Chapter 4

Shopping Environment
India

The previous chapter described the three stages through which markets develop. This chapter
describes the current shopping environment in India.
India has sometimes been called a nation of shopkeepers. This epithet has its roots in the huge
number of retail enterprises in India, which totalled over 12 million in 2003 (refer figure 1 for details
of outlets in a market in India). The country has the highest per capita outlets in the world - 5.5
outlets per 1000 population. About 78% of these are small family businesses utilising only household
labour. Even among retail enterprises that employ hired workers, the bulk of them use less than three
workers1. This has however been changing and the 2005 Global Retail Development Index (GRDI)
study finds India moving from the second position to the top slot, pushing Russia to the second place.
Russia held the top slot since 20032. The retail growth in different countries is shown in figure 1.
Figure 1

Source: Retail Asia 2005, KPMG in India Analysis 2005

Retail Business
Estimates vary widely about the true size of the retail business in India. AT Kearney estimated it to be
Rs 4,00,000 crore in 1999 which more than doubled by 2005. The size of the corporate-owned retail
business was Rs 15,000 crore in 1999 and grew to Rs 35, 000 crore by 2005 and expected to grow at
a rate of 40 per cent per annum3.

As per the IMAGES F&R Research, the total private consumption expenditure (in direct retail sales) is
estimated at INR 10,500 billion (US $233 billion) growing at 5 percent annually; the estimated share
of organised retail is only INR 350 billion (US $8 billion) at present, albeit growing at over 30 per cent
every year.

1
http://www.euromonitor.com/Retailing_in_India
2
Retailing: "India tops list of 30 attractive countries" Hindu July 12, 2005
3
FDI in retailing — Short-changing the kirana store? Mohan Guruswamy, Businessline, Jan 06, 05
As per the CII report4 retail sales in India grew at 7% during 1999-2003 and amounted to about
Rs.7400 billion in 2002. With the upturn in economic growth during 2003, retail sales expanded at a
higher pace of nearly 10%. Across the country, retail sales in real terms were predicted to rise more
rapidly than consumer expenditure during 2006-08. The forecast growth in real retail sales during
2003- 2008 was 8.3% per year, compared with 7.1% for consumer expenditure. Sales from the
organized stores are to expand at growth rates ranging from 24% to
49% per year during 2003-2008, according Euromonitor International, a leading provider of global
consumer-market intelligence.

Food, beverages and tobacco accounted for as much as 71% of retail sales in 2002. The share of food
related items had, however, from 73% in 1999. Sales through supermarkets and department stores
are small compared with overall retail sales. Nevertheless, their sales have grown much more rapidly,
at almost a triple rate (about 30% per year during the review period). This high acceleration in sales
through modern retail formats is expected to continue during the next few years, with the rapid
growth in numbers of such outlets due to consumer demand and business potential.

The factors responsible for the development of the retail sector in India can be broadly summarized
as follows:
 Rising incomes and improvements in infrastructure are enlarging consumer markets and
accelerating the convergence of consumer tastes. National Council of Applied Economic
Research (NCAER) classified approximately 50% of the Indian population as low income in
1994- 95; which is expected to decline to 17.8% by 2006-07.
 Liberalization of the Indian economy which has led to the opening up of the market for
consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. to make
significant inroads into the vast consumer market by offering a wide range of choices to the
Indian consumers.
 Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.
 The internet revolution is making the Indian consumer more accessible to the growing
influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in
creating awareness about global products for local markets. About 47% of India’s population
is under the age of 20; and this will increase to 55% by 2015. This young population, which is
technology-savvy, watch more than 50 TV satellite channels, and display the highest
propensity to spend, will immensely contribute to the growth of the retail sector in the
country. As India continues to get strongly integrated with the world economy riding the
waves of globalization, the retail sector is bound to take big leaps in the years to come.

The major retail sectors in India can be broadly classified into:

a) FOOD RETAILERS
There are large number and variety of retailers in the food-retailing sector.
Traditional types of retailers, who operate small single-outlet businesses mainly using family labour,
dominate this sector .In comparison, super markets account for a small proportion of food sales in
India. However the growth rate of super market sales has being significant in recent years because
greater numbers of higher income Indians prefer to shop at super markets due to higher standards of
hygiene and attractive ambience.

b) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on health and beauty products.
Here also small, single-outlet retailers dominate the market. However in recent years, a few retail
chains specializing in these products have come into the market. Although these retail chains account
for only a small share of the total market , their business is expected to grow significantly in the
future due to the growing quality consciousness of buyers for these products .

4
RETAIL SCENARIO IN INDIA. Unlimited Opportunity CII report 2004
c) CLOTHING & FOOTWEAR
Numerous clothing and footwear shops in shopping centers and markets operate all over India.
Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing and
footwear stores have modern products and attractive displays to lure customers. However, rapid
urbanization, and changing patterns of consumer tastes and preferences, is helping the modern
formats.

d) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this market, very few large and
modern retailers have established specialized stores for these products. However there is
considerable potential for the entry or expansion of specialized retail chains in the country.

e) DURABLE GOODS
The Indian durable goods sector has seen the entry of a large number of foreign companies during
the post liberalization period. A greater variety of consumer electronic items and household
appliances became available to the Indian customer.
Intense competition among companies to sell their brands provided a strong impetus to the growth
for retailers doing business in this sector.

f) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities have encouraged consumer
expenditure on leisure and personal goods in the country. There are specialized retailers for each
category of products (books, music products, etc.) in this sector. Another prominent feature of this
sector is popularity of franchising agreements between established manufacturers and retailers.

Figure 2 shows the growth of various retail sectors.

Figure 2

Source: KPMG India Retail Survey 2005

Retail structure
Organised and Unorganised sectors
The retail industry is divided into the organised and unorganised sectors. The former refers to
businesses employing more than ten persons and includes the corporate-backed hypermarkets and
retail chains. The organised sector accounts for just 2 per cent of the trade and employs just five lakh
persons. The latter refers to the traditional formats of low-cost retailing such as the local kirana
shops, owner-manned general stores, paan/beedi shops, convenience stores, handcart and pavement
vendors, and employs over four crore persons.

(6) Employees in Stores - Wages of employees

 Employee Nos.
- 40% of the stores (On an Avg. 250-400 sq. ft. area size) are having only 2 employees.

- 24% of stores (400-600 sq. ft area size) have 3-4 employees.

