PEOPLE PERCEPTION ABOUT RETAIL

INDUSTRY IN INDIA

Submitted by:
STUDENT NAME: SAURABH GROVER
COURSE: MBA {M&S}
ENROLLMENT NO.: A7002209011
SPECIALISATION: MARKETING & SALES

UNDER GUIDANCE
FACULTY GUIDE:
Dr. Fatima Beena
(Asst. Prof.)
ABS
(DISSERTATION REPORT IN PARTIAL FULFILLMENT OF THE AWARD
OF FULL TIME MASTERS IN BUSINESS ADMINISTRATION (2009-11))

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTAR PRADESH LUCKNOW
 STUDENT’S STATEMENT

Certified that this report is prepared based on the Dissertation project

undertaken by SAURABH GROVER under the guidance of Dr.
FATIMA BEENA (Asst. Prof.) at Amity University, Lucknow Campus in
partial fulfilment of the requirement for award of degree of Master Of
Business Administration (M&S) from Amity University, Uttar Pradesh.

Date.

Signature: Signature: Signature:

SAURABH GROVER Dr. FATIMA BEENA Prof R.P.SINGH

Student Faculty Guide Director(A.B.S)

 FACULTY CERTIFICATE

Forwarded here with a dissertation report on “People perception about

retail industry in india” submitted by SAURABH GROVER Enrollment
NO. A7002209011, student of MBA (M&S) 3rd Semester (2009-2011). This
project work is partial fulfillment of the requirement for the degree of
Master in Business Administration from Amity University Lucknow
Campus, Uttar Pradesh.

Dr. FATIMA BEENA

(Asst. Prof.)
ABS
AMITY UNIVERSITY,
LUCKNOW CAMPUS
UTTAR PRADESH
 Acknowledgement

No work is a single man’s effort. Cooperation, guidance and coordination are required at
various levels for the successful completion of a project.
I take this opportunity to express my gratitude to all those people who have been
instrumental in successful completion of my project. I extend my sincere thanks to my
faculty guide Dr. Fatima Beena, who helped me in all possible ways and constantly
encouraged me throughout my project. I also thank her for her valuable guidance and for
being understanding and supportive.
I am also grateful to the respondents who filled my questionnaires in Lucknow. Their
enthusiastic feedback has given my project a direction. All errors, if any, in the project
are my sole responsibility.
I would also like to express my gratitude towards my parents and friends, who have
always been my source of inspiration and motivation.

Saurabh Grover
 SYNOPSIS

Report title : People perception about retail industry in india

Report guided by: Dr Fatima Beena
Area covered : Lucknow
Sample unit : Malls in Lucknow
Sample size : 100
Tools : questionnaire and interview
 TABLE OF Contents

CONTENTS
1.Research Objective
2.EXECUTIVE SUMMARY
3.PREFACE

Chapter 1- INTRODUCTION
• History
• Retailing and pricing
• Retail types
 Retail Industry
 Retail Crimes & Fraud
 Consumer goods & Retail growth

Chapter 2- LITERATURE REVIEW

Chapter 3- Research Methodology
 Significance and scope
 Hypothesis
 Limitation

Chapter 4- RECOMMENDATION & CONCLSION

Chapter 5- GRAPHICAL INTERPRETATION AND ANALYSIS
OF DATA
Biblography
 Research objective

 To know the market penetration.

 To know the market size .

 To know the service provide by a retail sector .

 To have the knowledge of consumer behavior

 To know the customer satisfaction toward organized and unorganized

 Executive summary

To point out from where does consumer prefer to purchase every day life product .to
out where the consumer are more interested in buying different product from shop near
their place (house)? To the find out the consumer choice regarding. They are going for
discount or not. do now what are the behavior of traders to words the consumer .what
type relationship they maintain with their consumer. Whether are interested to buy
product on credit.
Primary data is collected through personal interview and questionnaire and
secondary data is through journal, magazine, and searching on Internet
Research design is exploratory and descriptive research.
Sample size is of 100 and sample plan is of random sample.

Organized retailing is relatively new to India, although it has begun

to expand rapidly and has given though time to unorganized sector. As with other
consumer-oriented goods and services, this sector should benefit from rising wealth,
industry deregulation and a greater openness to international influences.
By 2010, however, the organized sector could account for as much as 20% of the total
retail sector, based on current trends
 Preface

In a sharp contrast to the retail sector in developed economies, retailing in India - though
large in terms of size - is highly fragmented and unorganized. With close to 12 million
retail outlets the country has one of the highest retail densities worldwide.

Retailers include street vendors, supermarkets, department stores, restaurants, hotels and
even two-wheeler and car showrooms.

Indian retailing industry has seen phenomenal growth in the last 5 years. Organized
retailing has finally emerged from the shadows of unorganized retailing and is
contributing significantly in the growth of Indian retail sector. Unorganized retailers
suffer due to poor shopping experience and inability to offer a wide range of products and
value-addition due to lack of sourcing capabilities.

The modern Indian consumer is seeking more value in terms of improved availability and
quality, pleasant shopping environment, financing options, trial rooms for clothing
products, return and exchange policies and competitive prices. This has created a rapidly
growing opportunity for organized, modern retail formats to emerge in recent years and
grow at a fast pace.

Inefficiency in the existing supply chains presents further opportunity for organized
players to draw on this large market even as lack of consumer culture and low purchasing
power restricted the development of modern formats. Migration from unorganized to
organized retail has been visible with economic development in most countries.
 Introduction to Retail

Retailing consists of the sale of goods or merchandise, from a fixed location such as a
department store or kiosk, in small or individual lots for direct consumption by the
purchaser. Retail comes from the French word retaillier which refers to "cutting off, clip
and divide" in terms of tailoring (1365).
It first was recorded as a noun with the
meaning of a "sale in small quantities" in
1433 (French). Its literal meaning for
retail was to "cut off, shred, paring".
Like the French, the word retail in both
Dutch and German (detailhandel and
Einzelhandel respectively) also refer to
sale of small quantities or items.
 Retail Industry

Retail consists of the sale of goods or merchandise from a fixed location, such as a

department store, boutique or kiosk, or by mail, in small or individual lots for direct

consumption by the purchaser.[1] Retailing may include subordinated services, such as

delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys

goods or products in large quantities from manufacturers or importers, either directly or

through a wholesaler, and then sells smaller quantities to the end-user. Retail

establishments are often called shops or stores. Manufacturing marketers see the process

of retailing as a necessary part of their overall distribution strategy. The term "retailer" is

also applied where a service provider services the needs of a large number of individuals,

such as a public utility, like electric power.

