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To
date, though, the country has avoided dealing with the hard questions about how best to
manage its massive urbanization. The policy vacuum may lead to worsening urban decay,
poor quality of life for citizens, and a reluctance among investors to commit funds to
projects in India’s urban centers.
A new report from the McKinsey Global Institute (MGI)—India’s urban awakening:
Building inclusive cities, sustaining economic growth—finds that a lack of effective
policies to manage urbanization could jeopardize India’s GDP growth rate. But
international experience shows that India could turn its cities around in a decade. If the
country makes and executes the right policy choices, it could boost annual GDP by 1 to
1.5 percentage points, taking the economy close to the double-digit growth it needs to
create sufficient jobs for the 270 million people expected to enter the working-age
population over the next 20 years.
The report projects that the country’s urban population will soar to 590 million in 2030,
from 340 million in 2008. India’s cities could generate 70 percent of the net new jobs
created by 2030, produce more than 70 percent of the country’s GDP, and stimulate a
near-fourfold increase in per capita income.
In This Article
• Comments (1)
India’s rapid economic growth has set the stage for fundamental change among the
country’s consumers. The same energy that has lifted hundreds of millions of Indians out
of desperate poverty is creating a massive middle class centered in the cities. A new study
by the McKinsey Global Institute (MGI) suggests that if India continues its recent
growth, average household incomes will triple over the next two decades and it will
become the world’s 5th-largest consumer economy by 2025, up from 12th now. (The full
report, The ‘Bird of Gold’: The Rise of India’s Consumer Market, is available free of
charge online.) Along the way, spending patterns will shift significantly as discretionary
purchases capture a majority of consumer spending. India’s potential should make it a
high priority for most consumer goods businesses, but to succeed in this complex market
they must overcome major challenges.
Private consumption has already played a much larger role in India’s growth than it has
in that of other developing countries. In 2005 private spending reached about 17 trillion
Indian rupees1 ($372 billion), accounting for more than 60 percent of India’s GDP, so in
this respect the country is closer to developed economies such...
Retailing in India
From Wikipedia, the free encyclopedia
Jump to: navigation, search
This article is an orphan, as few or no other articles link to it. Please introduce
links to this page from related articles; suggestions are available. (February 2009)
A spice market
Retailing is one of the pillars of the economy in India and accounts for 35% of GDP.[1]
The retail industry is divided into organised and unorganised sectors. Over 12 million
outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2) in
size. 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. Unorganised 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.[2] 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.[3] Regulations prevent most foreign investment in retailing. Moreover,
over thirty regulations such as "signboard licences" 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.[3]
Contents
[hide]
• 1 Growth
• 2 The Indian Retail Market
• 3 Major Indian Retailers
• 4 Entry of MNCs
• 5 Challenges
• 6 References
[edit] 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.[4]
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. Organised 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%.[5] 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.[6]
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.[7]
According to the Icrier report, 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.[8]
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.[11]
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,
little use of IT systems, limitations of mass media and existence of counterfeit goods.[12]
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 large 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.
• Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks
Safe Deposit Lockers
• PGC Retail -T-Mart India[1], 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.
• 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
Carrefour, the world’s second largest retailer by sales, is planning to setup two business
entities in the country one for its cash-and-carry business and the other a master
franchisee which will lend its banner, technical services and know how to an Indian
company for direct-to-consumer retail.[15]
The world’s fifth largest retailer by sales, Costco Wholesale Corp (Costco) known for its
warehouse club model is also interested in coming to India and waiting for the right
opportunity.[16]
Opposition to the retailers' plans have argued that livelihoods of small scale and rural
vendors would be threatened. However, studies have found that only a limited number of
small vendors will be affected and that the benefits of market expansion far outweigh the
impact of the new stores.[17]
Tesco Plc., plans to set up shop in India with a wholesale cash-and-carry business and
will help Indian conglomerate Tata group to grow its hypermarket business.(19)
[edit] Challenges
To become a truly flourishing industry, retailing needs to cross the following hurdles:[18]
To overcome some of the challenges faced by modern retail, the country is developing a
support infrastructure in form of specialised retail schools. One such skill development
initiative has been taken by TKWs Group. Its TKWs Retail School has already training
over a thousand students and retail professionals for different retail skills. TKWs Retail
School is also associated with government projects like enhancing retail experience of
foreign tourists, improving retail of handicraft and local produce, skill development of
village youth.
