Project retail

8/7/2019 Project retail

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Introduction

Indian retail industry is going through a transition phase. Most of the

retailing in our country is still in the unorganized sector. The spread out of

the retails in US and India shows a wide gap between the two countries.Though retailing in India is undergoing an exponential growth, the road

ahead is full of challenges.

What is retailing?The word "Retail" originates from a French-Italian word. Retailer-

someone who cuts off or sheds a small piece from something. Retailing is the

set of activities that markets products or services to final consumers for their

own personal or household use. It does this by organizing their availability on

a relatively large scale and supplying them to customers on a relatively smallscale. Retailer is a Person or Agent or Agency or Company or

Organization who is instrumental in reaching the Goods or

Merchandise or Services to the End User or Ultimate Consumer.

Scenario of Retailing In IndiaRetailing is the most active and attractive sector of last decade. While

the retailing industry itself has been present since ages in our country, it is

only the recent past that it has witnessed so much dynamism. The

emergence of retailing in India has more to do with the increased purchasingpower of buyers, especially post-liberalization, increase in product variety,

and increase in economies of scale, with the aid of modern supply and

distributions solution. Indian retailing today is at an interesting crossroads.

The retail sales are at the highest point in history and new technologies are

improving retail productivity. though there are many opportunities to start a

new retail business, retailers are facing numerous challenges.

Present Indian Scenario Unorganized market: Rs. 583,000 crores

Organized market: Rs.5, 000 crores

5X growth in organized retailing between 2000-2005

Over 4,000 new modern Outlets in the last 3 years

Over 5,000,000 sq. ft. of mall space under development

BRCM College of Business Administration, Surat


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The top 3 modern retailers control over 750,000 sq. ft. of retail

space

Over 400,000 shoppers walk through their doors every week

Growth in organized retailing on par with expectations and

projections of the last 5 Years: on course to touch Rs. 35,000crores (US$ 7 Billion) or more by 2008-09.

Contribution To GDP

The Indian retail market, which is the fifth largest retail destination

globally, has been ranked the second most attractive emerging market for

investment after Vietnam in the retail sector by AT Kearney's seventh annual

Global Retail Development Index (GRDI), in 2008. The share of retail trade

in the country's gross domestic product (GDP) was between 810

per cent in 2007. It is currently around 12 per cent, and is likely to

reach 22 per cent by 2010.

According to industry experts, the next phase of growth is expected to

come from rural markets, with rural India accounting for almost half of the

domestic retail market, valued over US$ 300 billion. Rural India is set to

witness an economic boom, with per capita income having grown by 50 per

cent over the last 10 years, mainly on account of rising commodity prices

and improved productivity.

According to the Investment commission of India, the overall retail

market is expected to grow from US$ 262 billion to about US$ 1065 billion by

2016, with organised retail at US$ 165 billion (approximately 15.5 per cent of

total retail sales). India is expected to be among the top 5 retail markets in

the world in 10 years.

Types of Retailing In IndiaTraditional retailing continues to be the backbone of the Indian retail

industry, with traditional/unorganized retailing contributing to over 95% of

total retail revenues. The quintessential mom-and-pop retailing outlets or thecorner- store formats constitute a major part of Indian retail store formats.

Over 12 million small and medium retail outlets exist in India, the highest in

any country. More than 80 per cent of these are run as small family

businesses.



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Business EnvironmentA business does not function in a vacuum. It has to act and react to

what happens outside the factory and office walls. These factors that happen

outside the business are known as external factors or influences. These

will affect the main internal functions of the business and possibly the

objectives of the business and its strategies.



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Macro economics is the study of behavior of the

economy as a whole. It examines the overall level of nationsoutput, employment, price and foreign trade. Macroeconomics is concerned

with aggregate and average of entire economy.

Business environment is a set of political, economic, social and

technological (PEST) forces that are largely outside the control and

influence of a business, and that can potentially have both a

positive and a negative impact on the business.

In other words in macro economics study how these aggregates

and averages of economy as whole are determined and what

causes fluctuation in them. For making of useful economic policies for the

nation macroeconomics is necessary.


