c


c
c  

Retail means selling goods and services in small quantities directly to customers.
Retailing consists of all activities involved in marketing of goods and services directly to
consumer for their personnel family and household use.

The Indian retailing industry is becoming intensely competitive, as more and more
payers are Vying for the same set of customers. The major retail players are Pantaloon
Retail, Shoppers Stop, Reliance, etc.,

Retailing is one of the biggest sectors and it is witnessing revolution in India. The
newentrant in retailing in India signifies the beginning of retail revolution. India's retail
market is expected to grow tremendously in next few years. According to AT Kearney,
The Windows of Opportunity shows that Retailing in India was at opening stage in 1995
and now it is in peaking stage in 2006. India's retail market is expected to grow
tremendously in next few years. India shows US$330 billion retail market that is
expected to grow 10% a year, with modern retailing just beginning. India ranks first in
2005. In fact, in 2005 and 2006, India is the most compelling opportunity for retailers,
because now India is in peaking stage.



1. Introduction to retail industries.
2. Retail word is derived French word retailer means to cut off a piece.
3. Retailing includes all the activities involved in selling goods or services to the
final customer for personnel or non-business use.
4. Supermarket is a retailing of a wide variety of consumer products under one roof,
ample stock, stock of several brands & extended business hours.



] 

Retail concept is old in India. World¶s first departmental store started in Rome.
Today¶s kirana stores are based on Manusmriti & Kautilya¶s arthshastra.
Haats, Melas, Mandis & door to door salesmen are traditional Indian retail.
Vishal Mega Mart is a retail sector, which is providing good quality of products in very
reasonable price than its competitors. Retailing and wholeselling consist of many
organizations designed to bring goods and services from the point of production to the
point of use.
Retailing includes all the activities involved in selling goods or services directly to final
consumers for their personal, non-business use. Retailers can be classified in terms of
store retailers, non-store retailing, and retail organizations.
Store retailers include many types, such as specialty stores, department stores,
supermarkets, convenience stores, superstores, combination stores, hypermarkets,
discount stores, warehouse stores, and catalog showrooms. These store forms have
haddifferent longevities and are at different stages of the retail life cycle. Depending on
thewheel-of-retailing, some will go out of existence because they cannot compete on a
quality, service, or price basis.
Non-store retailing is growing more rapidly than store retailing. It includes direct selling
(door-to-door, party selling), direct marketing, automatic vending, and buying services.
Much of retailing is in the hands of large retail organizations such as corporate chains,
voluntary chain and retailer cooperatives, consumer cooperatives, franchise
organizations, and merchandising conglomerates. More retail chains are now
sponsoringdiversified retailing lines and forms instead of sticking to one form such as
thedepartment store.
Retailers, like manufacturers, must prepare marketing plans that include decisions on
target markets, product assortment and services, store atmosphere, pricing, promotion,
And place. Retailers are showing strong signs of improving their professional
management and their productivity, in the face of such trends as shortening retail life
cycles, new retail forms, increasing intertype competition, and polarity of retailing, new
retail technologies, and many others.
Wholesaling includes all the activities involved in selling goods or services to those who
are buying for the purpose of resale or for business use. Wholesalers help
manufacturersdeliver their products efficiently to the many retailers and industrial users
across thenation. Wholesalers perform many functions, including selling and promoting,
buyingand assortment-building, bulk-breaking, warehousing, transporting, financing, risk
bearing, supplying market information, and providing management services and
counseling. Wholesalers fall into four groups. Merchant wholesalers take possession of
the goods and include full-service wholesalers (wholesale merchants, industrial
distributors) and limited-service wholesalers (cash-and- carry wholesalers, truck
wholesalers, drop shippers, rack jobbers, producers' cooperatives, and mail-order
wholesalers). Agents and brokers do not take possession of the goods but are paid a
commission for facilitating buying and selling. Manufacturers' and retailers' branches
andoffices are wholesaling operations conducted by non-wholesalers to bypass the
wholesalers. Miscellaneous wholesalers include agricultural assemblers, petroleum bulk
plants and terminals, and auction companies.

