INSTITUTE OF PROFESSIONAL

EDUCATION AND RESEARCH

Project of “Business Economics”

Topic: -

The Indian Retail Sector

SUBMITTED TO:- SUBMITTED BY:-

ARVIND
WARKE

DR. RESHAM CHOPRA

 ACKNOWLEDGMENT

This assignment is done with the help and superb guidance

of DR. RESHAM CHOPRA And we would like to give
thanks our department who has given us this opportunity. to
reveal our theoretical knowledge in real life situation.

We would like to give thanks to my family member who

gives a proper support in term of money and my friends
also.

TABLE OF CONTENTS
CHAPTER I: - Introduction
• Introduction of Retail Sector
• Retailing formats in India
• Industry Evolution

CHAPTER II: - No. Of Players, (Major Retailers)

CHAPTER III: - Production /Supply pattern of product

• Hangzhou Buxing Dress Company

CHAPTER IV: -Price variations of the product.

CHAPTER V: - Causes and effects of variations

in price and volume of goods

CHAPTER IV: - Biblography

Introduction of Retail Sector

 India has the highest shop density in the world and the
present retail market in India is estimated to be US$ 200 billion of
which only 3% (around US$ 64 billion) is in the organized Sector.

This organized retail sector is poised for a take off. India is

ranked second in the global retail development index out of 30 by
AT Kearney.

The comparative penetration of organized retail

in India.

With the organized retail segment growing at the rate of 25-

30 per cent per annum, revenues from the sector are expected to
triple from the current US$ 7.7 billion to US$ 24 billion by 2010.
The share of modern retail is likely to grow from its current 3 per
cent to 15-20 percent over the next decade. 85 per cent of
organized retailing is taking place in India’s urban areas while 66
per cent of it taking place in India’s 6 main cities alone.

The growth is much faster in south India than in northern

states. The total retail market in south India is $94 billio and of this
organized retail is $8.5 billion. In southern part of India the
organized retail market grow this estimated as 35 per cent per
annum.

In Chennai the growth rate is 12 percent while in Hyderabad

it is 7 percent and in Kerala it is 3-4 percent per annum. As per
Technopark study the sales in the organized sector forfood,
beverage and tobacco is $195

Retailing formats in India

  Malls:
The largest form of organized retailing today. Located mainly
in metro cities, in proximity to urban outskirts. Ranges from
60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal
shopping experience with an amalgamation of product, service and
entertainment, all under a common roof.Examples include
Shoppers Stop, Piramyd, Pantaloon.

 Specialty Stores:
Chains such as the Bangalore based Kids Kemp, the Mumbai
books retailer Crossword, RPG's Music World and the Times
Group's music chain Planet M, are focusing on specific market
segments and have established themselves strongly in their sectors.

 Discount Stores:
As the name suggests, discount stores or factory outlets, offer
discounts on the MRP through selling in bulk reaching economies
of scale or excess stock left over at the season. The product
category can range from a variety of perishable/ non perishable
goods

 Department Stores:
Large stores ranging from 20000-50000 sq. ft, catering to a
variety of consumer needs. Further classified into localized
departments such as clothing, toys, home, groceries, etc.

 Department Stores:
 Departmental Stores are expected to take over the apparel
business from exclusive brand showrooms. Among these, the
biggest success is K Raheja's Shoppers Stop, which started in
Mumbai and now has more than seven large stores (over 30,000
sq. ft) across India and even has its own in store brand for clothes
called Stop!.

 Hypermarts/Supermarkets:
Large self service outlets, catering to varied shopper needs
are termed as Supermarkets. These are located in or near
residential high streets. These stores today contribute to 30% of all
food & grocery organized retail sales. Super Markets can further
be classified in to mini supermarkets typically 1,000 sq ft to 2,000
sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000
sq ft. having a strong focus on food & grocery and personal sales.

 Convenience Stores:
These are relatively small stores 400-2,000 sq. feet located
near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods
during the day, seven days a week. Prices are slightly higher due to
the convenience premium.

 MBO’s :
Multi Brand outlets, also known as Category Killers, offer
several brands across a single product category. These usually do
well in busy market places and Metros.

Industry Evolution
 Traditionally retailing in India can be traced to
– The emergence of the neighborhood ‘Kirana’ stores
catering to the convenience of the consumers
– Era of government support for rural retail: Indigenous
franchise model of store chains run by Khadi & Village
Industries Commission

 1980s experienced slow change as India began to open up

economy.