Retail Sector


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A macro environmental analysis can be completed alone or in a

brainstorming session, however you may like to do some research before

starting. To simplify the Macro Environment Analysis the following 6 broad

heading will provide some structure, a good start is to list all of the trends

you can think of or can find and indicate whether they will have a positive

impact or negative impact on the size of your industry.

Economic Trends: The macro economic environment analysis will

identify trends such as changes in personal disposable income, interest

rates, inflation and unemployment rates.

Political Trends: The macro political environment analysis will

identify changes in the position politicians take on issues. A current

example is a shift towards greener policies in the developed world.

Technological Trends: The macro technological environment

analysis will identify changes in the application of technology. A

current example is a shift towards online transactions and in some

areas a shift away from online transactions.

Legal Trends: The macro legal environment analysis is closely linked

to the political environment (politicians tend to make the laws), but

also includes trends in court decisions such as liability compensation.

Social/Cultural Trends: The macro social/cultural environment

analysis will identify trends in societies beliefs, behaviours, values and

norms. Such as the number of part time workers, attitudes towards

global warming, make up of the family structure.

Demographic Trends: The macro demographic analysis will identify

trends in population growth at relevant ages for your industry (Theremaybe zero population growth in general but high growth in the

number of people over 65), the population location.



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Economic Environment

Retail markets consist of purchasing power as well as people. Total

purchasing power is a function of current income, prices, savings and creditavailability. Marketers should be cognizant of major trends in the economic

environment. The changes in economic conditions can have destructive

impacts on business plans of a firm. Economic forecasters looking ahead

through the next decade are likely to find their predictions clouded by the

recurrent themes of shortages, rising costs and up and down business

cycles. These changes in economic conditions provide marketers with new

challenges and threats. How effectively these challenges could be converted

into opportunities depend on well-thought-out marketing programmes and

strategies.Economic conditions, economic policies and the economic system

are the important external factors that constitute the economics of

a business.

The fast and furious pace of growth of the Indian economy is the

driving force for Indian consumerism; with the Indian consumers

confident about their earnings and are spending a large portion of their

high disposable incomes. Projections by analysts suggest that India has

the potential to be labeled the fastest-growing economy and outpace

the developed economies by 2050.

The Government is progressively undertaking reforms and liberalizing

the retail sector by give 49% FDI(Foreign Direct Investment).

India ranking as the fourth largest economy in terms of Purchasing

Power Parity (PPP), next only to United States,Japan and China. India is

expected to outpace Japan by the year 2010 to become worlds third

largest economy. With 54 per cent of the Indians aged below 25, the

young Indian consumer is buying big to look good and feel good.

Performance of a retail sector in India indicates the bright future.



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Following economic factors affecting Retail Industry in India :

GNP or GDP per capita

As we have already seen in above discussion that India`s GDP growth

rate was 9.4% in 2006-07. GDP shows the tendency to grow bigger & bigger

in future. It is expected to grow more than 27& in next 5-6 years. Retail

industry contributed around 13% to the GDP. So it shows that there is a big

opportunity to grab the market opportunities.

In India unorganized sector have grab 95% retail market. So there is

an opportunity for organized market to grab those 95% market share. Indian

retail business promises to be one of the core sectors of the Indian economy,

with organised retail sector estimated to grow by 400 per cent of its current

size. India ranking as the fourth largest economy in terms of Purchasing

Power Parity (PPP), next only to United States, Japan and China. India is

expected to outpace Japan by the year 2010 to become worlds third largest

economy. With 54 per cent of the Indians aged below 25, the young Indian

consumer is buying big to look good and feel good.

Economic growthThe fast and furious pace of growth of the Indian economy is the

driving force for Indian consumerism; with the Indian consumers

confident about their earnings and are spending a large portion of their high

disposable incomes. Projections by analysts suggest that India has the

potential to be labeled the fastest-growing economy and outpace the

developed economies by 2050. Analysts predict India to sustain an average

GDP growth rate of 5 per cent till the mid of this century, with India

projected to outpace the other developed economy markets by 2050.

