RESEARCH REPORT

On

“FUTURE OF MALL MANAGEMENT IN

DELHI & NCR REGION”

SUBMITTED TOWARDS PARTIAL FULFILLMENT

OF
Master of Business Administration Degree
(Affiliated to UPTU, Lucknow)
(2008-2010)

SUBMITTED TO: SUBMITTED BY:

DR. S. K. Mishra SANDEEP KUMAR
GAUTAM
MBA (HOD) MBA IV SEM

B.B.S INSTITUTE OF MANAGEMENT STUDIES

1
 GREATER NOIDA

TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr. SANDEEP KUMAR GAUTAM, a student of

MBA 2008-2010 batch, BBS, Greater Noida, has done his live Dissertations
Project under my supervision and guidance.
During his project he was found to be very sincere and attentive to small

details whatsoever was told to him.

I wish him good luck and success in his future.

Dr. S. K. Mishra
MBA (HOD)
BBS INSTITUTE Of
MANAGEMENT
STUDIES GR. NOIDA.

2
 CERTIFICATE
This is to certify that the Research Report entitled on "FUTURE
IN MALL MANAGEMENT IN DELHI & NCR REGION".Being
submitted by “SANDEEP KUMAR GAUTAM” in fulfillment of
the requirement of master of business administration degree,
of U.P. TECHNICAL UNIVERSITY is a record of an independent
work done by him under my guidance and supervision.

Mr. AKHIL AGNIHOTRI

(Lecturer)

B.B.S., institute of management studies

Greater noida.

Date………………..

3
 DECLARATION

I, “Sandeep Kumar Gautam” to declare that the Research

report entitled “FUTURE OF MALL MANAGEMENT IN
DELHI & NCR REGION” being submitted to the
U.P.TECHNICAL UNIVERSITY for the partial fulfillment
of the requirement for the degree of Master of Business
Administration is my own endeavors and it has not been
submitted earlier to any institution/university for any
degree.

Place:
(Sandeep Kumar Gautam)
Date:

4
 ACKNOWLEDGEMENT

One of the most pleasant aspects of writing an acknowledgement is

the opportunity to thank all those who have contributed to it.
Unfortunately, the list of expression of gratitude- no matter how
extensive – is always incomplete and inadequate. This
acknowledgement is no exception.

First of all, I wish to express my sincere gratitude to Mr. S.K.

MISHRA (HOD) B.B.S INSTITUTE OF MANAGEMENT
STUDIES, Greater Noida, for giving me opportunity to do research
under her profound guidance. Because of her inspiring guidance,
motivation, positive criticism, continuous encouragement and untiring
supervision this work could be brought to its present shape.

I would like to thank all of them who in one way or the other have
helped me.

Sandeep Kumar Gautam

5
 PREFACE

The success of any business entity solely depends on how

effectively does it utilizes its optimum resources and how soon
does it make arrangements for the removal of the customer’s
grievances. Moreover, the company should always be ready to
make necessary changes according to the requirement in order to
attract more customers so as to maintain a substantial growth in the
market. The topic given to me was:

“FUTURE OF MALL MANAGEMENT IN DELHI & NCR REGION”

I have tried to put my best efforts to complete this task on the basis
of skill that I have achieved during my studies in the institute.

I have tried to put my maximum effort to get the accurate statistical

data. If there is any error or any mistake in collecting the data,
please ignore it.

6
 TABLE OF CONTENTS

1 Objective

2 Executive Summary

3 Introduction of Retail to India

4 Mall revolution in India

5 Pragmatic scenario in Mall Mechanism

6 Essentiality of Mall Design Element

7 Consumer perception about Malls

8 Footfall Mathematics

9 Footfall Statistics

10 Mall Profiling of Indian Cities

11 Research Methodology for studying mall revolution in India

12 Data Analysis and Interpretation

13 Graphical Representation & Elucidation

14 Recommendations and Suggestions

15 Ultimate Prescription

16 Epilogue

17 Limitations

18 Bibliography

19 Annexure – Questionnaire

7
8
Objective

9
 OBJECTIVES OF THE STUDY :

 Analyzing the current retail atmosphere in malls.

 Future of mall management in Delhi & NCR Region.

 Suggesting a structured format for tenant mix.

 Analyzing customer perception towards grocery shopping in malls

and department stores.

 Determining if brands influence foot fall.

 Analyzing the location for a new mall in Delhi.

For the accomplishment of the above stated objectives a research of

100 samples was conducted over a period of 20 days.

During the course of research primary data was collected through

observations, interviews and questionnaires.

10
EXECUTIVE
SUMMARY

11
 EXECUTIVE SUMMARY

For the Indian mass affluent, the call of the mall is proving irresistible. Malls

increasingly dot the urban Indian landscape and their packed parking lots, busy

food courts and restaurants, crowded anchor stores and noisy gaming arcades

bear testimony to this alluring call.

Some would call it consumerism in action, I call it the celebration of mass

affluence. The secret of the lure of the mall lies in its mass appeal - it has

something on offer for everyone in the family.

There is a wide range of shopping experiences - bargains and discounts or high-

end brands for couples, gaming and other amusement facilities for kids, a large

choice of cuisines for family meals, and, of course, the multiplex theatres.

In many ways, malls reflect the state of our society and act as agents of change.

Rising incomes and busier lifestyles are creating the space for malls in the lives

of the urban mass affluent.

The retailing configuration in India is fast developing as shopping malls are

increasingly becoming familiar in large cities. When it comes to development

of retail space specially the malls, the Tier II cities are no longer behind in the

race. If development plans till 2007 is studied it shows the projection of 220

12
shopping malls, with 139 malls in metros and the remaining 81 in the Tier II

cities. The government of states like Delhi and National Capital Region (NCR)

are very upbeat about permitting the use of land for commercial development

thus increasing the availability of land for retail space; thus making NCR render

to 50% of the malls in India.

Predicted mall distribution space in India

HYDERABAD
MUMBAI
DELHI & NCR
PUNE
TIER II CITIES
BANGLORE

With such quantum of new format retail space in the pipeline, innovation,

striking the right tenant mix, effective mall management and provision of ample

parking space are components that will decide the future success of mall

developments.

In my Summer Internship Project I got an opportunity to study and analyze the

Mall Mechanism in the Indian sub-continent and in dept study of consumer

perception and Footfall statistics in the Malls.

13
The surrounding area covered up in this analysis was Delhi & NCR. The

scrutiny comprises of consumer feedback with respect to the upcoming

Mall Mania and the Organized Retailing format

14
 Introduction to retail in

India

With organized retail in India pegged at Rs 25,000 crore (Rs 250 billion) -- out

of a total of Rs 800,000 crore and marketing companies are setting up shops

to provide differentiated services to clients. Till now sales people were the link

between the retailer and the producer. But sales personnel are busy selling a

product and do not have a fair idea of what retailing is about. The focus is to

prioritize retail. That is, not only to sell a product to a consumer but to get the

consumer to interact with the product. Gone are the days when retailing

meant mere availability of a product. With competition becoming stiffer

companies are looking at 'experiential' marketing. Also the lack of proper

metrics to measure marketing spends is a serious issue.

In today's swiftly changing business environment, there is no option but to be

in the know - to be constantly on the move, keeping tabs on the shifting trends

in the market place and maneuvering your strategy to stay on top. The retail

arena today is very different - the opportunities are incredible but exploiting

them is extremely tough.

15
Super smart shoppers know all the rules of the game. They can instantly

sense a good buy and lap it up or sniff out a bad product and dismiss it. Their

expectations are tough to meet but for retailers aiming to make a big sale,

there is not much of a choice but to find ways to win customers over and keep

them permanently happy.

In an environment, which is still restrictive in many ways and lacks adequate

infrastructure, this becomes a formidable task. So how are Indian retailers coping up

and how long will it be before organized retail becomes the primary way of selling.