Wholesalers, too, must make decisions on their target market, product assortment and
services, pricing, promotion, and place. Wholesalers who fail to carry adequate
assortments and inventory and provide satisfactory service are likely to be bypassed by
manufacturers. Progressive wholesalers, on the other hand, are adapting marketing
concepts and streamlining their costs of doing business.


  c 

India rank first in terms of emerging market potential in retail sector. Current retail
market is US $ 215 billion. Growth rate of retail sector in India is 8-10% per annum.
Near about 12 million retail outlets are spread across India.
FDI in retail sector increases from US $ 3.1 billion in 2003 to over US $7.6 billion in
2010.
TYPES OF RETAILERS
Retailers are broadly classified into 3 categories

j Food Retailers.
j General Merchandise Retailers.
j Service Retailers.

]c c

c


Retail not only provides products to the customer but also gives different types of
services like:

?Airlines & travel agents

?Àanks
?Health clubs
?Hotel & Restaurants
?Movie theatres

]  c
c cc  


?c !" -
?Interactive kiosks
?Virtual display case
?Radio Frequency identification tags
?Self-scanning & self-checkout system
?Àody scanning
?  " -
?Online display of products
?Online shopping
] 

?Largely urban phenomenon, pace of growth is still slow.
?Not being recognized as an industry in India so availability of finance is low to
new market players.
?High cost of real estate.
?High stamp duties.
?Lack of infrastructure.
?Multiple & complex taxation system.
?Protest against retail sector.

 

?It is projected that up to 2010 retail sector will be worth around US $ 300 billion.
?FDI is going to increase rapidly, up to 2010 retail sector will become biggest
industry in India.
?Retail sector is expected to create 2 million jobs up to 2010.
?According to Indian Retail Report top 10 players in modern retail trade are going
to invest US $ 18-20 billion in next five years.




In India, the most of the retail sector is unorganized. In India, the retail business
contributes around #$ %  
. Of this, the organized retail sector accounts
only
for about &% ", and the expected  '"&(per annum and
remaining share is contributed by the unorganized sector. The main challenge facing
theorganized sector is the competition from unorganized sector. Unorganized retailing
hasbeen there in India for centuries, theses are named as mom-pop stores. The main
advantage in unorganized retailing is consumer familiarity that runs from generation to
generation. It is a low cost structure, they are mostly operated by owners, has very low
real estate and labor costs and has low taxes to pay. And it also )*(+%+ 
"  .

In late 1990's the retail sector has witnessed a level of transformation. Retailing is being
perceived as a beginner and as an attractive commercial business for organized
businessi.e. the pure retailer is starting to emerge now. Organized retail business in
India is verysmall but has tremendous scope. The total in 2005 stood at $225 billion,
accounting forabout 10% of GDP. In this total market, the organized retail accounts for
only $8 billionof total revenue. According to A T Kearney, the organized retailing is
expected to bemore than $23 billion revenue by 2010.

In organized retailing will grow faster than unorganized sector and the growth
speed willbe responsible for its high market share, which is expected to be $ 17 billion
by 2010-11.

The organized sector is expected to grow faster than GDP growth in next few years
driven by favorable demographic patterns, changing lifestyles, and strong income
growth. This organized retail sector mix includes supermarkets, hypermarkets
discountedstores and specialty stores, departmental stores. For example, Spencer
network has 69stores, which includes seven Spencer hypermarkets, three Spencer
super markets and 49Spencer Daily¶s. Now the company is planning to open 20 stores
in 10 cities in sixmonths. The top 10 retailers account only for 2% of total market, today
modern retailingis expected to enter a boom phase, which has major players and these
players mightcapture 10% of total market, within next five years. The retail sales in India
for future areshown below (data from 2005-2008 is based on estimates)
"  "c 

1. Low share of organized retailing
2. Falling real estate prices
3. Increase in disposable income and customer aspiration
Increase in expenditure for luxury items (CHART)
Another credible factor in the prospects of the retail sector in India is the increase in the
young working population. In India, hefty pay packets, nuclear families in urban areas,
along with increasing working-women population and emerging opportunities in the
services sector. These key factors have been the growth drivers of the organized retail
sector in India which now boast of retailing almost all the preferences of life - Apparel &
Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office
Products,
Travel and Leisure and many more. With this the retail sector in India is witnessing
rejuvenation as traditional markets make way for new formats such as departmental
stores, hypermarkets, supermarkets and specialty stores.