The average annual growth rate for 1994-2004 was pegged at

6.1 per cent, second only to China. The more recent growth rates of over

9 per cent posted for India, promise a continued robust growth story.

Private consumption accounted for 62 per cent of Indias GDP in 2004-05,

comparable to most of the leading economies around the world.

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Unemployment rate

India has a vast resource base of talent and skilled labour. Over

37,000,000 students were enrolled in about 150,000 pre-college institutes

and over 11,700,000 in 14,000 higher education institutions. With english

being the language for business in india, the language skills of the indianworkforce score higher than that of emerging economies. Retail

management is a sought after education stream amongst students, with

over15 premier institutes offering specialised courses in retail management.

Due to increase in retail industry people get employment. In India Retail

Industry provide employment to 8% of total population.

Inflation rate

In recent times country passes through deflationary period. In such a

period business have to face many problems like low rate of consumption,more savings etc. But International retail jiants are increasingly choosing

India as the target market of the global retail power house.

Due to high rate of inflation retail Industry may face following problems-

High cost of land, labour

High transportation

Reduction in consumption pattern

Lesser demand for luxurious product

Less profit margin

Consumer & Investor ConfidenceHow did those companies develop and cement that trust? They promised

and delivered the following principles of building and maintaining

trust.

T - Truth

Trust and solid relationships are built on telling the truth. Companies mustmaintain this principle both with internal and external customers. It is

imperative that this value is represented in everything a company does. We

have seen how the lack of solid ethics can crumble even the largest of

companies.

R Responsibility

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Trust is built when everyone within an organization realizes what their

responsibilities are and that they are held accountable for them. Choose to

schedule reviews quarterly for every member of the company to make sure

they are aware of their responsibilities. Take ownership of mistakes and be

diligent to find ways to make corrections.

U Unselfishness

Trust is built when employees give of their time and talent in the workplace

and do it, unselfishly. Customers appreciate the employee who goes out of

their way to satisfy the customer. Customers don't appreciate hearing how

badly the employee wants to go home, or how they didn't get a break, or

how awful their schedule is.

S - Security

Trust is built on a feeling of security. Good lighting in the parking lot and

store entrance, fitting rooms with doors that lock, employees that handle

ringing up a sale with accuracy, and alarm systems that are visible are all

ways to make the customer feel safe in your place of business. Employees

want to feel a sense of job security and that they are appreciated for the job

the.

T - Teamwork

Trust is built when everyone within the organization feels a sense of

ownership. How well do your employees work together? Are they willing togo out of their way to help each other out?

Road Ahead; Plans of Large Retailers

Reliance Retai l: 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 Retai l: Will occupy 10 mn sq.ft retail space and achieve

Rs.9,000 crore-plus ($2 bn) sales in 2008.

RPG : Planning IPO will have 450-plus Music World, 50-plus Spencer's

Hyper covering 4 million sq.ft by 2010.



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LIFESTYLE : Investing Rs.400 crore-plus ($90 million) 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 spaces

through 150 stores in next five years.

Political & Government Environment

Political systems can be classified based on the party system in the

society, and mode in which governments attain power. Based on the way

governments come into power, they can be classified into parliamentary

type or absolutist type. To understand and assess the political environment

of a company it is necessary to identify and evaluate factors that can cause

political instability. Social unrest, attitudes of nationals, and policies of the

host government are some factors that can cause social instability. Political

risk refers to political actions that have a negative impact on a firm's value.Companies operating internationally have to deal with foreign politics,

domestic politics, and international politics.

The process of establishing a cause-and-effect relationship between

political factors and business income is called political risk analysis. Some

government policies that adversely affect the business environment include ;

Non-convertibility of currency

Preventing the repatriation of profits

Nationalization and inadequacy of compensation Domestic political violence.