This report also surveys the property market and reiterates the significance of IT in

organized retail before presenting a payback analysis to reveal the financial aspects

involved.

India's attempt to go the international way in retailing has met with some success

though not quite as expected. At about 2 per cent of the total retail market, we are

still only scraping the surface. Easy to see why. Only a few large industry houses

have invested in this sector and even fewer have put in any significant sums of

money in a business, which is capital intensive in nature. The fragmented make-up

of the consuming market, complex geographical and cultural structure made more

difficult by poor infrastructural linkages do not allow economies of scale

immediately.

But a tremendous opportunity exists in the Indian market and organized retail will

prevail as in other parts of the world. It is only a matter of time before that happens

16
and it is probably closer than we imagine. This is the right time to invest and

continue investing in the business. Profits may come in only after five or even seven

years, but that's the way this industry operates and unlike some of the other sectors,

this is not a business where revenues are imaginary and profits illusory. The market

exists, the consumer is out there spending that money somewhere - you just have to

get him into your store.

In this review the state of business and potential and more importantly, study the

best practices being followed by various retailers in India. I also present in-depth

analysis of practices in the food and apparel sectors supported by case studies and

insights into the financial side of the business.

The size of the industry is estimated at Rs 16,000 crore and is growing at the

rate of about 18-20 per cent per annum. The two areas that have seen action in

organized retail are apparel and food retailing with sales of Rs 5,000 crore and

Rs 1,800 crore, respectively. Segments like consumer durables retailing and

books and music have grown but not as anticipated.

17
 Executive Summary

Retailing, considered a sunrise industry today after InfoTech, is the most happening

industry with almost all the big players vying for a share of the coveted pie. Buoyed

by a strong increase in private consumption (see graph), retailing is one industry that

is waiting to explode.

Source: KSA Report

Today however, organized retailing is less than 2 per cent of the retailing industry in

India, that is, about Rs 5,000 crore.(see table) Therefore, there is no real retail

revolution in India; the industry is still in the stages of infancy.

18
 Share of Organized Retail

1999 2002 2006

Total Retail (US $ Bn) 150 180 225
Organized Retail (US $ Bn) 1.1 3.3 7
% Share of Organized Retail 0.70% 1.80% 3.20%
Source: KSA Report

Organized retailing is bound to grow tremendously provided the right marketing

strategies are adopted. Retail businesses have broken rank and seem poised to

surge ahead with renewed vigor, optimism, confidence and capability.

There is an incredible amount of activity in terms of creation of retail-oriented space

across India. As per some estimates, there are over 200 retail mall projects under

construction or under active planning stage spanning over 25 cities. This may

translate into over 25 million sq. ft. of new retail space in the market within next 24

months.

Huge retail formats, with high quality ambience and very courteous and ambivalent

sales staff, are the regular features of retail formats in most Asian countries.

However, in India except for a few big towns where modern retailing formats

abound, these features are grossly missing. I expect organized retailing to slowly

penetrate the second rung and smaller towns, which will catapult the growth rate for

the sector.

19
Even though the big retail chains are concentrating on the upper segment and

selling products at higher prices like Crossroads, Akbarally's and Shopper's Stop,

retail stores are sprouting that cater to the needs of middle class. With a huge

middle class population, the retailers like RPG's Food world are tapping this market.

The market is flooded with products branded and unbranded.

The customers are in a dilemma as to pick which one. Simon Bell of AT Kearney

says "There is a close relation between the growth of brands and the growth of the

organized retailing. Companies selling branded products prefer to have big and

organized retail outlets such as supermarkets where they can be differentiated from

unbranded products"

Though doubts have been cast on the future of Indian retailing it is our belief that the

retail boom is yet to happen. While the industry is in the introduction stage in most

geographies, it has just entered the growth region in the metro cities.

Today, the right product mix, right sourcing strategy, and the right communications

are the mantras for success.

This paper begins by analyzing the retail formats in the present Indian scenario and

proceeds to outline the key strategic factors in retailing. In the last part the paper

shows the challenges facing retail and the recommendations for making organized

retailing a success.

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 Definition of retailing

Retailing is all the activities involved in selling goods and services directly to final

consumers for their personal, non-business use.

Although most retailing is done in retail stores, in recent years non-store retailing

-selling by mail, telephone (telemarketing), door-to-door contact, vending machines,

and numerous electronic means -- has grown tremendously.

Store retailing: retail stores come in a variety of shapes and sizes, and new retail

types keep emerging. They can be classified by one or more of several

characteristics:

Retailers can be classified by one or more of several characteristics:-

 Amount of service

 Product line

 Relative prices

 Control of outlets

 Type of store cluster

Amount of service: different products require different amounts of service, and

customer service preferences vary:

(1) Self-service retailers increased rapidly in the US during the Great Depression in

the 1930's. Customers were willing to perform their own "locate-compare-select"

21
process to save money. Today, self-service is the basis of all discount operations,

and typically is used by sellers of convenience goods (such as supermarkets) and

nationally branded, fast moving shopping goods (such as catalog showrooms).

(2) Limited service retailers, such as Sears and J C Penney, provide more sales

assistance because they carry more shopping goods about which consumers need

information. Their increased operating costs result in higher prices.

(3) Full service retailers, such as specialty stores and first-class department stores,

have salespeople to assist customers in every phase of the shopping process. Full

service stores usually carry more specialty goods for which customers like to be

waited on. They provide more liberal return policies, various credit plans, free

delivery, home servicing, and extras such as lounges and restaurants.

Product line: retailers can also be classified by the depth and breadth of their

product assortments:

(1) Specialty stores carry a narrow product line with a deep assortment within that

line. Examples include stores selling sporting goods, books, furniture, electronics,

flowers, or toys. Today, specialty stores are flourishing, due to the increasing use of

market segmentation, market targeting, and product specialization.

22
(2) A department store carries a wide variety of product lines. Each line is

operated as a separate department managed by specialist buyers and

merchandisers. Department Stores, are large retail stores with a fashion orientation

that sell many types of merchandise organized in separate departments. Found in

virtually every major city in the world, most department stores today are part of

larger retail organizations that operate a flagship (or main) store, as well as branch

stores in shopping centers and malls. The biggest single segment of their business

is apparel and accessories, accounting on average for more than two-thirds of sales.

Most department stores also offer a range of customer services such as personal

shopping assistance, fashion shows, and charge accounts.

The organization of a modern department store is complex because of the large

number of goods and services provided.

Typically, the operation of a store is conducted through four principal divisions:-

(a) The merchandising division, responsible for the planning, buying, and direct

selling of merchandise;

(b) The publicity division, which handles advertising, display, public relations, and

other sales promotion functions;

(c) The control division, which deals with credit, accounting, and other financial

matters;

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(d) And the store management division, which covers personnel, service, store

security, maintenance, and operational duties.

Within these four divisions are many subdivisions. The heads, or managers, of the

four principal divisions report to the general management of the store. Many

variations of this organization plan exist;

(3) Supermarkets are large, low-cost, low-margin, high-volume, self-service stores

that carry a wide variety of food, laundry, and household products. Most US

supermarket stores are owned by large chains such as Safeway, Kroger, Publix,

Winn-Dixie, Jewel, and Tops.Chains account for almost 70% of all supermarket

sales. Supermarkets departmentalized self-service stores that are the predominant

type of retail outlet for food products. An average supermarket handles thousands of

edible items including meat, fresh fruits and vegetables, dairy products, canned

groceries, bakery items, delicatessen, and frozen foods. Some also carry items such

as seafood and liquor. Nonedibles found in supermarkets include household

cleaners, paper products, health and beauty aids, and housewares. The markets are

located in shopping centers, neighborhood areas, business and centers, and along

highways.