- 16% of stores (700 sq. ft and above area size) have 4 employees.
- 8% of the stores (200 sq. ft area size) even do not have any employees – small size store.
Owner operates along with his maid (male) or family member(s).
 Wages
- 56% of the store owners pays wages in the range of Rs.2000-2500/- per month to its
employees.
- 20% of the store owner pays wages in the range of Rs.3000-3500/- per month to its
employees.
- 12% of the store owner pays wages in the range of Rs.1000-1500/- per month to its
employees.
- Remaining 12% of the stores owners does not pay any wages as their family member (s)
gives a helping hand in the store operations.

India's retail sector is highly fragmented, with over 12 million outlets operating in the country. As
much as 96 per cent of the outlets are smaller than 500 square feet in area. (retailers survey in
Mumbai is shown in fig). This means that India per capita retailing space is about 2 square feet
(compared to 16 square feet in the United States). India's per capita retailing space is thus the lowest
in the world (source: KSA Technopak (I) Pvt Ltd, the India operation of the US-based Kurt Salmon
Associates). Its greatest contribution is that it is labour-intensive. Compare this with an employment
of just 0.9 million in the US, yet doing a business more than 13 times of the Indian retail market size.

Since the early 1990s the retail scenario in India has been characterised by a major shift from
traditional kirana shops to modern formats that include department stores, hypermarkets,
supermarkets and specialty stores across a wide range of categories. Today, these retail formats have
established good presence across prime locations in the metropolitan and mini-metro centres and
the last few years have seen them spreading out to the second-tier cities and towns, thereby exposing
consumers in these areas to modern shopping options and experiences like never before 5. The
growth of the organized and unorganized retailing formats is given in table 1.

Share of Organised Retail

1999 2002 2005
Total Retail (in billion INR) 7000 8250 10000
Organized Retail (in billion INR) 50 150 350
% Share of Organized Retail 0.70% 1.80% 3.5%
Source: INDIA RETAIL REPORT 2005, -KSA Technopak study

Modern Stores Are Booming (Pg.No.98)

They have been growing at 15 per cent CAGR for the last five years, and account for 3 per cent of
FMCG sales today.
Year Stores (Thousands)
1995 0.7
1996 0.8
1997 0.9
1998 1.1
1999 1.2
2000 1.5
2001 1.8
2002 2.1
2003 2.4
2004 2.5
Source: “The Emerging Retail Landscape,” (Pg. No.98) Business Today, July 3, 2005.

Reasons why Indian Organized Retail is at the brink of Revolution :

> Scalable and Profitable Retail Models are well established for most of the categories
> Rapid Evolution of New-age Young Indian Consumers
> Retail Space is no more a constraint for growth
> Partnering among Brands, retailers, franchisees, investors and malls
> India is on the radar of Global Retailers Suppliers

5
Mohanty Pravaban, The other Retail Story, Images Retail, May 2006.
Source: India Retail Report 2005

Retail formats
As mentioned in the earlier chapter India has different formats like Malls, Specialty stores, general
merchants, kirana, kiosks etc operating at the same time.

Malls In India
Over the last 2-3 years, the Indian consumer market has seen a significant growth in the number of
modern-day shopping centers, popularly known as ‘malls’. There is an increased demand for quality
retail space from a varied segment of large-format retailers and brands, which include food and
apparel chains, consumer durables and multiplex operators. From just 3 malls in 2000, India is all set
to have over 2000 malls in the next few years. Table 2 gives the retail formats adopted by major
players in the retail sector in India. According to consultancy firm Technopak, the industry will see
$20bn of fresh investments (excluding investments in real estate), at least 6.5m new direct and
indirect jobs6. Refer Box 1.

Table 2: Formats adopted by key players

Retailer Original formats Later formats
RPG Retail Supermarket Hypermarket (Spencer's),
(Foodworld) Specialty store (Health & Glow)
Piramal's Department store (Piramyd Discount store (TruMart)
Megastore)
Pantaloon Retail Small format outlets Supermarket (Food Bazaar),
(Shoppe), Department store Hypermarket (Big Bazaar), Mall
(Pantaloon) (Central)
K Raheja Group Department store (Shopper's Supermarket (TBA),
Stop), Specialty Hypermarket (TBA),
store(Crossword)
Tata/ Trent Department store (Westside) Hypermarket (Star India
Bazaar)
Landmark Group Department store (Lifestyle) Hypermarket (TBA)
Others Discount store (Subhiksha, Margin Free, Apna Bazaar),

6
http://www.indiaaidcshow.com/newsfiles/47.htm
 Supermarket (Nilgiri's), Specialty Electronics (Vivek's, Vijay Sales)
Source: KPMG in India analysis 2005

Malls aim to provide complete shopping experience. For example Ansal plaza in New Delhi has gone
about providing shopping experience by:
 Fully air- conditioned building with a 100% power back-up system.
 Covered car parking space on two level basements with a capacity for over 700 cars with
additional 300 car parking on ground level.
 Escalators and Glass lifts.
 C.C.TV monitored security system.
 A unique pollution control tower (mechanical scrubber) to ensure a perfectly clean and
healthy environment.
 Water cascade and fountains spread all through the water channel amidst landscaped
greenery and abundant plantations.
 Corridors, passages and lobbies have granite and marble combination floorings.
 The exterior of the complex have permanent stone cladding.

Inevitable Growth Southern Bias

Despite regulatory hurdles, modern retail will Modern trade in FMCG booms in southern metros.
account for 10 per cent of FMCG sales by 2010. (figures are shares in per cent)
India 2010
 More than 5,500 modern trade stores India (U & R) 3
 Account for 10 per cent of India FMCG
 30 per cent of metro FMCG Urban India 4

23 Metros 9

South Metros 20
Source: “The Emerging Retail Landscape,” (Pg. No.98) Business Today, July 3, 2005.

Specialty stores
The churn in the country’s retail sector has ushered in the multi-brand, all-under-one-roof the
speciality store catering to niche products and consumers.

Sharda Technology
Speciality stores differ from department stores and supermarkets based on the range of
merchandise7 available. Specialty stores are small stores which specialise in a specific range of
merchandise and related items. Most stores have an extensive width and depth of stock in the item
that they specify in and provide high levels of service and expertise. The pricing policy is generally in
the medium to high range, depending on factors like the type and exclusivity of merchandise and
ownership, that is, whether they are owner operated or a chain operation. Chain operated have the
advantage of bulk purchasing and centralised warehousing system. Example of speciality store is
described below.