The major political and governmental factors affecting Indian retail sector

are ;

Political climate - amount of government activity

Political stability and risk



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Government debt

Budget deficit or surplus

Corporate and personal tax rates

Payroll taxes

Import tariffs and quotas

Export restrictions

Restrictions on international financial flows

Minimum wage laws

Environmental protection laws

Worker safety laws

Union laws

Copyright and patent laws

Anti- monopoly laws

Municipal licenses

Political impact of larger FDI in Retail Sector

The political impact of larger FDI in India has transformed the Indian

investment scenario in various areas. The fact that more multinationalcorporations are investing in India signifies that India is increasingly focusing

on the industrial sector. The increase in Foreign Direct Investments

resulted in the Government of India making critical reforms in 1991 and

since then, the emphasis on Indian industry has been constantly on the rise.

The political scenario of India is looking forward to Foreign Direct

Investment as a mechanism for development. In fact, there has been

development in the fields of land use, water, power generation, and

roads. This points towards the great political impact of larger FDI.

The increase in FDI flow has strengthened the foreign politicalrelations and now foreign companies are trying to persuade the Indian

Parliament to increase FDI capital depending on the sector.

There are some chief bodies and boards that have been set up for the

purpose of Foreign Direct Investment, such as:

Project Approval Board (PAB)



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Licensing Committee (LC)

District Industries Centers

Investment Promotion and Infrastructure Development Cell

Foreign Investment Promotion Board (1991)

Foreign Investment Promotion Council (1996)

Foreign Investment Implementation Authority (1999)

Investment Commission (2004)

Thus, the political impact of larger FDI has made prospects for India's future

relationships with foreign companies really bright and exciting.

Socio-Cultural Environment

Humans essentially create their own cultural and social environment.

Customs, practices and traditions for survival and development are passed

down from one generation to the next. In this way, the members of a

particular society become conditioned to accept certain "truths" about life

around them. The increasingly competitive international businessenvironment calls upon exporters to tailor or adapt their business approach

to the culture and traditions of specific foreign markets. The inability or

unwillingness to do so could become a serious obstacle to success.

In the context of the socio-cultural environment, there are a number of

factors that you will need to consider. These are:

Language: A language usually defines the parameters of a particular

culture. Thus if several languages are spoken within the borders of a

country, that country is seen to have as many cultures. Translationsshould be undertaken within the country concerned or at least by a

native of the country in question.

Material Culture: Material culture relates to the way in which a

society organises and views its economic activities. It includes the



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techniques and know-how used in the creation of goods and services,

the manner in which the people of the society use their capabilities,

and the resulting benefits. When one refers to an 'industrialised' or a

'developing' nation, one is really referring to a material culture.

Aesthetics: A culture's aesthetics refer to its ideas concerning good

taste and beauty as expressed in the fine arts - music, art, drama and

dance - and in the appreciation of colour and form. Insensitivity to

aesthetic values can not only lead to ineffective advertising and

package design for products, it can also offend prospective customers.

Social Organization: Social organization refers to the ways in which

people relate to one another, form groups and organize their activities,teach acceptable behavior and govern themselves. It thus comprises

the social, educational and political systems of a society. In a culture

where great importance is attached to the family unit, promotional

efforts should be directed at the family rather than the individual.

Religious Belief: Religious system refers to the spiritual side of a

culture or its approach to the supernatural. Western culture isaccepted as having been largely influenced by the Judeo-Christian

traditions, while Eastern or Oriental cultures have been strongly

influenced by Buddhism, Confucianism, Taoism and Hinduism.

Although very few religions influence business activities directly, the

impact of religion on human value systems and decision-making is

significant. Thus, religion exerts a considerable influence on people's

actions and outlook on life, as well as on the products they buy.

Attitudes: Attitudes are psychological states that predispose people

to behave in certain ways. Attitudes may relate, for example, to work,

wealth, achievement, change, the role of women in the economy, etc.

Stereotypes are sets of attitudes in which one attributes qualities or



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characteristics to a person on the basis of the group to which that

person belongs.

Values: Values are judgements regarding what is valuable or

important in life, and they vary greatly from one culture to another.People who are operating at a survival level will value food, shelter and

clothing. Those with high security needs, on the other hand, may value

job security, status, money, etc.

