Chapter Objective

Chapter Objective:
An outlook is made in this chapter to analyze the data pertaining to objectives one and two objective1″To study the recent developments in retailing in India with a view to know the trends in retailing and shifts in government policy towards retaining in India”.objective2″ To analyze the factors that contributes to the shifting of customers from unorganized to organized retailing in recent times”
In the complex world of today, the consumer is king and retailers are keener on consumer satisfaction. Considering the busy lifestyles of today’s consumers, the retailers also provide services apart from products.
Retailing is an amazingly diverse economic institution with many interesting extremes in size retailers very from ‘Mama-and-Papa’ store with few or no fulltime employees to the giant sears. Size is not only variable but also the variation in product-lines some retailer’s handle only one product or a few closely related products. While departmental stores may carry 1000 or more different items or consider the location variation. Methods of operations of these vary greatly (viz: some are located in shopping districts that grew naturally, some at home, etc.;)
Retailing occupies a very important place in the economics of any country. It is the final stage of distribution of product or service. It not only contributes to country’s GDP but also empowers a large number of people by providing employment.
The word ‘Retail’ is derived from the French word retailer, meaning “to cut off, clip, pare, divide, in terms of tailoring (1365). Retail trade is one that cuts off smaller portions from large lumps of goods. It is a process through which goods are transported to final consumers. In other words, retailing consists of the activities involved in selling directly to the ultimate consumer for personal, non-business use. It was first recorded as a noun with the meaning of a “sale in small quantities” in 1433 (from the Middle French retail, “piece cut off, shred, scrap, paring”). Some of the “cut” functions retailers perform include sorting and storing, packing and selling in small quantities to the final consumers thus adding value. . It implies first hand transaction with the customers. A retailer is a chain between wholesaler and final customer. Retailing involves a direct interface with the customers.
The word ‘Retail’ is taken from the French word retailer, indicating “to cut off, cut, pare, partition, as far as fitting (1365). Retail exchange is one that breaks large merchandise into small. It is a procedure through which merchandise are transported to the place of end users. Finally retailing comprises of selling to the final purchaser for individual, non-business utilize. It was first recorded as a noun with the significance of a “selling in small amounts” in 1433 (from the Middle French retail, “piece cut off, shred, scrap, paring”). A portion of the “cut” roles of retailers include arranging and putting away, pressing and offering in little amounts to the last shoppers in this manner including esteem. . It suggests direct exchange with the clients. A retailer is a chain among distributer and last client. Retailing includes an immediate interface with the clients.
American Marketing Association defined “retailing as, the activities involved in selling directly to the ultimate consumer in all forms .It holds the direct consumer sales activities of the producer, whether through his own stores, by house-to-house canvassing or by mail order. It does not cover the sale by producers of industrial goods, by industrial supply houses, or by retailers to industrial, commercial, or institutional buyers for use in the conduct of their enterprise.”
Gibson G Vedamani opined that, “Retailing involves a direct interface with the customer and the co-ordination of business activities from end to end –right from the concept or design stage of a product or offering to its delivery and post delivery service to the customer. The industry has contributed to the economic growth of many countries”.
According to Philip Kotler “Retailing comprises of all the activities included in selling goods or services to the ultimate consumers for private, non-resale use. A retailer or retail store is any business enterprise whose sale volume comes primarily from retailing. Any organization selling to ultimate consumers whether it is a manufacturer, wholesaler or retailer is doing retailing. It does not matter how the goods services are sold (by person, mail, telephone, vending machine or internet or where they are sold – in a store, on the street or in the consumer’s home)” .
The North American Industry Classification System (NAICS)2 states that the retail trade sector consist of establishing mainly involved in retailing stock, usually lacking alteration, and execution facilities related to the sale of goods.
Retailing comprises of the business activities involved in selling goods ; services to consumers for personal, family, or household use. Today retailing is at a fascinating crossroads, with many challenges ahead.
Retailing may be viewed from multiple perspectives. It includes tangible and intangible items, does not have to involve a store and can be done by manufacturers and others-as well as retailers. It is the last stage in channels of distribution.
Any concept in marketing initially starts with customer orientation. Here concept means philosophy according to Philip. Kilter the concept of retailing also starts with customer orientation.
Customer orientation:
The retailer determines the attributes and needs of its customers and endeavors to satisfy these needs to fullest.
Co- coordinated effort:
The retailer integrates all plans and activities to maximize efficiency.
Value-driven:
The retailers offers good value to customers, whether it is upscale or discount. This means having prices appropriate for the level of products and customer service.
Goal orientation:
The retailer sets goals and then uses its strategy to attain them

Source: Indian journal of management
Managerial considerations-Retail Face:
Marketing managers engaged in retailing are involved in a number of key decision areas. These decisions are all interrelated and cannot be made independently (about what products to stock and where to locate the store, etc.). This fact makes retailing both complicated and challenging and explains the high risk it entails. They are:
1. Product line decisions:
What types and brands of products should we stock? what level quality should we offer?, how wide variety should we provide? Are the product type decisions taken at top-level managers?
2. Location decisions:
These include the location of a store, structure of shopping centers, investment decisions, etc.,
3. Pricing decision:
These decisions include the setting of prices and expected profit margins.
4. Promotion decision:
Promotion decisions include allocation certain budget to advertising, and how should be it divided among various media, Should we offer trading stamps, etc.,
5. Target decisions:
A target decision means the selection of the consumer on whom the retailer want to emphasize more basing on their income, age, lifestyle, etc., or the selection of the type of the marketed.
6. Service decision:
This involves the following:
? Should we offer credit? if so,
? What kinds of credit plan should we provide?,
? What about delivery? Etc.
7. Image-building decisions:
These include how to gain target customers, how attract consumers, etc.,
Retailer is a Person or Agent or Agency or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer.
Types of Retailing
In US, UK, Germany, France major market share is in larger formats of business in terms of retail space, Categories, Range, Brands, and Volumes, etc. Mere looking at the west success stories in retail like Wal-Mart, Kroger, Sears, Kmart, Target, J.C.Penny From US: Metro AG, Tenglemann, Reve, from Germany: Care four, Intermarche from France,
Tesco, J sainbery, Marks ; Spencer from UK is all having local presence ; multinational presence. The scales of operations are very huge, the markups they earn are also much higher ; they operate in multiple formats like
? Discount Warehouse
? Supermarket
? Departmental Store
? Hyper Market
? Convenience Store
? Specialty Store
? Other Channel to reach consumer could be,
Mail Order
? Direct Marketing
? Multi-Level Marketing
? Customer Induced Marketing
? Exhibition Sale
These chain stores mainly deal in Branded merchandise, Designer goods, ; their own home label or In-house Brand / Brands. The economy ; lifestyle of west is not in line with that of India ; hence we may not be able to copy the format as it is.
Structure of the retail sector in India:
Retail Sector can basically be classified in to two segments. One is organized segment and another one is unorganized segment. As far as India is concerned this organized segment contributes only to 3% of the retail trade and the unorganized segment contributes to remaining 97% of the retail trade.
a. Unorganized Retailing:
The unorganized retailing sector dominates the total retailing activity in India. In India it constitutes around 95.4 percent. It includes thousands of small retail shops spread over the entire geographical area of the country. It refers to the traditional format of retail industry. These sectors is mainly characterized by small retailers and are subject to tax evasion and lack of labour law system. Example: Local kirana shops, pan bidi shops etc.
b. Organized Retailing:
Organized retailing is a recent development in India. Due to changes in the socio-economic factors there is a growth of organised retailing. The modern retail structure is characterized by Malls, Chain shops, departmental stores hyper markets, super market etc. It refers to trading activities undertaken by the licensed retailers i.e. those who are registered for sales tax and income tax. In India organised retailing constitutes a very little share of 4.6 percent of total retail market.
Retail Formats can be further classified into the following categories:
The retailing formats can be classified into following types as shown in the diagram –

Importance of Retail Industry
Retail involves the selling of goods to customers. While meeting the needs of customers, following are some of the functions performed by a retailer:
Customer Convenience: Perhaps the most important role of bringing the ready to be consumed goods to the doorstep of the consumer is performed by the retail community. Consumers benefit from retailing as retailers perform marketing functions that makes it possible for customers to have access to a broad variety of products and services. Retailing also helps to create place, time and possession utilities. A retailer’s service also helps to enhance a product’s image. Retailers stock goods and ensure the availability of products and services just when the customer needs them. Convenience Stores operate over extended hours through the week and give customers greater flexibility and choice.
Accessibility: Products and services have no value for consumers until they are acquired and used by the customers. Retailers acquire products and services from different places and. assort them at a single point as per the needs of the consumers and thus facilitate customers’ access.
Convenience of Size: Retailers break bulk and serve the products in quantities and sizes as desired by the customer. For example, shampoo is available in small sachets. The retailer helps consumer by providing appropriate products, service and advice in the packing and quantities desired by them.
Associated Services: A vibrant retail sector benefits the consumers by providing range of products and services efficiently. Retailing can be done in either fixed locations or online. Retailing includes subordinated services, such as delivery. 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. Retailing also helps to increase the living standards and enable the consumers to possess various goods, services and utilities.
Supply Chain: Retailers are part of an integrated system called the supply-chain. A retailer purchases goods or products in large quantities from manufacturers or directly through a wholesaler, and then sells smaller quantities to the consumer for a profit. Retailers participate in the sorting process by collecting an assortment of goods and services from a wide variety of suppliers and offering them for sale. The width and depth of assortment depend upon the individual retailer’s strategy. Retailers provide the vital link between producers and ultimate consumers.
Value Chain: When consumers purchase goods, retailers must order more goods to replenish their stock. In turn, factories must manufacture the goods for the retailers. The factories then purchase more raw materials to use to manufacture more goods. This is how consumer spending is able to drive much of the economy.
Research ; Information: The retailer provides useful information across the supply chain. He informs and educates customers about product features and benefits. They provide information to consumers through advertising, displays and signs and sales personnel. Marketing research support is given to other channels, members. Retailing in a way, is the final stage in marketing channels for consumer products. He also provides feedback about consumer requirements to the manufacturers and wholesalers which help them in planning production and supply.
Mobilizing Finance: Retailing industry mobilize the investment and savings of people, as a small shop can be set up with minimal investment. They store merchandise, mark prices on it, place items on the selling floor and otherwise handle products; usually they pay suppliers for items before selling them to final customers. They complete transactions by using appropriate locations, and timings, credit policies, and other services e.g. delivery. They influence life style of consumers and help people to build their identity in a social setting.
Economic Development: Retailing has great impact on economic development of a nation. Retailing has become an intrinsic part of our daily lives. Consumer spending on retail goods drives much of the global economy, and the retail industry employs a large number of people. Nations that have enjoyed the greatest economic and social progress have a vibrant retail sector. Retailing is one of the most important industries in the world and plays a predominant role in economic development of the country. A healthy retail sector growth and speeds up economic development.
Employment: There are a large number of people and companies involved in the production, distribution, and retail of goods. Globally, retailing is the largest revenue generator and employment provider next only to agriculture. It provides opportunities to the poorest and unskilled along with the educated and skilled. As a major source of employment retailing offers a wide range of career opportunities including; store management, merchandising and owning a retail business.
Social Responsibility: Successful retailers also recognize that people want to see the improvements in the general level of consumption and social cohesion over time. Retailers have to enhance their perceived value to the community by acting as a focal point and through effective public relations and promotional campaign including sponsorships. This encourages social responsibility behavior by the corporates where public welfare programs get funded by a certain percentage of purchase prices of company’s products.
Retailers today can no longer be accurately characterized as intermediaries that buy from suppliers and sell to customers. Today they serve as ecosystems in which value is created and delivered to customers and, subsequently, appropriated by the retailer and its business partners.
All the major retail chains like Reliance, Bharati-Wal-Mart, Tatas, RPG, and a host of others are banking for profits. India is ” attempting to do in 10 years what took25-30 years in other major markets in the world” and it is likely to see emergence of several innovative India-specific retail business models and formats
In the retail sector, factors contributing to high inventory are the fragmented retail market, and the high proportion of retail business taking place in the ‘unorganized’ sector – often informal businesses in rural areas that may be many miles from paved roads – which leads to much higher levels of ‘safety stocks’ than in organized retailing. The state sales tax regime encourages local stock points in each state, say companies.
The transport and warehousing industry is fragmented and lacks scale – the average load carried by trucks in India is low by global standards, at around seven tons. Third party logistics is also undeveloped, and most businesses manage distribution and logistics themselves.
“A big distribution problem is the lack of cold storage chains,” comments an industrialist. “Private logistics companies should be coming in and offering refrigerated transport, but they are not. So if you want to sell ice cream, say, you have to have your own vehicle fleet, and that is not necessarily the most cost effective way to go to market.” 1 The distribution challenge A big distribution problem is the lack of cold storage chains… private logistics companies should be coming in and offering refrigerated transport, but they are not.
As with many other retail segments, companies say the main driving forces in the FMCG segment are rising disposable income together with changing lifestyle patterns in India. Low-priced products constitute the majority of sales volume, and lower income and lower middle-income consumers accounting for over 60 percent of les.
Rural markets account for around 56 percent of total FMCG demand, although some companies believe that much more can be done by the organized sector to tap rural demand. “Road infrastructure is improving and communications infrastructure is improving,” says a vice president of a leading FMCG company; There is no reason why as many as 300 million new consumers cannot be brought into the ‘consumer basket’. Just by increasing the geographical reach, there will be enormous growth in the FCMG sector. After four years of growth of between 1 and 1.5 percent, the segment saw revival in 2004, driven in part by a surge in retail innovation.
Retailers introduced price cuts, and launched new packaging sizes together with discounts and promotional offers. By a large margin companies identify poor infrastructure as the key constraint in the FMCG segment, as in other sectors of the economy.
Bureaucratic control and the lack of a ‘single window’ administrative procedure to approve new business investments are also considered constraints, although in interview many companies concede that Indian’s bureaucratic handling of business issues is improving quite fast.
The FMCG segment is also the area of retailing where companies are most likely to cite FDI controls on retailing investment as a constraint to growth.
RETAIL IN GLOBAL SCENARIO
Retailing in more developed countries is big business and better organized than what it is in India. According to a report published by Mc Kinsey ; Co. along with the confederation of the Indian industry the global retail business is worth $6.6 trillion. In the developed world, most of it is accounted for by the organized retail sector. For instance, the organized sector has up to 80% share of retail sales in the US. The corresponding figure for Western Europe is 70% while it is 50% in Malaysia and Thailand, 40% in Brazil and Argentina, 35% in Philippines, 25% in Indonesia and 15% in South Korea. Organized retailing however remains poorly developed, accounting for a paltry 10% in China.