Shops may be on residential streets, shopping streets with few or no houses or in a

shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping
street has a partial or full roof to protect customers from precipitation. Online retailing, a

type of electronic commerce used for business-to-consumer (B2C) transactions and mail
order, are forms of non-shop retailin

• Retail sector: on an upward curve

India's vast middle class and its almost untapped retail industry are key attractions for
global retail giants wanting to enter newer markets. While organized retail in India is
only two per cent of the total US$ 215 billion retail industry, it is expected to grow 25 per
cent annually, driven by changing lifestyles, strong income growth and favorable
demographic patterns.

KSA-Technopak, a retail consulting and research agency, predicts that by 2010,

organized retailing in India will cross the US$ 21.5-billion mark from the current size of
US$ 7.5 billion.

• Retail space: up for grabs

By 2007, an estimated 50 million square feet of quality retail space will be available
across India. This is in sharp contrast to the situation a decade ago. Then, there was not
one shopping mall in India. Today, in Delhi, Mumbai and their suburbs, there are about
100 malls. Of the 700 new malls coming up all over India, 40 per cent are concentrated in
the smaller cities. Organized retailing in small-town India is growing at a staggering 50-
60 per cent a year compared to 35-40 per cent in the large cities.
 • A push for branded retail

India's branded retail sector, estimated at about US$ 6 billion, makes up only three per
cent of the total market, but is forecast to grow at 25-30 per cent a year over the next four
years, with plush department stores and malls springing up across the country.

• Food retail

Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods industry,
which forms 44 per cent of the entire FMCG sales, is growing at 9 per cent and has set
the growth agenda for modern trade formats. Since nearly 60 per cent of the average
Indian grocery basket comprises non-branded items, the branded food industry is homing
in on converting Indian consumers to branded food.

• The mobile revolution

The retail market for mobile phones - handset, airtime and accessories - is already a US$
16.7 billion business, growing at over 20 per cent per year. In comparison, the consumer
electronics and appliance market looks paltry, at just US$ 5.6 billion, with growth rate
just half of the mobile market, and that too in a good year

• Kids retailing: no child's play

Kids retailing is growing by leaps and bounds in India and those in the industry say it is
likely to see 30-35 per cent growth per annum. From clothes to stationary, sportswear,
outerwear, tailored clothing, eyewear, watches, fragrance, footwear and accessories, the
list is endless. Apparel, however, remains the key revenue driver accounting for almost
80 per cent of total sales.
According to industry insiders, “The total apparel market in India for kids is around US$
2.9 billion, out of which about US$ 668.2 – 780.5 million is branded apparel.”

• Future of Retail in India

The retail industry in India is currently growing at a great pace and is expected to go

up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion

by the year 2018 at a CAGR of 10%. As the country has got a high growth rates, the

consumer spending has also gone up and is also expected to go up further in the

future. In the last four year, the consumer spending in India climbed up to 75%. As a

result, the India retail industry is expected to grow further in the future days. By the

year 2013, the organized sector is also expected to grow at a CAGR of 40%.
 RETAIL FORMATS IN INDIA

1.Mom-and-pop Stores

These are small family-owned businesses, which sell a small collection of goods to the

customers. They are individually run and cater to small sections of the society. These

stores are known for their high standards of customer service.

2.Department stores

Department stores are general merchandisers. They offer to the customers mid- to

high-quality products. Though they sell general goods, some department stores sell

only a select line of products. Examples in India would include stores like "Westside"

and "Lifestyle"--popular department stores.

3.Category Killers

Specialty stores are called category killers. Category killers are specialized in their

fields and offer one category of products. Most popular examples of category killers
 include electronic stores like Best Buy and sports accessories stores like Sports
Authority.

4.Malls

Malls are the largest retail format in India

One of the most popular and most visited retail formats in India is the mall. These

are the largest retail format in India. Malls provide everything that a person wants

to buy, all under one roof. From clothes and accessories to food or cinemas, malls

provide all of this, and more. Examples include Spencers Plaza in Chennai, India,

or the Forum Mall in Bangalore.

5.Discount Stores

Discount stores offer price reduction

Discount stores are those that offer their products at a discount, that is, at a lesser

rate than the maximum retail price. This is mainly done when there is additional

stock left over towards the end of any season. Discount stores sell their goods at a

reduced rate with an aim of drawing bargain shoppers.

6.Supermarkets

One of the other popular retail formats in India is the supermarkets. A supermarket is

a grocery store that sells food and household goods. They are large, most often self-

service and offer a huge variety of products. People head to supermarkets when they

need to stock up on groceries and other items. They provide products for reasonable

prices, and of mid to high quality.

7.Street vendors

Street vendors, or hawkers who sell goods on the streets, are quite popular in

India. Through shouting out their wares, they draw the attention of customers.

Street vendors are found in almost every city in India, and the business capital of

Mumbai has a number of shopping areas comprised solely of street vendors.

These hawkers sell not just clothes and accessories, but also local food.

8.Hypermarkets

Similar to supermarkets, hypermarkets in India are a combination of supermarket

and department store. These are large retailers that provide all kinds of groceries

and general goods. Saravana Stores in Chennai, Big Bazaar and Reliance Fresh

are hypermarkets that draw enormous crowds.

9.Kiosks

Kiosks are box-like shops, which sell small and inexpensive items like cigarettes,

toffees, newspapers and magazines, water packets and sometimes, tea and coffee.