Name of the Outlet: Saligram Lifestyle (Multibrand Men’s Readymade Fashion Store)

Display of Products
7
http://en.wikipedia.org/wiki/Specialty_store
Product Overall Display
All the jeans are stacked in the order of
waist sizes in a vertical rack. The top
row of the rack consisted of size 28, the
2nd row (from top) size 30, the next one
size 32, while the lower row consisted
of all the other sizes (most of which are
size 34). Brands are predominantly
displayed in the transparent glass for
Jeans people passing by the shop.
Kept in transparent glass displays.
They are also displayed behind the
counter. Round neck t-shirts and the
collar ones are displayed separately.
The round necks carry printed designs,
slogans, witty messages etc. all
directed at the youth. While the
Collared Tees come in solids as well as
T-Shirts stripes.
The brands of shirts displayed are
Excalibur, Crocodile, FM, Ruggers, Pan-
America. Local Brands of shirts are
Passport, Zedd, Cairo, D’Sir. The fastest
Shirts moving are sizes 40 and 42.
A very few of these are stacked in the
shop most of which are of a local
brand. They are available in only sizes
28, 30 and 32. Their stock is less owing
to the low demand they had in the
recent past. Much of the demand has
Cargo sifted to the casuals according to the
Pants shop owner.
The entire branded are stacked in the
same rows as Non-branded on the
basis of waist size. But within a row,
Casual the banded are kept separate from the
Trousers non-branded.
Shop Layout New Bombay store (another speciality store):
Specific arrangement
In each row all the jeans of each brand are
stacked side by side, Lee, Levis, Newport and
local brands like stitch and passport. The
fastest moving are sizes 30 and 32, followed
by 28. Hence, size 30 is kept in the second
row which is at an optimal height with
respect to the average male Indian height. The
sizes 28 and 32 are placed just above and
below with respect to it. Different shades of
blue and black are the fast moving in this
category and hence are predominantly
displayed.
The round necks especially with printed
designs targeted at the youth are
predominantly on display, compared to the
solids or stripes with collar. Most of the T-
shirts especially the round neck ones are local
brands.
The shirts are again arranged in rows on the
basis of their being solids (top row), stripes
(2nd row), and checks (3rd row from top).
Other types of designs in the bottom row.
Within a row, the space is partitioned
between half hands and full hands. One rack
consists of all the national brands while local
brands are stacked in another rack beside
this.
All the cargos are stacked along with the
casuals in the order of waist sizes in a vertical
rack. The top row of the rack consisted of size
28, the 2nd row (from top) size 30, the next
one size 32, while the lower row consisted of
all the other sizes (most of which are size 34).
They stacked in a rack along with the Cargos
as mentioned above. Most of the brands in the
casual category are local brands. The national
brands that are stocked and displayed are
crocodile, ruggers, FM and Lee.
 1. Ladies Tops
2. Cashier Counter
3. Adidas Rack – PoP Promos (Topmost rack)
4. Adidas Caps and Socks (Below the PoP rack)
5. Adidas Rack (Below the PoP rack)
a. Top – Adidas Shoes
b. Bottom – Adidas and threadz T-Shirts
6. Dockers Rack – Sweat shirts and trousers of Dockers.
7. Changing Room
8. Unnamed Rack – Levi’s Denim
9. Levi’s Rack – Levi’s Denim
10. Levi’s Accessories PoP rack – Levi’s sweater and Adidas jackets stored.
11. Levi’s Rack – But Adidas jackets and Threadz Tops stored
12. Unnamed rack – Adidas Apparel
13. Unnamed Rack - Adidas Shorts and Levi’s shorts
14. Unnamed cabinet – Levi’s Jackets and tops and Adidas jackets
15. Levi’s Poster
16. Mannequin with Levi’s Apparel

Display of products:
There was no specific order in which the products were stored. All the apparel was
segregated into:
 Jeans
 Shorts
 Shoes
 Tops
  Jackets and Sweaters
And all of this apparel had different racks.

Display of brands:
 Though the shop is supposed to be for only two brands, Levi’s and Adidas, there was
also a local brand called Threadz present in the shop.
 The two brands were displayed on either side of the shop with all Levi’s apparel and
accessories on the left hand side of the shop and the Adidas apparel and accessories
on the right hand side.
 The threadz brand was stacked along with Adidas.

Display of Point of Purchase advertisements (POP):

 The shop had both Levi’s and Adidas glow signs above the entrance. But Adidas
clearly had more space on the POP.
 The poster on the entrance glass (15) was of Levi’s and the mannequin had Levi’s
apparel.
 Adidas had a huge top rack (3) for its PoP inside the shop.

Block diagram of the outlay of the shop

Display units of the unbranded gold ornaments

Kirana stores/ Grocery stores

At present, kirana stores, as mentioned earlier, are more popular than modern format stores due to
their close proximity to customers. The local kirana stores, fondly called the ‘Moms and Pops’ of India
are usually around 500 to 800 sq ft in size. Omni-present, low-key outlets, they’re run by owners/
proprietors who know their business well and pass on the knowledge to the next generation. The
small shops account for about 64% of all shops, with the medium-size shops accounting for 25%. The
large shops account for only 8% and the very large ones, only 3%.

Mainly family operated kirana stores have minimal labour costs. The focus is on creating and
retaining clients. As a result, the owner has been ingrained in the psyche of the Indian consumer and
he knows his customers’ shopping habits personally. He knows the brand of basmati rice a customer
prefer, or the brand of garam masala he hates. The Kirana store would provide the customer with
easy credit and a hassle-free monthly settlement. Due to this these outlets enjoy a customer
patronage of about 70-80%. This store format saw a moderate growth of 7% in current value terms in
2005.

Despite the new formats the kirana stores would continue. Moreover, several modern format retailers
such as Big Bazaar, Haiko, D’Mart and Foodland have formed partnerships with kirana stores to
maximize neighborhood sales. With these partnerships, kirana’s will increase profit margins due to
efficient supply chains and reduced wasatge, and modern format stores extend their reach deeper
into neighborhoods8 (Also Refer Box 2). An example of a typical kirana store / grocery store is
described below.

Banmali Sahu Shop

(Location of the Shop – Sakchi Market, Near Payal Movie Hall)

About the Shop

The shop is located in a high density shopping area. The consumer base of most of the shops
in the area is drawn from middle to lower middle class families.

