Classic Polo are busy chalking out foreign expansion plans through the distribution route
and standalone stores as well. Another denim wear brand, Spykar, which is now moving towards
becoming a casualwear lifestyle brand, has launched its store in Melbourne recently. It plans to
open three stores in London by 2008-end.

The low-intensity entry of the diversified Mahindra Group into retail is unique because it plans
to focus on lifestyle products. The Mahindra Group is the fourth largest Indian business group to
enter the business of retail after Reliance Industries Ltd, the Aditya Birla Group, and Bharti
Enterprises Ltd. The other three groups are focusing either on perishables and groceries, or a
range of products, or both.

 Next retail India Ltd (Consumer Electronics)(www.next.co.in)

 Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe
Deposit Lockers
 PGC Retail -T-Mart India[2], Switcher , Respect India , Grand India Bazaar ,etc.,
 REI AGRO LTD Retail-Formats:6TEN Hyper & 6TEN Super
 RPG Retail-Formats: Music World, Books & Beyond, Spencer’s Hyper, Spencer’s Super,
Daily & Fresh
 Pantaloon Retail-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion
Station, Brand Factory, Depot, aLL, E-Zone etc.
 Marks & Spencer: Clothing, lifestyle products, etc.
 The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction, Landmark, Titan
Industries with World of Titans showrooms, Tanishq outlets, Chroma.
 K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, Inorbit Mall
 Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International
Franchise brand stores.
 Pyramid Retail-Formats: Pyramid Megastore, TruMart
 Nilgiri’s-Formats: Nilgiris’ supermarket chain
 Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.
 Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket chain
 Vishal Retail Group-Formats: Vishal Mega Mart
 BPCL-Formats: In & Out
 Reliance Retail-Formats: Reliance Fresh
 Reliance ADAG Retail-Format: Reliance World
 German Metro Cash & Carry
 Shoprite Holdings-Formats: Shoprite Hyper
 Paritala stores bazar: honey shine stores
 Aditya Birla Group - more Outlets
 Kapas- Cotton garment outlets