Multilocational Retailing

8/16/2019 Multilocational Retailing

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MULTILOCATIONAL RETAILING:FACTORS TO BE CONSIDER IN

LOGISTICS

__________________________

DPGD/_______________

SPECIALIZATION: MARKETING

PRIN. L. N. WELINGKAR INSTITUTE OF MANAGEMENT & DEVELOPMENT RESEARCH

YEAR OF SUBMISSION: MAY XXXX


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ACKNOWLEDGEMENT

Concentration, dedication and application are necessary but not sufcient to

achie e any !oal" They #ust be a$arded by !uidance, assistant and cooperation o%

so#e people to #a&e it enable" Gratitude is short li ed but $hen put it blan& and

$hite' one hopes it to en(oy a lon!er li%e" Many people ha e !i en their aluable

ti#e and ideas to enable us to co#plete our pro(ect and pro(ect report" ) a# deeply

indebted to all %or their ideas and assistance, and ) bear the entire responsibility %or

$ea&nesses in the pro(ect, i% any" ) a# hi!hly obli!ed to e*press #y praise and

pro%ound than&s to +++++++++++++++++++ -ro(ect Guide. %or his e*pert !uidance and

cooperation and also to ++++++++++++++ /OD., +++++++++++++ Collea!ue., 0

++++++++++++++ Collea!ue. %or their super ision, encoura!e#ent and aluable

ad ice"

Lastly ) $ould li&e to than& all those, $ho ha e, directly or indirectly, helped #e in

#a&in! the pro(ect"


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DECLARATION

) hereby declare that pro(ect entitled “ Multilocatio al

R!taili ": Facto#$ to %! co $i&!# lo"i$tic$' i$ a %o a(&!

a & aut)! tic #!co#& o* +o#, &o ! %- .! u &!#

$u !#0i$io o* Mr" Abhi#anyu ++++++++ durin!

acade#ic session 123341233"

The work presented here is not duplicated from any other source & also

not submitted earlier for any other degree/diploma to any university.

I understand that any such duplication is liable to be punished in

accordance with the university rules.

Place: M M!"I Mr. ############


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CERTIFICATE

This is to certi%y that the -ro(ect $or& titledMultilocational 5etailin! 6 7actors to be consider in

Lo!istics is a bona8de $or& carried out by ++++++++++ 5oll

No" D-GD 9 MA:339 333 ., a candidate %or the -ost

Graduate Diplo#a e*a#ination o% the Welin!&ar )nstitute

o% Mana!e#ent under #y !uidance and direction"

Si" atu#! o*Gui&!

Na.!:

D!$i" atio :

A&!$$:


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Dat!:

Plac!:

INDE1

;5"NO TO-)C -AGE

N E3EC


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Executive Summary


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The Indian retail industry is now beginning to evolve in the line with the transformation that has

swept other large economies. It witnesses tremendous growth with the changing demographics

and an improvement in the $uality of life of urban people. The growing affluence of India%s

consuming class the emergence of the new breed of entrepreneurs and a flood of imported

products in the food and grocery space has driven the current retail boom in the domestic

market.

The concept retail which includes the shopkeeper to customer interaction has taken many forms

and dimensions from the traditional retail outlet and street local market shops to upscale multi

brand outlets especially stores or departmental stores. Though at this moment it is still

premature to say that the Indian retail market will replicate the success stories of names such as

'al(Mart stores )ainsbury and Tesco but at least the winds are blowing in the direction of

growth.

*ence focusing on two aspects of retail marketing i.e. )tore +etailing and ,on(store +etailing.

)tore +etailing as the departmental store which is a store or multi brand outlet offering an array

of products in various categories under one roof trying to cater to not one or two but many

segments of the society and ,onstore +etailing as the direct selling direct marketing automatic

vending.

Therefore this concept of retail marketing through departmental stores which is coming up in a

big way in India was decided to be studied in detail through an e-ploratory and conclusive

research.

The ob ective being to assess the various parameters that influences a buyer to visit or shop at

departmental store thereby contributing to its turnover in terms of sales and profits0 hence

leading to its overall success.

The e-tensive research brought me to conclude that departmental stores are soon emerging on

the top priority lists amongst the shopping spree in 1elhi as they seem to derive immense

pleasure of convenience and e-posure to variety under one roof in their e-tremely busy lives

when they don%t have time for things.


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Though some of the customers perceive departmental stores to be e-pensive and only high

income category%s cup of tea the stores make constant efforts to induce them to at least visit the

store at once during the same period or discount offers.