The shop has a broad façade which extends to approximately 30 feet in width. The depth of
the shop is divided into 3 distinct regions. First, it is the customer waiting area. Because of
the high customer turnout in the shop, the retailer has provided comparatively large waiting
area. The second part is the ‘front store’ as per the retailer. It is 15 feet in depth and most of
the products in the shop are put on display here. Lastly, there a godown just behind the store
and this is well connected with the store through a small door. The point worth noting here
was that the retailer emphasizes on not using the front store SKUs for dispensing. Whenever
a customer demands a product, the SKU is fetched from the godown.

Owing to its good location, the shop had a large turnout of customers. It was observed that
on an average, at least 10 customers were present at the shop at any given time and this was
the reason why the shop employed a large sales force consisting of nearly 14 people. Each
customer was handled by a single sales person. At the end of purchase, the sales person
made a rough bill. The final cash settlement was done at a separate cash counter where the
owner of the shop cross checked the bill and did the transaction.

Display of Products

The broad façade of the shop provided for excellent display of products. The customers were
able to see almost all the products of the shop standing at the counter without making much
of an effort.

At the entrance of the shop, most of the cosmetic products were neatly displayed in 3 glass
showcases. The brands which generally had high brand recall were kept inside the store but
were adequately visible. Brands which were new or local were kept at the glass cabinet
8
Retail Alliances, Economic Times July 21, 2006
beneath the counter. As per the retailer, it is only through visibility and pushing that these
products are sold as the customers are not aware of these local brands otherwise.

The products inside the store are neatly arranged in wooden shelves (figure 2). All the walls
inside the store are fitted with a wooden grid 3 feet square racks in it. Each shelf contains
different brands of the same product (refer fig 3). For example, the shelf containing
toothpaste and toothpastes of all brands stacked inside.
Figure 2

Figure 3
Display of Brands

Since the brands are kept close to each other in one shelf, the customer is offered a number
of choices for a certain product. This kind of arrangement is helpful for the new brands as
they have the chance of getting noticed if placed near the known brands. However, it was
 observed that the arrangement proved helpful only if it is placed in a way which exposed its
brand name. For e.g., refined oil, bottle of which had to be kept upright and thus displaying
the brand name (refer figure 3). In other cases such as toothpaste, this advantage was not
there and they were stacked one over the other making it difficult for the consumer to
discriminate between the brands.

Display of Stock Keeping Units (SKU)

For similar SKUs, (for e.g. 100 g toothpaste) or same size soap bars, each of the shelves had
one SKU mainly because of the convenience of arrangement (figure 3).

Figure 3
From PPT of Australia

The bigger SKUs especially in the case of the refined oils were not kept on display. Instead,
the sales persons in the shop had to tell the customers that they also have larger SKU.

Degree of Push for different products and brands

As per the retailer, the benefits of push are realized more in cosmetics and toiletries as
compared to food items as people were more loyal to brands of food products and were not
willing to with new brands.

The large sales force in the shop ensured that each customer is given substantial time for
making his own purchase as well as facilitate better push of products.

Also, it was noted that a larger push was being given to the local brands probably because of
larger margins they offer to the retailer.

Some of the Kirana stores are upgrading to mini-supermarkets. The ‘evolved’ kirana stores of
1,500 or even 2,000 sq ft. ‘Aapka general store’, without the analytical skills of trained
managers, has an enviable and unbeatable cost structure.

Supermarket
A supermarket is a departmentalized self-service store offering a wide variety of food and household
merchandise. It is larger in size and has a wider selection than a traditional grocery store.
Supermarkets usually offer products at low prices by reducing margins. In addition, the consumer
normally gets better prices, quality, selection and convenience for these purchases at organised
retailing chains.
Supermarkets generate greater revenues when they get the customer or the traffic into the store as it
facilitates impulse purchases

In the initial years supermarkets could not attract Indian Middle Class as the consumers felt that
`whatever is modern is expensive.' This kept several potential middle-class shoppers from buying at
supermarkets. Moreover customer practices amongst the middle class in the mid nineties prevented
supermarkets from taking full control of the retail scene. One of them was the prevailing habit of
sending servants to do the shopping, especially in the north and west. Generally intimidated by large
stores, servants stuck to the small, friendly store where they can relate to the shopkeeper on a one on
one basis and speak his language. Also, there is a tendency among Indian customers to buy fresh food
products (ingredients/raw commodities) and avoid packaged, processed foods (which is what
supermarkets mostly stock)9. Thus, the supermarkets still have not made great inroads into the
kirana segment.

A study found the following reasons why customers did not shift loyalties from the small retailer to
supermarkets:
- proximity of the small retailer
- added service provided such as credit facility, ordering on the phone and home delivery
- stockouts at supermarkets
– perceived high prices at supermarkets
- personal attention of the small retailer
- parking space problems at supermarkets
- operating systems of the supermarket such as long queues at checkouts, poor air-conditioning
http://www.hinduonnet.com/businessline/praxis/pr0202/02020540.htm

Another study was conducted to identify the differences in the perceptions of supermarkets and
kirana stores. An exploratory study identified the following variables influencing the choice of the
retail format:

Variables
 Clean

9
http://www.hinduonnet.com/businessline/praxis/pr0202/02020540.htm
  Closer to home
 Quality
 Attractive promotions
 Good environment
 Convenience
 Freshness of items
 Nice shopping experience
 Self Service
 Credit
 Always has what the customer wants in stock
 Doesn't push brands / doesn't influence choice
 Variety / Everything under one roof
 Home delivery
 Easy to find products
 Well presented display of products
 Prices are cheap
 Helpful people
 More discounts
 Easy parking available
 Has loyalty programs

A factor analysis using the above variables identified that the consumers look for different factors
while shopping in the kirana and supermarkets (table )

Factors in order of importance for choice of retail formats

Supermarket Kirana
Shopping experience Product quality
Convenience Convenience
Product quality & availability Relationship
Product promotions Hassle free
Price / Discounts Price/ Promotions
Hassle free

As found in the study consumers consider shopping experience as an important factor for
supermarkets. It is therefore not surprising to note that supermarkets are gaining prominence
amongst the youth.

GENERAL MERCHANTS

While the grocer stocks non-packaged, unbranded commodities such as rice, flour, and pulses, as well
as branded fast-moving consumer goods (FMCGs); the general store stocks only branded, packaged
FMCGs.

General merchants wish to be seen as providing higher value items. So, though they are associated
with FMCG products, they stock stationery and other small items. Small gifts are also available. The
range and depth of products sold is therefore very large.