These are most commonly found on every street in a city, and cater primarily to
local residents.
 COMPETITION OVERVIEW

Profile of the Major Players

Pantaloon Retail

Pantaloon Retail (India) Limited, is India’s leading retail company with presence across

multiple lines of businesses. The company owns and manages multiple retail formats that

cater to a wide cross-section of the Indian society and is able to capture almost the entire

consumption basket of the Indian consumer. Headquartered in Mumbai (Bombay), the

company operates through 4 million square feet of retail space, has over 140 stores across

32 cities in India and employs over 14,000 people. The company registered a turnover of

Rs 20.19 billion for FY 2005-06.

Pantaloon Retail (India) Limited, is a large Indian retailer, which is part of the Future
Group, and operates multiple retail formats in both the value and lifestyle segment of the

Indian consumer market. Headquartered in Mumbai, the company has over 1,000 stores
across 71 cities in India and employs over 30,000 people , and as of 2010, it was the

country's largest listed retailer by market capitalization and revenue

With effect from 1 January 2010 the company separated its discount store business,

which includes the Big Bazaar hypermarket and the Food Bazaar supermarket businesses,

into Future Value Retail Ltd., its wholly-owned subsidiary, so that the company may be

listed independently

The company’s brands include Pantaloons, a chain of fashion outlets, Big Bazaar, a

hypermarket chain and Food Bazaar, a supermarket chain. Some of the company's other

regional brands include, Depot, Shoe Factory, Brand Factory, Blue Sky, aLL, Top 10 and

Star and Sitara.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a

large-format home solutions store, Collection i, selling home furniture products and E-

Zone focussed on catering to the consumer electronics segment.

Lifestyle International

Lifestyle International Holdings Ltd’s principal activity is the operation of lifestyle

department store and retail outlets. It focuses on high-end department store format. As of

December 31, 2005, Lifestyle International operated its retailing business through two

brandnames, SOGO and Jiuguang. The SOGO Department Stores consists of the

Company'sflagship department store, SOGO CWB, in Causeway Bay, Hong Kong, and

the Tsimshatsuistore, which features a slightly different format that targets younger group

of customers. TheJiuguang Department Store, which is located in Shanghai, has a similar

business format asthat of the SOGO store. During the year ended December 31, 2005, it

launched SOGOCLUB, a lifestyle service center. Some of the Company’s subsidiaries

include Asia KineticLimited, Congenial Company Limited, Eastlord Development

Limited, Everwin Worldwide Limited and Fine Shine Limited.

RPG Retail

RPG Enterprises is one of India’s largest business conglomerates, with a turnover of

US$ 1.65 billion (Rs 7,472 crore) and assets worth US$ 1.8 billion. Since its inception in

1979,RPG Enterprises has been one of the fastest growing groups in India with more than

20 companies operating successfully in 7 business sectors: Retail, IT & Communications,

Entertainment, Power, Transmission, Tyres and Life Sciences.

Spencer’s retail is the largest supermarket chain in India. Spencer’s retail offers the

completegamut of products & durables ranging from bread to bed covers; from toothpaste

totelevision. Spencer’s today is operating across 80 stores spread across 20 cities in the

countrywith a retail trading area of more than half a million square feet, and rapidly

growing.

Spencer’s Retail is located in various parts of India like Chennai, Hyderabad, Vizag,

Bangalore, Mumbai, Aurangabad, Pune, Ghaziabad, Faridabad, Delhi, Cochin,

Trivandrumand many more to come by this financial year.

Shopper’s Stop

The foundation of Shoppers’ Stop was laid on October 27, 1991 by the K. Raheja Corp.

group of companies. From its inception, Shoppers’ Stop has progressed from being a

single brand shop to becoming a Fashion & Lifestyle store for the family.

Shoppers’ Stop is the only retailer from India to become a member of the prestigious

Intercontinental Group of Departmental Stores (IGDS). The IGDS consists of 29

experienced retailers from all over the world, which include established stores like

Selfridges(England), Karstadt (Germany), Shanghai No. 1 (China), Matahari (Indonesia),

Takashimaya(Japan), C K Tang (Singapore), Manor (Switzerland) and Lamcy Plaza

(Dubai). Thismembership is restricted to one member organization per country/region

Trent (Tata)

Trent (Tata) was established in 1998, Trent operates some of the nation’s largest and

fastestgrowing retail store chains. A beginning was made in 1998 with Westside, a

lifestyle retailchain, which was followed up in 2004 with Star India Bazaar, a
hypermarket with a large assortment of products at the lowest prices. In 2005, it acquired

Landmark, India’s largest book and music retailer.

In a recently signed deal, Trent has agreed to anchor 12 malls set up by DLF Universal

Ltd across the country, at its Westside, Landmark and Star India Bazaar outlets. This

amounts to about 27 locations, totaling to about a million square feet of space.

 Drivers of Retail Growth

The study of the history of retailing business throws up the fact that in most economies
organized retailing passes through four distinct phases in its evolution cycle.

In the first phase, new entrants create awareness of modern formats and raise consumer
expectations. During the second phase, consumers demand modern formats as the market
develops, leading to strong growth. As the market matures, intense competition forces
retailers to invest in back-end operating efficiency.

In the final phase, retailers explore new markets as well as inorganic opportunities as
growth tapers off. Supply chain management (SCM) attains top priority in the third phase
of evolution.

Fierce competition forces retailers to respond quickly to changes in the market, bringing
forth the importance of SCM in handling availability of stock, supplier relationships,
value-added services and cost cutting.

Traditional retailers are expected to enhance their investments in supply chain, whilst
new entrants are likely to look at supply chain first broadening their national reach.

What drove the retailing in India?

India is currently in the second phase of the retail evolution, with domestic customers
becoming more demanding with their rising standard of living and changing lifestyles.
Change in customers' focus from just buying to broad shopping (buying, entertainment
and experience) has led to a pick-up in momentum in organized formats of retailing.

Unavailability of quality retail space has been one of the main constraints for
development of organized formats in India. In the past, negative yield on leased property
and lack of bank funding due to unorganised property market resulted in a dearth of
quality retail space in the country.

The spread between yield on property and its financing cost has turned positive with the
fall in interest rates. Attractive yields on investments have resulted in a sharp increase in
property development. From 25 operational malls in 2003, the country is expecting to
have over 220 malls by 2006 with a cumulative estimated space of 40 million sq ft and
over 600 malls by 2010, with as much as 100 million sq ft retail space.