Conventional Retail Scene in India:
Though the barter system is considered as the oldest form of retailing, the traditional forms of retailing such as neighborhood stores, main-street stores and fairs still exist in the laid-back towns around the world. During post-war years in the US and Europe, small retailers reformed their shops into large organized stores, markets, and malls.
Retail evolution mainly took place in three stages ?
• Conventional
• Established
• Emerging

Retail marketing is not just buying and selling but also rendering all other personalized consumer services. With the RM picking up it has given a new look for various fast moving capital goods (FMCG) goods. This not only increased the demand for various goods in the market but also made retail marketing the second largest employment area, the first being agriculture.
Today’s retail market is satisfying diverse needs of its consumers. The consumer’s needs range from as basic as food ; food services to as luxurious as jewelry items. In this chapter, we analyze prominent retail sectors around the world, their structure, and the key players in that sector.The retail sectors are prominently divided into Food, Clothing ; Textiles, Consumer Durables, Footwear, Jewelry, Books-Music-Gift Articles, and Fuel.
India is the nation having the most chaotic retail advertises. Customarily the retail business is controlled by Mom and Pop having Shop in the front and house at the back. Over 99% retailers work in under 500Sq.Ft of zone. All the stock was obtained according to the test and vim and likes of the proprietor likewise the evaluating was done on promotion hawk premise or by observing at the face.

Benefits were aggregated in moderate moving and non-moving stocks which were to end up excess or expended in-house. In this way benefits were vanished without their insight. The Manufactures were to disseminate merchandise through C and F operators to Distributors and Wholesalers. Retailers happen to source the stock from Wholesalers and reach to end-clients.

The stock value used to get expanded, as it were, till it comes to from Manufacturer to End-client. Offering costs were to a great extent not controlled by Manufacturers. Marking was not an issue for larger part of clients. Over 99% clients are value delicate and not quality or Brand Sensitive in the meantime they are Brand cognizant moreover. For the most part the records of exchanging and home are not looked after independently

Week after week Bazaar in numerous little tows was held and every one of the items were on the scene including domesticated animals. Dealing was the unwritten law of market. Instructive capability level of these retailers was constantly low. Thus showcase was controlled by modest bunch of merchants and/or Wholesalers. For all intents and purposes there was just a single configuration of retailing and that was mass retail.

Retailer to customer proportion was low, for every one of the classifications no matter what. Varity regarding quality, Styles were on territorial premise, group based and really low range was accessible at any given single place. Indiscreet purchasing or utilization is limited to nourishment or vegetables and so on. Having additional combine of pants or Shirts or Casuals and Formals and relaxation wear and games wear and distinctive match of shoes for events is till date is an extravagance for greater part populace aside from those living in Metros. Buying energy of Indian urban purchaser is low and that of Branded stock in classes like Apparels, Cosmetics, Shoes, and Watches
Drinks, Food, Jeweler, are gradually saturating the life saver of Indian City people. Anyway electronic and electrical home apparatuses do hold proper picture into the psyches of shoppers. Brand name does make a difference in these white products classifications. In the coming circumstances additionally greater part of sorted out retailers will think that it’s hard to keep adjust with rest of the unbranded retail advertise which is extremely gigantic.
Retailing in India can be projected to the development of the Corner stores (Kirana) taking into account the comfort of the shoppers. While the government support for rural retail, domestic model of store chains run by Khadi and Village Industries Commission. During 1980s as a moderate change, Indian economy has opened up.

Textile organizations like Bombay Dyeing, Raymond’s, S Kumar’s and Grasim saw the rise of retail chains. Afterwards, Titan effectively made a sorted out retailing idea and built up a progression of showrooms for its premium watches. The last 50% of the 1990s saw a crisp influx of contestants with a move from Manufactures to Pure Retailers. For e.g. Sustenance World, Subhiksha and Nilgiris in nourishment and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. 1995 onwards observed a rise of strip malls, for the most part in urban regions, with offices like auto stopping focused to give an entire goal experience to all fragments of society

EMERGENCE OF ORGANISED RETAIL IN INDIA
The emergence of first phase of organized retailing in India can be traced back when a shopping center into existence in the year 1869 with Mumbai Crawford Market. After that, in the year 1874 Hogg market, popularly and better known as new market came into existence in Calcutta (Now known as Kolkata) this shopping center was designed by an East Indian Railways Co. Architect R.R. Banya and was named after the then municipal commissioner of Calcutta Sir Stuart Hogg. Earlier the Hogg market even had a garden with a beautiful fountain adding to its ambience and benches too for tired shoppers. Today, the New Market continues to be a premier shopping area in Kolkata despite a part of it being incinerated in late 1985. Its red-brick Gothic clock-tower today bears testimony to the past Grandeur of this first shopping center in India.

Economic reforms starting back in 1991 have enabled India to capitalize on this large pool of educated people.
Since the relaxation of foreign investment rules in 2004 India has become the top destination for multinational corporations looking to outsource operations and is now the second largest beneficiary of foreign direct investment. Within India’s fast-growing economy, real estate has emerged as one of the most appealing investment areas for domestic as well as foreign investors
.
By the end of 2006 Other factors that are contributing to the booming real estate prices include a more mature mortgage market, modern attitudes to home ownership (the average age of a new homeowner is now 32 years compared with 45 years a decade ago).

The young working population is shifting to the more Western philosophy `buy and repay’ as opposed to `save and buy’. GDP growth has reached 9.1% and property prices are increasing by an average 30% cade since 1994. Real estate is able to sustain such fast growth because the demand for property continues to outstrip supply .Government and industry analysts forecast a shortfall of 20m units in urban areas. Cushman and Wakefield have reported that there is an urban shortage of more than 12m homes in the 45-50 cities with a population of more than 1m. The demand increases by approximately 1.5m homes each year.

Other factors that are contributing to the booming real estate prices include a more mature mortgage market, modern attitudes to home ownership (the average age of a new homeowner is now 32 years compared with 45 years a decade ago). The young working population is shifting to the more Western philosophy `buy and repay’ as opposed to `save and buy’.

The liberalization of Foreign Direct Investment (FDI) rules is also encouraging interest in the country and its real estate market from investors around the world. 2006 has seen further relaxation of FDI rules, widening opportunities for those looking to invest in India. In February the Government enabled foreign investment in the construction and development sector. In order to spur investment in the vital infrastructure sector 100% foreign direct investment (FDI) is now allowed under the ‘automatic route’

This is the first time that the Indian real estate market has been fully opened up to global investors. Over 150 private equity funds including JP Morgan, Goldman Sachs, Morgan Stanley, Deutsche Bank and Blackstone have raised over $10bn to invest in Indian Real Estate. Where are the investment hotspots? Unlike many other parts of the world the Indian real estate boom is by and large based on sound fundamentals. India consistently proves its long-term potential.
However, being such a large and diverse country there are naturally many different markets, each with their own pitfalls and potential. Whether Bangalore, Pune, Calcutta or Chennai or even already sky high Mumbai and Delhi, the Indian real estate market has the potential to meet the requirements of most investors criteria.

Retail (incl. shopping malls) India has huge potential for retail expansion and the sector is growing in the region of 10% a year. Organised retailing currently accounts for only 2-3% of the market compared to 70% in developed countries. Jones Lang Lasalle say the sector is “undergoing structural change, with leading domestic retailers going through rapid growth, format migration and consolidation

India’s Boom has acquired further momentum with international giants beginning to test the waters and the country’s big business groups taking bold new steps. At the same time, in a bid to fortify their existing presence amid growing competition, the early entrants are re-tailoring their strategies to suit the new market landscape. Clearly, the next wave of the retail boom is upon us

All these mega moves are, however, not without their own set of problems, some of which already seem daunting. Skilled manpower shortage. Supply chain issues and adequate land for setting shop are proving to be major hurdles for these chains.

But what make $300 billion the Indian retail market suddenly hot despite all the odds are the changing demographics, economic boom and the fact that only 5% of the Indian retail market is currently in the organised sector. According to AT Kearney, organised retail is expected to grow at a rate of approximately 35% per annum till 2010. Which is why the retail sector, piggybacking on the robust growth of the Indian economy, in the coming years.

Today from linen to cakes and fruits to fishes everything is available at the New Market Atta reasonable price and this has made the New Market sustain its popularity among the metro customers of Kolkata. The tenant mix of this first shopping center is unique as it has a large number of 2000 stalls which are organized in an order of merchandize. There are rows of stalls dealing with one particular line of Goods. A retail researcher by name Christine Furedy in 70s has observed in her article in the capital on 24th Dec. 1979 tracing the emergence of the New Market, thus “The most complex retail business of late nineteenth century Calcutta, establishment which were to dominate the modern retail sector, were the departmental stores.
Although everyone has closed its doors, many Calcutta’s still remembered the name or recognize their converted, subdivided building: Francis, Harrison and Hathaway; Hall and Anderson; the Army and Navy stores; white a way; laid low and Co.
In their scope and outreach these shops rivaled those to be found in cities of the same size in Britain, Europe or the United States”. The second phase of development of organised retailing can be traced back to the year 1931 when Bata shoe Co. took lead in opening its chain stores at various cities & towns. It was followed by DCM and Raymond’s extensively.
The earliest seed of the so-called specialty malls can be traced to shopkeepers who stocked goods of the same product category in a particular locality. If one were to go back to the early 80s, it can be said that organised retail, to a great extent was visible in the functioning of stores such as ‘Akbarally’ in Mumbai and ‘Nilgiris’ and ‘Spencers’ in Chennai. These stores later evolved into multi-chain outlet and were the first to bring on the ‘onset of organised retail’ in India.
The evolution of PDS (Public Distribution System) of Grains in India having its origin in the rationing system introduced by the British during World War II was example of single largest retail chain in the country the canteen stores Department and the Post Offices in India are also among the largest network of outlets in the country, reaching populations across state boundaries. The Khadi and Village Industries (KVIC) were set during post-Independence and today it has more than 7000 stores across the country.
While Independence retail stores like Akbarally’s, Vivek’s and Nallis have existed in India for a long time, Reliance , Garden silk mills, Madhura Garments, Arvind mills etc have set up show rooms for retail sale of their branded products.
With revolutionary changes taking place in the worldwide economy and the growing importance of 24/7 operation of the business, the retail sector has been undergoing a paradigm shift across the world. The world of today has turned into a global village; consumerism is having a huge impact on the contemporary retail business, and technological advancements have created opportunities as well as several challenges for the retail industry. With the advent of the internet, the growth in the retail industry has been impressive due to the benefits of the economies of scale and also the expansion of business across the geographical boundaries at B2B (Business to Business) and B2C (Business to Consumer) levels.