A typical shop can be divided into four broad parts:

a) Cabinet facing the cashier: Used primarily to upgrade the image of the shop by displaying high
value products and gift items.

b) Wall behind the cashier: Mainly stock toiletries the products associated with the general stores.

c) Cabinet diagonally opposite the cashier: Typically stock low value gift items and crockery.

d) Rear wall: Stock regular use items like stationery products.

A typical general merchant is described below:

D H I R AJ L A L PA R M A N A N D S TO R E , B I S H T U P U R
The first cabinet (directly facing the cashier) has three shelves. The topmost shelf had the
following items:
Product Brands SKU
Car Air Freshener AmbiPur  8mL, 12mL
 With refill/without refill
Photo Film Kodak Gold 36 Film Roll, 200 Film Roll, 400
Film Roll

The middle shelf had the following items:

Product Brands SKU
Calculators Orpat, Casio, Citizen, Samay, Canon, Scientific/Retail
Chinese unbranded variants Solar/Electronic
Compact Disks Moser Baer Pro One Size
Phillips
T-Series
Floppy Disks Sony, Imation, HP One Size (10 pack size)
Maxell, Amkette
CD Wallet Amkette, DeSmat One Size (32 holder)
Mouse DeSmat One Type (3 button scroll
mouse)
Color Inkjet Printer DeSmat, HP One Type
Cartridge

The bottom-most shelf had the following items:

Product Brands SKU
Floor and Toilet Cleaners Lizol, Harpic, Domex, Pril, Robin 200ml, 500ml, 1000ml

The second cabinet has 3 shelves. The topmost shelf had the following items:
Product Brands SKU
Flasks Eagle, Milton 250ml, 500ml, 1Litre
Ice Pack Milton One Size

The middle shelf had the following items:

Product Brands SKU
Pencils Nataraj, Polo, Faber Castel, Apsara, Apollo 10 units, 20 units
Pins King, Bell, Eagle 20gms, 50gms, 100gms
Pencil boxes Camel, Faber Castel, Novex 1 Size Only
Staplers Jumbo, Kangaro 1 Size Only
Hole Puncher Kangaro 1mm Hole, 1.20 mm Hole, 1.35 mm
 Hole, 2 mm Hole and 2.5 mm Hole
Clips Bell, Perfect 1000 units pack, 500 units
pack, 100 units pack
26mm, 30mm, 35mm
Stamp Pad Kores 1 Size only

The bottom-most shelf has the following items:

Product Brands SKU
Glassware Treo, Borosil 1 Size Type only

The third cabinet towards the rear end of the store on this wall had the following
items:
Product Brands SKU
Water bottles Milton 750 ml, 800 ml, 500 ml, 1 liter
Lunch box, bowels, casseroles, Milton, Borosil, TReO, Colorex, All sizes
snack plates local brands

A. WALL BEHIND THE CASHIER

The wall behind the cashier has 3 cabinets. The first cabinet towards the rear of the store has
4 shelves. They are all in the line of sight of the customer.

The topmost shelf had the following items:

Product Brands SKU
Shaving cream Old Spice, Park Avenue, Nivea, Denim, Both big and small (arranged in
Premium, Godrej order).

The second shelf had the following items:

Product Brands SKU
Writing Ink Chelpark, Parker One size
Hair remover Veet One size
Shining Polish Brasso, Silvo, MIN One Size
Shoe Polish Kiwi Liquid One Size
Air Freshner Odonil One Size

The third shelf had the following items:

Product Brands SKU
Cleaners Robin, Kleen One Size
Shoe Polish Kiwi Liquid, Kiwi Wax One Size
Hair cream Brylcreem Tube – one size
Hair dye Bigen, Godrej, Black Rose One Size
Whitener Erasex One Size
Antiseptic Dettol Both big and small
Hair remover Anne French One size

On this shelf, Kiwi and Brylcreem were getting blocked by the various hair dye brands and
the hair removers.

The fourth shelf had the following items:

Product Brands SKU
Hair cream Brylcreem Box – small and big
Hair gel Park Avenue One Size
Glue Sticks No brands visible One Size
Liquid glue No brands visible One Size

Under this cabinet, beneath the line of sight of customers, were stacks of folders, the brands
of which were not visible.

The second cabinet had 3 shelves, all within the line of sight of the customer. Here, the
topmost shelf had the following items:
Product Brands SKU
Hand Wash Dettol, Palmolive, Fem Liquid – small (with
dispenser) for all
Fem: refill pack
Shampoo UltraDoux, Garnier Fructis, Clinic Plus, Johnson’s Baby, Small
Clinic All Clear, Head & Shoulders, Pantene, Sunsilk

The second shelf had the following items:

Product Brands SKU
Shampoo UltraDoux, Garnier Fructis, Clinic Plus, Clinic All Big
Clear, Head & Shoulders, Pantene, Sunsilk
Conditioner Ultra Doux, Loreal One Size
Body Wash Olay, Dove, Herbal Essence Medium

The third shelf had the following items:

Product Brands SKU
Talcum Powder Johnson’s Baby, Premium, Nivea, Ponds, Big
Cinthol
Talcum Powder Fa, Vaseline, Johnson’s Baby, Premium, Small
Nivea, Ponds, Cinthol, Axe
Hand Wash Lifebuoy One Size
Body Wash Lux Big

On this shelf, the bigger SKUs of talcum powder were placed at the back and the smaller ones
were in front. Premium and Ponds occupied 2 lines each as opposed to one line each for the
rest of the brands.

The third cabinet, directly behind the cashier, had the following items on its 3
shelves:
Product Brands SKU
Deodorants Rexona, Dove, Nivea, Fa 150 ml and 225 ml bottles
Skin Creè mes Lakme, Nivea, Vaseline, garnier, Oil of Small, Medium and Large packs
Olay, Everyuth, Ponds for all
Hair color Godrej, Nutrisse, L’oreal Regular size
Mosquito repellant All out, Good night Refill pack; refill + machine
pack
Perfume Jovan, Charlie, Park Avenue, BRUT Regular bottle
Hair gel Lakme, Livon Regular bottle, Livon: tube
Shaving Creè me Gillete, Old spice Small, big
Razors and blades 7’o clock, mach 3, sensor excel, Vector Single razor, razor + blade pack,
plus razor pack
Hair oil Hair care, J&J, Dabur, Parachute, Vatika, All Large, medium and small packs
clear
After Shave Old spice, Premium, Gillette, Axe Regular and large packs
Tooth paste Colgate, Close up, Pepsodent, Neem ; Small, medium and large packs
variations of all

Under this shelf, beneath the customer’s line of sight were the following items:
Product Brands SKU
Soaps Lux, Pears, Palmolive, Medimix All sizes

Certain products were stacked above the customer’s line of sight in shelves in the wall behind
the cashier. These were divided into 3 shelves.