Pro-active steps taken by the government permitting use of land for commercial
development in various cities, including Mumbai and Delhi, have also contributed to
increased availability of retail space in the country.

Availability of retail space is expected to increase further whenever property funds and
investment trusts are permitted, which will help create a secondary market for real estate
in the country.

Consumerism and brand proliferation also enhanced organised retailing in the country.
Most of the world's leading brands, including like L'Oreal, Espirit, Louis Vuitton, Marks
& Spencer, Tommy Hilfiger, Louis Phillipe, Levis, Pepe, Lee, Arrow, Dockers, Red
Tape, Clairns, Hugo Boss, Tiffany, Bulgari, Ecco, Chambor, Revlon, Philips, Corelle,
Magppie, Nike, Reebok, Parker, Ray Ban, Lego and Mattel, are now present in India.
Another factor that accelerated the growth of organised retailing is media proliferation.
Increased advertisements and brand promotions have led to a growing consumer
spending across a wide range of product categories.

What will fuel the boom?

Differential sales tax rates exist across states in the country. Besides, there is multiple-
point octroi/entry tax collection.

All these add to cost and complexity of distribution as these necessitate multiple
warehouses and do not allow for centralisation of certain procurements given the
incidence of local levies.

Implementation of Value Added Tax will streamline the complexities in the tax structure
and narrow the cost disadvantage between organised and unorganised retailers.

While some leading retailers are still able to get funding from banks, the smaller ones are
constrained for funding for growth. Similarly, equity options are also restricted as foreign
direct investment is not permitted in the retail trading sector.

FDI restrictions have also stalled entry of international majors to retailing in the country,
which could have otherwise helped the industry develop with funding and bring better
practices and systems. However, positive changes are expected on the FDI front.

The development of road infrastructure, especially the Golden Quadrilateral project

interlinking North-West and East-West corridors, will bring in efficiency in supply chain
and reduce wastages.
Where are the road-blocks?

Non-availability of trained manpower, especially at the management level, poses a key

risk for the retail sector. Besides, as organised retail grows rapidly, there will be pressure
on existing players as new entrants look for trained manpower at various levels.

Opening up of FDI in retail could see the entry of international majors which will put
further pressure on the manpower of existing retailers.

SCM efficiencies are essential to retailers to maintain and improve margins. SCM
includes vendor and logistics management which is underdeveloped in India. However,
with growing size of operations, SCM efficiencies will become a key differentiator of
profitability in retail.

The road ahead

Notwithstanding some stumbling blocks, no one can mistake the immense potential of the
boom in the domestic retail sector.

Given the size and the purchasing power of the Indian consumer, the road ahead can only
get smoother and it is only a matter of time before the domestic retail industry is on par
with its western counterparts.
 Challenges facing Indian retail industry

1.The tax structure in India favors small retail business

2.Lack of adequate infrastructure facilities

3.High cost of real estate

4. Dissimilarity in consumer groups

5.Restrictions in Foreign Direct Investment

6.Shortage of retail study options

7.Shortage of trained manpower

8.Low retail management skil

 Reasons for Retail Growth

It has been a decade-and-a-half since India embarked on an ambitious economic

liberalisation programme. Over the last five years, many of its benefits have manifested
themselves and one of the areas where growth is clearly reflected is retailing.

The latest pronouncements of Finance Minister P Chidambaram about the sector have
fuelled interest in stocks from the segment. Let's turn the spotlight on the factors that
triggered the exponential growth in the sector.

 Primary reasons

The prime reasons that fuelled this boom include favourable demographics, rising
consumer incomes, real estate developments, especially the emergence of new shopping
malls, availability of better sourcing options - both from within India and overseas - and
changing lifestyle.

These factors have transformed hitherto savings-oriented and conservative Indian

consumers and made them akin to those in developed markets.

 Organized versus unorganized Retailing

In a sharp contrast to the retail sector in developed economies, retailing in India - though
large in terms of size - is highly fragmented and unorganized. With close to 12 million
retail outlets the country has one of the highest retail densities worldwide. Retailers
include street vendors, supermarkets, department stores, restaurants, hotels and even two-
wheeler and car showrooms.

Counter stores, kiosks, street markets and vendors, where the ownership and management
rest with one person, are classified as traditional or unorganized retail outlets.

These formats typically require employees with low skills and account for around two-
thirds of the sector's output. These are highly competitive outlets, with minimal rental
costs (unregistered kiosks or traditional property), cheap labor (work is shared by family
members) and negligible overheads and taxes.

However, unorganized retailers suffer due to poor shopping experience and inability to
offer a wide range of products and value-addition due to lack of sourcing capabilities.

The modern Indian consumer is seeking more value in terms of improved availability and
quality, pleasant shopping environment, financing options, trial rooms for clothing
products, return and exchange policies and competitive prices. This has created a rapidly

growing opportunity for organized, modern retail formats to emerge in recent years and
grow at a fast pace. Inefficiency in the existing supply chains presents further opportunity
for organised players to draw on this large market even as lack of consumer culture and
low purchasing power restricted the development of modern formats. Migration from
unorganised to organised retail has been visible with economic development in most
countries.

 Changing age profile and disintegration of joint family

India is witnessing a change in the age and income profiles of its over 1 billion
population, which is likely to fuel accelerated consumption in the years to come.

The country is believed to have an average age of 24 years for its population as against
36 years for the USA and 30 years for China. A younger population tends to have higher
aspirations and spends more as it enters the earning phase.

Besides, the gradual disintegration of the traditional Indian joint family system has led to
nuclearisation of families, which in turn has led to enhanced demand.

Add to this an increasing population of working women and new job opportunities in
emerging service sectors such as IT-enabled services, retail, food services, entertainment
and financial services.

With declining interest rates, the aversion of domestic consumers to taking loans is also
fast disappearing. Growing media penetration is leading to a convergence of aspirations
of various classes of consumers, bridging the rural-urban divide.

 Growing disposable income

More Indian households are getting added to the consuming class with the growth in
income levels. The number of households with income of over Rs 45,000 per annum is
expected to grow from 58 million in 1999-2000 to 81 million by 2005-06.