Development of hyper and super markets trying to give client, 3 V’s – Value, Variety and Volume .Expanding target customer section: The Sachet insurgency – case of coming to the base of the pyramid. At year end of 2000 the extent of the Indian sorted out retail industry was assessed at Rs. 13,000 crore The retail business is isolated into sorted out and chaotic segments.

Organized retailing indicates to exchanging transactions incorporated by authorized retailers, that is, the individuals who are registered for deals charge, salary impose, and so forth. These incorporate the corporate-upheld hypermarkets, retail chains, and furthermore the exclusive extensive retail organizations.

Unorganized retailing, indicates to the routine arrangements of effortlessness retailing, for instance, the Corner stores (Kirana shops), proprietor kept an eye on general stores, Cigarette slows down (paan/beedi), comfort stores, pushcart and asphalt merchants, and so on.
Several studies have proven that the Indian Retail Market is one of the top emerging markets in the world. For Indian Economy, the retail sector is one of the pillars, which contributes towards a growth rate of approximately 10% of the total GDP and towards the total employment around 8%. According to the latest studies, Indian retail market is ranked amongst the top 5 retail markets worldwide estimated around 600 Billion US Dollars.
Indian Retail industry is expected to have a bright future and offers numerous opportunities for progress and growth. According to GRDI reports, some favorable factors which support the growth of retail business are: rise in fashion loving and brand conscious young population, extensive urbanization, and expansion of opportunities for new investment in retail sector. As per the report of FICCI (2011), a positive trend in the Indian retail sector can be attributed to a sharp rise in the Middle-Income segment and growth in domestic consumption. Moreover, studies suggest that with changes in the consumer buying preferences, demographics composition and increasing preference for mall culture, there has been a transition from the traditional retail formats to a more organized form of retailing, as a result of which the Indian Retail market is expected to witness an optimistic trend in future as well.
The retail sector in Indian context can be subdivided into Organized and Unorganized retail sectors. Organized retailing constitutes licensed retailers registered under sales and income tax, involved in carrying out their day-to-day trading functions. This may include large hypermarkets, large-scale owned retail ventures owned privately or the retail chains as well. On the other hand, unorganized retailing comprises of a sizeable proportion of small retailers operating their own Kirana, paan, beedi shops, general stores, chemists, hawkers, etc. In developed economies, organized retail enjoys a predominant share of around nearly 75-80% as against traditional retailing, while in developing economies; unorganized sector enjoys a predominant share in the retail market.
The retail sector in India is highly fragmented or distributed. Unorganized retail constitutes a significant share of over 90%, while the organized retail segment is just in a start up stage and has witnessed an impressive growth over last few years. Retail in India originated with the Mom and Pop Stores and Kirana Stores, which used to cater to the requirements of the local population. Over a period, the government encouraged rural retail and provided support for establishing Khadi & Village industries.
During 1980’s, the retail scene in India changed further with the opening up of the economy, as a result of which leading retail chains in textile sector were established like Raymond’s, S Kumar’s and Bombay Dyeing. Subsequently, Titan launched its retail showroom, and the organized retailing started strengthening its grip in the Indian market. By 1995, major retail outlets such as Food World, Music World, and Planet M, Crossword entered the Indian retail market. Large retail formats and stores like shopping malls, hypermarkets and supermarkets came into operation for providing best of the class experience to the customers.
The retail sector evolution witnessed improvements in the distribution set up, supply chain management, technological innovations, back end operational support and excellence and increase in business alliances in the form of collaborative ventures, mergers, acquisitions, joint ventures, etc.
Major players in the retail industry like Tata Group, Future Group, Bharti, and Reliance, etc. have stepped forward with aggressive and ambitious investment plans in the retail sector as a part of their business expansion strategy across various verticals. Moreover, with the introduction of retail reforms by the Government of India which allows FDI of 51% in multi brand stores in India, organized retail sector is expected to capture a major share of the market in the upcoming future.

India Retail Structure during 2002 and 2003 is given below.

Table 1: India Retail Structure
Retail formats 2002 2003
Total Grocery Outlets 5,170,709 6,037,738
Traditional grocery outlets 4,525,264 5,273,310
Supermarkets 175 2,314
Other grocery outlets 645,270 762,114
Total Drug stores 352,786 405,743
Traditional medical/drugstores 247,582 276,058
Cosmetic stores 105,204 129,685
Source: Businessworld Marketing Whitebook 2005

Retailing in India is currently estimated to be a US$ 230 billion industry, of which organized retailing makes up 3 percent. By 2010, organized retail is projected to reach US$ 30 billion with an expected growth rate of about 400%.
A study conducted by Fitch, expects the organized retail industry to continue to grow rapidly, especially through increased levels of penetration in larger towns and metros and also as it begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in development of the retail-specific properties and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20% market share by 2010.
While organised retail makes up for over 70-80 per cent of the total business in developed countries, the Indian organised retail segment pales in comparison with other Asian countries such as China, South Korea and Thailand. Retailing is the largest private sector industry in the world economy, with the global industry size exceeding $6.6 trillion, according to Euro monitor. In China, the organised retail segment accounts for about 20 per cent of the overall business; in Thailand, it is around 40 per cent, while in Malaysia it makes up for nearly 50 per cent of the total business, according to the data.
The retail sector in India is highly fragmented and organized retail in the country is at a very nascent stage. Of the 12 million retail outlets, more than 80 per cent are run by small family business, which use only household labour. China and Brazil, took 10-15 years to raise the share of their organized retail sectors from 5 per cent to 20 per cent and 38 per cent respectively. India too is moving towards growth and maturity in the retail sector at faster pace, according to Ernst and Young India.
According to the E;Y India Retail Report:
Hypermarkets to be the preferred format for the international retailers entering India Malls to move beyond the metros, increase presence in tier II cities Organized retail penetration highest across footwear, clothing segment. Franchising gaining steam with retailers. Retail sales in India amounted to be about Rs.7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upsurge in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly than consumer expenditure during 2003-08. The forecast growth in real retail sales during 2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure.
Modernization of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores and hyper marts. Sales from these large-format stores are set to expand at growth rates ranging from 24% to 49% per year during 2003-2008, according to a report by Euro monitor International, a leading provider of global consumer-market intelligence.

Table: 2
Retail Trade 2005 2006 2007 2008 2009 2010
Retail Sales (Rs Bn) 15,409 17,360 19,465 21,715 24,215 27,107
Retail sales (Us $bn) 349.4 385.8 421.3 467 516.3 564.7
Retail Sales volume growth (%) 6 7.5 7.7 6.9 6.8 7.3
Retail sales US$ Value growth (%) 13.6 10.4 9.2 10.8 10.6 9.4
Source: EIU

The trends that are driving the growth of retail sector in India are:
? Low share of organized retailing
? Falling real estate prices
? Increase in disposable income and customer aspiration
? Increase in expenditure for luxury items
According to Ascham study, factors such as globalization and liberalization of economies, increase in the purchasing power of the consumers, changing lifestyle and infrastructural developments, have revolutionized the Indian retail market. Studies reveal that organized retail market which was just at 7% of the total retail market share in 2011-12, is expected to attain a total share of over 10% across the retail sector by 2016-17. The estimated growth rate of traditional retail is expected to be around 5% while for organized retail it is expected to be around 25% by 2020.
Food ; Grocery is the major contributor in the entire retail market in India with a total contribution of almost around 60% of the total retail sector in 2012. This is followed by Clothing (8%) and Telecom ; Mobile (6%) and many others. In organized retailing, Apparels is the major contributor which accounted for a total contribution of 33% in 2012 to the retail industry followed by food and grocery (11%). Though, the share of Food ; Grocery segment in organized retailing has shown an impressive growth since last few years. E Commerce and E Tailing in recent years have redefined the retail landscape and offer a lot of opportunities to various stakeholders.
Challenges Faced by the Indian Retail Sector
Even though the retail sector in India has a lot to offer regarding opportunities and prospects of business growth, still it is susceptible to various impediments/bottlenecks which may slow down the pace of growth. Several challenges such as infrastructural limitations, rigid or stringent regulations, political uncertainties, etc, may restrict the growth prospects and pose a lot of hurdles. Some of the major challenges which Indian retail industry is faced with are:
? Competing with the international standards
? Indian retail industry is exposed to several systemic inefficiencies and problems with the supply chain framework.
? Indian retail outlets operate in a constrained space of below 500 sq. ft., which is too small as per the international retail outlet space standards.
? Growth in the retail industry has given rise to real estate related problems with increasing requirements for setting up hypermarkets and supermarkets across various locations in large scale.
? Problems related to the shortage or lack of availability of trained or skilled manpower.
? Frauds in the form of thefts, vendor frauds or administrative loopholes in the retail industry, are a major cause of worry and this has posed several challenges before the management.
? Infrastructural and logistics related issues

PROFILE OF FEW MAJOR MARKET PLAYERS
1. Future Group / Pantaloon Retail: Kishore Biyani popularly known as India’s “King of Retail” has started multiple retail formats in both value and lifestyle segments under the flagship Pantaloon Retail. The company operates across multiple segments including –Food, Books & Music, Fashion, Telecom & IT, Home & Electronics, General Merchandise, Leisure & Entertainment, Wellness, Health & Beauty and E-tailing. The gross sales of the company are Rs. 2,019 crores for the financial year ending June 2006.Initially started as a menswear shop, Pantaloon has transformed into multi-branded garment retail outlet. The success has given birth to India’s first hypermarket chain Big Bazaar in 2001, followed by supermarket chain Food Bazaar in 2002.Future groups retail ventures: The Company operates more than 331 outlets covering 5 million square feet of retail space, spread across 40 cities and has over 17,000 employees. The company caters to the ‘Lifestyle’ segment through its 31 Pantaloons Stores and 4 Central Malls, as well as its other concepts. In ‘Value’ retailing it is present through 51 Big Bazaar hypermarkets, 77 Food Bazaars and 5 Fashion Stations, and other delivery formats.
Pantaloons — department store
Central – ‘Shop, Eat, Celebrate In The Heart Of Our City’, Seamless malls
Blue Sky – Fashion accessories
ALL – Fashion apparel for plus-size individuals.
Fashion Station – popular fashion chain
Futurebazaar.com/e-zone— Pantaloons’ website, an online shopping center with wide range of products.
Big Bazaar — Hypermarkets
Food Bazaar – a chain of supermarkets
Furniture Bazaar — a lifestyle home furniture store popularly called Collection I
Shoe factory – footwear outlets
Electronics Bazaar – offers branded electronic goods and appliances
Depot — offers books, CDs and stationery items.
Bowling Co, Rain, Bollywood Café, Chamosa, Fuel, Sports Bar, Food Stop and Your Kitchen – Leisure and Entertainment.
M- Zone and Converge M – Communications
2. RPG Enterprises / Spencer Retail: RPG Enterprises enjoys a strong base with more than 20 companies in business sectors like Retail, IT ; Communications, Entertainment, Power ; Transmission, Tyres, Life Sciences and Specialties.
In retail sector, the company runs a chain of stores in four formats ranging from hypermarkets to Supermarkets to Daily and Fresh Stores, a music store and a health and beauty products outlet. Retail segment contributes 11per cent to the overall company turnover.
RPG’s Retail ventures:
Spencer Retail: There are 125 stores across 25 cities covering a retail trading area of half a million square feet. Basically it has five formats. Spencer’s express – These stores are around 1000 sq ft in size, provides fresh food ranging from bread to vegetables and fruits, coffee, milk to juices. Spencer’s Fresh – These are slightly bigger in size than Express outlets with 2000 sq. ft. air-conditioned stores are well stocked with fresh food for lesser prices than the local vendors. Spencer’s Daily – It is a regular friendly neighborhood grocery store with about 4000-7000 sq ft in size. Spencer’s hyper – A hypermarket with more than 25,000 sq. ft. in trading area.
Music World: Started in 1997, music and home video retail chain spread across 45 cities in India through 279 outlets. It commands a market share of 20-25per cent in markets where it is present. Today it operates in four formats. Music World Destination stores – 13, Express stores -64, Franchisee stores – 26, Unplugged – 176.
Spencer’s Travel Services: With a turnover of over US$ 2.2 billion and offices all over India dedicated to Cargo and Passenger transportation.
3. K Rahejas / Shopper’s stop: The group’s primary and largest business is Real Estate Business. But the group is considered as pioneer in the retail industry in India. The group forayed into retail business in way back 1991 with its first organized departmental store, “Shopper’s Stop”.
Raheja’s Retail ventures:
Shopper’s Stop: Opened as a menswear in Mumbai in 1991 turned into a full fledged Department store. Today the stores also offer accessories, fragrances, cosmetics, footwear; home furnishing and décor products. Shopper’s Stop is the only Indian member of the “Intercontinental Group of Departmental Stores”. Today the stores are spread over 22 cities across the country. The company plans to increase its presence in 10 more cities covering an area of 2.5mn.sq.ft by 2008.
Crossword: The group continued its march in retail business with Crossword – lifestyle book retail outlets in 2000. The store offers widest range of books for the young and old alike, along with magazines, CD-ROMs, music, stationery and toys. The store also gives its customer value added services like Dial-a-book, Fax-a-book and Email-a-book. Currently crossword has about 45 stores across Mumbai, Bangalore, Ahmedabad, Ghaziabad, Pune, Vadodara, Kolkata, Chennai, Jaipur, Vishakhapatnam and Hyderabad.
In orbit Malls: ‘more than just a mall’ which comprises of shopping, leisure, food and entertainment under a single roof, spread over three levels. Inorbit Mall is now expanding to Navi Mumbai, Hyderabad, Pune and other cities across India.
Hyper CITY: is a neighborhood convenience store offers value added daily use products ranging from fresh produce, groceries, dairy products, bakery items, meals-to-go, household needs & personal care. The stores are spread over an area between 2500 to 4000sq feet. Currently they operate in three locations in Jaipur with the name Express CITY.
Home Stop: It is an exclusive one stop solution to home furnishing and furniture, kitchen, bed, bath, lighting equipment and home decor. The first HomeStop was launched in 2005 in Bangalore.
Specialty stores: The Company opened Mother Care (Maternal & Infant care) shop-in-shops in shopper’s stop, two cosmetics shops in the first quarter of FY08. Currently there are about 22 Desi Cafes, 20 Of Brio cafes under food and beverages category are operating.
4. Reliance / Reliance Fresh: Reliance Retail is a retail chain division of Mukesh Ambani’s Reliance Industries. The Reliance Retail envisages huge expansion plans through hypermarkets, supermarkets, discount stores, department stores, convenience stores and specialty stores in 800-odd cities and towns across India. Reliance Industries have started its ambitious retail business with investments around US$ 750million, which is about 10per cent of India’s organized retail market.Reliance started its retail rollout in five states – Maharashtra, Gujarat, Punjab, West Bengal and Andhra Pradesh in its first phase.

