Emerging retail formats in india

Emerging sell formats in indiaRetailing has been defined as art activities involved in selling goods and services to consumers for their personal, family or ho go forhold use (Berman and Evans, 2001). Although sell has been around for millennia, the 20th century witnessed a lot of trade in the retail sector, especially in the true countries. Modern formats such as department inventorys, discount stores, supermarkets, convenience stores, fast food outlets, variousiation stores, w arhouse retailers and hypermarkets bedevil emerged. Retailing has become more(prenominal) organized and string stores buzz off been growing at the expense of independent shops. The chains are utilizing sophisticated culture technology and communication to manage their operations and pretend gr possess rapidly not lonesome(prenominal) within their home countries corresponding US, UK, France, Germany and Holland but to other developed countries. Walmart Stores, the US retailer, was recognized a s the largest steadfast in terms of sales in 2002 in Fortune magazines describe of 500 largest global firms. Modern retail formats have also facing pages beyond developed countries and are becoming more important in the NICs and growth countries. 3The emergence of impudently formats and the developing of youthful retail in India has attracted attention in recent years. The business press in India has carried several articles and news items in the last three years nigh the forward-looking formats (Shukla 2001 Anand Rajshekhar, 2001 Bhattacharjee, 2001). The consulting firm KSA Technopak has organized retail meetings or summits in major(ip) metros which have witnessed participation from major domestic and international retailers, and also from manufacturers. Venugopal (2001), has discussed the census studies of retail outlets that the market enquiry firm ORG MARG conducted in the 1990s. This census provided info and estimates on a number of parameters relating to Indian ret ail such as number and type of outlets and growth of outlets over time separately for urban and rural areas. Due to these reports and activities, thither is good deal of information operational about what is happening in Indian retail. heretofore Indian retail has received sparse attention by way of academic research with the exception of a few articles in academic journals and virtually skid studies.Purpose of the study.The purpose of this report is to develop an understanding of the factors influencing the evolution of modern formats in Indian retailingObjective of the studyThe report investigates modern retail developments and growth of modern formats in this country.The challenges and opportunities available to the retailers to succeed in this country.Literature reviewIndian retailing is undergoing a process of evolution and is poised to undergo dramatic transformation. The retail sector employs over 8% of the national workforce but is characterized by a high horizontal su rface of fragmentation with over 5 million outlets, 96% of whom are in truth small with an area of less than 50 m2 (Aggarwal, 2000). The retail universe more than doubled between 1978 and 1996 and the number of outlets per 1000 good deal at an each India level, change magnitude from 3.7 in 1978 to 5.6 in 1996. For the urban sector alone, the shop minginess increased from 4 per 1000 people in 1978 to 7.6 per 1000 people in 1996 (Venugopal, 2001). Because of their small size, Indian retailers have very little negociate power with manufacturers and perform only a few of the flows in merchandising channels un ilk in the case of retailers in developed countries, ( Sarma , 2000).The coigne grocer or the kirana store is a key element in the retail in India due to the housewifes un leave aloneingness to go long distances for purchasing routine needs. An empirical study was carried out by Sinha et al ( 2002) to identify factors that influenced consumers quality of a store. Although convenience and merchandise were the two most importantreasons for choosing a store, the choice criteria varied across product categories. Convenience was indicated by consumers as the most important reason in the choice of groceries and fruit outlets, chemists and life style items while merchandise was indicated as the most important in durables, books and apparel.The traditionalisticistic formats like hawkers, grocers and paan shops co exist with modern formats like supermarkets, and non store retailing channels such as multi level marketing and teleshop. Example of modern formats include department stores like Akbarallys , supermarkets like Food World, franchise stores like Van Heusen and Lee, discount stores like Subhiksha, shop-in-shops, factory outlets and service retailers ( Nathan , 2001). Modern stores course to be larger, carry more stock keeping units have a self service format and an experiential ambience. Modern formats also feed to have higher levels of sales per u nit of space, stock turnover and primitive margin but lower levels of net margin as compared to traditional formats (Radhakrishnan, 2003). Modernisation in retail formats is likely to happen quicker in categories like Dry groceries, electronics, Mens apparel, Books, Music. Some reshaping and adaptation my also happen in Fresh groceries, Womens apparel, fast food, and personal care products (Fernandes et al, 2000).In recent years, there has been a slow spread of retail chains in some formats like supermarkets, department stores, malls and discount stores. Factors facilitating the spread of chains are the availableness of quality products at lower prices, improved shopping standards, convenient shopping and display, and blending of shopping withentertainment, and the entry of industrial houses like Goenkas, Rahejas, Piramals and Tatas into retailing ( Ramaswamy and Namakumari, 2002).However formats are not easily scalable across the country. Several companies have found that it is no t easy to expand beyond some regions and cities as evident from the examples of Margin Free Market and Foodworld, which are active only in a few states or cities. Affordable real earth prices and availability of sufficient number of economically well off households in the catchment area are critical requirements that will determine new store viability and thus the possibility of further expansion (Anand and Rajashekhar, 2001).According to Rao (2001), foreign leave investment in the retail sector in India, although not still permitted by government, is desirable, as it would improve productivity and increase competitiveness. New stores will introduce efficiency. Customers also gain as prices in the new stores list to be lower. The consequences of modernization in India may be somewhat different due to lower purchasing power and the new stores may allow for to only to branded products aimed at upper income segments. However it will be wise for old style stores to join together in to wholesale and retail groups to improve bargaining power as experience in developed markets such as UK has shown that the modernization in retail has led to the lour of independent mom and pop stores.The need for a fresh opinion while developing theories to explain the new developments has been stressed by Bennett et al (1998). The Indian retail environment is witnessing several changes on the demand view due to increased per capita income, changing lifestyle and increased product availability. cognise of retailing in US shows that existing theories of retail development establish on changing consumer needs, are inadequate to explain new developments. In developed markets, there has been a power shift with power wretched from manufacturers towards retailers. The strategies used by retailers to wrest power include the development of retailers own brands, and the introduction of slotting allowances which necessitate payments by manufacturers to retailers for providing shelf spa ce for new products. Retailers have also used technology effectively to obtain usable information about consumer buying patterns. The increased power of retailers has led to the introduction of new tactics by manufacturers such as everyday low pricing, partnerships with retailers and increased use of direct marketing methods. Because of these issues, a supply side sentiment needs to be fused with the demand side in developing theories for explaining modernization in retail.Research designIn order to pull through the objectives of the study primary as well as indirect info have been collected to dismantle the trends in modern retail formats meticulously. To analyze the emerging trends in shoppers behavior 30 shop keepers from 6 Malls in operation(p) in Ahmedabad will be interviewed. And for the rest part of the country secondary data published by different research institutions like TSMG, CSSO, upcoming Group, NCAER etc have been considered to draw the key inferences.