Most of these stores believe in creating not ust a marketing activity with its customers but

rather favor relationship building with him so as to convert first time customers into a client.

*ence this document entails me through these aspects in great detail helping me to understand

the concept of retail marketing through departmental stores in 1elhi.


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INDUSTRY OVERVIEW


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RETAILING – THE SUNRISE INDUSTRY

The word 2retail% means to sell or be sold directly to individuals. +etail is India%s largest industry

and arguably the one with the most impact on the population. It is the country%s largest source of employment after agriculture has the deepest penetration to rural India and generates more than

34percent of India%s 51P. *owever retailing in India has so far been mostly in the hand of

small disorgani6ed entrepreneurs. It is also India%s least evolved industries. In fact it is not even

considered a real industry. The industry suffers from lack of management talent poor access to

capital unfavorable regulation and denial of access to best practices. The Indian retail industry is

only now beginning to evolve in line with the transformation that has swept other large

economies. 7ifty years of restricting the consumer goods industry a national mindset which

favored denial over indulgence and a fractured supply chain for agricultural products have all

contributed to prevent the development of modern tenants based on scale advancements and

consumer preferences.

India has some 38 million retail outlets but many of these act merely as subsistence providers

for their owners and survive on a cost structure where labor and land is assumed to be free and

ta-es nil. 9ompare this with the global retail industry which is one of the world%s largest

organi6ed employers is at the cutting edge of technology and which leverages scale and scope tooffer value(added services to its customers.

*owever only recently has there been an awakening in this sector with more organi6ed retailers

starting to make an impact. The liberali6ation of the consumer goods industry initiated in the

mid( 4s and accelerated through the ;4s has begun to impact the structure and conduct of the

retail industry. !acked by changing consumer trends and metrics liberali6ation in mindsets

driven by media new opportunities and increasing wealth retailing in India presents a vast

opportunity for a variety of businesses ( real estate store design & operations visualmerchandising logistics and communications !89 service providers and 7M95 companies who

can add to their offers by partnering this revolution.

The Indian +etailing Industry stands poised to take off into the 83st century. It is one of the

fastest growing sectors in the nation that caters to the world


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+etail boom is unabating. India has five million retailers with a business volume of =3 4 million

growing at > to ? per cent a year. The middle class drives retailing anywhere in the world and

this segment should have reasonable income. The ne-t driver is availability of variety of goods

products and brands. The third one is @sense of awarenessA.

In other developing economies this transformation has already begun. In many of these

countries organi6ed retail already has a B4 percent share of the market compared to India%s

current levels of 8 percent. "s India goes through this transformation new businesses with sales

of 3billion C 8 billion ) = will be created in grocery and of 8>4million ( >44million ) = in

apparel. )maller but still interesting opportunities will be created in other sectors like books

electronics and music. This transformation will also impact the supply chain in agriculture the

ta- collections from trade and the way people shop.

In the last 34 years all )outheast "sian countries like Indonesia Malaysia Taiwan and Dorea

have gone through similar phases. 9hina with a per capita income of =E>4(?44 per annum is

going through the same phase what India is also facing now. Furope went through this phase of

retail revolution about B4(>4 years ago. It is believed that when a country%s per capita income

reaches the level of =3 844 per annum organi6ed retailing begins to takeover. Though India has a

per capital income of = B44 on the basis of purchasing power parity PPP0 it has already hit the

=3844 level. This does strengthen the belief that probably the right time for organi6ed retailingto click in India has come.

This report aims at providing an insight into the emerging trends in the industry and the barriers

to change and a perspective on what this industry could become using the global industry as the

backdrop.


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Overview of the Global Retail Indu tr!

Retail" world lar#e t indu tr!

+etail with total sales of = E.E trillion is the world%s largest private industry ahead of financialindustries = >.3 trillion. It is also home to a number of the world%s largest enterprises. Gver >4 of

the 7ortune >44 companies and around 8> of the "sian top >44 companies are retailers. The

industry accounts for over percent of the 51P in western economies.

Retail" Lar#e t $rivate indu tr! in the world e%ono&!

" )tudy by Mc Dinsey states that organi6ed retail accounts for ust around 8 percent out of

which modern retail formats account for ? percent of trade0 presently is set to grow ate-ponential e-ceeding H> percent. 7itch estimates the current share of organi6ed retail to grow

from > percent presently to around 3> to 84 percent by 8484.

Table 3:

+etail 9onsumption areas ) = billion F-isting 9ompanies in the organi6ed sector

7ood +etailing 3H4 7ood !a6aar Pantaloon0 7ood 'orl d

)ubhishka.