(4) Convenience stores are small stores that carry a limited line of high-turnover

convenience goods. These stores located near residential areas and remain open

long hours, seven days a week. Convenience stores must charge high prices to

24
make up for higher operating costs and lower sales volume, but they satisfy an

important consumer need.

(5) Superstores, combination stores, and hypermarkets are all larger than the

conventional supermarket. Many leading chains are moving toward superstores

because their wider assortment allows prices to be 5-6% higher than conventional

supermarkets'. Combination stores are combined food and drug stores. Examples

are A&P's Family Marts and Wal-Mart's Supercenters. Hypermarkets combine

discount, supermarket, and warehouse retailing, and operate like a warehouse --

products in wire baskets are stacked high on metal racks, and forklifts move through

aisles during selling hours to restock shelves. They usually give discounts to

customers who carry their own heavy appliances and furniture out of the store.

Relative prices: retailers can also be classified by the prices they charge. Most

retailers charge regular prices and offer normal quality goods and customer service.

Some offer higher quality goods and service at higher prices. Retailers that feature

low prices include:

(1) Discount stores sell standard merchandise at lower prices by accepting lower

margins and selling higher volume. Occasional discounts or specials does not make

a store a discount store. A true discount store regularly sells its merchandise at

lower prices, offering mostly national brands, not inferior goods.

In recent years, facing intense competition from other discounters and department

stores, many discount retailers have "traded up" by improving their decor, adding

new lines and services, and opening suburban branches. This, of course, has led

25
to higher costs and prices. With the discounters trading up, off-price retailers have

moved in to fill the low-price, high-volume gap. They obtain a changing and

unstable collection of higher-quality merchandise, often leftover

goods, overruns, and irregulars at reduced prices from manufacturers or other

retailers. The three main types of off-price retailers are factory outlets,

independents, and warehouse clubs.

Control of outlets: about 80% of all retail stores are independents, accounting for

2/3 of retail sales. Other forms of ownership include the corporate chain, the

voluntary chain and retailer cooperative, the franchise organization, and the

merchandising conglomerate.

The chain store is one of the most important retail developments of this century.

Corporate chains appear in all types of retailing, but they are strongest in

department, variety, food, drug, shoe, and women's clothing stores. The size of

corporate chains allows them to buy in large quantities at lower prices, and chains

gain promotional economies because their advertising costs are spread out over

many stores and over a large sales volume. Chain stores, are two or more retail

stores dealing in the same general kind of merchandise and operated by the same

firm. The outlet is also known as a multiunit and is generally operated by an

employee-manager rather than an individual owner. The manager of a chain store,

unlike the independent retailer, does not make policy decisions and is responsible to

the individual or company that owns the store. Chain stores deal mainly in general

merchandise, food, drugs, and shoes; many variety and discount stores are chains

26
The great success of corporate chains caused many independents to band together

under contractual associations. The voluntary chain is a wholesaler-sponsored

group of independent retailers that engages in-group buying and common

merchandising. The retailer cooperative is a group of independent retailers that set

up a jointly- owned central wholesale operations and conduct joint merchandising

and promotion efforts.

A franchise is a contractual association between a manufacturer, wholesaler, or

service organization (the franchiser) and independent businesspeople (the

franchisees) who buy the right to own and operate one or more units in the

franchise system. Franchising has been prominent in fast-food companies, motels,

gas stations, video stores, auto rentals, hair cutting salons, real estate, and dozen of

other goods and services. The compensation received by the franchiser may

include an initial fee, a royalty on sales, lease fees for equipment, and a share of the

profits.

Merchandising conglomerates are corporations that combine several different

retailing forms under central ownership and share some distribution and

management functions. Examples include Dayton-Hudson and JCPenney.

Type of store cluster: Most stores today cluster together to increase their

customer pulling power and to give consumers the convenience of one-stop

shopping:

27
Central business districts were the main form of retail cluster until the 1950's.

Every large city and town had a central business district with banks, department

stores, specialty stores, and movie theatres. When people began to move to the

suburbs, however, these central business districts (with their traffic, parking, and

crime problems) began to lose business.

A shopping center is a group of retail businesses planned, developed, owned, and

managed as a unit. All shopping centers combined account for about 1/3 of all retail

sales.

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Non-Store Retailing: although most goods and services are sold through stores,

non-store retailing has been growing much faster than store retailing.

Traditional store retailers are facing increasing sales competition from catalogs,

direct mail, telephone, home TV shopping shows, on-line computer shopping

services, home and office parties, and other direct retailing approaches.

Non-store retailing includes direct marketing, direct selling, and automatic

vending:

Direct Marketing vehicles are used to obtain immediate orders directly from

targeted consumers. Although direct marketing initially consisted mostly of direct

mail and mail-order catalogs, it has taken on several additional forms, including

telemarketing, direct radio and TV, and on-line computer shopping. Its growing use

in consumer marketing is largely a response to the "demassification" of mass

markets, which has resulted in an increasing number of fragmented market

segments with highly individualized needs.

Trends that have increased the use of direct marketing include:-

(1) number of women in the workforce;

(2) higher costs of driving, including traffic congestion and parking problems;

(3) shortage of retail help;

(4) longer checkout lines;

(5) toll-free telephone numbers;

(6) availability of credit through proliferation of credit cards;

29
(7) growth of computer power & communication technology; and

(8) increasing time pressures on consumers

Direct Selling, or door-to-door retailing, started centuries ago with roving peddlers.

Today, it has grown into a huge industry, with more than 600 companies selling

their products door-to-door, office-to-office, or at home-sales parties. Although some

direct selling companies are thriving, door-to-door selling has a somewhat uncertain

future.

Trends working against this form of selling include:-

(1) increase in single-person and working-couple households decreases the

chances of finding someone at home;

(2) home-party companies are having difficulty finding non-working women

who want to sell product part-time;

(3) increases in crimes against individuals has made consumers reluctant to

invite strangers into their homes; and

(4) recent advances in interactive direct-marketing technology mean that the

door-to-door salesperson may be replaced by the telephone, the television,

and the home computer.

Automatic Vending is not new. In 215 B.C., Egyptians could buy sacrificial water

from coin-operated dispensers. But this method of selling soared after World War II.

There are now about 4.5 million vending machines in the US -- one for every 55

people. Vending machines are found everywhere; compared to store retailing,

vending machines offer consumers greater convenience 24 hours a day, and have

replaced many services formally requiring a human interface. For example, when

was the last time you went to the bank and actually talked with a "live person?”

30
The expensive equipment and labour required to stock and service vending

machines makes this a costly channel of distribution, and prices of vended goods

are often 15-20% higher than those in retail stores. So, the adage "there's no free

lunch" still holds -we have to pay for the convenience that vending machines

provide.

The Wheel of Retailing concept states that new types of retailers usually begin as

low-margin, low-price, low-status operations, but later evolve into higher-priced,

higher-service operations, eventually becoming like the conventional retailers they

replaced.

Demographics and Consumer Behavior

Courtesy: KSA Analysis

31
India is estimated to have a population of 1.04 billion as of 2003. Population growth

is expected to stabilize at approximately one and a half percent in the next few

years. In recent years, there has been a trend in the movement of population from

rural areas to urban areas, largely as a result of increased employment opportunities

in the cities as well as a preference of the younger generation to move away from

agriculture.

The percentage of population moving to Class I towns, which are basically large

cities with a population of over 1 million, has seen significant growth in recent years.

As a result of this trend, the percentage of population living in urban areas, has seen

dramatic growth in the past two decades. One of the important demographic trends

in recent times is the change in the age profile of the population. The percentage of

the population in the 15 to 59 year age group, which is largely the country’s

workforce, is expected to increase in coming years.

32
POPULATION POPULATION- BREAK

UP BY TOWN CLASS URBAN & RURAL

Total Population: 846 million Population: 217million

Census '91. Only one fourth of India's population is urban.