Reliance’s Retail ventures:
Reliance Fresh: A super market format for the fresh vegetables, dairy products etc. As of today there are about 226 Reliance Fresh outlets in 11 states and is planning to expand its network to buy 1200 more outlets across the country in next 4-5 years.
Reliance Mart: A Hypermarket that carry a range of over 95,000 products from various ranging from Fresh Produce, Food & Grocery, Home Care Products, Apparel and Accessories, Non-food FMCG products, Consumer Durables and IT, Automotive Accessories, Lifestyle Product, Footwear and much more. Reliance opened its first mega Mart in Ahmedabad in August 2007. The company is planning to open 30 more hypermarkets and increase the number to 500 by 2010 across the country.
Reliance Digital: Mega store for consumer electronics. In next 3-4 years Reliance likes to set up 150 stores.
Specialty Stores: Yet to start stores for new product categories like apparel, footwear, books, and wellness products.
Rangers Farm: It’s a supply chain store that mostly source and supply farm products required for its ‘fresh’ stores chain as well as for bulk customers like small traders and street vendors.
Reliance Town Centers: These centers to be set up in the towns having population of less than three lakhs will provide all facilities that a small town may require. Reliance intends to open 700 such stores.
Storage and logistics stores: Reliance is also setting up 62 storage stores to ensure uninterrupted supply of merchandise including perishables and short expiry items to its stores.
The Indian retail industry has strong linkages with the economic growth and development of the economy. India’s nominal GDP was an estimated US$1.20trn in 2009. Average annual GDP growth of 7.8% is predicted through to 2014. With the population expected to increase from an estimated 1.17bn in 2009 to 1.25bn by 2014, GDP per capita is forecasted to expand by over 117% by the end of the forecast period (2014), to reach US$2,231. Moreover, it has been forecasted for consumer spending that per capita is for an increase from US$701 in 2009 to US$1,160 in 2014
Trends which are transforming Indian retail industry
Growing at a CAGR of 13%, the Indian retail market is set to double over the next four years and touch US $1.08 trillion by 2020 from the current US $585 billion. With the Indian retail industry warming up to Omni-channel retail and major retailers in the country focused on delivering the right shopping experience, technology’s role as an enabler is becoming more and more significant. The coming year will see consumerisation of technology touch an all new level, with consumers not just in control of brands but also open to new paths of purchase. Indeed, the era of digital consumerism that unfurled earlier this year is now here to stay
ORGANISED RETAIL GROWTH RATE BETWEE 2005-2015

India to become world’s 5th largest consumer market by 2030
The growth in India’s FMCG and retail sector has been primarily driven by the increase in consumption brought about by economic prosperity, as a result of strong GDP growth post liberalization in 1991.In the coming years, macro-economic trends are expected to make India the fifth largest consumer market in the world by 2030, providing a big opportunity for retail and consumer goods sectors, especially FMCG, as per a recent KPMG-FICCI report. The growth in India’s FMCG and retail sector has been primarily driven by the increase in consumption brought about by economic prosperity, as a result of strong GDP growth post liberalization in 1991. A combination of growing income levels and rising urbanization among over 1.29 billion consumers in India is expected to continue driving the increase in overall spending in the country.

GROCERY RETAILING IN INDIA
The Indian retail industry is growing in a faster rate because of growth in the changing demographics of Indian population and an improvement in the quality of life of urban people. (Sunita Chopra, S K S Yadav, 2015). Indian retail industry is the 5th largest in the world and accounts for 14-15% of country’s GDP. Land of retail democracy and hundreds of thousands of retail outlets of all kinds exist in emerging Indian market. Of these, the majority are small neighborhood traditional grocery stores. Food and grocery constitute a major portion of the private consumption. This offers a large potential market for the organized retail companies to enter the emerging market.
Organized Retailing in India refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the publicly traded supermarkets, corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses. (Dr. Pallavi Mehta, 2013). Unorganized retailing refers to the traditional forms of low- cost retailing, for example, local kirana shops, owner-operated general stores, pan/beedi shops, convenience stores, hand cart and street vendors, etc. (Dr. Pallavi Mehta, 2013).
KSA Technopak’s Consumer Outlook 2004 report estimates that the average Indian spends 40% of his monthly salary on food and grocery. In spite of this, organised retail represent less than 1% of the total food retailing business in India, which is currently valued at US$ 145 billion and is expected to grow to US$ 200 billion by 2010. By 2020, India is expected to become the fifth-largest food retail market in the world.
The food retail market is dominated by a large number of independent, family-owned grocery stores. These outlets mainly sell food commodities, but the proportion of non-food sales has been increasing gradually. Larger franchised outlets and hypermarkets
Food & grocery forms the backbone of the Indian retail sector. With an estimated market size of US$ 320 Bn. (Rs. 20,000 Bn.) the category accounts for about 57% of the total retail market. There are an estimated 8-9 Million. food & grocery stores (including local kirana shops, hawkers etc.) in India and the sector supports millions of other SME’s and MSME’s who cater to the demand
are, however, becoming more common. General stores are the largest non-food retailer by outlet type.
The food and beverages retail segment can broadly be classified into three segments:
• Coffee house chains
• Fast food chains
• Groceries
Most food is sold in the local `wet’ market, vendors, roadside push cart sellers or tiny kirana stores. According to McKinsey report, the share of an Indian household’s spending on food is one of the highest in the world, with 48% of income being spent on food and beverages.
The F&G segment consists of fresh fruits and vegetables, milk and milk products, fast moving consumer goods and food grains. About half of the total F&G retail comes from food grains and unprocessed fruits & vegetables – items that are purchased from farmers. CRISIL Research estimates the retail value of these unprocessed items at approximately Rs3.8 trillion (Rs380,000 crore).
The period from 2005-10 is expected to see over US$12 billion being pumped into Indian retail with almost half of it slated for food retail. More and more corporate houses such as HLL, ITC and Reliance are now making inroads into food retail, with some even exploring the integrated approach via agri- business and food processing. Entrenched players such as Subhiksha, Food Bazaar and Spencer’s Daily are also tapping into backward linkages, while trying to match their expanding geographies with retail formats.
The supply chain for unprocessed food items is fairly underdeveloped in India and has many layers leading to high wastages and a high cost of distribution. CRISIL Research believes that increasing penetration of organised retail into the F;G segment can bring about improvements to the supply chain for unprocessed food items
Snapshot of the Indian Food ; Grocery Retail Market
The Indian retail industry is growing in a faster rate because of growth in the changing demographics of Indian population and an improvement in the quality of life of urban people. Indian retail industry consists of both organised and unorganised sectors. Organized retail which now constitutes a small percentage of total retail sectors is growing at a higher rate. Growth opportunity in the retail sectors comes with several challenges. There are instances where retailers have failed to understand the market and have to suffer losses and in some case had to shut down their business. Hence retailers need to be cautious and be prepared well for the challenges. Understanding the consumer psychology is important in order to frame better marketing strategies to retain customers and grow in the retail business
According to A.T. Kearney’s GRDI report- 2011, the consistent growth performance of developing countries like China, India, Russia, Vietnam and Chile is increased phenomenally. While the retail spending has been increased 9 percent average rest of index, the modern grocery sales have been increased by 20 percent average rest of index during 2001 – 2010. The consistent performance of emerging retail markets is shown in figure 1.2. The following paragraph explains the consistent performance of emerging retail markets.
Figure 2.2 GRDI’s most consistent performers during 2001-2010

Retail Spending Modern Grocery sales
Source: A.T. Kearney GRDI, 10- year perspective, 2011