[edit] References
1. ^ "Retail reality." 7 November 2007.
2. ^ "ICRIER Begins Survey of Indian Retail Sector." 19 March 2007.
3. ^ a b "Retailing in India Unshackling the chain stores". The Economist. 2008.
http://www.economist.com/displayStory.cfm?story_id=11465586.
4. ^ "India again tops global retail index." 22 June 2007.
5. ^ "Economic and financial indicators" 3 July 2008.
6. ^ "Indian Retail story from Myths to Mall." 11 August 2007.
7. ^ "Demand for retail real estate to soar"
8. ^ "Centre consulting states for setting up retail regulator." 2 July 2008.
9. ^ "Fashion meets tech as handsets get sleek expensive"
10. ^ "LCD televisions, laptops are flying off the shelves."
11. ^ "[ICICI Properties & KSA Technopak White Paper - [India Retail Real Estate –
2005-06]"
12. ^ "Traditional Retail Trade in India." 28 June 2009.
13. ^ "Mahindra joins the retail bandwagon, to sell lifestyle products"
14. ^ "Bharti & Wal-Mart joint venture"
15. ^ "Carrerfour readies plan to enter India’s retail industry"
16. ^ "Costco, US’s fifth biggest, eying India?"
17. ^ "India's Retail Revolution - CNN Money"
18. ^ "Retail Scenario in India
Retailing
From Wikipedia, the free encyclopedia
Jump to: navigation, search
"Retail" and "Retail stores" redirect here. For the comic strip by Norm Feuti, see Retail
(comic strip).
Retailing 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.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain
necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and
browsing and does not always result in a purchase.
Contents
[hide]
• 1 Etymology
• 2 Types of retail outlets
• 3 Retail pricing
• 4 Transfer mechanism
• 5 Second hand retail
• 6 Sales techniques
• 7 Customer service
• 8 Retail Sales
• 9 Bibliography
• 10 See also
• 11 Notes
• 12 External links
[edit] Etymology
The Apple Store retail location on the Magnificent Mile in Chicago.
The world's only Garmin retail location is located on the Magnificent Mile in Chicago.
Retail comes from the French word retailler, which refers to "cutting off, clip and divide"
in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in
small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred,
paring".[2] Like the French, the word retail in both Dutch and German (detailhandel and
Einzelhandel respectively), also refers to the sale of small quantities of items.
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.
• Food products
• Soft goods - clothing, apparel, and other fabrics.
• Hard goods ("hardline retailers") - appliances, electronics, furniture, sporting
goods, etc.
Some stores take a no frills approach, while others are "mid-range" or "high end",
depending on what income level they target.
• General store - a store which sells most goods needed, typically in a rural area;
• Convenience store - a small store often with extended hours, stocking everyday or
roadside items;
• Big-box stores encompass larger department, discount, general merchandise, and
warehouse stores.
A food vendor in India
In Western countries, retail prices are often called psychological prices or odd prices.
Often prices are fixed and displayed on signs or labels. Alternatively, when prices are not
clearly displayed, there can be price discrimination, where the sale price is dependent
upon who the customer is. For example, a customer may have to pay more if the seller
determines that he or she is willing and/or able to. Another example would be the practice
of discounting for youths or students.
Some shops sell second-hand goods. In the case of a nonprofit shop, the public donates
goods to the shop to be sold. In give-away shops goods can be taken for free.
Another form is the pawnshop, in which goods are sold that were used as collateral for
loans. There are also "consignment" shops, which are where a person can place an item in
a store and if it sells, the person gives the shop owner a percentage of the sale price. The
advantage of selling an item this way is that the established shop gives the item exposure
to more potential buyers.
A destination store is one that customers will initiate a trip specifically to visit,
sometimes over a large area. These stores are often used to "anchor" a shopping mall or
plaza, generating foot traffic, which is capitalized upon by smaller retailers.
[edit] Bibliography
• Krafft, Manfred; Mantrala, Murali K. (eds.) (2006). Retailing in the 21st century:
current and future trends. New York: Springer Verlag. ISBN 3540283994.
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