Source Census '91

Top 8 metros constitute more than one fourth of India’s population

33
 The Global Retail Industry-An Overview

Retail has played a major role world over in increasing productivity across a wide

range of consumer goods and services .The impact can be best seen in countries

like U.S.A., U.K., Mexico, Thailand and more recently China. Economies of countries

like Singapore, Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted

by the retail sector. Retail is the second-largest industry in the United States both in

number of establishments and number of employees. It is also one of the largest

worldwide. The retail industry employs more than 22 million Americans and

generates more than $3 trillion in retail sale annually. Retailing is a U.S. $7 trillion

sector.

Wal-Mart is the world’s largest retailer. Already the world’s largest employer with

over 1million associates, Wal-Mart displaced oil giant Exxon Mobil as the world’s

largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has

become the most successful retail brand in the world due its ability to leverage size,

market clout, and efficiency to create market dominance. Wal-Mart heads Fortune

magazine list of top 500 companies in the world. Forbes Annual List of Billionaires

has the largest number (45/497) from the retail business.

GLOBAL RETAIL

34
 1999 2002 2006
Total Retail (US$ Billion) 150 180 225

Organised Retail (US$Billion) 1.1 3.3 7

% Share of Organised retail 0.7 1.8 3.2

(Source: CSO, MGI Study)

Top Retailers Worldwide

Rank Retailer Home Country

1 Wal-Mart Stores, Inc. U.S.A.

2 Carrefour Group France

3 The Kroger Co. U.S.A.

4 The Home Depot, Inc. U.S.A.

5 Metro Germany

(Source: STORES / Deloitte Touche Tomahatsu)

Retail Scene in India - Touching Meteoric Height

As the corporates – the Piramals, the Tatas, the Rahejas, ITC, S.Kumar’s, RPG

Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and Pantaloons race

35
to develop the retailing sector, retail as an industry in India is coming alive. Retail

sales in India amounted to about Rs.7400 billion in 2002, expanded at an average

annual rate of 7% during 1999-2002. With the upturn 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 hypermarts.

Sales from these large-format stores are to expand at growth rates ranging from

24% to 49% per year during 2003-2008, according to a latest report by Euro monitor

International, a leading provider of global consumer-market intelligence.

A.T.Kearney Inc. places India 6th on a global retail development index. The country

has the highest per capita outlets in the world - 5.5 outlets per 1000 population.

Around 7% of the population in India is engaged in retailing, as compared to 20% in

the USA.

In a developing country like India, a large chunk of consumer expenditure is on basic

necessities, especially food-related items. Hence, it is not surprising that food,

beverages and tobacco accounted for as much as 71% of retail sales in 2002. The

share of food related items had, however, declined over the review period, down

from 73% in 1999. This is not unexpected, because with income growth, Indians, like

consumers elsewhere, have started spending more on non-food items compared

36
with food products. Sales through supermarkets and department stores are small

compared with overall retail sales. Nevertheless, their sales have grown much more

rapidly, at almost a triple rate (about 30% per year during the review period). This

high acceleration in sales through modern retail formats is expected to continue

during the next few years, with the rapid growth in numbers of such outlets due to

consumer demand and business potential.

The factors responsible for the development of the retail sector in India can be

broadly summarized as follows:-

 Rising incomes and improvements in infrastructure are enlarging consumer

markets and accelerating the convergence of consumer tastes.

 Looking at income classification, the National Council of Applied Economic

Research (NCAER) classified approximately 50% of the Indian population as low

income in 1994-95; this is expected to decline to 17.8% by 2006-07.

 Liberalization of the Indian economy which has led to the opening up of the

market for consumer goods has helped the MNC brands like Kellogg’s, Unilever,

Nestle, etc. to make significant inroads into the vast consumer market by offering

a wide range of choices to the Indian consumers.

 Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic,

etc.

37
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.

channels is helping in creating awareness about global products for local markets.

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. As India continues to get strongly

integrated with the world economy riding the waves of globalization, the retail sector

is bound to take big leaps in the years to come.

The Indian retail sector is estimated to have a market size of about $ 180 billion; but

the organized sector represents only 2% share of this market. Most of the organized

retailing in the country has just started recently, and has been concentrated mainly

in the metro cities. India is the last large Asian economy to liberalize its retail sector.

In Thailand, more than 40% of all consumer goods are sold through the super

markets and departmental stores. A similar phenomenon has swept through all other

Asian countries. Organized retailing in India has a huge scope because of the vast

market and the growing consciousness of the Consumer about product quality and

services.

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

38
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.

A McKinsey report on India says organized retailing would increase the efficiency

and productivity of entire gamut of economic activities, and would help in achieving

higher GDP growth. At 6%, the share of employment of retail in India is low, even

when compared to Brazil (14%), and Poland (12%).

Current Status of Retail Marketing in India

Winds of Change Sweeping Through Retail Industry.

What is it that has made the Piraml’s, the Tata’s, the Raheja’s, ITC and scores of

others take a plunge into mega retailing? Why is market research, space

management, ERP, promotions etc now a necessary tool in this industry?

Retail Economics in India.

Traditionally retailing has not been a structurally organized industry in India.

Organized retail network was seen only in fabrics, with large mills building their own

exclusive stores e.g. Raymond’s, Bombay Dyeing etc.

39
Currently there are about 5130000 retail outlets selling about Rs4790bn worth of

products. Retail universe in India comprises large, medium general stores, chemists

and pan-bidi (apart from accessories stores). Of these –thanks to unemployment,

the number of pan-bidi outlets are steadily rising. On account of the fragmented

nature of Indian retail industry the inhabitants to stores ratio in India is about 150:1,

i.e. there is a store catering to every 150 people. This ratio varies from country to

country. In china the ratio is similar to that of India where as incase of more

developed countries the ratio would be higher. For instance in Europe the inhabitant

to stores ratio is 2000:1.As markets mature, consumer expectations rise it would be

a necessity for small retailers to come together and form innovative and strong

supply chain that will cut through distribution and increase margins.

Turnaround Times

In last couple of years this industry has made responsive move from its hopeful

stages. Organized retailing started picking up in Southern India. Availability of land

at prime locations coupled with cheaper real estate prices (compared to Mumbai &

Delhi) made it possible to have multi stored shopping complexes here. It took two

years of recession to get this concept of shopping to major cities like Mumbai &

Delhi. Recession brought property prices down in these cities. It was during this

period of industry slump that big business houses took notice of the potential in

retailing. A classic example being- Lakme Ltd. The company after selling off its

cosmetic division to HLL, made an aggressive foray into retailing. Its retail chain

branded’Westside’ already comprises 4 stores- one each in Bangalore, Hyderabad,

40
Chennai and Mumbai. A cash hoard of Rs107bn will enable Lakme to roll out stores

aggressively.

Consumerism Cycle

Consumer cycle starts with Industry Dictating the market. Eventually with time the

distributor gains control over the market. At this stage distributor becomes an

important link between manufacturer and customer. When markets start developing

further expanding its horizons, suddenly retailers turn out to be vital point in this

supply chain.

In India we are entering into this third stage where retailers control the market. With

shopping attitudes of people changing, Indian markets today desires for value added

products and services with good ambience and brands, which only a retailer can

provide.

Whereas developed countries have reached the final stage where customer

dictates. US, UK and other developed markets have now reached a stage wherein

consumers are willing to save on price by going to discount stores where ambience

and services are low and goods are unbranded.

It’s a vicious cycle, but for the new aspect - Omnipresent net. Though it would be

sometime before e-commerce gears up in India. But all the same a merger of

Internet, catalogues, telephone and television is inevitable.

41
What Makes it Attractive

Today the number of smaller retailers ($500pa) has shot up from 40% in 1990 to

54% in 1996, whereas the number of large stores (turnover of $3000pa) increased

from 2.8% to 6.5%. Thus though large retailers are growing the smaller outlets are

growing even faster. However changing shopping attitudes of an average customer

will make future growth increasingly difficult for unorganized retail sector.