Space: The concept of space is different wherever one goes. In

western corporate culture, the size and location of an executive's office

is usually determined by his level of seniority in the company. The

locality and size of an Arab business executive's office, on the otherhand, are a poor indication of the person's importance.

In recent years, the concept of social responsibility has

entered into the marketing literature as an alternative to the marketing

concept. The implication of socially responsible marketing is that retail firms

should take the lead in eliminating socially harmful products such as

cigarettes and other harmful drugs etc. There are innumerable pressure

groups such as consumer activists, social workers, mass media, professional

groups and others who impose restrictions on marketing process and its

impact may be felt by retailers in doing their business. The society thatpeople grow up in shapes their basic beliefs, values and norms.

Demographic Environment

Favorable demographics, combined with increasing disposable

incomes, are progressively changing the face of Indian consumerism. With

the economy opening new vistas of employment and with employers

offering attractive compensation packages and perks, the pool of Indian

skilled professionals are boasting of higher disposable incomes. From frugal

spending to frenzied shopping, Indias swelling middle class is redefining

lifestyle patterns with adoption of western values and growing brand

consciousness.



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With the countrys income pyramid changing dramatically,

there has been a definite shift from thesaving tendency to

the spending attitude. Increased consumer exposure to the latest

trends and brands driven by the mass media is contributing to the

soaring retail revenues. There has been a marked increase in the

number of new entrants in the retail sector with player revenues

increasing across all the retail segments

The thriving services sector growth has handed young India a bulging

wallet and a penchant for luxury products. The new found freedom toshop at plush malls and stores for expensive gadgets like mobile

phones and laptops has fuelled the growth of organised retail in India.

The Indian consumer is gradually moving from the local kirana

shopping to Mall Hopping. With a number of domestic and

international brands available in stores in metros and smaller cities

and with a wide range of product offerings from food and grocery to

furniture and fixtures, the Indian consumer is fast embracing modern

retail.

The first environmental fact of interest to retailers is population

because people make up markets. Retailers are keenly interested in

the size of the population, its geographical distribution, density,

mobility trends, age distribution and social ethnic and religious

structure.

Some of the Demographic Business Factors are :



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Population size and distribution

Age distribution

Socio demographic factors will lead to faster growth of Organized

retail in India:

Education levels

Income levels

Ethnic origins

Demographic structure is seldom static for

long and changes in its composition often test the residency of a marketing

firm. Further, these changes influence the behaviour of consumers which, in

turn, will have a direct impact in the retailer's business. The ripples of these

changes will reach the organisation forcing it to alter or amend the existing

marketing practices in vogue. In short, Retail firms, will have to continuously

measure the changes - qualitative as well as quantitative - that are taking

place in the population structure. To avoid negative consequences brought

on by active consumer groups, a retailer must communicate with consumers,anticipate problems, respond to complaints and make sure that the firm

operates properly.

Technological Environment

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Technology can be defined as the method or technique for converting inputs

to outputs in accomplishing a specific task. Thus, the terms 'method' and

'technique' refer not only to the knowledge but also to the skills and the

means for accomplishing a task. Technological innovation, then, refers to the

increase in knowledge, the improvement in skills, or the discovery of a new

or improved means that extends people's ability to achieve a given task.

Technology is the knowledge or methods that are necessary to

carry on or to improve the existing production and distribution of

goods, services, products or processes, and also includes

entrepreneurial expertise and professional know-how.

Changes in the technological environment have had some of the most

dramatic effects on business. A company may be thoroughly committed to a

particular type of technology, and may have made major investments in

equipment and training only to see a new, more innovative and cost-effective technology emerge.

Technology is a critical factor in economic development. Because of

the advances of international communication, the increasing economic

interdependence of nations, and the serious scarcity of vital natural

resources, the transfer of technology has become an important

preoccupation of both industrialised and developing countries.

The infrastructure of the retail sector will evolve radically in the

recent future. The emergence of shopping malls are increasing at asteady pace in the metros.

The most dramatic force shaping people's lives is technology.