Besides some boxes, the items in the shelf towards the rear of the store were as follows:
Product Brands SKU
Ledgers No brands visible One Size
Desk Calendars No brands visible Couldn’t be seen
Drawing Pins Captain Medium boxes
Tape Dispenser Handy Big

The items in the middle shelf were as follows:

Product Brands SKU
Water filter candle Puro Couldn’t be seen
Torch Novino, Eveready, Nippo One Size
Sanitary Napkins Whisper, Stayfree Big and Small

The items in the shelf towards the entrance were as follows:

Product Brands SKU
Sanitary Napkins Angela Big and Small
Hand Tissues No brands visible Medium
Coffee Maker Borosil One Size

Certain items were hanging between the shelves too. Those that were in the customer’s line of
sight were as follows:
Product Brands SKU
Razors Gillette Presto One Size
Pens Reynolds Trimax Fluid Ink One Size
System, Cello i-zone, Cello Click
Grip, Carino, Silver Sand

Those hanging items that were above the customer’s line of sight were as follows:
Product Brands SKU
Pens Parker Vector One Size
Torch Nippo, Eveready Pocket-size

B. GLASS CABINET DIAGONALLY OPPOSITE THE CASHIER

The glass cabinet in front of the cashier extended throughout the length of the store. Built in
this cabinet are 3 sub-cabinets with 3 shelves each. The top shelves of the sub-cabinets are
most noticeable by the customer. The rest of the shelves are clearly beneath the line of sight
of the customer.

The top shelf of the sub-cabinet towards the rear of the store had the following items:
Product Brands SKU
CDs Moser Baer, BenQ, Sony One Size
Pen Sets Pierre Cardin, Atlantic, Lifetime, President, One Size
Monopoly
Floppies Amkette One Size
CD Covers No brands visible One Size

The second shelf had the following items:

Product Brands SKU
Umbrellas No brands visible Small
Glass Items (e.g. paper weights) No brands visible One Size

The last shelf in this sub-cabinet had unidentifiable products. No brand names were visible
either.

The top shelf of the middle sub-cabinet had the following items:
Product Brands SKU
Cello tape (with dispenser) Omega Small and Big
Writing Paper No brands visible Small and Big
Pen Stands Omega, Graphix, Topaz One Size
Table Pencil Sharpener No brands visible One Size
Table Coasters Prime, Designer One Size
Self adhesive notes DeSmat Small and Big

The second shelf had diaries in all sizes. No brands were visible here.

The third shelf, besides some unidentifiable products, had the following items:
Product Brands SKU
Tapes No brands visible Medium rolls
Paper plates No brands visible Big and small

The sub-cabinet directly in front of the cashier had the following items on its 3 shelves:
Product Brands SKU
Tape Dispenser Omega, Corporate Big, small size
Post it notes Corporate, Sticking, deSmat Multiple sizes and colors
Pen and pin holder Omega, Graphix Various shapes and sizes
Damper Round Wonder, Graphix Regular size
Nail Color Elle 18, Lakme Regular size
Ear Buds J&J, Apex Jar, small plastic packs
Highlighter Faber Castell
Battery Eveready, Nippo, Kodak Pack sizes of 2 and 4 units

C. WALL AT EXTREME END OF THE STORE

on the wall at the extreme

The following items were in the line of sight of the customer
end of the store. This wall directly faces the entrance to the store.
Product Brands SKU
Clip files, Office files, spiral bound files, Matrix, Sweety, Local All sizes, colors and types.
Business card holders brands
Pencil Boxes Local brands
Colors pens, crayons, pencils Camel, Luxor, Faber castell 6 pc, 12pc and 68 pc units
Notebooks Navneet, Classmate, Local All sizes and thickness
 made

The following items occupied a mini-shelf towards the extreme end of the store:
Product Brands SKU
Crockery Borosil, Marinex One Size

D. INNER ROOM

The store owner stocks items in a room towards the rear end of the store too. Only
a couple of shelves here are visible to the customer from the outer room which is
the main selling area. The items on these shelves are as follows:
Product Brands SKU
Dusters No brands standard
Detergent Powders Surf, Rin, Ariel, Sunlight Medium bags
Printing Paper No specific brands standard

Kiosks:
Kiosks are very small store road side stores. In terms of area they could be about 70 square feet (6
feet X 12 feet) but the outlets are heavily loaded with goods.

India is dotted with several kiosks selling provisions and FMCG products. They satisfy the daily
requirements of most low income who purchase their provisions on a day to day basis. The kiosks
also serve as an outlet for the emergency purchases of the middle income and upper income groups.
These outlets typically stock smaller packs.

KIRANA STORE NEAR ARIES, C.H.AREA

O B S E R VAT I O N S
A R E AS O F D I S P L AY

The store layout is given below:

 Space Behind Cashier

Wall to
the Wall to the
Extreme Right of
Left Cashier

Cashier

Glass Cabinet

Entrance

As can be seen, the store has 4 main areas of display:

a. Wall to the right of the cashier
b. Space behind the cashier
c. Glass cabinet in front of the cashier
d. Space at extreme left of the store

The display in each of these areas is described below.

A. WALL TO THE RIGHT OF THE CASHIER

The wall to the right of the cashier is divided into 2 main parts. The first part is in the line of
sight of the customer. The second part is above the line of sight of the customer.
The first part had the following items:
Product Brands SKU
Baby care Huggies, J&J baby powder and Huggies-regular, large pack
lotion. J&J- regular pack
Deodorant Fa, Xm, DO IT Regular packs
Hair colour Bigen Regular packs

The second part had the following items:

Product Brands SKU
Disinfectants/ cleaners Harpic (Different types) Regular size
Lizol
Mosquito Repellent Spray and HIT, Mortein Spray- extra large
Coil Coil- regular
Liquid Hand Wash Dettol Regular packs
Talcum Powder NUMIS, Ponds Regular packs
Lotion Himalaya Regular packs
Hair care Himalaya Regular packs

B. SPACE BEHIND THE CASHIER

The space behind the cashier is divided into 3 cabinets. Two of these cabinets have 5 shelves
each while the third one has 3 shelves. All these shelves are in the line of sight of the
customer.