According to Ireena Vittal, McKinsey said that she is clearly seeing five trends in the Indian economy:
(i) Shoppers are getting richer faster. India has one of the youngest populations in the world which has a high acceptance of new brands.
(ii) Many more Indians are emerging within the country geographically and digitally. The top eight cities of India are countries in their own right in terms of population and purchasing power. At least ten states have developed a very large consumer base, with each going at differentiated rates. Additionally, the online consumer base in India is going to expand four times to 350 million by 2015, leading to huge opportunities for retailers. There is also a huge base of mobile users who have already started buying through their phones.
(iii) Habits and aspirations of consumers are changing driven by supply cycles of product upgrades. For example, the typical Indian customer changes his mobile every eight months.
(iv) Volatility in cost and growth is here to stay, especially in terms of food, cotton and power prices; and
(v) The Indian industry is going to witness more fragmentation before consolidation.
With significant consumer spending in India on grocery products, grocery retailers dominated the retailing scene in India, accounting for 90 percent of store-based outlets and 66 percent of value sales in 2009-10. But, food and grocery retailing continues to be in the hands of unorganized independent kirana shops (97 percent), as organised retailing outlets such as supermarkets, hypermarkets, convenience stores and discounters combined accounted for a miniscule three percent of food and grocery retailing value sales in 2009-10. The highly fragmented nature of retailing in India was evident in the fact that the top 50 retailers in India accounted for only 3.5 per cent of store-based retail value sales in 2010. The constant value compound annual growth rate for store-based retailing is expected to be 14 percent over the forecast period 2010-2015. The Indian retail industry has experienced growth of 10.6% between 2010 and 2012 and is expected to increase to USD 750-850billion. Food and Grocery is the largest category within retail sector with 60% of share. According to A.T. Kearney’s Global Retail development Index (GRDI), 2012, India is the fifth most favorable destination for international retailers. Of the total Indian retail market 8% constitutes the organised retail segment which is estimated to grow at a rate of almost 30% by 2015, and hence, at a much faster pace than the overall retail market which is forecast to grow by 16% in the same period.
Growth among grocery retailers is likely to be dampened by the mature formats such as independent grocers and other grocery retailers. This would arise as result of the shift in consumer demand from traditional to modern trading formats and as one-stop shopping has become order of the day.
As new categories come up and spends on aspirational categories increase, food & grocery’s share of the consumer wallet is going down in percentage terms, though actual spend continues to increase. The food ; grocery category will continue to grow at about 13-14% per annum over the next decade, though the decadal drop in terms of the share of consumer wallet and hence the retail market share would be about 2-2.5%. Thus, for foreseeable future, food ; grocery retail is expected to dominate the market with more than 50% share of the overall retail market.
The first decade of modern retail in India has been characterized by a shift from traditional channel to new formats including hypermarkets, supermarkets and so on across a range of categories. Modern retail format have mushroomed in metros and mini metros and also established its presence in the second rung cities. Supermarkets are large, low cost, low-margin, high-volume, self-service stores that carry a wide variety of food, laundry and household products. Supermarkets, generally large in size and typical in layouts, offer not only household products but also food as an integral part of their services. An average supermarket handless thousands of edible items including meat, fresh fruits and vegetables, dairy products, canned groceries, bakery items and frozen food. Non edibles found in supermarkets include household cleaners, paper products, health and beauty aids and house wares. Large supermarkets ranging from 3,500 sq ft to 5000 sq ft having a strong focus on food ; grocery and personal sales. Hypermarkets, Superstores, combination stores are all larger than the conventional supermarket. Combination stores are combined food and drug stores Examples are A;Ps Family Marts and Wal-Mart’s Supercenters. Typically varying between 50,000 sq ft and 100,000 sq ft, hypermarkets offer a large basket of products, ranging from grocery, fresh and processed food; beauty and house hold products, clothing and appliances etc. The study maps the current Indian grocery retail format scene and identifies the attributed and critical elements for successful retail format. The study also identifies shoppers perspective of grocery retail formats, develops an understanding of how shoppers relate to formats. The research examines the store format choice behavior and effect of store attributes on the same in Indian grocery markets. This study focuses on the organized grocery sector. The study based on attributes as store personnel, proximity convenience, in store communication, price consciousness, store services, fast check out and store reputation
By 2020, average household income will increase three times to $18,448 from $6393 in 2010. Moreover, urbanization will increase to 40% from 31% and over 200 million households will be nuclear, representing a 25-50% higher consumption per capita spends. Also, attitudinal shifts will be seen as 75% of the population will belong to generation I, that is they were below 14 years of age when the economy started opening and hence will have higher consumption levels, said by the Retailers Association of India report titled Retail 2020.
PROFILE OF VIJAYAWADA GROCERY
Vijayawada is a city on progression and transition. It is getting modernized day by day at great pace, particularly after the bifurcation. Undoubtedly, the cricket Icon Sachin Tendulkar’s recent visit to the city and inauguration of a multiplex-cum-shopping-mall, PVP Square, gave a new momentum to Vijayawada.
As McKinsey, American global management consulting firm, has already foreseen Vijayawada a ‘Global City of the Future’, the visiting of celebrities is becoming a value addition to the city of emerging world class infrastructure.
Speaking to KostaLife, V V M Krishna, President, Confederation of Indian Industries (CII), Vijayawada chapter said Vijayawada is no more a tier II, but a tier I city now. With the tremendous potential it has. Vijayawada is best suited for the capital, No other region in the State has what Vijayawada possesses in terms of physical and social infrastructure, in a radius of 30 KM,” he said.
Andhra Pradesh Retail Trade Policy 2015-20
Andhra Pradesh has huge potential to become one of the leading destinations for retail trade. The State is a leader in agriculture, horticulture, dairy/poultry production and other raw materials, ranking amongst the top states in India across many sectors. The State is also providing significant thrust to sectors such as Food Processing, Electronics, Textiles & Pharmaceuticals, and is poised to emerge as a key sourcing hub for many segments of the Retail trade industry.
The Retail Trade Policy 2016 aims to catalyze growth and provide thrust to the development of the Retail sector in Andhra Pradesh.
(1) Policy Objectives and Targets
Policy objectives and targets are as follows:
a) Objectives:
(i) Make Andhra Pradesh one of the most preferred destinations for retail trade in India.
(ii) Make Andhra Pradesh a hub for retail logistics by promoting setting up of warehouses and distribution centers.
(iii) To accelerate investment flow to underdeveloped regions of the state.
(iv) Identify and address existing infrastructure gaps affecting retail trade industry in AP.
(v) Encourage skill development; create more employment opportunities for all sections of society involved in retail trade.
(vi) Leverage retail trade as a tool for socio-economic development of the state.
(vii) Promote e-commerce in the state.
b) Targets:
(i) Attract new investments worth Rs.5,000 crore in the sector by 2020.
(ii) Create 20,000 additional employment opportunities in the sector by 2020.
(2) Policy Validity and Applicability
a) This policy will be valid for 5 years from date of notification, unless otherwise notified separately by GoAP.
b) The policy will be applicable to all Retail Enterprises which fulfil any one of the following criteria:
i. Retail Enterprise shall have an annual turnover of Rs. 1 crore or more
ii. Retail Enterprise shall directly employ 10 or more people on full time basis at all times
c) However, the Single Desk Clearance facility referred to in section 10(a) of Retail Trade Policy and Simplification of processes referred to in section 10(b) of Policy in retail sector shall be applicable to all retail enterprises irrespective of number of people employed or annual turnover of the retail enterprise.
Fast Changing Face- Emergence of Mall Culture
It was generally commented that mall culture was a failure in Vijayawada, which is contrarily an affluent place- a glorified village. The malls that opened with much fanfare, reportedly displayed the blank stares of shut shops. Even in the times of unprecedented boom in the business of real estate, the people, engaged in shopping malls, visiting multiplex theatres and having fun and food at branded eatery joints, was a rare sight. With huge shopping malls or complexes in the city wear an almost deserted look, the traders wary of setting up their businesses here. A majority of the spaces in these multistoried buildings lie vacant.
But, all of a sudden, mall culture is to set root in Vijayawada now. After the announcement of Amravati as the new capital, there is a rapid change elsewhere. A shopping mall with about 40 per cent of unoccupied space is now being crammed with business outlets. Rs. 125- crore PVP Square, inaugurated by Sachin Tendulkar, is doing well.
The face of the city is fast changing with International brands along with mega structures coming up besides residential and commercial apartments. According to a business analyst, the people of Vijayawada are getting used to shopping in these malls which usually host single brand showrooms or exclusive brands. An analyst shared his views as below
“We, the Vijayawadaians, are very price sensitive and look for cheaper deals. The cost of the commodity is assessed just through window-shopping, which is a free affair. This attitudinal factor made many players keep away from starting businesses in these malls with heavy rentals”
Initially, malls attracted the citizens, because they are obsessive of photo-selfies and they love air-conditioned ambiances and escalators. However, the multiplexes in these shopping malls have been successfully running as the cinema- loving Vijayawadaians throng them often.
Full Fledged Running of Existing Malls
There are already a few renowned brands present in the market. Big Bazaar, M&M, Life Style and Trends are only a few to name. Spanking and sparkly malls- LEPL Icon Mall near Maris Stella and Ripples Mall in Labbipet are attracting crowds in their droves. Mexico-based multiplex operator Cinepolis launched screens in PVP Square. Trendset at Benz Circle is the biggest of the new shopping malls and several reputed brands have already forged tie-ups for space, the promoters of the mall said.
“Vijayawada is not overcrowded, parks and landscapes are not eroded or disappeared and thus, the city is not conducive for family outings. Yet, shopping malls are emerging new destinies in weekends, because it’s facilitating weekly purchases, video games, a meal and most importantly a movie,” one Jagadeesh, a frequent visitor with family, opined.
The gleaming MG Road in Vijayawada is absolutely about a new kind of shopping experience, especially for those used to jostling the crowds in jewellery stores across the city. The road alone consists of 15 gold shops with four more shops soon to be added. Variety of ornaments, be it earrings, necklaces or bangles, are an accurate work of art, meticulously handcrafted to perfection.
Every big name in jewellery, including Khazana, Kirtilal Kalidas, Tanishq, Reliance Jewels, GRT, Joyalukkas, Mahaveer Jewellers, Anjaneya, Tribhovandas Bhimji Zaveri, Chandana Grand, Malabar, Kalyan, Kalaniketan, Tibarumal Jewels, Bombay Jewellers, Massiddi Lal, Mohammad Khan have their outlet in the city. The average monthly transactions cross Rs.100 crore.
Business analysts generally call 1990s and early 2000s – a period of jinx for Vijayawada. The city in 1970s and ’80s, witnessed phenomenal rural- urban migration, as Besant road of Vijayawada became chief business destination to the migrants not only from Krishna districts, but also from villages, towns and 3-tier cities in the neighboring districts including Guntur, Khammam and West Godavari. After a lull, scenario was changed and Bandar Road was suddenly to sport a swanky look with most happening shopping spree.”We foresaw the change and pioneered to start a big showroom here,” Dinesh Achpeliya, managing director, M;M said.
Parallel this new segment of apparel destinies with all-in- one kind: designer wear, western outfits, perfumes and accessories, there are more than 2,000 textile traders in Vijayawada, doing a business of whopping Rs.100 crore every day.”Vastralatha and Krishnaveni are hubs of wholesale and retail textile business in the city. Huge quantities of clothes and textiles arrive here from States like Uttar Pradesh, Gujarat, Maharashtra Tamil Nadu and West Bengal,” Bachchu Venkata Narasimha Rao, Vice President, AP Textiles Federation told KostaLife.
With the entry of high-end textile showrooms, including Kalanjali, RS Brothers, Kalamandir, Chandana Grand, JC Brothers, Kalaniketan, Twills, K-Lounge and Maanya, new contours were drawn for textile business of the city. The big players have brought with them a whole variability of items within the reach of all segments of shoppers – middle-level and high-end.
In the sector of organized Retail, color, range and buzz were added to Vijayawada with the entry of Retail giants including Big Bazaar, Spencer’s, More and Magna. Shoppers Stop, Lifestyle brought a new sheen to the city’s lifestyle habits.
“In general parlance, Organized Retail is one of burgeoning industries. But, in Vijayawada, it is still in its nascent stage, scaring proliferation. People are slowing moving from their conventional mode of retailing, which is posing grave challenges to new mode. Nevertheless, organized Retail is very promising, experiencing noticeable growth” regional head of a retailing giant said, under the condition of anonymity.
observations were supported by the statistics in food and grocery retail in Vijayawada, which witnessed a spurt of 14 per cent per annum, in consumers shopping at modern trade. Meanwhile, International retail giant – Walmart, recently started its online wholesale platform to its members in Vijayawada. Best Price, Walmart’s brand in India, in Vijayawada started facilitating its members to shop and book orders online. The e-commerce platform will provide the same range of products as its wholesale stores, including a select variety of fresh fruit and veggies.
The RPG Group opened Spencer’s Hypermarket, a first of its kind in coastal Andhra, at Yalamanchili Complex near Andhra Loyola College here on Monday.
RPG Group president and chief executive officer of the retail sector Sumantra Banerjee, who inaugurated the hypermarket, said with a total shopping area of 20,000 square feet the hypermarket would offer an international range of 25,000 high quality products under the same roof. “Customers can purchase a wide variety of products ranging from tomatoes to televisions at the store,” he said. Spencer’s, which was a part of the Rs.11,500-crore RPG Group, had already opened 320 outlets with 12 hypermarkets, 11 supermarkets and 297 express and daily stores in 55 cities.
“We’re opening on an average more than a shop a day, which makes it 35 to 45 shops a month,” he said. Spencer’s currently had a national consumer base of 40 million people who walk into its stores every year. The RPG Group’s other retail outlets, including ‘Music World’, ‘Books and Beyond’ and ‘RPG Cellucom’, currently total up to 550 outlets. There were plans to increase their number to 2,000 stores in the next two years and 5,000 stores in the next four years.
Personalized service
Mr. Banerjee said Spencer’s hypermarket in the city was opened to provide for shopping with comfort, convenience, quality and precise quantity. The emphasis would be on personalised service at the most competitive prices. Spencer’s addresses the ‘retail aspirations’ of Vijayawada, emulating the success of other stores in other regions of Andhra Pradesh.
It would be a destination store for garments, toys, electronic goods and electricals, pharmacy and cellular products. The different product categories inside the store would be easily accessible through the clever use of differentiated zone colours and world-class signs for easy navigation, he detailed. RPG Group senior vice-president (operations) Ramesh Menon said format of the hypermarket here was different from that of the one opened in Visakhapatnam three years ago. Two more hypermarkets would be coming up in Hyderabad shortly.
Spencer’s, a pioneer in food retailing, draws its inspiration from serving customers across the country with different food tastes and preferences. This experience had enabled it to explore newer ways to reach out to customers through providing them expert guidance such as ‘Chef’s Corner’, a live kitchen experience dishing out Italian and Chinese cuisines at the stores. Tips on health through the right food selections would also be provided, he said
“Spencer’s is planning a major expansion drive, which will mean doubling of the total floor space of the stores from one million sq.ft to 2 million sq. feet by 2012. This will entail an investment of about Rs. 150 crore.”
When the entire retail fraternity is praying for 100 per cent FDI norms in multi-brand retail and an ease of doing business ecosystem in the retailing segment in the country, Andhra Pradesh Government has introduced a revolutionary retail trade policy.
The said government has unveiled a new retail trade policy, under which retail enterprises are given greater flexibility in terms of open hours, engaging part-time employees, and removal of stock limits for essential commodities, among others. Considered to be the first-of-its-kind policy in the country to have attempted by any state, the policy also offers various incentives and the ease of doing business applicable to other sectors.
As per the policy, retail enterprises can stay open seven days a week from 6 am to 11 pm, can employ people on an hourly basis, however, the number of workers should not exceed 25 per cent of the total employees of the firm. The policy also have brought relief to retail chains who can now onwards can generate customer bills in an electronic form instead of giving them the physical bills.Moreover, the distribution centres and warehouses of the retail enterprises are not only allowed to function on a 24/7 basis, they are also declared ‘public utility’ under the Industrial Disputes Act, 1947, to prevent strikes.
Major Highlights
1. The policy seeks to attract Rs 5,000 crore-investment in the retail sector by 2020
2. It offers various incentives and the ease of doing business applicable to other sectors
3. Retail enterprises can stay open seven days a week from 6 am to 11 pm
4. People can be employed on an hourly basis
5. The number of workers should not exceed 25 per cent of the total employees of the firm
Additionally, the policy has extended the existing ‘single desk policy of approvals’ for all small to big sized retail brands. It has also been reported investment from major retail brands including Walmart, Future Group, Spencer’s and Arvind who have signed MoU to invest Rs 1,500 crore in Andhra Pradesh with a total commitment to provide 25,000 new jobs in the retail space.
The new policy will be valid for five years from the date of notification and has brought cheers among retailers. Sharing details on the same development, Krish Iyer, President ; CEO, Walmart India said, “In Andhra, we already have three Cash & Carry stores (Vijayawada, Rajamundhry and Guntur). AP is one of the very important growth regions for us and we are working to strengthen our footprints in the State by opening several more of our Cash & Carry stores to cater to our business members such as small kiranas and other small businesses. In addition, we are also strengthening our direct farm program to source from farmers, partnering with Society of Elimination of Rural Poverty (SERP) to help women SHGs and other women owned businesses, sourcing from small & medium suppliers locally and help create thousands of local jobs in the State.Acknowledging it as a memorable occasion for entire retail industry in India, Biyani stated, “Andhra Pradesh’s Retail Trade Policy is a new beginning and a good start for the retailers.”
On the occasion, Kumar Rajagopalan from RAI said, “This is a big moment for retail in the country as state governments have now begun to see the importance of retail to their growth. Andhra Pradesh, lead by its visionary Chief Minister Shri. Chandrababu Naidu, has once again taken the initiative to herald a new era in retail in the state – a welcome step towards ease of doing business. We feel this is just the beginning of good things to come for Indian retail.”
Reliance Trends is chalking out major expansion plans. Mr. Arun Sirdeshmukh had said in mid Jan, “You will see now and for the next two years, our growth rate would be far higher than any apparel retailer in the market.” According to senior company officials, with their incredible price offering, it is on its way to transform the apparel industry in India. It remains the only apparel outlet unaffected by the economic downturn and with the launch of Vijayawada store, it is looking all set to expand aggressively, thereby strengthening its foothold over the Indian Apparel industry. Stating that the store would offer many brands to meet the needs of all categories, Mr. Sirdeshmukh said renowned brands like Peter England, John Players, Contra by Indigo Nation, Shapes, Reid & Taylor, Belmonte, Oxemberg and so on were available. Apart from the ready-to-wear garments, the store also caters to consumers who prefer to shop for fabric and tailor their clothes. Reliance Trends offers its own collection alongside renowned Indian and International brands at the store. It also caters not just to the ready-to-wear consumers but also fabric lovers. It has a number of company-owned outlets along with a franchisee format that would be in collaboration with Kirana shop owners. Its various divisions are: Reliance Mart, Reliance fresh, Reliance Super,Reliance Digital,Reliance Trends,Reliance Wellness,Reliance Footprints,Reliance Jewels,Reliance Timeout
The main shopping areas in Vijayawada are MG Road, Besant Road and Kondapalli. Mangalagiri saris and Kalamkari paintings are the must-buy items here. When you are here do buy a bottle of delicious mango pickle or ‘avakkai’, as it is locally known. Besides these, Vijayawada is also known for its pearls, silver jewellery and semi-precious stones.
Besant Road – a shoppers’ paradise has grown into a commercial hub of Vijaywada and is known for its street shopping with hawkers and pushcart sellers offering bangles, garments and trinkets. Kamadhenu Silks, on this road is a leading retail store, which offers exclusive saris and salwar suits. They also stock traditional sherwani and kurta pyjama for men here.The Kondapalli shopping district is where you can shop for colourful toys made from light-weight wood, known as “Tella Poniki” or “Puniki”.A combination of economic factors and changing consumer preferences has led to the emergence of new consumer segments in India. KPMG describes the drivers behind emerging consumer segments in India.
STORAI features:
The retail industry in India has been growing steadily for some years now and this trend is likely to continue into the next decade. Euro monitor estimates that the retail industry has grown at 12% since 2007 – slowing economic growth has not impacted the consumption story.
India as a country is witnessing the emergence of some key consumer segments. Tapping these segments successfully could hold the key to sustainable growth for retailers. There are three forces shaping the growth of new consumer segments namely:
a. Rising income levels
b. Urbanization
c. Online purchase behavior.
Rising income levels has led to an increase in the number of affluent in the society. While the definition of income range may vary, a few characteristics of these consumers include their preference for high quality, variety, brands and the need to ‘stand out’ and be serviced differently. It is observed that typically, these consumers have entered into a new phase of their lives with jobs, marriages, relocation, etc. and have become decision makers for the purchase of various products in different categories.
NCAER data shows the structural shift that rising income levels creates. In 2011, 56% of households had income levels less than Rs 112,000 per annum. By 2015-16 this will decrease to 43%. This means that roughly 10% of the Indian market will be ready to consume new categories.
Rapid urbanization and lifestyle changes have also leaving consumers with less time leading to emergence of the ‘time starved’ segment of consumers. Consequently, convenience becomes the most important factor for them and they are usually willing to pay a premium for services. While service is fast becoming a must-have across segments, some innovative business models have managed to strike gold with these consumers without compromising on profitability. For example, retailers of consumer durables – e.g. Croma, Viveks – have realized that customers are willing to pay for a plan which covers regular maintenance of all their consumer durables. In Croma’s case, the solution is ‘extended warranty insurance’ underwritten by Group company TATA AIG General Insurance Co, but in Viveks’ case, they have chosen to create a line of business employing 400 engineers and technicians to deliver the service.
First-time consumers in any new category constitute a separate segment. Managing adoption is critical – there are ample examples in the retail sector of players who successfully introduced new products and categories and created a niche for themselves. They have overcome traditional purchase barriers such as trust, pricing and awareness through innovative means. The best example of this was Big Bazaar’s “Sabse Sasta Din” – which created ‘event based’ offers – drawing in the aspirational
The bottom of pyramid segment in India continues its movement up the consumption ladder. This movement is also marked by drastic changes in their consumption habits. There is likely to be a shift from ‘product push’ from companies to ‘pull’ driven consumption based on specific needs of the segment. Few players are well placed to serve specific need of these consumers and opportunity exists to target low hanging fruits in this segment for new entrants in the market.
With economic slowdown and rising inflation, shoppers in India are increasingly becoming attuned to the discount culture and are actively seeking discounts in their daily purchase regimes as well. Retailers have responded to this trend by bringing in more promotional and discount offers for their products. These cost-conscious consumers are typically brand conscious, with purchase characterized by bulk buys and active deal hunting. Innovative approaches have successfully linked these offers to specific business objectives such as increasing footfalls on certain days, increasing sales of some categories, etc. targeted at well-defined target consumers. Retailers such as “Loot” have built a business model by targeting this customer segment. Future market opportunity is beyond metros — in ‘urban’ India — with advancements in the media and telecommunication facilities. The urban consumer is steadily and quietly evolving, new categories and products are being consumed, the ‘occasional’ is becoming ‘routine’, ‘commodities’ are transforming into ‘brands’ and ‘loose’ is becoming ‘packaged’. While concerns around infrastructure continue to pose a challenge, successful models targeting urban consumers have seamlessly dovetailed into existing setups without having to reinvent the wheel.
The heterogeneity of consumption drivers underscores the task ahead for players in the retail industry. There are lessons from both within and outside the retail sector that can be leveraged to create consumer connect and forge long-termites.
The Andhra Pradesh government has unveiled a new retail trade policy, under which retail enterprises are given greater flexibility in terms of open hours, engaging part-time employees, and removal of stock limits for essential commodities, among others. Touted to be the first-of-its-kind policy in the country to have attempted by any state, the policy also offers various incentives and the ease of doing business applicable to other sectors.
Under the policy, unveiled by Chief Minister N Chandrababu Naidu on the sidelines of the Confederation of Indian Industry Partnership Summit here, retail enterprises can stay open seven days a week from 6 am to 11 pm. They can also employ people on an hourly basis, but the number of workers should not exceed 25 per cent of the total employees of the firm. Retail chains will now be allowed to generate customer bills in an electronic form instead of giving them the physical bills.
The distribution centres and warehouses of the retail enterprises are not only allowed to function on a 24/7 basis, they are also declared ‘public utility’ under the Industrial Disputes Act, 1947, to prevent strikes.
POLICY PROPOSALS
? The policy seeks to attract Rs 5,000 crore-investment in the retail sector by 2020
? It offers various incentives and the ease of doing business applicable to other sectors
? Retail enterprises can stay open seven days a week from 6 am to 11 pm
? People can be employed on an hourly basis
? The number of workers should not exceed 25 per cent of the total employees of the firm
The state government, through its nodal agency Andhra Pradesh Industrial Infrastructure Corporation, will allot land to set up the distribution centres as well as warehouses under the commercial category for a period of 33 years.While the government extends the existing single desk policy of approvals for all retail enterprises irrespective of their size, the policy has provided tailor-made incentives for mega retail enterprises, which are defined as the projects that come with an investment of at least Rs 100 crore or those that can give a direct employment to 2,000 people.Andhra Pradesh constitutes eight per cent of the total estimated retail market of 13 million stores. The policy seeks to attract Rs 5,000 crore investments in the retail sector by 2020.
Meanwhile, four leading retail chains — Walmart, Future Group, Spencer’s and Arvind — have signed MoUs to invest Rs 1,500 crore in Andhra Pradesh with a total commitment to provide 25,000 new jobs in the retail space. Besides, K Raheja Corporation group president Neel Raheja announced the group had identified four cities to establish new shopping malls. Walmart India president and chief executive Krish Iyer said the company would establish 15 new stores in the state, apart from setting up a centre for sourcing agriculture products from small and marginal farmers.
PROFILE OF FIVE RETAIL OUTLETS IN VIJAYAWADA
Reliance Fresh: History of Reliance Fresh
Reliance Trends, the apparel retailing chain of Mukesh Ambani’s Reliance Retail Limited, has opened its first store at Vijayawada, which happens to be the fifth in Andhra. Reliance Trends is on an expansion spree and trends outlets have already arrived at Hyderabad, Visakhapatnam and Guntur. Reliance Retail group is planning to take the number of stores to 10 by covering towns like Tirupati and Warangal.
The Vijayawada outlet of Reliance Trends has a spread of around 20,000 square feet and offers more than 100 Indian and international brands for men, women and kids. Addressing at the launch press conference on Tuesday, Reliance Trends chief executive Arun Sirdeshmukh said that they were bringing the best and widest collection of designs at affordable prices to meet the needs of entire family. “We are confident that the discerning consumers will welcome our latest fashion and high quality products. We offer these at reasonable prices,” he said.
The retail business wing of the Reliance Industries Limited, which has opened a chain of Reliance Fresh outlets in Hyderabad and other cities for sale of edible products, has now made its foray into the Vijayawada-Guntur market.
Representatives of the company announced on Saturday the opening of four Reliance Fresh outlets in Vijayawada and three in Guntur simultaneously. The stores in Vijayawada have been located at K.K. Towers, Vinnakotavari Street in One Town; opposite SBI Zonal Office on Prakasam Road in Suryaraopet; Nageswara Rao Pantulu Road between Gandhinagar and Satyanarayanapuram; and beside SRR College in Machavaram.
In Guntur, the three stores have been located at Brodipet 4th line; GGK Plaza, Arundalpet; and GV Doctor’s Plaza, Kothapet. The outlets will remain open from 8 a.m. to 9 p.m. seven days a week.
All the seven outlets will be thrown open to public at 8 a.m. on Sunday without the involvement of any celebrity. True to the company’s stated policy of placing consumer “at the centre of scheme of things”, each store would be inaugurated by the first consumer who would walk into it. For all the first-day consumers, half-a-kg of sugar would be given free of cost.

