SUBMITTED TO:

Joita Sen (FACULTY CRM)

SUBMITTED BY:
Ankitesh Kumar Tiwari (74) Sushant Agrawal (79)

Current Situation of Indian Retail Market: Retailing is one of the pillars of the economy in India and accounts for about 15% of Indias GDP. The Indian retail market is estimated to be Rs. 45000 crore and is one of the top five retail markets in the world by economic value. However, the Indian government has been opening the retail market and simplifying regulations. In 2011, Indian central government announced major reforms paving way for giants such as Wal-Mart, Carrefour and Tesco, as well single brand majors such as IKEA, Nike, Reebok and Apple to enter one of the fastest growing retail market of 1.22 billion people.

Major Indian Retailers: Pantaloons Retails: The flagship company of Future Group, Pantaloons Retail operates over 16 million square feet of retail space, has over 1000 stores across 73 cities in India and employs over 30,000 people. It boasted the Indian market by launching the first hypermarket BigBazaar at India in 2001. The companies operates in other retail segments such as - Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown, furniture bazaar, collection-i), consumer electronics (e-zone), shoes (shoe factory), Books: music & gifts (Depot), Health & Beauty care services (Star, Sitara and Health village in the pipeline), e-tailing (Futurbazaar.com), entertainment (Bowling co.) The turnover this year was 12500 crores. Reliance: The company owns more than 560 Reliance Fresh stores and recently it has also launched Reliance Mart Hypermart. The company further plans to launch its hypermart in Delhi / NCR, Hyderabad, Vijaywada, Pune and Ludhiana region. The turnover was 4500 crore for this year. AV Birla Group: AV Birla Group`s brand portfolio includes brands such as Louis Phillipe, Van Heusen, Allen Solly, Peter England, Trouser town. Also, Madura garments is subsidiary of Aditya Birla Nuvo Ltd. The recently acquired food and grocery chain of south, Trineth, has further increased their number of store to 400 stores in the country. The company also own More supermarkets and hypermarkets. Currently it runs 600 supermarket and nine hypermarkets across India. The turnover this year was 1700 crores. K Raheja Group: They forayed into retail with Shoppers Stop, Indias first departmental store in 2001. It is the only retailer from India to become a member of the prestigious Intercontinental Group of Departmental Stores (IGDS). They have signed a 50:50 joint venture with the Nuance Group for Airport Retailing. Shoppers Stop has a national presence, with over

2.05

million

square

feet

area

across

39

stores

in

17

cities.

It has also introduced new formats in the market viz Home Stop the exclusive home furnishings, dcor as well as furniture store and Hyper City a premium shopping destination for Foods, Home ware, Home Entertainment, Hi-Tech Appliances, Furniture, Sports, Toys & Fashion. Other format of the company includes -- Crossword Book Store, Mother care & Early Learning Centre (ELC), Airport Retailing, Time Zone Entertainment. The turnover this year was 1570 crores.

FDI in Retail: The government has decided to allow 51 percent foreign direct investment in the multibrand retail sector and also decided to raise the cap on foreign investment in single-brand retailing to 100 percent from 51 percent. Within a week of retail reform announcement, Indian government has faced a political backlash against its decision to allow competition and 51% ownership of multi-brand organized retail in India. Despite the fact that Salman Khurshid, Indias law minister, claiming that many opposition parties, including the Bharatiya Janata Party, had privately encouraged the government to push through the retail reform, the intense criticism now targets Congressled coalition government, and its decision to push through one of the biggest economic reforms in years for India. Opposition parties claim supermarket chains are ill advised, unilateral and unwelcome. On 1 December 2011, an India-wide "bandh" (close all business in protest) was called by political parties opposing the retail reform. While many organizations responded, the reach of the protest was mixed.

Support for retail reforms: In a pan-Indian survey conducted over the weekend of 3 December 2011, overwhelming majority of consumers and farmers in and around ten major cities across the country support the retail reforms. Over 90 per cent of consumers said FDI in retail would bring down prices and offer a wider choice of goods. Nearly 78 per cent of farmers said they would get better prices for their produce from multi-format stores. Over 75 per cent of the traders claimed their marketing resources will continue to be needed to push sales through multiple channels, but they may have to accept lower margins for greater volumes. Farmer groups Various farmer associations in India have announced their support for the retail reforms. For example: Shriram Gadhve of All India Vegetable Growers Association (AIVGA) claims his organization supports retail reform. He claimed that currently, it is the middlemen commission agents who benefit at the cost of farmers. He urged that the retail reform must focus on rural areas and that farmers receive benefits. Gadhve claimed, "A better cold storage would help since this could help prevent the existing loss of 34% of fruits and vegetables due to inefficient systems in place." Bharat Krishak Samaj, a farmer association with more than 75,000 members says it supports retail reform. Ajay Vir Jakhar, the chairman of Bharat Krishak Samaj, claimed a monopoly exists between the private guilds of middlemen, commission agents at the sabzi mandis (India's wholesale markets for vegetables and farm produce) and the small shopkeepers in the unorganized retail market. Given the perishable nature of food like fruit and vegetables, without the option of safe and reliable cold storage, the farmer is compelled to sell his crop at whatever price he can get. He cannot wait for a better price and is thus exploited by the current monopoly of middlemen. Jakhar asked that the government must make it mandatory for organized retailers to buy 75% of their produce directly from farmers, bypassing the middlemen monopoly and India's sabzi mandi auction system.

Benefits to entrepreneurs: Many business groups in India are welcoming the transformation of a long-protected sector that has left Indian shoppers a variety of their counterparts in more developed markets: 1. Organized retailers will reduce waste by improving logistics, creating cold storage to prevent food spoilage, improve hygiene and product safety, reduce counterfeit trade and tax evasion on expensive item purchases, and create dependable supply chains for secure supply of food staples, fruits and vegetables. They will increase choice and reduce Indias rampant inflation by reducing waste, spoilage and cutting out middlemen. Fresh investment in organized retail, the supporters of retail reform claim will generate 10 million new jobs by 2014, about five to six million of them in logistics alone. 2. Organized retail will offer the small Indian farmer more competing venues to sell his or her products, and increase income from less spoilage and waste. A Food and Agricultural Organization report claims that currently, in India, the small farmer faces significant losses post-harvest at the farm and because of poor roads, inadequate storage technologies, inefficient supply chains and farmer's inability to bring the produce into retail markets dominated by small shopkeepers. These experts claim India's post-harvest losses to exceed 25%, on average, every year for each farmer. 3. Not only do these losses reduce food security in India, the study claims that poor farmers and others loose income because of the waste and inefficient retail. Over US$50 billion of additional income can become available to Indian farmers by preventing postharvest farm losses, improving transport, proper storage and retail. Organized retail is also expected to initiate infrastructure development creating millions of rural and urban jobs for Indias growing population. One study claims that if these post-harvest food staple losses could be eliminated with better infrastructure and retail network in India, enough food would be saved every year to feed 70 to 100 million people over the year.

Defensive Strategy: As an Entrepreneur I would start giving franchise at various places of a city in small size so that people get the basics conveniently which will help increase profits and employability.

Competitive Strategy: I would give weekly discount to my regular customers and make the basic product economical to all.