The cabinet directly facing the customer had the following items on its top shelf:
Product Brands SKU
Milk cartons Amul Small, Medium and Big
Milk Foods Nestle Lactogen, Nestle Cerelac Big

The second shelf of this cabinet contained the following items:

Product Brands SKU
Shampoo Eleen, Ayur, St. Ives Small, Medium and Big
Hair Gel No brands visible Small
Milk Foods Nestle Lactogen, Nestle Cerelac Medium

The third shelf had the following items:

Product Brands SKU
Sweets Haldiram Rasgulla Tin - big
Juice cartons Real Big and Small
Milk Amul Can - medium
Milk Flavouring Complan Bottle - big
Namkeen Priya Jar - big
The fourth shelf had the following items:
Product Brands SKU
Coffee Nescafe Small bottles, sachets, big packets
Corn flour No brands visible Medium carton
Milk Flavouring Complan Bottle – medium
Biscuits Parle (different varieties) Medium and Small packets
Sugar-less Sweetener Sugarfree Small packs
Sweets Haldiram Rasgulla Tin – big

The fifth shelf had the following items:

Product Brands SKU
Antiseptic Dettol Small, Medium and Big
Coffee Bru Big packets
Hair remover Veet One Size - medium
Tea Tata, Brookebond Different sizes (packets and tins)
Blood purifier Safi Medium bottle
Antacid Eno Small packets

Beneath this cabinet, there were packets of daal (pulses), sugar and other grains along with
packets of frying papad and medium packets of MDH masalas.

Above the customer’s line of sight, above this cabinet, were bulbs. Brands were not visible in
this case.

In the space behind the cashier, the second cabinet is to the right of the customer. It has 3
shelves where the top-most and bottom-most shelves were highly cluttered and items were
not easily identifiable.

The items in the middle shelf were as follows:

Product Brands SKU
Pickle Brands not clear Small and medium
Sauces Kissan, other brands not clear Small and Big

In the space behind the cashier, the third cabinet is to the left of the customer. It has 5 shelves.
The topmost shelf had the following items:
Product Brands SKU
Chewing gum Lotte Cartons and small packs
Rusks Moreish One Size
Breakfast Cereals Kellogs Big

The second shelf had the following items:

Product Brands SKU
Biscuits and Cookies No brands visible Small and Medium
Namkeen No brands visible Medium packets

The third shelf had the following items:

Product Brands SKU
Toothpaste Colgate, Close Up Medium and Big
Beauty Cream Fair & Lovely One Size
Masalas Everest Medium packets

The fourth shelf had the following items:

Product Brands SKU
Bathing Soaps Lux, Dettol, Margo, Breeze, Chandrika, Shikakai, Lifebuoy, Small and big
Cinthol, Mysore Sandal, Pears
Washing Soaps Rin, Tide, Ariel, Chek, Wheel Big

The bottom-most shelf contained the following items:

Product Brands SKU
Pesticide Mortein One Size
Detergent Powders Tide, Ariel Medium bags

C. GLASS CABINET IN FRONT OF THE CASHIER

The glass cabinet in front of the cashier has 2 main parts. The first is the counter display
which is in the line of sight of the customer. The second part comprises the shelves in the
cabinet which are beneath the customer’s line of sight.

The items in the counter display were as follows:

Product Brands SKU
Soup powder Knorr- various flavors Regular size
Chips and wafers Taka Tak, Bhujia, Lays,Uncle Chips, Kurkure Packs of Rs. 5, 10 and
20.
Toffee and gums Parle mango byte, Poppins, chlormint, Center fresh,
Big Babol, Mentos
Chocolate Perk Small 5 Rs
Breads Protein bread, moreish, Local All small packs
Fruit cakes Monginis, Moreish Small and regular

The items in the lower shelves of the glass cabinet were as follows:
Product Brands SKU
Mints POLO Regular
Dry fruits Dates, Cashew, peanut Small retailer made packs
Chocolate Safari, 5 Star Small 5 Rs pack
Noodles Maggi – all flavors Regular, large

In front of the glass cabinet, to the outer part of the store, was a Lays wafer counter carrying
chips and wafers of different brands such as Lays and Uncle Chips in large and medium pack
sizes. This was the only POP item visible in the front area of the store.

D. SPACE AT EXTREME LEFT OF THE STORE

Certain items were hanging towards the left side of the store. These were as follows:
Product Brands SKU
Shampoo Head & Shoulders, Rejoice, Himalaya Sachets
Noodles Maggi Small
Masalas MDH Sachets
Chips Lays, Uncle Chips, Kurkure Small packets

At the extreme left end of the store, the following items were visible in a cabinet:
Product Brands SKU
Toilet Paper No brands visible Medium
Napkins No brands visible Medium
 Balm Amrutanjan One Size
Hair Oil Parachute, Vatika, Dabur Amla, Shanti Amla, Keo Small and Medium
Karpin
Bleach Ujala, Robin One Size
Tooth Powder Colgate Medium tins

Paan / Bida Shops:

Pan Bidi shops (primarily meant to sell cigarettes also started selling other products, especially FMCG
products. In Tamil Nadu these shops are called “Potti Kadai”. In other words box shops, an apt name!
As the name suggests these shops are like little boxes in street corners and literally wedged between
neighborhood streets. These shops cater primarily to the emergency purchases of the public. People
who generally buy branded products here are actually buying to meet current or urgent needs. Its like
you wake up in the morning and you find you have run out of tooth paste. You rush to the nearest
such shop and ask for a small pack of paste, which can provide for your urgent need. This way you can
avoid the time wasted in going to big shops, which may not even be open that early in the morning.
The point is that these shops cater to the immediate needs of the consumer. The customers coming to
these shops are not regular or loyal customers. There is no need for the FMCG Company to maintain
any displays in such shops. This is due to the fact that, first of all there is no space for displays and
secondly the customers visiting the shop are not looking for any product range or features. Invariably
they know what they want and they ask for it.

A pack of Parachute being sold here is being sold at the MRP only. The customers here are only
looking for temporary satisfaction and will generally look at low prices. However the brand Parachute
is so dominant that they seem to forego that request and any reduction in pricing for these kinds of
shops is not warranted.

Box 2. HLL teams up with kiranas to fight malls

Roxy Gagdekar
Monday, August 28, 2006 23:00 IST
Ahmedabad grocers rebranded as Super Value Stores to woo mall-o-holics with freebies.