Currently in India, organized retailing accounts for 6% of the industry turnover,

comprising value-added foods (Rs770bn), music & entertainment (Rs40bn), colour

cosmetics (Rs12bn) etc. By 2005 organized retailing will account for 20% the total

retailing industry turnover (Rs8300bn).

Big business houses today are in a position to provide Indian masses with shopping

satisfaction, entertainment, quality product, polite salesperson, product information

and discounts. Though margins currently are low due to high property cost and poor

infrastructure. This is the only business where one buys in credit and sells for cash.

Further the number of households earning more than Rs150000 per annum amounts

to 30mn today and is expected to grow to 80mn by 2007.Additionally financial

institutions are encouraging such ventures. ICICI has recently sanctioned term loans

to Vivek & co, a mega-retailer, in Chennai to meet their expansion plans. Very

shortly the market will also witness IPO’s for some of these Retail Ventures.

Proven success

In early 90’s, K. Raheja Group started a mega Apparels stores in Mumbai-

‘Shoppers Stop’. Initially, the group was averse to start outlets at South Mumbai

42
for various reasons like low walk-ins, space constraints, narrowed target audience

etc. However the success of Crossroads, an ardent rival, has prompted them to start

one at South Mumbai in near future. The group has more of such stores, one each

at Bangalore, Hyderabad and Jaipur. Within seven years of operations it has a

yearly turnover of Rs1.30bn. The group has plans of opening about 20 mega apparel

stores in next 2 years. For this the company plans to sell 25.1% stake for Rs559mn

to Singapore based investor Warburg Pincus. The success story of Shoppers Stop

has convinced other business houses to take a leap.

Origin of Modern Retailing in India

Retailing, which is one of the largest sectors in the global economy, is going through

a transition phase in India. However the Indian retail sector is still in a nascent stage.

Organized retailing still contributes to only about 2% of the total retailing in the

country. Now a question that would arise is what constitutes Organized Retailing.

Mr. Raghu Pillai, the Managing Director of Food World, which is one of the leading

organized food retailing chain in India says that, “Organized Retailing presupposes a

retailers’ ability to manage or more importantly influence a set of supply chain

variables in a commercially viable and sustainable way”. Efficient management of

the supply chain to ensure the profitability of the entire chain, large outlets with

modern ambiance and facilities, a wide product profile, self service facilities etc are

generally the features of a modern retail store. Organized retailing aims at providing

an ideal shopping experience for the consumer based on the advantages of large-

scale purchases, consumer preference analysis, excellent ambience and choice of

merchandise. However, there are no single formats, designs, facilities or product

43
portfolios that can be identified as the success formula and as a general rule

differentiation between chains is necessary to increase viability. For a long time, the

corner grocery store was the only choice available to the consumer, especially in the

urban areas. This is slowly giving way to international formats of retailing. The

traditional food and grocery segment has seen the emergence of supermarkets/

grocery chains. The Indian food retail market is still in stage-1, which represents the

‘First Steps’ in the Stages of Maturity of Modern Retail Food Market.

The stages of this progression and the position of the other major countries are

given below:

Source: KSA Report

Stages of Maturity of Modern Food Retail Markets

Largely in the post independence period, Indian retailing has been unorganised, to

the most part untouched by corporate business principles. When the economy

started to be opened in the 1980s the situation began to change slowly. Emergence

44
of retail chains was at first witnessed in the textiles sector, with companies like

Bombay Dyeing, Raymond, S. Kumar‘s and Grasim, opening their own outlets. Titan

then successfully created a retailing concept, by establishing its series of elegant

showrooms. The later half of the nineties has been a witness to a fresh wave of

entrants in the retailing business. The new chains have not been restricted to textiles

and garment sellers but there have been entrants from various fields of commerce.

FoodWorld and Subhiksha in food and Fast-Moving Consumer Goods; Musicworld

and Musiccafe in music; Viveks and Vijay sales in the consumer durables etc were

the beginners.

Now the number of players and the variety of formats and product categories reflect

variety.

45
 Different Forms of Retailing

Popular Formats

 Hyper marts

 Large supermarkets, typically (3,500 - 5,000 sq. ft)

 Mini supermarkets, typically (1,000 - 2,000 sq. ft)

 Convenience store, typically (7,50 - 1,000 sq. ft)

 Discount/shopping list grocer

 Traditional retailers trying to reinvent by introducing self-service formats as well

as

Value-added services such as credit free home delivery etc.

The Indian retail sector can be broadly classified into:-

a) FOOD RETAILERS

There are large number and variety of retailers in the food-retailing sector.

Traditional types of retailers, who operate small single-outlet businesses mainly

using family labour, dominate this sector .In comparison, super markets account for

a small proportion of food sales in India. However the growth rate of super market

sales has being significant in recent years because greater numbers of higher

income Indians prefer to shop at super markets due to higher standards of hygiene

and attractive ambience.

46
b) HEALTH & BEAUTY PRODUCTS

With growth in income levels, Indians have started spending more on health and

beauty products. Here also small, single-outlet retailers dominate the market.

However in recent years, a few retail chains specializing in these products have

come into the market. Although these retail chains account for only a small share of

the total market, their business is expected to grow significantly in the future due to

the growing quality consciousness of buyers for these products.

c) CLOTHING & FOOTWEAR

Numerous clothing and footwear shops in shopping centers and markets operate all

over India. Traditional outlets stock a limited range of cheap and popular items; in

contrast, modern clothing and footwear stores have modern products and attractive

displays to lure customers. However, with rapid urbanization, and changing patterns

of consumer tastes and preferences, it is unlikely that the traditional outlets will

survive the test of time.

d) HOME FURNITURE & HOUSEHOLD GOODS

Small retailers again dominate this sector. Despite the large size of this market, very

few large and modern retailers have established specialized stores for these

products. However there is considerable potential for the entry or expansion of

specialized retail chains in the country.

e) DURABLE GOODS

47
The Indian durable goods sector has seen the entry of a large number of foreign

companies during the post liberalization period. A greater variety of consumer

electronic items and household appliances became available to the Indian customer.

Intense competition among companies to sell their brands provided a strong impetus

to the growth for retailers doing business in this sector.

f) LEISURE & PERSONAL GOODS

Increasing household incomes due to better economic opportunities have

encouraged consumer expenditure on leisure and personal goods in the country.

There are specialized retailers for each category of products (books, music products,

etc.) in this sector. Another prominent feature of this sector is popularity of

franchising agreements between established manufacturers and retailers.

Each of the retail stars has identified and settled into a feasible and sustainable

business model of its own.:-

 Shoppers' Stop - department store format

 Westside - emulated the Marks & Spencer model of 100 per cent private label,

very

good value for money merchandise for the entire family

 Giant and Big Bazaar - hypermarket/cash & carry store

 Food World and Nilgiris – supermarket format

 Pantaloons and The Home Store - speciality retailing

48
 Tanishq has very successfully pioneered a very high quality organized retail

business in fine jewellery

Structure of the retailing industry according to ownership patterns:-

 An unaffiliated or independent retailer

 A chain retailer or corporate retail chain

 A franchise system

 A Leased Department (LD)

 Vertical Marketing System (VMS)

 Consumer Co-operatives

49
A new entrant in the retail environment is the 'discounter' format. It is also is known

as cashand- carry or hypermarket. These formats usually work on bulk buying and

bulk selling.

Shopping experience in terms of ambience or the service is not the mainstay here.

RPG group has set up the first 'discounter' in Hyderabad called the Giant. Now

Pantaloon is following suit.

Two categories of customers visit these retail outlets.

1. The small retailer. For example, a customer of Giant could be a dhabawala who

needs to buy edible oil in bulk.

2. The regular consumer who spends on big volumes (large pack sizes) because

of a price advantage per unit.