This large base of households with growing disposable income is expected to drive
demand for organized retail. Of this, 56 per cent (44. 8 million households) are expected
to be concentrated in urban India.

Changing income demographics, age profile and macro environment are visible in the
growth in consumption of durables. To cite live examples, the installed base of cars,
cable TV subscribers and cellular subscribers has increased significantly over the last five
years.

India: Consumer goods and retail forecast

FROM THE ECONOMIST INTELLIGENCE UNIT

2005 2006 2007 2008 2009 2010

Retail trade

15,40
Retail sales (Rs bn) 9 17,360 19,465 21,715 24,215 27,107
Retail sales (US$ bn) 349.4 385.8 421.3 467.0 516.3 564.7
Retail sales volume growth (%) 6.0 7.5 7.7 6.9 6.8 7.3
Retail sales US$ value growth (%) 13.6 10.4 9.2 10.8 10.6 9.4
Clothing, cosmetics & household goods

58,35
Clothing, sales value (US$ m) 2 65,818 74,505 84,724 96,130 107,883
Perfumes & fragrances, sales value
(US$ m) 2,103 2,291 2,464 2,696 2,941 3,169
Electronic & domestic appliances

Television sets (stock per 1,000

population) 91 94 97 101 109 118
Television sets, sales volume ('000) 8,867 9,436 10,029 10,655 11,204 11,795
Cable-TV subscribers (per 1,000 28 29 30 31 32 33
population)
Personal computers, sales volume ('000) 693 789 894 1,026 1,178 1,352
Refrigerators, sales volume ('000) 4,230 4,626 5,048 5,505 5,996 6,542
Video recorders, sales volume ('000) 121 121 125 127 128 129

The retail sector in India is undergoing substantial growth and development, driven by
the impact of rising incomes, increasing urbanisation, low interest rates, greater brand
competition and a youth-driven culture. Retail sales grew by 10.5% in rupee terms in
2005, equivalent to a volume rise of 6%. Retailing is undergoing a structural shift in
India, as supply slowly moves from small, family-run shops to larger, organised retail
outlets. The rising number of attractive stores and foreign brands, coupled with readily
available credit, will support steady real growth in retail sales of 7.2% a year between
2006 and 2010.

Income growth and structural changes will fuel growth

Apart from steady income gains, consumer financing has become a major driver in the
consumer durables industry. In the case of more expensive consumer goods, such as
refrigerators, washing machines, colour televisions and personal computers, retailers are
joining forces with banks and finance companies to market their goods more
aggressively. Among department stores, other factors that will support rising sales
include a strong emphasis on retail technology, loyalty schemes, private labels and the
subletting of floor space in larger stores to smaller retailers selling a variety of products
and services, such as music and coffee.
Organised retailing will expand sharply

Organised retailing is relatively new to India, although it has begun to expand rapidly. As
with other consumer-oriented goods and services, this sector should benefit from rising
wealth, industry deregulation and a greater openness to international influences. Perhaps
only 3% of retail sales in India are accounted for by organised retailers. By 2010,
however, the organised sector could account for as much as 20% of the total retail sector,
based on current trends. At present, around 96% of the more than 5m retail premises of
all types in India are smaller than 50 sq metres. Yet this is beginning to change. Shopping
malls are becoming increasingly common in large Indian cities, and developers have
plans to add hundreds of new malls over the next three years. Although not all of these
plans will be realised—and many of the new malls will be much smaller than their
Western counterparts—Indian consumers will have a far larger number of attractive,
comfortable, brand-conscious outlets in which to shop.

Competition from the traditional retail sector will continue to be a major issue for
international firms entering the Indian market, whether directly at the wholesale level or
indirectly through local firms. Traditional shops are mostly owner-operated, have low
labour and property costs, and generally pay little or no tax. New entrants to the
organised retail sector will also face higher labour and property costs than traditional
firms and must bear the additional expense of back-up power supplies. Other
impediments include high intermediation costs, expensive—and often inadequate—

supply-chain infrastructure, inflexible labour laws, complicated property codes, multiple

licensing requirements and a shortage of skilled managerial staff.

Retailers will target affluent and well-off households

GDP per head in India was about US$730 in 2005 (at market exchange rates), but this
figure disguises wide variations across social strata and between regions. There were
nearly 13m households (6.4% of the total) with an annual income of more than US$5,000
in 2005. These households already own a wide variety of consumer goods, including cars,
and constitute India's most sought-after consumers. Apart from these relatively wealthy
Indians, 34m households (16.5% of the total) had annual incomes of US$3,000-5,000.
These "well-off" households can afford, and many already own, airconditioners, washing
machines, refrigerators, colour televisions and motor scooters. This segment, which is
increasingly brand-conscious, is the target market for the rapidly growing organised retail
sector in India.

The food and groceries sector has strong growth prospects

The greatest opportunities for retail sales growth are likely to be in the food and groceries
sector. Modern retailing—involving large shops and supermarkets—constitutes less than
1% of the total food-retailing sector. The rest is composed of traditional kiosks and small
jshops. Indian food retailing is, however, moving inexorably towards the supermarket

format, and consumers in the affluent, upper-income segment are attracted to brand
names, variety and convenience. Other sectors that are likely to see growth include
consumer durables, information technology (IT), home improvement, and health and
beauty. A more sophisticated front-end retail infrastructure will also create more demand.

India's biggest retailer, Pantaloon, plans to increase its 300,000 sq metres of retail space
to 1m sq metres by end-2007, enabling it to expand its Pantaloon department stores as
well as its Big Bazaar hypermarkets and Food Bazaar supermarkets. India's biggest
private-sector company, Reliance Industries, has ambitious plans to enter the retail sector.
The company is thought to be considering investment of Rs100bn (US$2.2bn) over the
next two years to establish more than 1,500 outlets across the country employing
400,000-500,000 people.
Increasingly, local manufacturers and wholesalers are establishing retail outlets in a bid
to ensure higher margins. This has been especially true of retailers in the IT sector, where
growth is likely to be robust. Zenith of the US, Acer India (Taiwan) and a local company,
HCL Infosystems, have all set up retail outlets across India, with more locations planned.
New product development and relatively inexpensive financing are fuelling the trend.
Existing local IT distributors and wholesalers are also expanding into the retail sector.