, +% 

?Reliance fresh.
?Aditya Àirla group.
?Shopper¶s Shoppe.
?Subhiksha.
?Àig bazaar.
?Mark and Spencer¶s.
The untapped scope of retailing has attracted superstores like Wal-Mart into India,
leaving behind the kiranas that served us for years. Such companies are basically IT
based. The other important participants in the Indian Retail sector are Àata, Àig Àazaar,
Pantaloons, Archies, Cafe Coffee Day, landmark, Khadims, Crossword, to name a few.

) c  c 

Indian Retail Industry is standing at its point of inflexion, waiting for the boom to take
place. The inception of the  dates back to times where retail stores were
found in the village fairs, Mela¶s or in the weekly markets. These stores were highly
unorganized. The maturity of the retail sector took place with the establishment of retail
stores in the locality for convenience. With the government intervention the retail
industry in India took a new shape. Outlets for Public Distribution System, Cooperative
stores and Khadi stores were set up. These retail Stores demanded low investments for
itsestablishment. International Àrand Outlets, Hyper or Super markets, shopping malls
anddepartmental stores

  c -


Future of organized retail in India looks bright. According to recent researches it is
projected to grow at a rate of about 37% in 2007 and at a rate of 42% in 2008. It will
capture a share of 10% of the total retailing by the end of 2010.

c
c-]%

India retail industry is the largest industry in India, with an employment of around 8%
and contributing to over 10% of the country's GDP. Retail industry in India is expected
torise 25% yearly being driven by strong income growth, changing lifestyles, and
favorabledemographic patterns.

It is expected that by 2016 +   c will be worth US$ 175- 200
billion. India retail industry is one of the fastest growing industries with revenue
expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A
further increase of 7-8% is expected in the industry of retail in India by growth in
consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It
hasfurther been predicted that the retailing industry in India will amount to US$ 21.5
billionby 2010 from the current size of US$ 7.5 billion.

Shopping in India has witnessed a revolution with the change in the consumer buying
behavior and the whole format of shopping also altering. Industry of retail in India which
have become modern can be seen from the fact that there are multi- stored malls, huge
shopping centers, and sprawling complexes which offer food, shopping, and
entertainment all under the same roof.

India retail industry is expanding itself most aggressively; as a result a great demand for
real estate is being created. c  preferred means of expansion is to expand
to other regions and to increase the number of their outlets in a city. It is expected that
by2010, India may have 600 new shopping centers.

In the Indian retailing industry, food is the most dominating sector and is growing at a
rate of 9% annually. The branded food industry is trying to enter the India retail industry
and convert Indian consumers to branded food. Since at present 60% of the Indian
grocery basket consists of non- branded items.

As the contemporary retail sector in India is reflected in sprawling shopping centers,

multiplex- malls and huge complexes offer shopping, entertainment and food all under
one roof, the concept of shopping has altered in terms of format and consumer buying
behavior, ushering in a revolution in shopping in India. This has also contributed to
large-scale investments in the real estate sector with major national and global players
investing in developing the infrastructure and construction of the retailing business.


 '"
)

'") c 

j Rising incomes and improvements in infrastructure are enlarging consumer markets

and accelerating the convergence of consumer tastes.

j Liberalization of the Indian economy

j Increase in spending Per capital Income.

j Advent of dual income families also helps in the growth of retail sector.

j Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc.

j Consumer preference for shopping in new environs

The Internet revolution is making the Indian consumer more accessible to the growing
influences of domestic and foreign retail chains. Reach of satellite T.V.
j Channels are helping in creating awareness about global products for local markets.

j About 47% of India's population is under the age of 20; and this will increase to

55% by 2015. This young population, which is technology-savvy, watch more than
50 TV satellite channels, and display the highest propensity to spend, will
immensely contribute to the growth of the retail sector in the country.
j Availability of quality real estate and mall management practices

j Foreign companies' attraction to India is the billion-plus population.