 Textiles sector with companies like Bombay Dyeing,

Raymond's, S Kumar's and Grasim first saw the emergence of
retail chains
 Later Titan successfully created an organized retailing concept
and established a series of showrooms for its premium watches
 The latter half of the 1990s saw a fresh wave of entrants with a
shift from Manufactures to Pure Retailers.
 For e.g. Food World, Subhiksha and Nilgiris in food and
FMCG; Planet M and Music World in music; Crossword and
Fountainhead in books.
 Post 1995 onwards saw an emergence of shopping centers,
– mainly in urban areas, with facilities like car parking
– targeted to provide a complete destination experience for
all segments of society
 Emergence of hyper and super markets trying to provide
customer with 3 V’s - Value, Variety and Volume
 Expanding target consumer segment: The Sachet revolution -
example of reaching to the bottom of the pyramid.
 At year end of 2000 the size of the Indian organized retail
industry is estimated at Rs. 13,000 crore
 No. Of Players
(Major Retailers)
 India’s top retailers are largely lifestyle, clothing and apparel
stores
 This is followed by grocery stores
 Following the past trends and business models in the west
retail giants such as Pantaloon, Shoppers’ Stop and Lifestyle
are likely to target metros and small cities almost doubling
their current number of stores
 These Walmart wannabes have the economy of scale to be
low –medium cost retailers pocketing narrow margin
 Production / Supply pattern of
product
Taking example of Hangzhou Buxing Dress Company

Company Name: Hangzhou Buxing Dress Co., Ltd.

Manufacturer, Trading Company, Agent,

Business Type:
Distributor/Wholesaler, Other

Trousers, pants, cloths, shorts, men's pants, men's

trouser, ladies' pants, ladies' trousers, cotton
Product/Services: pants, polyester trousers, wool pants, wool
trousers, leisure pants, west-style pants, corduroy
pants, denim pants, rayon pants, spandex pants

Registered Jiangjiadou Village, Sandun Town, Xihu,

Address: Hangzhou, Zhejiang, China Zip: 310030

Brands: Buxing

Number of
501 - 1000 People
Employees:
 Supply pattern of product
Export Percentage:
They have more than 600 units of professional
equipment. More than 80% products are exported to oversea
countries all over the world. Foreign customers show their great
interests in our products, and frequently contact us for cooperation.

They are working to set up a world

fabrication center of trousers articles, while they are dedicated to
developing multiple business scopes. The objective is to build a
world grade brand, therefore they are strict in the management,
technique and product quality. And they have successively passed
the certification of ISO9001:2000, which upgrades the quality
management of the company.

Discount retailer:
They has opened its new Showroom at Hualian Village, covering
an area 20,150 sq. ft, which takes the tally of total number of stores
of the company to 131. Hangzhou Buxing Dress Co., Ltd. has
widely spread network across China, with an area of 24,43,000 sq.
ft. (approx). In this showroom they start making business through
giving some extent of discount to their consumer,
 Price variations
Product/Services prices have exploded worldwide. Prices of
Product has risen100%-200%in one year alone. like price of
Trousers 114% , pants 125% and cloths about 200% in last two to
five years .The years 2007- 2008 saw dramatic rises in world
goods prices creating global crisis and causing political and
economical instability social unrest in both poor developed nations

• Explanations that don't persuade Hypothesis:

The spike in world goods prices is caused by increased demand in

China, particularly the shift towards consumption of high quality
cloths as people get richer. With the help of this explanation we
can find that the price index for major products and service was
stable at 100 from 1990 to till 1998 and spiked thereafter. This
shows that China had a massive transformation of incomes and the
structure of the cloths products basket from 1990 to 1998.

Hypothesis:
It's the evil speculators. Speculators who
anticipated higher prices would have held more inventories. But
the graph shows that inventories have dropped from 2000 onwards.
There was less hoarding, not more. The bulk of trading on futures
markets is speculative: but for every buyer on a futures market
there's an equal and opposite seller (by definition). A bigger
futures open interest has no net effect on prices.

More generally, futures markets have been around for over

a century and grown steadily over the 1990-1998, period: it's hard
to blame them for the spike in prices starting in 2005.
 Yes, there's a new phenomenon of commodity funds and
hedge funds trading in commodities. But these numbers are just
tiny when compared with the global trade. And if they had held a
lot of inventory, it would have shown up in the inventory series
above - but total global inventories went down and not up.

Recent Trends
 Causes and effects of variations in
price and volume of goods
produced.

Causes: several factors that cause price rice in

commodities.

• World population:- As population is growing so demand of

cloths increasing.
• Rise in the price of row materials .
• Natural calamity causes price rice as extended drought in
China.
• Leather outfit consumption also cause food crisis.
• High price of cotton, which is importing from other
countries.
• More then 68 million square feet of mall space is not to be
available by end of 2005, Though which they might not lead
to over-capacity of malls
• Lack of differentiation among the malls. One option may be
to look at specialization.
 BIBLIOGRAPHY

WEBSITES
• www.google.com
• KPMG-FICCI Report
• http://www.indiainbusiness.nic.in/