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Key Trends in Indian Retailing

The document summarizes trends in the retail industry in India. Traditionally, the industry has been unorganized, fragmented, and rural-biased. However, recent changes include experimentation with new store formats, an increased focus on store design to drive impulse purchases, and the emergence of discount stores modeled after Walmart. While unorganized retailing remains prevalent, some stores are organizing in response to modern retail formats. Key drivers of future growth are favorable demographics, rising incomes, and an increasing focus on rural markets. Information technology is also being leveraged to enable online retail.

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104 views11 pages

Key Trends in Indian Retailing

The document summarizes trends in the retail industry in India. Traditionally, the industry has been unorganized, fragmented, and rural-biased. However, recent changes include experimentation with new store formats, an increased focus on store design to drive impulse purchases, and the emergence of discount stores modeled after Walmart. While unorganized retailing remains prevalent, some stores are organizing in response to modern retail formats. Key drivers of future growth are favorable demographics, rising incomes, and an increasing focus on rural markets. Information technology is also being leveraged to enable online retail.

Uploaded by

mayurgharat
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Trends in Retailing

Session: 2 Prof: Yasmin

Traditionally three factors have plagued the retail industry


Unorganized : Vast majority of the twelve million stores are small "father and son" outlets Fragmented : Mostly small individually owned businesses, average size of outlet equals 50 s.q. ft. Though India has the highest number of retail outlets per capita in the world, the retail space per capita at 2 s.q. ft per person is amongst the lowest.

Traditionally three factors have plagued the retail industry


Rural bias: Nearly two thirds of the stores are located in rural areas. Rural retail industry has typically two forms: "Haats" and Melas". Haats are the weekly markets : serve groups of 10-50 villages and sell day-to-day necessities. Melas are larger in size and more sophisticated in terms of the goods sold (like TVs)

Recent changes
Experimentation with formats: Retailing in India is still evolving and the sector is witnessing a series of experiments across the country with new formats being tested out. Ex. Quasi-mall, sub-urban discount stores, Cash and carry etc. Store design : Biggest challenge for organized retailing to create a customer-pull environment that increases the amount of impulse shopping. Research shows that the chances of senses dictating sales are up to 10-15%. Retail chains like MusicWorld, Baristas, Piramyd and Globus are laying major emphasis & investing heavily in store design.

Recent changes
Emergence of discount stores: They are expected to spearhead the organised retailing revolution. Stores trying to emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay Bazaar, RPGs.

Recent changes
Unorganized retailing is getting organized: To meet the challenges of organized retailing such as large Cineplex's, and malls, which are backed by the corporate house such as 'Ansals' and 'PVR the unorganized sector is getting organized. 25 stores in Delhi under the banner of Provision mart are joining hands to combine monthly buying. Bombay Bazaar and Efoodmart formed which are aggregations of Kiranas.

Recent trends
Multiple drivers leading to a consumption boom: Favorable demographics Growth in income Increasing population of women Raising aspirations : Value added goods sales Food and apparel retailing key drivers of growth Organized retailing in India has been largely an urban phenomenon with affluent classes and growing number of double-income households. More successful in cities in the south and west of India. Reasons range from differences in consumer buying behavior to cost of real estate and taxation laws.

Recent trends
Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption ITC is experimenting with retailing through its e-Choupal and Choupal Sagar rural hypermarkets. HLL is using its Project Shakti initiative leveraging women self-help groups to explore the rural market. Mahamaza is leveraging technology and network marketing concepts to act as an aggregator and serve the rural markets.

Recent trends
IT is a tool that has been used by retailers ranging from Amazon.com to eBay to radically change buying behavior across the globe. e-tailing slowly making its presence felt. Companies using their own web portal or tiesups with horizontal players like Rediff.com and Indiatimes.com to offer products on the web.

Trends in Retailing
Self serve Blurring of sectors High speed retail Brand experience RFID Women

Trends in Global Retailing


Social Responsibility Global consumer growth shifts away from the US Emerging market investment in developed retailers Focus on customer experience

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