+%+ %%   c 

India's retail industry is the second largest sector, after agriculture, which provides
employment. According to Associated Chambers of Commerce and Industry of India
(ASSOCHAM), the retail sector will create 50,000 jobs in next few years.
Retail companies are starting retail management courses in partnership with
managementinstitutes, roping in talent from other sectors and developing
comprehensive careergrowth and loyalty plans for existing employees.
Top players like Pantaloon Retail India Limited, Trent, Shopper's Stop, RPG Group and
ebony are virtually on their toes.
Consider the plans of largest player, The Pantaloon Retail India Ltd, the company has
developed a comprehensive strategy, where in it expects that in 2years, it will not recruit
any new managers from outside.

"The estimated need is 1 lakh of employees till 2011", said Mr. Sanjoy Jog, HR Head at
Pantaloon Retail India Ltd. Pantaloon has the concept of partnership with educational
Institute to run retail courses across the entire chain. Trent has also started in-house
learning programmers and now goes to under graduate colleges to recruit students.
Since, the job market is hugely receptive to this with more and more business schools
focusing on the sector and large retailers setting up retail academics.

"   c 


In India the Retailing industry has a long way to go, and to become a truly flourishing
industry, retailing needs to cross the following hurdles:

* The first challenge facing the organized retail sector is the competition from
unorganized sector.
* In retail sector, Automatic approval is not allowed for foreign investment.
* Taxation, which favors small retail businesses.
* Developed supply chain and integrated IT management is absent in retail sector.
* Lack of trained work force.
j Low skill level for retailing management.

j Intrinsic complexity of retailing- rapid price changes, threat of product

obsolescence and low margins.

* Organized retail sector has to pay huge taxes, which is negligible for small retail
business.
Many agencies have estimated differently about the size of organized retail market in
2010. The one thing that is common amongst these estimates is that Indian organized
retail market will be very big in 2010. The status of the retail industry will depend
mostly on external factors like Government regulations and policies and real estate
prices, besides the activities of retailers and demands of the customers also show
impact on retail industry.

+%  

India RetailÀiz attempts to capture excitement of Retail Àusiness in India by
aggregatingthe best in news, views, research, analysis, trends, technology, and
competition  '".

The performance of the retail sector in the last quarter of financial year 2008-09 has
beena gloomy one. Not only has the quarter-on-quarter growth declined by 700 basis
point, onyear-on-year (YoY) basis, sales growth fell drastically from 67.8% to 49.1%.
Includingthe recently listed Koutons and Vishal Retail, all big retailers continue to be on
anaggressive expansion mode. This kind of competition is having a negative impact on
margins of retailers, as the target audience for all of them, more or less, remains the
same.

The slowdown has triggered a volume game in the industry. Strategies like promotional
campaigns, freebies, promoting private labels and online discounts are just some of the
avenues that retailers are looking at to lure customers. According to analysts, this is a
knee-jerk reaction by the industry to fight the inflation-induced dent in the purchasing
power of customers. As they say, retail is a number game, so, big retailers are trying to
push volumes. For some, it comes at the cost of profit. Meanwhile, in contrast to YoY
sales growth of 49% for the sector, the interest cost has registered a whopping 96%
growth. Though growing at a lesser 39%, depreciation cost has also been impacting
margins.
The cost factor too is adding to the woes. For instance, during the quarter, Shoppers
Stopopened its new stores in various formats. Provogue and Pantaloon followed soon.
Thecompanies are increasing their geographical presence in the wake of increasing
competition. Launch of new formats continues to catch the attention of these retailers. In
fact, a couple of these new formats are already generating profit at the operating level,
thus showing a positive sign towards growth.

Like for Shoppers Stop, the average transaction size increased by about 7% for the
current quarter over the same quarter in the previous year. Players like Provogue and
Pantaloons too have witnessed a similar upward movement. Also, though growth in total
expenses as a whole has almost been equivalent to the growth in sales at about 47%,
some individual cost items like staff costs, selling and administration costs are under
control. On a YoY basis, staff cost has grown at 26% against 44% in the corresponding
quarter of the previous year.

Nonetheless, raw material cost continues to remain high - it grew by 66% in the last
quarter and now is equivalent to 74% of the industry's aggregate net sales. This is the
reason why operating margins have reduced to 4.8% of the revenue sale compared with
5.7% during the corresponding quarter of the previous year.