Foreign investment will play a bigger role in retailing

The opening of the retail sector to foreign direct investment (FDI)—a policy change that
would alter radically the face of the Indian economy—is happening slowly. Since
February 2005 the government has taken several liberalising steps, but it continues to
disallow FDI by retailers of multiple brands, keeping out the big hypermarket groups and
discounters. This is a carefully crafted decision designed to cause minimum political
damage domestically, while showing foreign investors that liberalisation remains on
track. Foreign firms will continue to lobby for liberalisation and have cited the restriction
on FDI as a factor limiting future growth. Their options should multiply as food imports
are liberalised and import duties come down. The government will also need to reform
real-estate laws and restructure tax regimes further if it is to attract international retailers.

Wal-Mart of the US will continue its high-profile campaign to open up India's retail
sector to foreign companies. Tesco of the UK and Carrefour of France are also sizing up
the Indian market. Wal-Mart argues it would use local producers not only for its Indian
operations, but also for its global network as this could increase India's exports. As
domestic companies expand into the organised retail sector, the pressure on the
government to open the sector to foreign investment is likely to increase on competition
grounds. Some domestic companies, such as Reliance Industries, are confident that their
familiarity with the numerous business operating difficulties in India would give them a
distinct competitive advantage over foreign companies.

Literature Review

Many researches are done on Unorganized Retail Sector and some of them are as
follows:-
According to TATAS MARKET ANALYSIS “
Although still at a nascent stage, organized retailing in India is witnessing a radical
transformation. The in
crease in the number of retail chains across the country is an indication that organized
retailing is emerging as an industry and will boom in a big way in the near future.

At present, the contribution of organized retailing to the total sales (US $ 180 billion) of
the Indian retail industry is just about two percent. However, studies indicate that
organized retailing will grow to 20 percent by the end of the decade.

 According to a report prepared by McKinsey & Co and the Confederation of

Indian Industry (CII), “India's retailing industry has the potential to generate US$
300 billion per year by 2010. Population growth combined with an increase in
disposable incomes is providing the impetus to this boom.

Household groceries and apparel are the key drivers in India's organized
retail industry. Food retail in particular is the sunrise sector. Research revels that
this category of retail is expected to grow to US$ 1.6 billion over the next five
years. The organized apparel segment is of 1.8 bn and is expected to grow at a
steady 9.5 percent per annum over the next three years.

There are various retail formats currently in use in India. These include
hyper and supermarkets, convenience stores, department stores and specialty
chains. Among these formats a notable trend has been the development of
integrated retail-cum-entertainment centers and malls as opposed to stand-alone
developments.
 About 25 million square feet of organized retail space is expected to come
up across the country by 2005. Mumbai and Delhi rank amongst the top two cities
in India for organized retail growth. Although, the emergence of the organized
retail outlets has predominantly been an urban phenomenon, in the next couple of
years, organized retailers will to enter semi-urban areas in India, where disposable
income is also fast increasing.

Retailing is not yet officially recognized as an industry. India does not allow
100 percent foreign direct investment (FDI) in the retailing sector. There have
been discussions between the government and the industry on opening up the
retail sector to FDI, and at least allow 26 percent foreign equity initially, but a
decision has not yet been taken. A case is being made to the Government of India
by officials of some global majors to allow FDI in retail trading of low-volume,
high-value products.

Though 100 percent FDI is not allowed, it is still possible for the foreign retailers
to enter the Indian market through three channels - franchise agreements, cash and
carry wholesale trading, and strategic license agreements.

With tariffs on imported consumer items gradually being aligned to meet

prescribed WTO norms and reduction of import restrictions, the retailing sector
will get a major boost. To attract and sustain the interest of international retailers,
India still has quite a way to go by way of reforming the real estate laws,
restructuring the tax structure, and allowing FDI in the retailsector.”

 According to recent DSP Merrill Lynch report, “the key factor providing a thrust
to this retail boom is the changing age profile of spenders. A new set of young
earners who are in their mid twenties has emerged and over seven million people
 are entering this category every year. The number of people who earn over US$
5,000 plus per annum (see table below) is growing at an intense pace and this is
primarily attributed to the rapid rise in young earners (those in their mid
twenties).”

 According to Resource centre “The retail sector in India is witnessing a huge

revamp as traditional markets and family run 'pop-n-son' shops are steadily paving
the way for new format retail outlets, departmental stores, mono and multi-
branded retail shops and specialty stores. Even in IT industry the scenario is
undergoing stellar changes as traditional”

 Shushmul Maheshwari gives an overview of the “different strategies adapted by

retailers in the organized and unorganized retail segments”

His findings are as follows “Today, retailing doesn’t involve just dealing
or marketing from shops, it includes analyzing the market in an effort to provide
reasonable prices together with an array of options and experience to customers.
The sole purpose of all this is retaining the brand loyalty of customers. Indian
retail is currently a US$ 245 billion market and is anticipated to extend to almost
US$ 385 billion mark by the next five years. The Indian retail sector is currently
sporting a brand new look and together with a 46.64 per cent three-year
Compounded Annual Growth Rate (CAGR), Conventional marketplaces are
paving way for new shopping malls, the likes of superstores, shopping plazas,
supermarkets and brand label stores. International style shopping centers have
started dotting the skyline of cities and smaller towns, acquainting the Indian
customer to a unique shopping experience. The retail industry in India is split up
 into the unorganized and organised retail segments. The unorganized retail sector
includes the big, average and modest grocery stores and the chemist shops. A
changeover is taking place from the conventional retail sector to organized
retailing. But the unorganised segment still dominates and leads the industry. By
2010, the Indian retailing sector is anticipated to become an Rs 12.5 trillion
market. The share of organised retailing is supposed to jump to about 10 per cent
from the existing three per cent. The anticipated staggering growth in organised
retailing provides an opportunity to expand the market for both established and
new players. According to the latest report India Retail Sector Analysis (2006ñ07)
by RNCOS, the total retail market is primarily focused in rural regions, which
makes up 55 per cent or US$ 165 billion of the overall retail market as opposed to
urban segment, which represents 45 per cent or US$ 135 billion of the gross retail
market. The rural market is spread over 627,000 villages, even though its centre
of attention is focused around a core group of 100,000 villages that makes up 50
per cent of the rural populace.”

