Changing Retail Paradigm

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Information about Changing Retail Paradigm
Business-Finance

Published on July 31, 2009

Author: akmohideen

Source: authorstream.com

National Seminar onMarketing in the Digital EraSona School of Management Salem. September 15 & 16 2006 : National Seminar onMarketing in the Digital EraSona School of Management Salem. September 15 & 16 2006 Changing Paradigms in Retailing Sector An Overview by A.K.Mohideen M.B.A., M.Phil.Assistant Professor in Dept. of Mgt. StudiesNoble Institute of Science & TechnologyVisakhapatnam : Changing Paradigms in Retailing Sector An Overview by A.K.Mohideen M.B.A., M.Phil.Assistant Professor in Dept. of Mgt. StudiesNoble Institute of Science & TechnologyVisakhapatnam Introduction : Introduction Growth of Retail industry Changing paradigm in Retail Industry Conclusion Introduction By the turn of the 21st century, the face of the Indian retailing industry had changed significantly. The retailing industry, which, until the early 1990’s was dominated by the unorganized sector, witnessed a rapid growth in the organized sector with the entry of corporate groups such as Reliance, Tata, RPG, ITC and Bennett& Coleman Company into the retailing market. : Introduction By the turn of the 21st century, the face of the Indian retailing industry had changed significantly. The retailing industry, which, until the early 1990’s was dominated by the unorganized sector, witnessed a rapid growth in the organized sector with the entry of corporate groups such as Reliance, Tata, RPG, ITC and Bennett& Coleman Company into the retailing market. Growth of Retail Industry : Growth of Retail Industry In 2004 alone about 12 million sq feet space was occupied by the organized retail industry, and by the end of 2006 is expected to grow to 40 million sq feet. The overall size of the retail market in India at present is estimated at 5, 88,000 crore of which, unorganized market is worth Rs 5,83,000 crore and the share of organized market is calculated at Rs. 35000 crore, and it will create 50000 jobs a year in the next 5 years. The organized retail sector is expected to grow at a higher rate than GDP growth in the next five years driven by changing lifestyles, strong income growth and favorable demographic patterns, says KPMG report titled ‘Consumer Market in India’. : The organized retail sector is expected to grow at a higher rate than GDP growth in the next five years driven by changing lifestyles, strong income growth and favorable demographic patterns, says KPMG report titled ‘Consumer Market in India’. The food and beverages segment is an emerging growth area. Similarly the gems and jewellery market is a key emerging area with significant potential A.T.Kearney has estimated India’s retail market at $202.6 billion, which is expected to grow at a compounded 30% over the next five years. : A.T.Kearney has estimated India’s retail market at $202.6 billion, which is expected to grow at a compounded 30% over the next five years. Organized retail at present comprises merely 2% of the total market in India. The share of modern retail is likely to grow from its current 2% to 15-20 % over the next decade analysts feel. Very shortly the market will also witness IPO’s for some these Retail Ventures. Changing Paradigms in Retail Industry : Changing Paradigms in Retail Industry The emergence of new segments also resulted in new store formats, including hyper marts, large supermarkets (3,000 – 5,000 sq ft), mini supermarkets (1,000 – 2,000 sq ft), convenience stores (750 – 1000 sq ft) and discount/shopping/grocer shops. The major changes took place in food retailing, book retailing, life style retailing, coffee parlors, vending machines and beauty and health care retailing. Food Retailing Segment : Food Retailing Segment Food World super market chain has been one of the pioneers in organized food retailing in India. The main challenge for FW was to alter the existing mindset of Indians with respect to price and value and add excitement to grocery shopping. FW defined its objective as: “To offer the Indian housewife the freedom to choose from a wide range of products at a convenient location in a clean, bright, and functional ambience without a price penalty.” : FW defined its objective as: “To offer the Indian housewife the freedom to choose from a wide range of products at a convenient location in a clean, bright, and functional ambience without a price penalty.” Considering the fact that the cost of real estate was low in Southern India, FW chose Chennai, Hyderabad and Bangalore as initial locations for setting up FW stores. Food World offered self service format Stores were given special attention Interiors were kept completely visible to the public Air conditioned outlets and continuous music Retailing of Lifestyle Products Segment : Retailing of Lifestyle Products Segment Shoppers Stop limited is the pioneer in India's organized retail revolution. In 1991 SSL set up its first outlet in Mumbai. SSL stores provide a complete and in – depth range of fashion and lifestyle products and accessories to meet the lifestyle pattern of every shopper. Around 85% of SSL’s merchandise is branded and it stocks more than 150 national and international brands. SSL also launched a range of private labels like Life, Kashish and Karrot in the premium classic, value classic and value fashion segments Coffee Parlors : Coffee Parlors Being a traditional tea consuming country, the average coffee consumption in India was quite low at 10 cups per person annually. However, in the late 1990s, a silent coffee revolution was sweeping urban India. Coffee drinking was increasingly becoming a statement of the young and upwardly mobile Indians. Coffee bars, an unheard concept till the mid 1990s had become big business. There was a transition from the conventional and outdated coffee house to more sophisticated and trendy coffee bar chains like Barista, Café Coffee Day, Qwiky’s and Café Nescafe Beauty and Health Care Retailing : Beauty and Health Care Retailing The Shahnaz Hussian group founded and led by Shahnaz Hussian has been one of the pioneers of organized beauty care retailing in India. The group offers exclusive salon treatment geared to individual needs as well as a number of commercial formulations for the treatment of specific problems like acne, pimples, pigmentation, dehydration, apopecia etc., it employs about 4200 people in 650 salons spread across 104 countries with a strong presence in Asia, US and the Middle east. Conclusion : Conclusion The retail sector in India is witnessing a huge revamping exercise as traditional markets make a way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western style malls have begun appearing in metros and second-rung cities which introduced the Indian consumer to a shopping experience like never before. Rated the fifth most attractive emerging retail market, India is being seen as a potential goldmine. It has been ranked 2nd in Global Retail Development Index of 30 developing countries drawn up by A.T.Kearney. Government of India has also opened the door for the retailing giants to enter into the markets. Many foreign investors are also showing keen interest to enter into the Indian market. With the flow of FDI, retail sector will have to see a many changes in the coming years.

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