Among individual retailers, Pantaloon Retail continues to outgrow the industry - it

recorded 57% a YoY growth in net sales during March 2008 quarter. Although it is lower
compared with the 63% growth recorded during the December quarter, momentum
continues to favour the company. New stores drove the growth in value-for-money
format - strategies such as KÀ's Fair Price and online shopping are picking up. Their
home store division has also been doing well. Next on growth charts is Provogue, which
grew 40% in the last quarter, similar to the previous quarter.

In short, setting up of new stores has resulted in higher working capital funding, which
has raised the industry's interest outgo. For Pantaloon, interest cost has almost doubled
during the current quarter - as a proportion of sales, it has increased from 2.7% to 3.2%
on a YoY basis. Provogue seems to be an exception in this as it recorded the highest
increase of 100 basis points in interest cost for March 2008. Overall, the profitability
margin has seen a sharp decline.

Only Shoppers Stop has registered some profit compared with its performance in the
corresponding quarter of the previous year. The company's net profit margin now stands
at 0.7% of net sales as compared to -1% in March 2007 quarter. It can be concluded
thatmargins of retail companies seem to have been hit by costs related to their
ambitiousexpansion programmer. Expansion plans for some of them are running behind
schedule.

It has led to higher interest cost, yet retail companies are trying hard to cut costs by
keeping inventory and carrying costs under control.
July 8, 2008Source: Economic Times

"'"/ )0 


A serious conflict is brewing between Indian retailers and multinationals over imports of
global brands. To stay afloat in the dog-eat-dog world of retail, local retailers have
reached arrangements with overseas players to bring in some international brands,
rattling many MNCs who manufacture or market these products locally. In some cases,
these brands have not yet been introduced in India.
Several major MNCs with a long presence in India are invoking the Intellectual Property
Rights (imported goods) Enforcement Rules 2007 to stop retailers from importing
foreign brands. Hindustan Unilever, L¶Oreal, Lancome Perfumes, Oakley Inc, Nivea and
Mico have already registered several brands with the Customs department. Sources
saidother MNCs are expected to follow suit.

Market circles perceive this as a move to prevent Indian retailers from getting first
accessto these brands. Some of the retailers are debating plans to legally contest the
move,since they possess a free sale certificate from the source of import. Retailers like
ÀigÀazaar & Food Àazaar, Reliance Retail, Spencer¶s and Sankalp Retail
(MyDollarStore),among others, have begun importing sizeable consignments of leading
consumer brandsand their variants for better fill rates, product variety and higher
margins.

However, the multinationals are not amused, and claim that it leads to loss of business
opportunity, unfair competition and product cannibalization. The fundamental issue
here,according to analysts, is that the Indian arms of the leading FMCG companies
would liketo control the way their brands are marketed and sold. They would also like to
determinewhen new products and variants of existing products should be introduced in
India.

A key reason for retailers to step up imports is bottom lines. Profit margins on imported
products are around 20% more than local brands, where producers and retailers are at
loggerheads over sharing margins.
³We are concerned over issues like protecting the properties of our brands, including
quality and consumer perception. Such unplanned imports create brand confusion in the
minds of consumers, since the properties of an imported brand are completely different
from the domestic ones, which are localized to suit the specific region¶s requirements.
Anunpleasant experience may work against our brand,´ said a high-ranking official in a
leading multinational, which makes personal care products.

Retailers claim they are creating µdemand in advance¶ for the multinationals, which
would otherwise have to invest heavily in marketing and ad spends to promote the
brands. Analysts say the developments are the natural effects of a globalised market
thatIndia is moving towards, which upsets the conventional distribution and trade
practices.



+%  "1" 

The study assesses the state of competition in the Philippine wholesale and retail
sector,focusing on the distribution of specialized goods and pharmaceutical products. It
uses thetraditional tools of analysis like concentration ratios and price-cost margins in
determining the competitive state of the sector. The study also analyzes the other
dimensions in retail competition like price, geographical location, and retail product and
retail service. Industry data from the National Statistics Office were used in the analysis,
aided by a small-scale survey conducted in the Metro Manila area.