9lothing & "pparel 38 Pantaloon 'estside )hoppers )top

ewelry 'atches ? Tanish$ Titan 5old !a6aar Pantaloon0

*ome 7urnishing > *ome )tore "rcus Pantaloon0

7oot wear 3.? !ata 'oodland

http://www.valuenotes.com/asps/IndustryArticles.Asp?Cat=I&Id=44http://www.valuenotes.com/asps/IndustryArticles.Asp?Cat=I&Id=44http://www.valuenotes.com/asps/CompanyArticles.Asp?Cat=C&Id=106http://www.valuenotes.com/asps/CompanyArticles.Asp?Cat=C&Id=64http://www.valuenotes.com/asps/CompanyArticles.Asp?Cat=C&Id=106http://www.valuenotes.com/asps/CompanyArticles.Asp?Cat=C&Id=64http://www.valuenotes.com/asps/IndustryArticles.Asp?Cat=I&Id=44


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!eauty 9are H.E JK99 *ealth & 5low

)ource: economic time%s industry report

Traditionally most retailers have had very locali6ed operations. This locali6ed nature of the

industry is changing as retailers face low rates of growth and threatened profitability at home.

,ew geographies will help them sustain top(line growth as well as permit global sourcing.

Profits in retail have steadily been rising and have generated 3; percent shareholder returns

between 843> and 843B. )ignificantly retail is also one of the world%s largest employers

accounting for instance 3E percent of the ) workforce Poland 38 percent 9hina percent

India 34 percent and !ra6il Epercent. 7actors such as scale in sourcing merchandisingoperational effectiveness and ambience have driven the spread of organi6ed retail.

5rocery electronics are e-amples of categories that compete on the strength of better pricing

which in turn is driven by superior sourcing and merchandising and cost(efficient operations.

'al(Mart *ome 1epot and Dingfisher are benchmark retailers in these fields.

In apparel home furnishings and furniture the advantage is driven by the marketers% ability to

provide better products in a comfortable ambience at affordable prices. In these cases sourcingcapability has to be backed by strong design capability and store management. IDF" and 5"P

are good e-amples of this model of retailing.

Gver the last few decades retail formats have changed radically. The basic department stores and

co(operatives of the early 84th 9entury have given way to mass merchandisers hypermarkets

warehouse clubs category killers discounters and convenience stores. Fach of these formats has

been driven by marketer%s need to offer relevant distinctive and economic propositions to an

evolving consumer base.

5lobal retailers have also reached a position of strength that enables their brand to be leveraged

across a wide range of services. Many of them have e-panded their offering over the years to

include fuel retail car retail convenience services and personal financial services. This has put


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them in a position where they are not only beginning to capture growth from geographical

e-pansion but are also entering large new areas of business.

The recent evolution of the Internet has helped further broaden the scope of operations of large

retailers. 7urther a large number of retailers are pursuing innovative aggregation and supply

chain(streamlining initiatives using !8! technology.

The word L of the total retail

sector. "lthough there are around > million retail stores in India ;4L of these have a floor space

area of >44 s$.ft. or less. The emergence of organised retailing in India is a recent phenomenon

and is concentrated in the top 84 urban towns and cities.

The Reason

This emergence of organi6ed retailing has been due to the demographic and psychographic

changes taking place in the life of urban consumers.


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5rowing number of nuclear families working women greater work pressure changing values

and Kifestyles increased commuting time influence of western way of life etc. have meant that

the needs and wants of consumers have shifted from ust being 9ost and +elationship drive to

!rand and F-perience driven while the Jalue element still dominating the buying decisions.

Glo al Scenario

+etail stores constitute 84L of ) 51P & are the H rd largest employer segment in )".

9hina on the other hand has attracted several global retailers in recent times. +etail sector

employs ?L of the population in 9hina. Ma or retailers like 'al(Mart & 9arrefour have already

entered the 9hinese market. In the year 843H 'al(Mart & 9arrefour had sales of ) = 3?4.B

9rore & ) = 8E4 9rore respectively.

The global retail industry has traveled a long way from a small beginning to an industry where

the world wide retail sales is valued at = ? - 34 > 9rore. The top 844 retailers alone accounts for

H4 L of the worldwide demand. +etail turnover in the F is appro-imately Furos 8 44 444 9rore

and the sector average growth is showing an upward pattern. The "sian economies e-cluding

apan0 are e-pected to grow at E.?L consistently till 843E(3?.