50
MALL REVOLUTION
IN INDIA

MALL REVOLUTION IN INDIA

Over the last 3-5 years, the Indian consumer market has seen a significant

growth in the number of modern-day shopping centers, popularly known as

‘malls’. A Mall is a mercantile establishment consisting of a carefully

landscaped complex of shops representing leading merchandisers; a modern

version of the traditional marketplace. There is an increased demand for quality

51
retail space from a varied segment of large-format retailers and brands, which

include food and apparel chains, consumer durables and multiplex operators.

Shopping-centre development has attracted real-estate developers and corporate

houses across cities in India. As a result, from just 3 malls in 2000, India has

over 220 malls by 2006. Today, the expected demand for quality retail space in

2008 is estimated to be around 40 million square feet.

While previously it was the large, organized retailers – with their modern, up-

market outlets, and direct consumer interface- who had been a key factor

driving the growth of organized retail in the country, now it is the malls which

are playing the role.

Factors such as availability of physical space, population densities, city

planning and socio-economic parameters have driven the Indian market to

evolve, to a certain extent, its own definition of a ‘mall’.

For example, while a mall in USA is 400,000 to 1 million sq.ft. in size, an

Indian version can be anywhere between 80,000 sq.ft. and 500,000 sq.ft.

52
By 2008, total mall space in the 6 cities of Mumbai, Bangalore, Hyderabad,

Chennai, Kolkata, and National Capital Region (Delhi, Noida, Gurgaon) is

expected to increase to over 21.1 million sq. ft. Compared to other big cities,

Kolkata and Hyderabad are relatively new entrants in the mall segment, but are

witnessing quick growth. Smaller cities like Pune, Ahmedabad, Lucknow,

Ludhiana, Jaipur, Chandigarh and Indore are also expected to see a formidable

growth in the growth of malls in the near future.

But malls in India need to have a clear positioning through the development of

differential product assortment and differential pricing, in order to compete

effectively in a growing mall market. Segmentation in malls, like up-market

malls, mid-market malls, etc., proper planning, correct identification of needs,

quality products at lower prices, the right store mix, and the right timing, would

ensure the success of the ‘mall revolution’ in India.

53
PRAGMATIC SCENARIO IN

MALL MECHANISM

Mall developers have traditionally been real estate businessmen looking to

diversify. Most have not really bothered with the daily operations of the mall

once the tenants are in.

But now, they are realizing the need to actively do so even as they understand

how low footfalls could lead to an exodus of tenants. For that, they need to put

a premium on quick, efficient and satisfactory service, both to consumers and to

the retailers.

Quite a lot of Mall Developers are already moving in that direction. They have

installed footfall counters to map the entire mall and study exactly where

customers head to and how much time they spend in different areas of the mall.

With this kind of competition, sustenance for malls will only happen if they

continue to draw in the crowds.

The parameters for developing a Mall are:

54
1. Studying the customers demographics and lifestyles and cities where retail

formats can be opened and succeed.

2. Infrastructure and facilities that can support the property for the next

10 years plus.

3. Potential which can lead to a payback in less than five years.

For the developers, the critical lesson is to invest some quality effort in

understanding the shopping-needs of customers in their targeted "catchment"

areas and then build a carefully planned portfolio of retail options that can meet

the needs of these targeted customers.

And this task is not easy. But if one attracts the numbers, he will thrive in the

compounded growth that the industry expects to see over the next 10 years.

55
ESSENTIALITY OF MALL

DESIGN ELEMENT

The mall phenomenon has transformed the way people shop and be entertained.

As single-point destinations for food, shopping and entertainment, malls have

revolutionized retailing, and have significantly increased consumer spending.

56
Expertise in the conceptualization, design, development, and management of

malls is necessary to optimize long-term sustainability and profitability.

Although some developers have become rapidly skilled in developing

successful malls, for the greater part there is still a lack of expertise and

experience which is required to develop sustainability.

Most mall owners and developers are not familiar with the multitude of factors

that govern the success or failure of shopping complexes. They are not aware of

the crucial fact that it is the heightened quality of art that mall designers, as

competent artists, can offer, and which no one in related fields - not space

planners, nor realtors, nor developers, nor construction cost analysts, nor

facility managers - can lay claim to.

57
These people perform useful functions, of course, but innovative mall designers

can bring something exciting and original to the projects.

CONSUMER’S PERCEPTION OF

A MALL

Exactly what is it that inspires a consumer to shop at a particular shopping

mall?

The answer lies in the amalgamation of various factors like the distance of the

mall from your home, the ambience, the interior designing, the anchor tenants,

brands, comfort level, kind of set up, location of the mall, display, sales, the

experience of visiting a mall, food and entertainment, the treatment you get and

the overall package which affects the shopping behavior of the consumer.

A mall must be a refuge from the humdrum of everyday life, an alternative

world where everything new and desirable is available. On the outside, a mall's

architecture must be enticingly futuristic to broadcast excitement and ultimate

58
shopping ease. On the inside, it must live up to the expectations that the exterior

has bred.

Ease of transit across various levels, informed shop location based on

established buying habits and patterns and easy access to all shops on each level

are the primary considerations. Customer loyalty comes from the overall

excitement that the shopping experience offers.

The needs of two kinds of customers are required to be addressed i.e., the tenant

and the end consumer. For the tenants factors like, floor, built up area, energy

efficiency, security, movement of goods, effective and timely garbage removal

system and safety should be taken care of.

The endusers/consumers, the factors like safety, easy customer circulation, wide

passageways to shop around with trolleys, ample parking space, easy access

from shopping areas with trolleys to the vehicle parking area, adequate rest

rooms, place for the tired to sit and relax and phone facilities should be

provided.

59
 FOOTFALL

MATHEMATICS

&

STATISTICS

60
FOOTFALL: MATHEMATICS AND STATISTICS

We keep hearing about the retail boom. But, then, who creates

this boom?

Is it real estate prices, elegant showroom displays, branded

products, state-of-the-art technology…?

Who is behind the great retail turnaround that we witness

today?

The answer is customers and more customers. Retail business, like any other

business, starts with the customer and grows only because of them. Loyal

customers and new customers make a retail outlet, be it a shop, store,

supermarket or mall, a great success.

61
With increase in competition, the need of retail businesses is sales and not just

footfalls, in other words, footfalls conversions. Retailers are analyzing whether

it is possible to survive within the figures that constitute conversions. It is

evident that the footfalls in a mall have a direct bearing on the success of the

outlets or the mall.

Today, the visitor wants much more from a mall. In addition to a great shopping

experience, the new-age visitor seeks an equally great visiting experience that

involves food courts and multiplexes. At the same time, there are customers

who come just for recreation and entertainment without the intention of

shopping.

This can be a great opportunity for the mall to convert probable customers into

actual customers. The challenge is to make mall visitors visit shopping joints,

the small stores and the anchor shops, to translate the big crowd outside a shop,

to the few customers inside the shop.

For this, a new equation in footfalls mathematics has evolved:

There are visitors who enter the mall and head for purchase, thereby becoming

customers, called 'C';

There are visitors who visit simply for recreation and entertainment and don't

make any purchase. Known as shoppers, called 'S',

62
These two types make up the C/S ratio. It can be solved using a marketing

strategy. We very well know that footfalls economics plays a vital role in

calculating C/S Ratio.

Now the question arises how to improve the C/S ratio? What is it that obstructs

the C/S ratio from attaining the value of 1?

The C/S ratio will equal 1 only when all the visitors to a mall convert into

buyers. Which strategies must be implemented that would increase the 'C'

factor?