The department store and grocery sub sector appears to operate in a competitive
environment despite the presence of two big dominating firms in the market. No price or
quantity leader-follower behavior was observed, as validated by the tools used in the
analysis. On the other hand, one firm, whose strategic advantages include economies
ofscope and space, retail image and consumer loyalty, dominates the distribution of
pharmaceutical products. Potential market entrants face these forms of challenges--
factors that are not regarded as anti-competitive and are welfare enhancing to the
generalpublic.The need for competition policy is recommended to guard against
possible merger of thegiant firms in the department store and grocery sub sector. Any
possible collusionbetween the big firms could result to a monopolistic outcome.
The study observes that the apparent high price of pharmaceutical products is mainly
attributed to the manufacturing process, and not at the distribution of these goods.
Hence,it is recommended that a study analyzing the state of competitiveness of
manufacturingpharmaceutical products be conducted. "   "  +2
" Electronicsretail sector could get new competition






% 

There are several types we can see in Retailing. They are like:

%-

Narrow product line with deep assortment, viz apparel stores, book stores etc. A
clothingstore would be a single line store, men's clothing store would be limited line
store&men's custom-shirt store would be a super specialty store.
Example: The limited, The Àody Shop.

%+ -

Several products lines-typically clothing, household goods, home furnishings- with each
line operated as a separate department managed by specialist buyers or
merchandisers.

Example: Sears, Àloomingdale's.

%+3-

Relatively large, low-cost, low-margin, high volume, self-service operation designed to
serve total needs for food, laundry & household maintenance products.
Example: Kroger, Safeway.

 )  -

Relatively small store located near residential area, open long hours, seven days a
weekand carrying a limited line of high-turnover convenience products at slightly higher
prices.

Example: 7-Eleven, Circle K.

 -

Standard merchandise sold at lower prices with lower margins and higher volumes.
Truediscount stores regularly sell merchandise at lower prices and offer mostly national
brands.

Example: Wal-Mart, Kmart.

!%-
Merchandise bought at less than regular wholesale prices & sold at less than retail;
oftenleftovergoods, overruns and irregulars obtained at reduced prices from
manufacturers orother retailers.

Factory outlets are owned and operated by manufacturers and normally carry the
manufacturer's surplus, discontinued or irregular goods.

Example: Mikasa (dinnerware), Dexter (shoes)

Independent off-price retailers are owned & run by entrepreneurs or by divisions of
larger retail corporations.

Example: T.J.Maxx, Filene's Àasement.

%-

Averages 35,000 square feet of selling space traditionally aimed at meeting consumers'
total needs for routinely purchased food and non-food items. Usually offer services such
as laundry, dry cleaning, shoe repair, check cashing & bill paying.
A new group called "category killers" carries a deep assortment in a particular category
& a knowledgeable staff.

Example: Àorders books & Music, IKEA.

Combination stores are a diversification of the supermarket store into the growing
drugand-prescription field. Combination food & drug stores average 55,000 square feet
ofselling space.

Example: Jewel & Osco stores.

Hypermarkets range between 80,000 and 220,000 square feet and combine
supermarket,discount & warehouse retailing principles. Product assortment goes
beyond routinelypurchased goods & includes furniture, large & small appliances,
clothing items and manyother items. Àulk display & minimum handling by store
personnel with discounts offeredto customers who are willing to carry heavy appliances
and furniture out of the store.

Hypermarkets originated in France.

Example: Carrefour and Casino (France), Pyrca, Continente and Alcampo (Spain).

+   c   4

   c 

ÀPO (Àusiness Process outsourcing) is one of the fastest growing segments of the
Information Technology Enabled Services (ITES) industry in India. Àusiness Process
Outsourcing refers to the delegation of one or more IT-intensive business process to an
external provider that in turn owns administers and manages the selected process
basedon defined and measurable performance criteria. The Indian ÀPO industry is
constantlygrowing and a lot of fortune 500 companies are outsourcing services to India.
There areseveral reasons for India¶s emergence as one of leading outsourcing
destinations. India isvery rich in educated and talented human resource.
India is one of the pioneers insoftware development. India has an excellent technical
facilities and infrastructure forsetting up call centers. Time zone difference between
India and America has also workedto the advantage of Indian ÀPO industry. India has
an 8-12 hour time zone differencewith respect to the US and other developed markets.
Most of the Indian cell centersservicing American customers have timings between 5:30
pm to 9:30 am this time zonedifference allows Indian companies ÀPO¶s to service
American clients by working in thenights. last but not the least India has huge pool of
English speaking workforce thatprovides excellent voice based services at extremely
competitive costs resulting in hugesavings for companies. Some of the leading ÀPO
companies in India are