Testing the waters
K. Venugopal, chief executive – customer operations of the retail business wing of Reliance Industries Limited, said at a press conference that Vijayawada and Guntur had been chosen for opening the stores after the company had opened the stores in Hyderabad first before moving over to Jaipur and Chennai.
Asked whether more stores were in the offing in Vijayawada and Guntur, Mr. Venugopal said the Reliance was “testing the waters” in these two cities with these seven outlets. “Based on the response and feedback of the consumers, we will certainly open more outlets but we can’t specify any time frame. We usually wait for a couple of months before opening more stores,” he explained.The seven stores together had a floor area of about 17,000 square feet, with each spread over 2,300 square feet on an average. Various kinds of fruits, vegetables, staples, and grocery and dairy products would be available at competitive prices.
VIJAY KRISHNA SUPER BAZAR
Vijay Krishna Super Bazar is located at Bandar Road, Buckinghampeta, Vijayawada, and Andhra Pradesh categorized as grocery registered under consumer cooperative credit societies act as The Vijaya Krishna Super Bazaar, Vijayawada (A Unit of Vijayawada Cooperative Central Stores Ltd., No.G.2291, Vijayawada)
It was started as a source for public distribution system by the government .Government used to distribute books for children and other grocery at a nominal profit and government also provides goods at concessional rates in this stores
In India the erstwhile Madras state was the pioneer in the field of cooperative movement. The first consumer cooperative society was set up in Madras, namely The Triplicate Urban Cooperative Society Limited’ in 1904 with the prime aim of supplying necessities of life to its members and it has grown up as one of the largest consumer cooperative societies in India’. With the passing of Cooperative Credit Societies Act, 1904, the Madras state gave registration to the Triplicate Urban Cooperative Society followed by the registration to the Coimbatore Cooperative Society in 1906. However the consumer cooperatives got legal recognition only after the enactment of the Cooperative Societies Act of 19 12, which repealed the Cooperative Credit Societies Act of 1904. Further, the Cooperative Societies Act, 1912 abolished the distinct between the rural and urban societies and in its place a new basis for classification, namely limited and unlimited liability societies were introduced
BIG BAZAAR
Future bazaar India Limited is a Public incorporated on 23 January 2006. It is classified as Non-government Company and is registered at Registrar of Companies, Mumbai. Its authorized share capital is Rs. 200,000,000 and its paid up capital is Rs. 191,600,000.It is involved in Other wholesale Includes specialized wholesale not covered in any one of the previous categories and wholesale in a variety of goods without any particular specialization.
Directors of Future bazaar India Limited are Deepak Mahan aria, Ankit Singhania, Ashni Biyani Kishore, Rakesh Biyani, Dinesh Ramnarayan Maheshwari, .
Pantaloons’ Retail (India) Limited, is India s leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer market. The company s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of seamless destination malls. Some of its other formats include Depot, Shoe Factory, Brand Factory, Blue Sky, and Fashion Station. The company also operates an online portal, futurebazaar.com. As customer s tastes and preferences are changing, the market scenario is also changing from time to time. It is the changing tastes and preference of customer which has bought in a change in the market. New generation people are no more dependent on haat market and far off departmental stores. Today we can see a new era in market with the opening up of many departmental stores, hyper market, shoppers stop, malls, branded retail outlets and specialty stores
More-Aditya Birla Group
The Aditya Birla Group has demonstrated capabilities of creating large- scale profitable businesses from scratch as well as building leadership position in the businesses acquired inorganically. The Group has a vast experience in promoting and growing consumer facing businesses and brands in the apparel as well as non-apparel sectors and in the process has gained significant consumer insights
Aditya Birla Retail Limited is the retail arm of Aditya Birla Group, a USD 41 billion corporation in the league of Fortune 500 companies. The Company ventured into food and grocery retail in 2007 through the acquisition of Trinethra Super Retail and subsequently expanded its presence nationally under the brand ‘more’ across Supermarkets & Hypermarkets. There are currently 494 Supermarkets and 20 Hypermarkets and more aims to offer a shopping experience that delivers unbeatable value and quality