Advances in technology are an important factor which affects retail

marketers in two ways. First, they are totally unpredictable and secondly,

adoption of new technology often is prevented by constraints imposed by

internal and external resources. At the same time, it should be

remembered that technological progress creates new avenues of opportunity

and also poses threat for individual firms. Technology has helped retailers to

measure the products with modern weighing machines. Earlier, they haveused balances which could not measure the merchandise correctly.With the

help of weighing machine, products can be measured with the result

customer satisfaction can be enhanced. In the following areas where

technology have been extensively used.

Packing of the products



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Printing the name of the shop on the product visibly

Modern refrigerators where merchandise can be used for a long time

Billing

Customer Interfacing Systems

Bar Coding and Scanners

Point of sale systems use scanners and bar coding to identify an item, use

pre-stored data to calculate the cost and generate the total bill for a client.

Tunnel Scanning is a new concept where the consumer pushes the full

shopping cart through an electronic gate to the point of sale. In a matter of

seconds, the items in the cart are hit with laser beams and scanned. All that

the consumer has to do is to pay for the goods.

Payment

Payment through credit cards has become quite widespread and this enables

a fast and easy payment process. Electronic cheque conversion, a recent

development in this area, processes a cheque electronically by transmitting

transaction information to the retailer and consumer's bank. Rather than

manually process a cheque, the retailer voids it and hands it back to the

consumer along with a receipt, having digitally captured and stored theimage of the cheque, which makes the process very fast.

Internet

Internet is also rapidly evolving as a customer interface, removing the need

of a consumer physically visiting the store.

ERP System

Various ERP vendors have developed retail-specific systems which help in

integrating all the functions from warehousing to distribution, front and back

office store systems and merchandising. An integrated supply chain helps

the retailer in maintaining his stocks, getting his supplies on time, preventing

stock-outs and thus reducing his costs, while servicing the customer better.

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These technology product profiles will help retailers evaluate the latest retail

enterprise solutions and keep pace with fast-moving innovations andtechnological advances. Customer reviews and retail technology

comparisons will help identify the best and most cost-effective solutions for

any retail operation. To use or adopt new technology in business consist of,

Efficiency of infrastructure, including: roads, ports, airports, rolling

stock, hospitals, education, healthcare, communication, etc.

Industrial productivity

New manufacturing processes

New products and services of competitors

New products and services of supply chain partners

Any new technology that could impact the company

Cost and accessibility of electrical power

The transfer of technology is essential for attaining a highlevel of industrial capability and competitiveness. Multinational corporations

are playing an increasingly important role in technology transfer because

they invest abroad to expand production, marketing and research activities.

There is also a growing consciousness amongst governments of the need to

increase technology transfer to the developing countries to help stabilise

their economic and social conditions.



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Global Environment

A major environmental change that has taken place in the last fifteen

years is the globalization of business. The world has become a global village

and business has become global in character. Organizations are venturing

beyond national boundaries in the pursuit of business opportunities.

Globalisation is affecting all aspects of social and economic activity,

and retailing is no exception. Many retailers are increasingly venturing

beyond their traditional territories, identifying expansion opportunities in

new countries and regions around the world. Retail business grew between

25% - 30% percent in India and 13 percent in fast growing economies Chinaand Russia. Global retail industry has been expanding to new markets for

a few years now. It is not a secret that retail business is one of the most

actively developing sectors of national economy. Besides territorial extension

retail chain now tends to create new formats of retail outlets in order to gain

more customers. With the increase in the purchasing power of the people the

retail business is sure to flourish.

Studying international business is important because:

Most companies are either international or compete with international

companies.

Modes ofoperation may differ from those used domestically.

The best way of conducting business may differ by country.

An understanding helps you make better career decisions.

An understanding helps you decide what governmental policies to

support.

How tourism helps the global retail.A strong retailing sector boosts tourism as seen from the experience of

Singapore and Dubai. Investment in whole supply chain Improved product

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basket from India for exports. Long term benefits,up-gradation of agriculture,

development of efficient small and medium size industries.