?GE capital.
?Converges
?Wipro Spectra mind.
?Dell
?ICICI One Source
?MphasiS.

c   c 

Inflation in India is at an acceptable level and remains much lower than in many other
developing countries. Àut off late prices of essential commodities such as food grain,
edible oil, vegetables etc have risen sharply and in the process driving up the inflation
rate.
Inflation is defined as a sustained increase in the general level of prices for goods and
services. It is measured as an annual percentage increase. As inflation rises the value
ofcurrency goes down. The current rise in inflation has its roots in supply-side factors.
There was shortfall in domestic production vis-à-vis domestic demand and hardening of
international pieces, prices of primary commodities, mainly food items. Wheat, pulses,
edible oils, fruits and vegetables, and condiments and spices have been the major
contributors to the higher inflation rate of primary articles. The inflation was also
accompanied by buoyant growth of money and credit. While GDP growth zoomed to 9.0
per cent per annum, the board money (M3) grew by more than 20 per cent.
Inflation is calculated on the bases of Wholesale Price Index (WPI) while in other
countries it is calculated on Consumer Price Index (CPI).The emerging trends in the
Indian organized retail sector would help the economicgrowth in India.

There is a fantastic rise in the Indian organized retail sector in a very short period of
timebetween 2001 and 2006. Eventually, out of the shadows of the unorganized retail
sector,India has a chance of tremendous economic growth, both in India and abroad.
The emerging trends in the Indian organized retail sector are also adding up to the
development of the Indian organized retail sector. The relaxation by the government on
regulatory controls on foreign direct investments has added to the process of the growth
of the Indian organized retail sector.

The infrastructure of the retail sector will evolve radically in the recent future. The
emergences of shopping malls are increasing at a steady pace in the metros and there
arefurther plans of expansion which would lead to 150 new ones coming up in India by
2008. As the count of super markets is going up much faster than rate of growth in retail
sector, it is taking the lion¶s share in food trade.

The growth of the Indian organized retail sector is anticipated to be heavier than the
growth of the gross domestic product. Alterations in people's lifestyle, growth in income
levels, and encouraging conventions of demography are proving favorable for the new
emerging trends in the Indian organized retail sector.

The success of this retail sector would also lie in the degree of penetration into the
lowerincome strata to tap the possible customers in the lowest levels of society. The
demandsof the buyers would also be enhanced by more access to credit facilities.
With the arrival of the Transnational Companies (TNC), the Indian retail sector will
undergo a transformation. At present the Foreign Direct Investments (FDI) is not
encouraged in the Indian organized retail sector but once the TNC'S get in they
inevitablytry to oust their Indian counterparts. This would be challenging to the retail
sector inIndia.

The trends to follow in the future:

j The Indian Organized retail sector will grow up to 10% of total retailing by 2010.

j No one single format can be assumed, as there is a huge difference in cultures

regionally.
j The most encouraging format now would be the hyper marts.

The hyper mart format would be further encouraged with the entry of the TNCs

  


j A glimpse of the International Retail
j One of the world's largest industries exceeding 56 
j 47 global fortune companies & 25 of Asia's top 200 companies are retailers
j Dominated by developed countries
j US, EU & Japan constitute *$('.
j Àiggest player in India is Pantaloon Retail India Limited.








   4

USA - 85%
Taiwan - 81%
Malaysia - 55%
Thailand - 40%
Àrazil - 36%
Indonesia - 30%
Poland - 20%
China - 20%
c !7(
8%

The existing players like Àig Àazaar, More Retail outlay, Vishal Mega Mart,
Shoppers' Stop, Piramyd are expanding to smaller towns and cities. Many other
business houses are planning to enter the retail sector either on their own or through
partnerships. New entrants like Reliance Retail Ltd and Wal-Mart are going to enter
the market soon. Even rural areas will provide a huge opportunity to be explored.








 


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