AHMEDABAD: Mauled by competition from modern-format malls, the traditional kirana stores are now
fighting back. And helping them in this endeavour is none other than Hindustan Lever Ltd (HLL), the
country’s largest fast-moving consumer goods (FMCG) major. HLL has tied up with nearly 175
neighbourhood grocery stores in Ahmedabad to convert them into “Super Value Stores” (SVS), offering
products loaded with freebies.

What brings kirana stores and HLL together is a common enemy. While glitzy malls have enticed
customers away from traditional kirana stores, they have also undercut FMCG giants with low-price
store labels. This has robbed kirana stores of volumes and FMCG majors of margins.

The key to this unusual partnership between elephant and ant is common branding, lower prices,
higher discounts and special promotional offers that are exclusive to Super Value Stores. Under the deal
worked out by HLL, kirana stores that opt to rebrand themselves as SVSs get an additional 3%
commission on monthly sales. Plus, there are promotional offers that are available nowhere else. An
HLL spokesperson told DNA Money: “SVS is the first and pioneering programme through which the
company and trade have developed a win-win partnership.”

For example an offer of a free hair dryer worth Rs 175 for every Rs 200 worth of HLL shampoos bought
is available only to SVS outlets. Based on the response, HLL reckons that it can use such lures across a
range of more than 500 different products in the cosmetics, fabric and personal wash, and food
segments. HLL has also offered to install special cabinets in SVS stores for dispensing its products.

“There are many schemes and free gifts through which we are able to offer attractive schemes to loyal
clientele who were drifting to malls,” says Ambalal Patel, an SVS shopowner in the Satellite area of
Ahmedabad.

“The company has many products, which if combined with attractive schemes, can ensure a continuous
flow of consumers,” adds Patel.

According to Patel, special schemes enable ordinary shopkeepers to earn an additional Rs 50-100 daily
by selling HLL products.

Kirana stores have another USP when it comes to malls. While malls offer home delivery of goods
provided the bill exceeds a certain minimum amount, kirana stores offer the same service for any bill
size.

“We have retained some customers because we provide home delivery no matter what the bill.
Additional service combined with better promotional packages should help us win back some of our
lost customers,” says Prakash Purohit, another kirana shopowner of Ahmedabad.

To drum up business volumes, HLL is trying to create common branding for these stores, with boards
painted in a tell-tale yellow colour. The company pays for the board, and the shopkeeper gains when
customers start associating bargains with such stores. The company also pays shopkeepers extra
(around Rs 200-300 a month) for display counters. The kirana owners, for their part, are trying to
improve customer value by repackaging loose grain and other products in different packages. Purohit,
for example, has started to supply grain in pack sizes from 200 gm to 1 kg.

Figure 1 Retail Map of a market in India

 Map Key:

1 Vijay Corner (Pan Shop)

2 Food Store
3 Sandeep Medicals
17 4 Banmali Sahu (General
15 Store)
16 5 Sahu Medicals
18 6 Shivnath Rai Vijay Lal
(general store)
7 Girdhari Lal Radhey
Shyam (General Store)
8 Singh Paan Bhandar
13 23
Karnail 9 Gunjan Stores (Grocer)
Singh 22 10 Lucknow Pan Bhandar
11 Pawan Betel Shop
12 R.S. Aggarwal Grocery
14 13 Bhola Prasad (Kirana
Store)
21 14 Shree Santosh General
12 Store
Basant 15 Chandan Medicals
14 20 Cinema 16 Ramvati Aggarwal
11 (General Store)
17 Dilip General Stores
18 Shree Shyam Stores
10 (General Store)
5 19 Paan Shop
3 4 20 Shayam Masala
6 3 2 (General Store)
19 21 Bhatia Juice Centre
3 9 22 Harish Store (General
7 1 Store)
3 8 23 Hind General Store
 Box 1. Retail Scene in india
Reliance Retail
A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010 with a planned investment of Rs
30,000 crore over the next five years – that's the retail vision of Mukesh Ambani and his RIL retail team.
The Reliance Retail blueprint envisages nation-wide chains of hypermarkets, supermarkets, discount
stores, department stores, convenience stores and specialty stores, in about 800-odd cities and towns
across the length and breadth of India. The RIL board of directors approved the initial phase of the retail
foray at an estimated cost of Rs 3,350 crore (US$ 750 million).
G D Singh and Pravahan Mohanty Images Retail April 2006 Reliance Retail: The Mega Retail Story.

6. Wednesday, July 19, 2006

Birla Group plans to enter retail sector

The Aditya Birla Group is readying plans to enter the Indian retail sector in the branded garments sector.
Details of a JV with a global retail chain are being worked out at present. The Birla Group is India’s
largest branded wear garment company and is also one of the country’s oldest business families.

The company is estimated to be worth Rs. 380 billion (£ 4.6 billion) and is the supplier to many of the
world’s leading companies such as, Marks & Spencer’s, Tommy Hilfiger, Polo and Ralph Lauren. Its
brand Madura Garments has the license for the Louis Philippe, Van Heusen, Allen Solly and Peter
England brands.

Source: Kamcity News

7. Wednesday, July 19, 2006

Oswal Group plans to expand retail presence

The Oswal Group, a north Indian based textile company, announced its retail division, Oswal Retail Pvt.
Ltd., plans to expand with an investment of Rs. 50 crore. The company had entered the retail sector with
Sensa, a lingerie store in December 2004. Recently, the company reworked the brand and named the
store Straps, which currently has 11 stores in India.

The company plans to have 25 stores open by the end of the financial year. While the north and west
accounts for 65% of its stores, the company plans to focus on Bangalore and Hyderabad in the future.

Source: The Hindu Business Line

8. Thursday, July 20, 2006

Wal-Mart considering DLF as franchisee for India

Wal-Mart is considering appointing DLF as its franchisee for the country to operate its stores in either
DLF’s malls or as stand-alone stores. DLF recently announced that it plans to develop more than 100
malls in 60 cities over the net 4-5 years. According to DLF, the retail stores would be owned by DLF,
Wal-Mart would take care of back-end distributions and logistics.

As per the rules set by the Indian government, foreign investment is permitted up to 51% only in single-
brand retail. The only options to set up shop here are to either operate as a cash and carry wholesale
format as Metro does or to have a Indian franchise partner. The retail market was estimated to be worth
$205 billion in 2004, of which only 3% was organized. By 2010 this is likely to rise to 9%.

Source: Rediff.money.com