SWOT Analysis

Strength:1. Retailing is a " technology-intensive" industry. It is technology

that will help the organized retailers to score over theunorganized retailers. Successful organized retailers today work

closely with their vendors to predict consumer demand, shortenlead times, reduce inventory holding and ultimately save cost.Example: Wal-Mart pioneered the concept of buildingcompetitive advantage through distribution & informationsystems in the retailing industry. They introduced twoinnovative logistics techniques cross-docking and EDI(electronic data interchange).

2. On an average a super market stocks up to 5000 SKU's against afew hundreds stocked with an average unorganized retailer.

Weakness:

1. Less Conversion level : Despite high footfalls, the conversionratio has been very low in the retail outlets in a mall ascompared to the standalone counter parts. It is seen that actualconversions of footfall into sales for a mall outlet isapproximately 20-25%. On the other hand, a high street store ofretail chain has an average conversion of about 50-60%. As aresult, a stand-alone store has a ROI (return on investment) of25-30%; in contrast the retail majors are experiencing a ROI of 8-10%.

2. Customer Loyalty: Retail chains are yet to settle down with the

proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they havestabilized in terms of footfalls & merchandise mix and thus havea higher customer loyalty base.

Opportunity:

1. The Indian middle class is already 30 Crore & is projected to

grow to over 60 Crore by 2010 making India one of the



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largest consumer markets of the world. The IMAGES-KSA

projections indicate that by 2015, India will have over 55 Crore

people under the age of 20 - reflecting the enormous

opportunities possible in the kids and teens retailing

segment.

2. Organized retail is only 3% of the total retailing market in India.

It is estimated to grow at the rate of 25-30% p.a. and reach INR

1,00,000 Crore by 2010.

3. Percolating down : In India it has been found out that the top 6

cities contribute for 66% of total organized retailing. While the

metros have already been exploited, the focus has now been

shifted towards the tier-II cities. The 'retail boom', 85% of which

has so far been concentrated in the metros is beginning to

percolate down to these smaller cities and towns. The

contribution of these tier-II cities to total organized retailing salesis expected to grow to 20-25%.

4. Rural Retailing: India's huge rural population has caught the

eye of the retailers looking for new areas of growth. ITC launched

India's first rural mall "Chaupal Saga" offering a diverse range of

products from FMCG to electronic goods to automobiles,

attempting to provide farmers a one-stop destination for all their

needs." Hariyali Bazar" is started by DCM Sriram group which

provides farm related inputs & services. The Godrej group has

launched the concept of 'agri-stores' named "Adhaar" which

offers agricultural products such as fertilizers & animal feed

along with the required knowledge for effective use of the same

to the farmers. Pepsi on the other hand is experimenting with the

farmers of Punjab for growing the right quality of tomato for its

tomato purees & pastes.

Threat:

1. If the unorganized retailers are put together, they are parallel

to a large supermarket with no or little overheads, highdegree of flexibility in merchandise, display, prices and

turnover.

2. Shopping Culture: Shopping culture has not developed in India

as yet. Even now malls are just a place to hang around with

family and friends and largely confined to window-shopping.



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Conclusion:-

To conclude, it can be said that though the globalretail industry has reached its maturity, the Indian retail industryis still at its infancy. But with the huge potentiality existing in theIndian market, it is expected to grow in leaps and bounds in thenear future.

Bibliography

Internet

www.wikipedia.org

www.ril.com

www.investopedia.com

Books

Capital Budgeting: Theory and Practice by

Pamela Parrish Peterson

http://www.wikipedia.org/http://www.wikipedia.org/http://www.ril.com/http://www.ril.com/http://www.google.co.in/search?hl=en&sa=X&biw=1436&bih=715&tbs=bks:1&q=inauthor:%22Pamela+Parrish+Peterson%22&ei=mCSUTafhHo7SrQeJhLHqCw&ved=0CC4Q9Aghttp://www.wikipedia.org/http://www.ril.com/http://www.google.co.in/search?hl=en&sa=X&biw=1436&bih=715&tbs=bks:1&q=inauthor:%22Pamela+Parrish+Peterson%22&ei=mCSUTafhHo7SrQeJhLHqCw&ved=0CC4Q9Ag


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Project retail

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