FOOTFALL STATISTICS

To evolve strategies for more conversions, find the average number of

customers per day, further divided into per working day, during weekends,

average spending per customer, average purchase made, comparative study of

purchase of food items and non-food items, durables and non-durables, top of

the line brands and general purpose products i.e., collect customer data using

different direct and indirect systems, such as developing customer profile,

analyzing the buying pattern, developing forecasting models (derived out of

information leading to knowledge which helps to forecast the sales in a similar

situation in real time, in real life) and the marketing strategy for CRM and other

applications.

63
Retail business marketing strategy, based on market trends and forces leading to

footfalls, are aimed at achieving the best from footfalls logic, mathematics and

data. If we have the relevant data and statistics on our customer, we get to know

him better. Once we get to know customer dynamics, we can position our

product accordingly and achieve maximum return. But it's not so simple to

know our customer in detail in a short period of time. It is an ongoing effort to

get more data both at the micro and macro levels, for every transaction. This

insight-gathering exercise helps generate the best results, including profits.

64
 PROFILING OF

INDIAN CITIES

PROFILING OF INDIAN CITIES

65
Now, I am hereby presenting a brief overview of Mall Mechanism in the major

cities all across India. This will discuss the demographic profiling of the city

and provide the present strata of the city vis-à-vis its Real Estate scenario and

its Retail scenario. This overview comprises of all those cities where mall

Revolution is on the progress or on the finishing process.

66
 CITY DEMOGRAPHIC LOCAL ECONOMY RETAIL BRANDS FUTURE

PROFILE OUTLOOK
Name Population Literacy Major Industries Anchor Apparel Multiplex Food &

Rate Stores Stores Beverage

Gurgaon 10,00,000 63% Maruti Udyog Ltd., Hero Westside, Raymonds, PVR, DT McDonalds, New Retail

Honda, IBM, Honda Pantaloon, United Cinemas Pizza Hut, Venture:

Motors, Sona Koyo, Pyramid Colors of Ruby (Specialty

Steering Systems Limited Megastore, Benetton, Tuesday, Malls)

Shoppers Marks & Barista, coming up

Stop Spencer, CCD. in the city

Tommy

Hilfiger,

Rockport
Delhi 13,782,9 81.82 Shoppers Nike, INOX, McDonald's, Retail Mall

76 % Stop, Reebok, IMAXE, Café Coffee developmen

Pantaloon, Adidas, Adlabs, Day, t around the

Wills Lacoste, PVR, Fun Subway, Capital

67
 Lifestyle, Allen Solly, Cinema, Barista, City. Major

Big Bazaar, Zodiac, Pizza Hut, projects at

Giant, Food Arrow, US Pizza, the city's

Bazaar, Planet Yo-China, southern

Westside, Fashion, Café part.

Spencer, Louis Mocha,

Vishal Phillipe, Dominos,

Mega Mart Raymonds Pizza Hut

Chennai 4,352,93 80.14% Ford, Hyundai, Shoppers Wills PVR, IMAX Food IT and

2 Hindustan Motors, TVS, Stop, Lifestyle, Cinemas World, ITES sector

Ashok, Leyland, MRF . Lifestyle, Cotton Pizza Hut, has

Westside, World, Barista, attracted

Pantaloon, Levis, Qwikys, most of the

Landmark, Crocodile, Café Coffee commercial

Globus Fab India, Day, real estate

Nalli Silks Copper activities in

68
 Chimney. the city
Coimbatore 1,695,08 79% Cognizant Technology Colorplus, PVR, Café Coffee Mall

5 Services, Spheri Textile Crocodile, INOXE, DT Day, Pizza Culture is

and Motor Pumps Jockey, Van Cinema Hut, in the

industries Heusen, Dominos upward

Nalli Silk, Pizza, shift in this

Louis Annapoorna city.

Phillipe,

Allen Solly,

Arrow.
Madurai 905,649. 79% Madura Coats Satya Paul, The new

(manufacturing industrial Crocodile, growth

textile, cotton and Arrow, Lee, corridors of

blended yarn). Wrangler, the city is

Reid & on Melur

Taylor, Highway.

Color Plus,

69
 Lee.
Kozhikode 953,195 82.23 Saw Mills, Textile Mills, Arrow, Van S.M. Street

% Boat Building, Timber Heusen, Heritage

Industry / institutions in Allen Solly, Project ,

the city. Raymond, Holistic

Peter Health

England, Village on

Pan 270 acres of

America land.
Cochin 606,223 90.9% Apollo Tyres, Kochi Wills, Indigo Café Coffee Kochi's

Refineries Ltd, Cochin, Lifestyle, Nation, Day, Pizza suburbs like

Shipyards, Kirloskar Trigger, Hut NH 47 by-

Copeland Ltd, HPCL, John pass,

IOCL, Indian Navy Players, Airport

Lee, Road

Century witnessing

Cottons, developmen

70
 Weekenders t.
Trivandrum 793,841 82.66 Infosys, TCS, Ernst and Raymond, Food world Techno

% Young, McKinsey and Allen Solly, Park Phase

Co., Keltron, Travancore Peter 1, 2, and 3

Titanium, Kinfra Apparel England, expansion

Park Arrow, and Special

Digjam, Economic

Louis Zone.

Philippe
Banglore 6,158,67 77% IIM-B, IISC, Westside, Zodiac, INOX, PVR Pizza Hut, commercial

7 Hindustan Lifestyle, Scullers, Subway, market (IT),

Aeronautics, Infosys, Shoppers Provogue, Foodworld, Software

Wipro, Biocon Stop United Barista, Parks and

Colors of Café Coffee high end

Benetton, Day, KFC. residential

Allen Solly, developmen

Mango, ts.

71
 Tommy

Hilfiger.
Hubli 853,730 78% BVB Engineering Food Raymonds, Pizza Hut, Airport

College, Hubli- World Indigo Pizza Road is fast

Dharavad Urban Nation, Lee, Corner, emerging as

Development Van Baskin an active

Authority Heusen, Robins real estate

Trigger. location.
Mangalore 9,00,000 85% Mangalore Refinery Wills Reebok, Café Coffee The city is

and Petrochemicals Lifestyle Van Day, growing in

Ltd., Mangalore Heusen, Dominos all

Fertilizers Ltd, Louis directions,

Headquarters of Phillipe, especially

Canara Bank, Allen Solly, along the

Syndicate Bank and Peter major

Corporation Bank. England, transport

Blackberrys, corridors

72
 Jockey, (NH17)

Raymonds
Mysore 902,986 79% Infosys, Wipro, Raymond, Food world, Upcoming

Mysore Polymers & Planet Nilgiris Mall

Rubber Products Ltd., Fashion, projects in

Ideal Jawa (India) Multibrand Lalitha

Ltd, Kirloskar outlets Mahal

Electric Co. Ltd Road, KRS

Road and in

vicinity of

the Ring

Road.
Mumbai 12,883,6 76.87 Godrej, ONGC, Big Bazaar, Century INOX, Café Coffee A supply of

45 % Bombay Dyeing, Pantaloon, Cottons, CineMax, Day, Pizza around 7.2

Castrol, Cipla, Glaxo, Lifestyle, Marks & Adlabs, Hut, million

HLL, Tata, TELCO, Pyramid, Spencer, Movie Time, McDonald's, sq.ft. of

Reliance. Globus, Mango, Fame Domino's retail space

73
 Westside, Provogue, Pizza, (37 malls)

Shopper's Pepe, Barista, is estimated

Stop Dockers, Subway, by the end

Reid & Tendulkar's, of 2007.

Taylor, Kobe

Sizzler
Pune 3,043,12 76% TELCO, Kinetic, Shopper's Wills INOX, E- Pizza Hut, The total

8 Bajaj Auto, Finolex, Stop, Lifestyle, Square, City Café Coffee mall space

Thermax, Hindustan Westside, Adidas, Pride Day, in Pune

Antibiotics, Kirloskar Food Levis , Lee, Barista, would be

Pneumatics, World, Dockers Burger more than 5

Cummins Pantaloons King, million

McDonald's sq.ft. in the

and Subway next 12 to

18 months.
Ahmedabad 5,080,56 79.50 Arvind Mills, Pantaloons, : Indigo City Pulse, McDonald's, Retail Mall

6 % Ashima, Torrent Westside, Nation, City Gold – Café Coffee developmen

74
 Pharma, Zydus Wills Trigger, Ashram Day, t around the

Cadilla, Nirma& Lifestyle, John Road, City Subway, old city.