Research Methodology

Research Methodology
Research methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically.
The main objectives of a research are to find out truth which is hidden and
which has not been discovered. According to advance learner’s Dictionary of current
English the definition of research is –
“A careful investigation or inquiry especially through search for new facts in any branch
of knowledge”

Sources of data-
To meet the specific objective of problem, primary data is collected. Primary data can be
collected either through survey or experiments.
For collecting primary data I had use the survey method.

 SURVEY METHOD-
To conduct my research the first step was to prepare the questionnaire for the
consumer, which includes preparing question and arranging them systematically in
the form of consumer questionnaire.
I even went to different showroom and asking each and every customer, for
the necessary information that I needed to accomplish my objective in the area. The
questionnaire includes the queries related with other preference, popularity of the brand,
and suggestion for improvement. While my visit to the consumers and showrooms I
found many facts and practical problems, which I have mentioned in to the chapter of
findings and observations.
The process of selecting information from people through questionnaire. There are two
types of questionnaire
1-Open –ended question
2- Close – ended question
For collecting the data I have use the close–ended questions. Through this I have get the
needed information about customer preference about various brands of microwave oven.
Open-ended questions used for the specific problems as like suggestion.

 OBSERVATION-
This process is nothing but recording information about people & their behavior without
asking any specific question.

INTERVIEW METHOD-
Personal interview is mainly the formal data collection tool either may be structured or
unstructured, direct or indirect.

SECONDARY DATA-
Secondary data means data that are already available. It’s collected through
-Searching of Internet
-Magazine, Newspapers, Books, Journals
-Collecting & analyzed data by some other agencies.

RESEARCH DESIGN-
There are generally two types of research design.
1-Exploratory Research
2-Descriptive Research
I have used exploratory & descriptive research both. In exploratory research I have
precise investigation or of developing the working hypothesis from an operational point
of view. The major emphasis in such studies is on the discovery of ideas, in sights&
problems.
As a descriptive research I must be define the problem clearly & obtain complete &
accurate information, & make a carefully planned procedure for collecting data.
This research design must make enough provision for protection against bias& must
maximize reliability, with due concern for the economical completion of the research
study.

Research Plan

Description of the coverage should to cover the area of the Lucknow city. I
personally went to each showrooms and customers situated within the area. I collect the
necessary information from the each showroom, which I found is necessary to
accomplish my objective, and for the completion of this project.

DATA COLLECTION-

Sampling Technique:
For proposed research plan non-probability sampling has been adopted for
the selection of samples. In the non–probability sampling the type chosen
was judgmental sampling. The reason behind this was that we had to
assess the customer’s attitude specifically and we had to judge their
thinking about unorganized retail sector.

Sampling plan:
Random sampling is used for the purpose of the research work.

Sampling unit:
. In sampling researches, decide who will be surveyed. The portion of population that
researches need to target and that represents the entire population is known as
SAMPLING UNITS. The target population is should be selected in such a way that
everyone in the population has that equal chances of being included in the sample.

Sample size:
The sample size consists of 110 units out of which the most logical and non biased
response are selected thus the sample size is taken out to be 100.

SIGNIFICANCE
Retail sector has vast scope in India earlier retail sector was mainly an metro city and big
company are mainly focused an bag city . because they are mainly focused on highly
income group.
But seeing the demand and thinking the company thought also focus in the lower income
and middle income group people. That s why their started opening their retail sectoring
different -2 small city also . which is turn increased their sales and business.

SCOPE

Retail sector is growing sector and it will not only increase the employment rate but also
increase the economy of the country . with the help of retail sector .product are become
more closer to the people they don’t have to search for product it is easily available to
them.

FUTURE

Retail sector has great future in India .today many big company are entering into this
sector like bharti is coming as wall mart .In luck now organized retail sector gone to
boom and many other new retail sector are still to be opened .
 Unorganized retail provide to benefit to the lower
income group mostly. Because mostly the product which they buy daily used by the
among the credit. so unorganized sector is benefit provide .where as organized retail
sector provide benefit to both middle and high class income people.
Also is different big MNC will come India and
invest their money an retail sector .then they will many job opportunity for different
people and also it will help am increasing the an economy growth.

Hypothesis

Earlier when I Was going to do my research it was assumed that maximum of the
customer purchase goods from unorganized sector .the reason for my assumption for that
was every one wants to purchase the product near to house.
As I started doing my research work by filling the questionnaire and personal interview
From the customer in luck now and some other city .I realized that maximum of them
want to purchase on unorganized sector.

Findings

The most important part of this management research program is to find whether
Unorganized sector have suffered because of organized retailing. For this purpose
retailers of Unorganized and Organized sectors have been surveyed for the following
purpose:
1. Brand Loyalty
2. Competition between two sectors.
3. Foreign Investments
4. To find whether customer have purchase intentions or not.
5. To find out whether there is any increase in sale of not after as a result of
Organized sectors.

Conclusion

In the last few years much has been written about the retail revolution in India. Industry
analysts, consultants, other in India are focusing on “massive middle class opportunity”
 and the explosion of retail in India. New shopping malls are opening up, foreign
investment is coming to India, and old cinemas halls are converting to multiplex.
Organised retail was launched in India with the launch of first malls in 1999. There were
only three malls existed in India till 2002. Retailing in India at that time was a child of
evolution.

Since then many changes have taken place, some of them are:
• Consumer markets have increased since then. With the increase in sales of
television and then cables and satellite channels, the mass reached of brands
have increased.
• Income growth and structural changes has fuel growth.

Apart from steady income gains, consumer financing has become a major driver in the
consumer durables industry. In the case of more expensive consumer goods, such as
refrigerators, washing machines, colour televisions and personal computers, retailers can
join hands with banks and finance companies to market their goods more aggressively.
Among department stores, other factors that will support rising sales include a strong
emphasis on retail technology, loyalty schemes, private labels and the subletting of floor

space in larger stores to smaller retailers selling a variety of products and services, such
as music and coffee.