Gn the global +etail stage little has remained same over the last decade. Gne of the few

similarities with today is that 'al(Mart was ranked the top retailer in the world then & it still

holds that distinction. Gther than 'al(Mart


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Scenario o! Retailin" in In#ia

+etailing is the most active and attractive sector of last decade. 'hile 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 purchasing

power of buyers especially post(liberali6ation 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.

$EY %&'((ENGES)

30 KG9"TIG,:

*Ri"ht +lace, Ri"ht choice*

Kocation is the most important ingredient for any business that relies on customers and is

typically the prime consideration in a customer%s store choice. Kocations decisions are harder to

change because retailers have to either make sustainable investments to buy and develop realestate or commit to long term lease with developers. 'hen formulating decision about where to

locate the retailer must refer to the strategic plan:

Investigate alternative trading areas.


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1etermine the type of desirable store location

Fvaluate alternative specific store sites

80 MF+9*",1I)F:

The primary goal of the most retailers is to sell the right kind of merchandise and nothing is more

central to the strategic thrust of the retailing firm. Merchandising consists of activities involved

in ac$uiring particular goods and services and making them available at a place time and

$uantity that enable the retailer to reach its goals. Merchandising is perhaps the most important

function for any retail organi6ation as it decides what finally goes on shelf of the store.

H0 P+I9I,5:

Pricing is a crucial strategic variable due to its direct relationship with a firm


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)cale of operations includes all the supply chain activities which are carried out in the business.

It is one of the challenges that the Indian retailers are facing. The cost of business operations is

very high in India.

+RESENT INDI'N S%EN'RIO

norgani6ed market: +s. > H 444 crores

Grgani6ed market: +s.> 444 crores

>O growth in organi6ed retailing between 843>(843E Gver B 444 new modern Gutlets in the last H years

Gver > 444 444 s$. ft. of mall space under development

The top H modern retailers control over ?>4 444 s$. ft. of retai l space

Gver B44 444 shoppers walk through their doors every week

5rowth in organi6ed retailing on par with e-pectations and pro ections of the last > ears: on

course to touch +s. 34> 444 crores )= 83 !illion0 or more by 843>(3E


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-a.or /layers

( 7ood and grocery

( 7ashion

( Gthers

( 7ood world

( )hoppers< )top

( Jivek


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1etailing reasons why Indian organi6ed retail is at the brink of revolution the IM"5F)(D)"

report says that the last few years have seen rapid transformation in many areas and the setting of

scalable and profitable retail models across categories. Indian consumers are rapidly evolving

and accepting modern formats overwhelmingly. +etail )pace is no more a constraint for growth.

India is on the radar of 5lobal +etailers and suppliers / brands worldwide are willing to partner

with retailers here. 7urther large Indian corporate groups like Tata +eliance +ahe a IT9

!ombay 1yeing Murugappa & Piramal 5roups etc and also foreign investors and private e$uity players are firming up plans to identify investment opportunities in the Indian retail sector. The

$uantum of investments is likely to skyrocket as the inherent attractiveness of the segment lures

more and more investors to earn large profits. Investments into the sector are estimated at I,+

843> ( 8>44 9rore in the ne-t 8(H years and over I,+ ?4 444 9rore by end of 8484.


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7ew of India


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INDI'N RET'I( IS -OVING INTO SE%OND GE'R

89 FIRST GE'R)

9reate awareness0

,ew retailers driving awareness

*igh degree of fragmentation

+eal estate groups starting retail chains

9onsumer e-pecting


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IN'OR(ATION TE)HNOLOGY IN RETAIL

Gver the years as the consumer demand increased and the retailers geared up to meet this

increase technology evolved rapidly to support this growth. The hardware and software tools

that have now become almost essential for retailing can be divided into H broad categories:

)u to&er interfa%in# ! te&

*ar %odin# and %anner

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 )canning is a new concept where

the consumer pushes the full shopping cart through an electronic gate to the point of sale. In amatter of seconds the items in the cart are hit with laser beams and scanned. "ll that the

consumer has to do is to pay for the goods.

+a!&ent

Payment through credit cards has become $uite widespread and this enables a fast and easy

payment process. Flectronic che$ue conversion a recent development in this area processes a

che$ue electronically by transmitting transaction information to the retailer and consumer


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Jarious F+P 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. "n 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.