SPENCER’S RETAIL LIMITED
Vijayawada, after its tremendous success at Hyderabad and Visakhapatnam, the Spencer’s Retail today opened a hyper outlet here by presenting international shopping experience to shoppers. Addressing the press, after launching the store, its senior Vice-President Ramesh Menon said the hyper market would offer about 25,000 products of superb quality and range under one roof. He said the Spencer’s was a destination store for garments, toys, electronic goods and electricals, pharmacy and cellular products.
Mr Menon said so far, the Spencer’s had opened 328 outlets, which included 15 hyper markets, 11 super markets, 297 express and daily stores across 55 cities and had a national consumer base of over 40 million. He said the Spencer’s books, music world and toys stores were launched in Guragaon and a similar one would come up in Kolkata in two weeks time. Its hyper markets would come up in Kolkata and Calicut and two more in Hyderabad shortly, he added. Spencer’s achieved a turnover of Rs 480 crore during the last year and it was expected to touch Rs 1,000 crore by the year end. ‘Trinetra’, ‘Magna’ and ‘Food World’ were its competitors, he revealed. Mr Menon said Spencer’s stores would come up in Orissa, Jharkand and Indore in the next two months. There were about 60 Spencer’s Daily in Andhra Pradesh and in the next four to five months its outlets would be launched in Kakinada and Rajahmundry, Mr Menon added.
Spencer’s Retail Limited, part of RP Sanjiv Goenka Group, is a multi-format retailer providing a wide range of quality products across categories such as food, personal care, fashion, home essentials, electrical and electronics to its key consumers. Specialty sections such as Spencer’s Gourmet, Patisserie, Wine and Liquor, and the recently launched Epicuisine section are some of the key differentiators in our hypermarket stores.
Spencer’s, being one of the earliest entrants into the retail space in India, introduced the Indian consumer to the concept of organized retailing. The first ever hypermarket in India was launched by Spencer’s in Hyderabad in 2000. Today, Spencer’s runs 120 stores, including 37 Hyper stores in over 35 cities in India.
Spencer’s brand positioning – Makes Fine Living Affordable – embodies its philosophy of delighting shoppers with the best products and services that enable a fine living at reasonable prices, while providing them with a warm, friendly and educational retail environment

PROFILE OF INDIAN CONSUMER
Changing consumption patterns especially in the urban areas are helping the cause. Shopping has replaced outing, as the most favoured option among the increasing tribe of DINK {double income no kids} couples. Salary hikes-the high highest in Asia Pacific according to consultancy firm Hewitt in the past few years-is seen as another reason for extra spending power, which fuels consumption. Moreover, with more families gong nuclear, buying additional household products becomes a necessity.

In India, the retail sector is the second largest employer after agriculture. The retailing sector is highly fragmented and predominantly consists of small independent, owner-managed shops. There are about 12 million retail outlets in India. organised retail in India is estimated to be around Rs. 15,000 crore, merelyless than 2% of the of total Rs11,00,000 crore retail sales. But there are indications that the organised retailing is gaining acceptance in India.

Increasing urbanisation, increasing number of working-women, changing lifestyle, higher purchasing power, increasing literacy level, increasing media penetration, increasing corporatisation, orientation towards westren culture,etc., have raised the aspirations of Indians. Moreover, the dearth of timing resulted in demand for large variety of products at one stop.

Sudden downfall in real estate business pushed the investors to look at retail activity as an alternative option. Flourishing consumer financing activity had further boosted the consumer demand. These factors are giving new dimensions to the INDIANRETAILING, which is highly unorganised.

Growing consumerism has led to organised retail option. Organised retail make life easier for FMCG companies since they can introduce new products more easily and can start differentiating products from various consumer segments
India is growing at an average annual rate of 7.6% for the past five years and it is expected to continue growing at an equal if not faster rate. The rapid economic growth is increasing and enhancing employment and business opportunities and in turn increasing disposable incomes. As the benefits of growth trickle down, an increasing number of people are moving up from the economically weaker class to join the middle class. The middle class with its rising numbers and incomes is thus becoming the biggest market segment. The affluent class too will continue to grow in terms of size and value, albeit, at a slower pace than the middle class. MGI study prediction on the effect of economic growth on different classes
• Middle class, defined as households with disposable incomes from Rs 200,000 to 1,000,000 a year comprises about 50 million people, roughly 5% of the population at present. By 2025 the size of middle class will increase to about 583 million people, or 41% of the population. The Indian consumption patterns are slowly converging with global norms.
The Indian consumer is now spending more on consumer durables, apparel, entertainment, vacations and lifestyle related activities. Entertainment, clothing and restaurant dining are categories that have been witnessing a maximum rise in consumer spending since 2002.
According to KSA Technopak 300 million odd middle class – the Real consumers – is catching the attention of the world with over 600 million effective consumers by 2010. India is bound to emerge as one of the largest consumer markets of the world by 2010.
About one-third of households in India can afford (usually inexpensive) white goods, such as washing machines, refrigerators and air conditioners. However, consumers are price-conscious, and demand for many white goods is restrained by long replacement cycles in urban areas. As per India’s Marketing Whitebook (2006) by Businessworld, India has around 192 million households. Of these only a little over six million are ‘affluent’ – that is, with household income in excess of INR 215, 000. Another 75 million households are in the category of ‘well off’ immediately below the affluent, earning between INR 45,000 and INR 215,000. This is a sizable proportion which offers excellent opportunity for organized retailers to serve.
One of the key reasons for the increased consumption is the impressive growth of the middle class. Around 70 per cent of the total households in India reside in the rural areas. The total number of rural household is expected to rise from 135 million in 2001-02 to 153 million in 2009-10. This presents the largest potential market in the world. According to the study conducted by NCEAR, the number of `lower middle income’ group in rural areas is almost double as compared to the urban areas, having a large consuming class with 41% of the Indian middle class and 58% of the total disposable income.
The Indian rural market has been growing at 3-4% per annum, adding more than 1 million new consumers every year and now accounts for close to 50% of the volume consumption of fast-moving consumer goods (FMCG) in India. The market size of the fast moving consumer goods sector is projected to be more than double to US$ 23.25 billion by 2010 from the present US$ 11.16 billion. As a result, it is becoming an important market place for fast moving consumer goods as well as consumer durables.
There were nearly 70 mn households (33% of the total) with an income of more than US$3,000 in 2006. These “well-off” households already own relatively expensive consumer durables, such as air conditioners and refrigerators.

India’s Income classes 1990-00 2005-06
RICH (annual income > US$ 4,700)Own cars, PCs 3million households 6milliion households
CONSUMING (US$ 1000-4700) 55million 75million
Have bulk of banded consumer goods, 70% of 2-wheelers, refrigerators, washing machines
CLIMBERS (US$500-1000)Have at least one major durable (mixer, sewing machine/tv) 66million 78million
ASPIRANTS (US$350-500)Have bicycles, radios and fans 32million 33million
DESTITUTES (Less than US$350) Not buying 24million 17million
Source: The Great Indian Retail Story 2006, Ernst & Young.