Organized retailing is relatively new to India, although it has begun to expand rapidly and
has given though time to unorganized sector. As with other consumer-oriented goods and
services, this sector should benefit from rising wealth, industry deregulation and a greater
openness to international influences.
By 2010, however, the organized sector could account for as much as 20% of the total
retail sector, based on current trends.

Shopping malls are becoming increasingly common in large Indian cities, and developers
have plans to add hundreds of new malls over the next three years. Although not all of
these plans will be realised—and many of the new malls will be much smaller than their
Western counterparts—Indian consumers will have a far larger number of attractive,
comfortable, brand-conscious outlets in which to shop.

Competition from the traditional retail sector will continue to be a major issue for
international firms entering the Indian market, whether directly at the wholesale level or
indirectly through local firms. Traditional shops are mostly owner-operated, have low
labour and property costs, and generally pay little or no tax. New entrants to the
organized retail sector will also face higher labour and property costs than traditional
firms and must bear the additional expense of back-up power supplies. Other
impediments include high intermediation costs, expensive—and often inadequate—

supply-chain infrastructure, inflexible labour laws, complicated property codes, multiple

licensing requirements and a shortage of skilled managerial staff.

Although the retail sector in India is undergoing substantial growth and development,
driven by the impact of rising incomes, increasing urbanisation, low interest rates, greater
brand competition and a youth-driven culture but at same time the biggest challenge for
the Indian retail industry is its huge unorganized market, which accounts for a staggering.
 Recommendations

Technology is going to be the dark horse in corporations’ bid to reduce costs, optimise
supply chain processes and improve productivity and profits. The benefits that
technology offers are manifold and include - improved efficiency and visibility, lower
costs, lower inventory levels yet constant product availability, better asset utilisation and
increased sales through better out-of-stock goods management.
There is huge potential in India specially, companies should try to tap middle class
people. The products and brands should meet the need and budgets of real Indian middle
class family as there is huge potential in this class. There are more than 220 million
households with yearly income between 90,000 and 200,000 Rs which need to be
explored.
Although 97% of the market has been captured by unorganized sector but it facing a
tough competition from organized sectors because of big malls. If unorganised sectors are
want to maintain this growth then they have to attract customers by:
• Launching new schemes.
• Providing good quality products at reasonable price.
• They should impart training to their ground staff, so that they can handle
customers well.
One of the main reason why prefer malls over unorganized retail store is that, every thing
is available under one roof. They don’t have to walk distances for buying particular
products. They can also have a good time with their family and friends.

QUESTIONNAIRE

1. From where you buy the goods?

 70% 65%

60%

50%

40% 35%
local shops
30% big stores

20%

10%

0%
1st Qtr

Local shops 65%

Big stores 35%

Interpretation:65% people purchase goods in local shop and 35%

people purchase product from big stores
2. Are you aware of the difference between organized and
unorganized retail sector?
 yes
40%
no
60%

Yes 60%
No 40%

Interpretation:

60% people do not have knowledge about organized retail only

40% people are aware of organized retail sector.

3. Which sector you prefer for buying the goods any products?
 Unorganized

Organized

Unorganized 65%
Organized 35%

Interpretation:
65% people prefer buying the goods from unorganized retail shops
while 35% people prefer organized shop.
4. Why you prefer organized retail sector?
 40

30

20

10

0
convinie credit near to others
Series1 35 20 30 15

Convenience 35%
Credit 20%
Near to house 30%
Others 15%

Interpretation:

35 % people prefer convenience while 20% people prefer credit,

30% people prefer nearby shopping.

5. Why you prefer unorganized retail sector?

 other

10
discount

25
proper display

25
availability

40
0 10 20 30 40 50

Series1

Availability 40%
Proper display 25%
Discount 25%
Others 10%

Interpretation:35 % people prefer product availability while 25%

people prefer proper display and discount each.

60

6. What you think that

40 organized Retail sector is good’s & should be
open more? 20

0
yes no
S e rie s 1 40 60
 Yes 40%
No 60%

Interpretation:
Only 40% people were of the view that more organized malls and
bazaar should be there while majority of respondents, 60% were
against this view.
7. If Unorganized Retail shop is Nearest to you then will you buy
the products from it?
 30% 70%
yes
no

Yes 70%
No 30%

Interpretation:

70% people were in favor that they will buy from small shops if
they were near to them.

8. Why you purchase the Product from Particular store?

 40

30

20

10

0
proper convini relatio discou other
Series1 25 20 40 40 5

Proper display 25%

Convenience 20%
Relationship 40%
Discount 40%
Others 05%

Interpretation:Maximum number of people with 40% each

purchases good on the basis of relationship with the shopkeeper
and discount available on the goods, while 25% people purchases
after seeing proper display
9. What change you think should be done in an unorganized
sector to compete with organized sector?
 50
40
30
Series1
20
10
0
y
ty

rs
ay

er
li

he
iv
bi
pl

l
la
s

ot
de
di

ai

e
av

m
ho

Proper display 20%

Availability 30%
Home delivery 40%
Others 10%

Interpretation:
Most of the people with 40% suggest home delivery, 30%
availability, and 20% proper display should be done in order that
this sector should compete with the organized one.

10. What other Facilities you want from an unorganized retail

sector?
 60

40

20

0
discount variety others
Series1 45 40 15

Discount 45%
Variety 40%
Others 15%

Interpretation:
45% of the respondents said they need discounts on purchases while
40% ask for more variety of products.
11. Does infrastructure if any store influences you to buy Product
from there?
 60
50
40
30 Series1
20
10
0
yes no

Yes 55%
No 45%

Interpretation:

55% of the respondents are in favor of the view while 45% were
against it.

Bibliography

The following books and websites have been consulted for writing up to this project:
1. Books: -

1. Kotler, Philip “Marketing Management” Published by Pearson Education

(Singapore) Pte. Ltd.

2. Kothari, C.R “Research Methodology” Published by New Age International (P)

Ltd.

3. Cooper “ Business Research” Published by Tata McGraw Hill

4. Websites:-

• www.google.com
• www.economictimes.com
• www.Scribd.com