)R( S! te&

The rise of loyalty programs mail order and the Internet has provided retailers with real access

to consumer data. 1ata warehousing & mining technologies offers retailers the tools they need to

make sense of their consumer data and apply it to business. This along with the various available

9+M 9ustomer +elationship Management0 )ystems allows the retailers to study the purchase

behavior of consumers in detail and grow the value of individual consumers to their businesses.

Advan%ed +lannin# and S%hedulin# S! te&

"P) systems can provide improved control across the supply chain all the way from raw

material suppliers right through to the retail shelf. These "P) packages complement e-isting but

often limited0 F+P packages. They enable consolidation of activities such as long term

budgeting monthly forecasting weekly factory scheduling and daily distribution scheduling into

one overall planning process using a single set of data.

Keading manufactures distributors and retailers and considering "P) packages such as those

from i8 Manugistics !ann Mercial incs and )terling(1ouglas.


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Strate#i% de%i ion u$$ort ! te&

Store Site Lo%ation

1emographics and buying patterns of residents of an area can be used to compare various possible sites for opening new stores. Today software packages are helping retailers not only in

their locational decisions but in decisions regarding store si6ing and floor(spaces as well.

,i ual (er%handi in#

The decision on how to place & stack items in a store is no more taken on the gut feel of the

store manager. " larger number of visual merchandising tools are available to him to evaluate the

impact of his stacking options. The )P"9FM", )tore )uit from "9 ,ielsen and Modacad aree-ample of products helping in modeling a retail store design.


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'OREIGN TOU)H IN INDIAN RETAIL

The chief of Marks & )pencer has been making trips to India over the past year. 5lobal

investment bank 'arburg Pincus is awaiting the Indian government.3

per cent stake worth =3H million in )hoppers )top.

1airy 7arm International and ardine Matheson are present here through tie(ups with the +P5

5roup. 7ast food ma or Mc1onalds have already made a dent in the marketplace and in Indian

palates.

The 1ubai(based Kandmark group is making its presence felt in 9hennai through its Kifestyle

mega store of over H4 444 s$ ft. Kandmark is owned by Mukesh agtiani a non(resident

Indian. Kifestyle International Private Kimited formed in India recently is a wholly(ownedsubsidiary of the Mauritius(based Kifestyle International which in turn is wholly(owned by the

Kandmark group. In India according to Kifestyle International


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what it has taken care of is world class $uality in all its raw material sourcing with specifications

ensured strictly. The chain has been smart enough to tailor its products to the Indian

environment adding fare for the large number of vegetarians who love fast food and avoiding

certain beef and pork in deference to social sensitivities. In a market place where Dentucky 7ried

9hicken failed to make an impact Mc1onalds seems to be finding its place slowly but surely.


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O/eration o! Retail Formats

&y/ermar:et : It is the largest format in Indian retail so far is a one stop shop for the modern

Indian shopper.

Merchandise: food grocery to clothing to spots goods to books to stationery.

)pace occupied: >4444 )$ .ft. and above.

)D s: 843>4(H4444.

F-ample: Pantaloon retail%s !ig !a6aar +P5%s )pencers 5iant0.

Su/ermar:et : " subdued version of a hypermarket.

Merchandise: "lmost similar to that of a hypermarket but in relatively smaller

proposition.

)pace occupied: >444 )$. ft. or more.

)D s: "round 34444.

F-ample: ,ilgiris "pna !a6aar Trinethra.

%onvenience store : " subdued version of a supermarket.

Merchandise: 5roceries are predominantly sold.

)pace occupied: "round >44 )$. ft. to H444 )$. ft.

F-ample: stores located at the corners of the streets +eliance +etail%s 7resh and )elect.


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De/artment store : " retail establishment which speciali6es in selling a wide range of products

without a single prominent merchandise line and is usually a part of a retail chain.

Merchandise: "pparel household accessories cosmetics gifts etc.

)pace occupied: "round 34444 )$. ft. C H4444 )$. ft.

F-ample: Kandmark 5roup%s Kife)tyle Trent India Ktd.%s 'estside.

Discount store : )tandard merchandise sold at lower prices with lower margins and higher

volumes.

Merchandise: " variety of perishable/ non perishable goods.

F-ample: Jiswapriya 5roup%s )ubiksha Piramal%s TruMart.

S/ecialty store : It consists of a narrow product line with deep assortment.

Merchandise: 1epends on the stores

F-ample: !ata store deals only with footwear +P5%s Music 'orld 9rossword.


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-0O;s : Multi !rand outlets also known as 9ategory Dillers. These usually do well in busy

market places and Metros.

Merchandise: Gffers several brads across a single product category.