INDIAN CONSUMER BEHAVIOR
Availability of lifestyle spending options is increasing for Indian consumers and that inducing higher spends on “status acquisition”. Traditionally, Indian consumer is cautious about debts. In recent past, this attitude has changed radically and in recent year’s credit is no more a feared entity.
Indian consumer buying behavior to a large extent has a western influence. Foreign brands have gained wide consumer acceptance in India and they are much more open for experimentation. Beauty parlors in cities, eateries, designer wear, watches, hi-tech products are a few instances which reflect these changes.
Purchasing priorities in India also influence the level of sales of individual products. Penetration data bear this out: televisions in use in 2006 were estimated at 95 per 1,000 populations, far higher than the level for white goods. This reflects the growing demand for entertainment in India.
According to Ernst & Young report, ‘The Great Indian Retail Story, 2006′, the emergence of a larger middle and upper middle classes and the substantial increase in their disposable income has changed the nature of shopping in India from need based to lifestyle dictated. The self-employed segment has replaced the employed salaried segment as the mainstream market, thus resulting in an increasing consumption of productivity goods, especially mobile phones and 2 – 4 wheeler vehicles. There is also an easier acceptance of luxury and an increased willingness to experiment with the mainstream fashion, resulting in an increased willingness towards disposability and casting out from apparels to cars to mobile phones to consumer durables.
CONSUMER SPENDING: India Consumer Spending 2004-2016 Forecast
Consumer Spending in India increased to 16668.88 INR Billion in the first quarter of 2016 from 15915.08 INR Billion in the fourth quarter of 2015. Consumer Spending in India averaged 9476.58 INR Billion from 2004 until 2016, reaching an all-time high of 16668.88 INR Billion in the first quarter of 2016 and a record low of 4469.88 INR Billion in the third quarter of 2004. Consumer Spending in India is reported by the Ministry of Statistics and Program me Implementation (MOSPI).
Indian Consumer Spending Forecast 2016-2020
Consumer Spending in India is expected to be 17200.00 INR Billion by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations. Looking forward, we estimate Consumer Spending in India to stand at 18900.00 in 12 months’ time. In the long-term, the India Consumer Spending is projected to trend around 21000.00 INR Billion in 2020, according to our econometric models.
Forecast Actual Q3/16 Q4/16 Q1/17 Q2/17 2020 Unit
Consumer Spending 16669 17200 17900 18300 18900 21000 INR Billion

India Consumer Spending Forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts’ expectations. We model the past behavior of India Consumer Spending using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analyst’s assessments and future expectations. The forecast for – India Consumer Spending – was last predicted on, August 23, 2016.
India Consumer Last Q3/16 Q4/16 Q1/17 Q2/17 2020
Consumer Confidence 128 130 132 133 134 133
Consumer Spending 16669 17200 17900 18300 18900 21000
Disposable Personal Income 138192890 147960218 150169203 153246866 156324529 231000000
Personal Savings 22124 23200 23874 24268 24662 33116
Bank Lending Rate 9.7 9.6 9.6 9.6 9.6 7.5
Gasoline Prices 0.92 0.94 0.92 0.92 0.92 1.23
Households Debt To GDP 10.1 10.44 10.57 10.67 10.75 11.19
Consumer Sentiment 11.6 112 112 112 112 110

The rate of growth of spending on discretionary items (unlike basic necessities like food) has been growing at an average of 9 per cent per year over the past five years. A nation of savers, India, has now altered into a nation of spenders. KSA Technopak’s Consumer Outlook 2004 report estimated that an average Indian spends 40% of his monthly salary on food and grocery and 8% on personal care products.
Indian consumer spending basket (2003):
? Consumer durables – 53%
? Books & Music – 32%
? Movies & Theater – 38%
? Vacation – 32%
? Home Textiles – 29%
? Mobile phones – 96%
? Payment Household help – 48%
? Computer / peripherals – 10%
? Consumer Spend (Year 2006)
? Total Consumer Spend : Rs. 20,00,000 cr ($ 445 bn)
? Retail : Rs. 12,00,000 cr ($ 270 billion) double digit growth expected
? Organised Retail: Rs. 55,000 cr ($ 12.4 bn) at current prices 40% annual growth expected
? Scope for Organized Retail may raise Rs. 2, 00,000 cr ($ 45 bn) by 2010.
? With the average salary hike of 15+ per cent, there will be lot more consumption.
? Leading retailers’ sales growth: 50-100% in 2005-06
Urban-Rural division in spending (%)
Category Rural Urban
Entertainment 33 67
Consumer Services 44 56
Durables 50 50
Misc. Consumer goods 57 43
Clothing and Footwear 61 39
Food 64 36
Source: KPMG/Research

As the retail sector witnesses’ unprecedented growth, India has emerged among the most desirable retail destinations in the world. Even though modern trade is growing at 15 to 20% per annum, it has a low organized retail penetration of just 8%.India’s economic growth and its demographic profile make the country a compelling business case for global retailers planning an international foray.
The strong economic growth is attributed to high disposable incomes, growing middle-class influence, increasing individual wealth and the country’s large young population. The untapped rural sector and the lesser developed Tier II and Tier III cities provide ample opportunities for growth. The liberalization of FDI in single-brand retail and the expected opening-up of FDI in multi-brand retail have generated significant interest among multinational retailers. PwC can be the ideal solutions provider in these exciting times and support you as you face global challenges.
A joint report released by lobby group Federation of Indian Chambers of Commerce and Industry (FICCI) and consultancy company PricewaterhouseCoopers has said that by 2020, India’s retail sector is expected to double to $1.1-1.2 trillion from $630 billion in 2015.
In the last decade India’s per capita GDP has marked a remarkable growth of Rs 71,607 in FY12 to Rs. 117,406 in FY17 at a10.4% of CAGR stimulating a consumption boom in the country. The per capita personal disposable income also surged from Rs 73,476 in FY12 to Rs 119,296 in FY17 at a CAGR of 10.2%. the per capita private final consumption expenditure too rose from Rs 40,250 in FY12 to Rs.68,049 in FY17 at a CAGR of 11.1%. The growth in country’s per capita GDP in turn has increased the disposable income of the populace ultimately driving the country’s consumption.
Chart: Per capita indicators (Rs at current prices)

Source: Care Rating
The growing use of ‘plastic money’ i.e. credit and debit cards has resulted in an increased spending amongst the consumers thereby fuelling the demand in the retail sector. With the acceptance of plastic money by almost all the retailers in the organised retail segment, the number of outstanding plastic cards in the country is on a rise. The incentives such as cash-back offer or discounts on selected sales linked to the plastic money have lured the Indian consumer to experience the pleasure of ‘cashless shopping

Chart: Use of Debit and Credit Cards

Source: Care Rating
Consumer spending in India in 2017
Consumer spending in India is expected to grow via demonetization and other reforms undertaken by its government in 2017. Consumer spending in India rose to 18.5 trillion Indian rupees in 1Q17, compared to 17.8 trillion rupees in 4Q16.

Source:marketrealist.com/2017/07/is-consumer-spending-rising-in-india-amid-reforms-in-2017
The consumer sentiment in India is improving, and it has an optimistic outlook for the medium term. However, a potential short-term disruption is expected in the near-term due to the country’s implementation of the goods and services tax (or GST), which was rolled out on July 1, 2017.With its rising incomes, India’s growing middle class is expected to support strong economic growth over the medium term. Expectations of a normal monsoon season are also likely to boost rural incomes and increase government spending in 2017.
The stability in the Indian markets in 2017 has led to the Reserve Bank of India’s adopting a neutral monetary policy in June. The bank is likely to move to an accommodative policy in 3Q17 because it’s expected to cut interest rates further, thereby supporting consumer spending.
Large size of the Indian market
The Indian economy is expected to grow at 7.2% and 7.7% in 2017–2018 and 2018–2019, respectively, more than double the anticipated global growth rate. The world GDP growth rate is expected to be 3.5% in 2017 and 3.6% in 2018, according to the International Monetary Fund’s July 2017 report. As a result, the consumer discretionary sector is expected to be one of the top-performing sectors in India in 2017.
The consumer discretionary sector has risen ~31% so far in 2017 as of July 25, 2017. Ambitious reforms such as the Make in India initiative led by Prime Minister Narendra Modi and his government are also increasing foreign investment in India.
The Columbia India Consumer ETF (INCO), which tracks the India Consumer Price Index, is a market cap–weighted index of ~30 Indian consumer discretionary stocks. It had risen to 5% so far in July 25, 2017.

India Consumer Last Previous Highest Lowest Unit
Consumer Confidence 95.1 96.9 116.7 88 Index Points
Consumer Spending 19190.11 17261.02 19190.11 4469.88 INR Billion
Disposable Personal Income 169623970 154965120 169623970 91540 INR Million
Personal Savings 26099.21 25429.6 26099.21 6.34 INR Billion
Bank Lending Rate 9.45 9.45 20 8 percent
Gasoline Prices 1.12 1.13 1.34 0.48 USD/Liter
Households Debt To Gdp 11.1 10.6 11.1 8.7 percent of GDP

The Indian consumer economy grew at an annual rate of 5.7% between FY05 and FY15 in real terms. The pace of growth during the last decade was slightly faster than that observed between FY94 and FY05. Overall, rural consumption grew at a slower pace than urban during last decade. The annual growth of the Indian consumption market is estimated to be 6.7% during FY15-FY20 and 7.1% during FY21-FY25. In monetary terms, this amounts to an estimated consumer market of R34 lakh crore for FY15, expected to grow to R50 lakh crore in FY21, and expand to R71 lakh crore in FY26. This equals to 43.6% of Private Final Consumption Expenditure as reported by National Account Statistics. Even though urban consumers have relatively higher spending power, rural India with a huge population base (70% of total) constitutes more than half of total household sector spending at present (53% in FY15).
Indian spending can broadly be divided into two distinct categories: Necessities and Discretionary Spending. While necessities include food and clothing, discretionary spending includes all other expenses. Trends in share of consumption on these two broad categories have followed opposite directions, with discretionary spending gradually getting more prominence in the consumption basket. Over the years, the gap between the two started narrowing down and eventually the shares became almost equal in FY12, and thereafter discretionary spending started getting a slightly greater importance. It is estimated that, in FY15, Indian households spent a slightly higher share of their total household budget (52%) on expenses other than food and clothing (48%). As per our forecasts, discretionary spending is expected to contribute 55% and 58%, respectively, to total consumption in FY21 and FY26.
Consumption patterns reflect the changes taking place in the economic status of households. For lower income households, the emphasis is on essentials such as food items. But as their disposable income grows, spending on durables, health, education and investment-related products comes into play. For the bottom 10% households, necessities form an overwhelming share of their consumption basket as these households spend a considerably large proportion of their total expenditure on food and clothing. Even though the gap between the two shares is narrowing, they are still way off from a meeting point. Currently, the bottom 10% households spend 63% of total consumption expenditure on necessities. In contrast, for the top 10% households, discretionary spending outpaced necessities by the end of 1990s. The data reveals that once discretionary spending takes over, there is a much slower change in the share over time. Between FY05 and FY12, expenditure on necessities came down by 1 percentage point only, from 34% to 33%. In FY15, the same proportion is expected to come down to 32%, reaching a saturation point thereafter.
Between FY05 and FY15, out-of-pocket expenditure on durable goods grew at a relatively faster pace than most other categories, at 10% per annum. Education and conveyance are the next two fast growing segments, registering 9% growth each. The bottom two segments in terms of pace of growth are observed to be food (4.2%) and non-food FMCG (4%). Among various food components, beverages and processed food, as a combined category, has had the highest growth. Real growth in spending on food, non-food FMCG, consumer services and education actually slowed down a little during FY05 to FY15, as compared to that during FY94 to FY05. Among food components, the pace of growth declined, especially on essentials such as cereals, edible oil, fruits and vegetables. On the other hand, the segments that have experienced some of the highest increases in growth in the last decade as compared to a decade earlier are apparel, footwear and healthcare
India’s growing middle class makes it an attractive market for foreign companies and the country’s consumer spending is likely to more than double to $2.4 trillion by 2018-19, said an Economist Intelligence Unit (EIU) study.
According to EIU, the growing middle class offers potential for manufacturers and retailers. Moreover, rising income levels mean India’s huge population of around 1.2 billion is becoming an increasingly important market for consumer goods, and this trend is likely to continue. Private consumption expenditure will rise from $1 trillion in 2013/14 to $2.4 trillion in 2018/19,” the EIU report said, adding that a majority though would continue to be preoccupied with meeting their basic daily needs rather than follow the latest consumer trends. But the presence of a large number of middle class households offers a considerable potential for manufacturers and retailers, it stated. “The rapid growth in personal incomes combined with a more open domestic market will make India an increasingly attractive market for foreign companies.