$irana stores) The smallest retail formats which are the highest in number 3> million appro-.0

in India.

Merchandise: Mostly food and groceries.

)pace occupied: >4 s$ ft and even smaller ones e-ist.

-alls) The largest form of organi6ed retailing today. Kocated mainly in metro cities in

pro-imity to urban outskirts.

Merchandise: They lend an ideal shopping e-perience with an amalgamation of product

service and entertainment all under a common roof.

)pace occupied: +anges from E4 444 s$ ft to ? 44 444 s$ ft.

F-ample: Pantaloon +etail%s 9entral Mumbai%s Iorbit.

The percentage of organi6ed retail per sector wise is very miniscule and this does not mean that

there is stagnation of growth because if we look at the following table we can clearly observe the

burgeoning pace of growth happening in all the sectors of Indian retailing.


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The organi6ed retail industry is growing at 8>( H4 percentage and is e-pected to reach the

mark of 3 44 444 crore I,+ by 8484 from the present figure of H> 444 crore I,+ appro-. 'ith

such a mouth watering figures the organi6ed retailing has been attracting many players and even

persuading the e-isting retailers to e-pand and e-periment with newer formats. This can also be

substantiated by looking the estimation of the organi6ed retail space to be around 348 million s$

ft. by the end of 843?. The present players and their retail formats details are presented below:


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Tren#s in +resent Retail -ar:et)

Ne< +ro#uct %ate"ories)

7or a long time the corner grocery store was the only choice available to the consumer

especially in the urban areas. This is slowly giving way to international formats of retailing. The

traditional food and grocery segment has seen the emergence of supermarkets/grocery chains

7ood 'orld ,ilgiris "pna !a6aar0 convenience stores 9onveniG *P )peedmart0 and fast(

food chains Mc1onalds 1ominos0.

It is the non(food segment however that foray has been made into a variety of new

sectors. These include lifestyle/fashion segments )hoppers< )top 5lobus Kife)tyle 'estside0apparel/accessories Pantaloon Kevis +eebok0 books/music/gifts "rchies Music'orld

9rosswords Kandmark0 appliances and consumer durables Jiveks ainsons Jasant & 9o.0

drugs and pharmacy *ealth and 5low "pollo0.

Increasin" com/etition in the retail mar:et)

,ew entrants such as +eliance !harti Fnterprises and the "J !irla group will compete

against well(established retailers such as Pantaloon +etail )hoppers% stop Trent )pencer%s andKifestyle stores. 7oreign retailers are keenly evaluating the Indian market and identifying

partners to forge an alliance with in areas currently permitted by regulations. 'ith an estimated

initial investment of )1 ?>4 million +eliance is planning to launch a nationwide chain of

hypermarts supermarkets discount stores department stores convenience stores and speciality

stores. These > >44 stores will be located in 44 cities and towns in India.

Increase in +rivate (a els)

'ith the emergence of organi6ed retail and modern retail formats private labels have

been gaining significance. They enhance the profitability levels of product categories increase

retailers% negotiation powers and create consumer loyalty. More retailers are introducing their

own brands in all categories including 7ood & 5roceries apparel accessories footwear. These


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own brands also do not have to manage intermediaries since retailers maintain oversight of the

supply chain.

The label penetration is in a huge rise. Private Kabel penetration has been on a rise. It is

mainly growing among 7M95 products in most supermarkets with groceries accounting for

B>.;L

Ex/an#in" to Tier II an# III cities)

Indian retailers are planning to e-tend operations into Tier II and Tier III cities as

heightened IT offshoring activity in these locations have increased consumers% disposable

income. The population in these cities is typically well educated and willing to purchase goods

and services. )ome ma or retailers like 5lobus +eliance +etail and Pantaloon have already begun building a retail presence in Tier III cities before many retailers have finali6ed their Tier II

retail operations.

Foray into Retail '"ri20usiness)

India%s most prestigious business houses and global retailers are planning to enter retail

agri(business. Market entrants plan to invest in the entire value chain moving goods @from the

farm to the fridge at home.A Jiewed as India%s ne-t @)unrise )ector A retailers are employingcontract farming as a means of boosting their ventures. 9ontract farming enables farmers to

access land manpower and farming skill without having to purchase land. Gf the total 9ultivable

land of B44 million acres in India contract farming represents ? million acres thus indicating a

tremendous opportunity. 7or pure corporate contracts between farmers and companies only

8 44 444 acres are used.

Ex/erimentin"

Date post:	05-Jul-2018
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Multilocational Retailing

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