IIM-A. V-Mart, Players, Gold - Barista, Major

Radhika, Color Plus, Bapunagar, Pizza Hut, residential

Planet Lee, Arrow, Fun US Pizza, projects at

Fashion, K Lounge, Republic, R Bombay the city's

Jade Blue, Allen Solly, World, Wide Blue, New western

Pyramid, Seasons Angle Yorkers, part.

Crossword, Copper

Big Bazaar, Chimney,

Star India Café

Bazaar Mocha, Tea

Centre,

Dominos
Vadodara 1,435,71 86.08 L&T, Alstrom Power Pantaloons, Indigo INOX McDonald's, Retail

6 % India Ltd, FAG India, Wills Nation, Café Coffee developmen

75
 Bombardier Lifestyle, Trigger, Day, t taking

Transportation India V-Mart John Subway, place on R

Ltd. Players, Barista, C Dutt

Color Plus, Pizza –Hut Road, Old

Lee, Arrow, Padra Road

K Lounge, and Race

Allen Solly, Course

Seasons Road
Indore 1,901,27 64.21 Kinetic Honda, Bajaj Pantaloons, John Velocity McDonald's, Retail

1 % Tempo, Hindustan Wills Players, Café Coffee developmen

Motors, L & T, Lifestyle, Color Plus, Day, Pizza t at

Bridgestone, V-Mart Lee, Arrow, Hut Rajwada

Crompton Greaves K Lounge, Chowk and

Allen Solly now

moving

towards

76
 Bombay

Hospital

area.
Raipur 699,683 81.09 L&T, Tata Iron & Killer, Café Coffee G.E. Road

% Steel, Century Color plus, Day is the most

Cement, Cement Reebok, important

Corporation of India, Peter corridor for

Gwalior Rayon England, retail real

Raymond estate

(Parx) developmen

t.
Bhubaneshw 794,039 67% Infosys, TCS and My Dollar : Raymond, Chandrashe

ar Satyam Store, Wills Indigo kharpur in

Lifestyle, Nation and the vicinity

Big Bazaar Century of the

Cottons IT/ITES

Park - one

77
 of the main

retail

developmen

t areas.
Jaipur 2,817,52 68% GE, IT Park (Sitapura Shoppers' Provogue, Vaibhav McDonald's, Jaipur is

2 Industrial area) Stop, Wills Raymond, Multiplex, Barista, slated to

Lifestyle Koutons, Time Square Café Coffee witness

Pepe Jeans Day and large-scale

Pizza Hut organized

retail

activity.
Hyderabad 3,632,09 87% Infosys, Microsoft, Pantaloons, Bombay Imax, Adlabs Café Coffee Hyderabad

4 Oracle, Wipro, Shopper's Dyeing, Day, will have

Kanbay, GE, Value Stop Reid & Barista, about 15

Labs, Dell, Deloitte, Taylor, Pizza Hut malls in the

HSBC, Intergraph, Raymond, next 18 to

IBM, Keane, Baan, Tommy 24 months.

78
 InMage, Tata Hilfiger,

Consultancy Wills

Services, Amazon Lifestyle

Lucknow 2,541,10 68.63 IIM - L, Central Big Bazaar, Khadder, A B Motion McDonald's, 4 malls are

1 % Drug Research Vishal Allen Solly, Movies, Barista, proposed.

Institute, King Mega Mart Raymonds, WAVES Café Coffee 3 of which

George's Medical, ITC Wills Moives. Day would be in

University. Sports, Gomti

Live-In Nagar.
Kharagpur 222,479 74% Tata Davy Ltd, Tata Big Bazaar, Raymonds, Fun Cinemas Café Coffee New Puja

Bearings Ltd. and V-mart. Mafatlal, Day, Mall at

Tata Metaliks Ltd. Arrow, Barista, Shalua

Pepe, Lee- Pizza Hut which is

Cooper. proposed to

have a retail

space of

500,000

79
 sq.ft
Kolkata 14,681,5 74% ITC Ltd, Mahindra, Shoppers Nike, INOX, McDonald's, Kolkata

89 Jessop RPG Group Stop, Reebok, Shringar, Café Coffee will have

McLeod Russels Pantaloon, Adidas, IMAX, Fame Day, around 24

India Ltd., Tata Wills Lacoste, Barista, malls by the

Consultancy Lifestyle, Allen Solly, Pizza Hut. end of

Services, IBM, IBP Big Bazaar, Zodiac, 2008, with

Co. Ltd Giant, Food Arrow, 5.5 million

Bazaar, Planet sq. ft. of

Westside, Fashion, retail space

Spencer Louis to the city.

Phillipe,

Raymonds.
Siliguri 527,223 69.22 : Administration, Vishal Lee, Arrow, Movie Siliguri Retail

% Services, Industry Mega Mart Excalibur, World Space developmen

Newport, t in 2-3 yrs.

Raymond

80
Ranchi 970,602 42% Heavy Engineering Peter PVR, Fun Café Coffee Upward

Corporation, Mecon, England, Cinemas Day, trend in the

SAIL's, Usha Martin Hoffman Subway Realty

[Usha Beltron] and Business in

Shipping Corporation of the next 3-5

India years
Noida 9,67,780 62% HCL, Silicon R.F. Hot Bread, Allen Solly, IMAXE, Fun Barista, Retail

Technology, Perot Shoppers Zodiac, Cinema, Pizza Hut, expansion

Systems, HONDA, Stop, Arrow, Adlabs, Peter Pizza, due to the

Samsung, L.G., Pantaloon, Louis PVR, Café urban

Moser bear. Wills Phillipe, INOX., Mocha, developmen

Lifestyle, Raymonds, Spice World. Dominos, t and the

Big Bazaar, Excalibur, Pizza Hut, Real Estate

Westside, Newport, McDonald's, developers

RPG Live-in, Café Coffee high

Retail, Pepe. Day, investment

81
 Vishal Subway. in NCR.

Mega Mart

RESEARCH METHODOLOGY

for studying the mall

82
revolution

in india

83
RESEARCH

METHODOLOGY

for studying the

mall revolution

in india

84
 RESEARCH METHODOLOGY

 American marketing association has defined market research as:

 The systematic gathering, recording and analyzing of data about

problems relating to the marketing of goods and services. The key

word that distinguishes research from a haphazard gathering of

observations is systematic.

 All research can be categorized in basic and applied research.

 Basic: Is that intended to expand the body of knowledge in a field

or to provide knowledge for the use of others?

 Applied: This is carried out for the solving of a particular problem

or for guiding a specific decision, and usually its results are private.

 Research also includes identifying opportunities. Opportunities are

situations with positive potentials that, if recognized and capitalized on

are profitable to the organization. They are subtle to identify and

challenging to solve.

85
 The nature of research design: The noun design has various

meanings, but the one suitable for our subject is a pattern or an

outline of a research project’s workings. It is a statement of only

the essential elements of a study, those that provide the basic

guidelines for the details of the project. It comprises a series of

prior decisions that, taken together, provide a master plan for

executing a research project. A master plan is comprehensive and

gives a general statement of the method to be used, in contrast to

the details that should be written to be sure of the specific work to

be done.

 During the course of the project the first step was formulating a

series of hypotheses :

 Does the presence of facilities like multiplexes and food courts

effect the foot fall and conversion?

 The type and location of the occupiers effect the foot fall on the

conversion.

 Should the malls have convenience stores / department stores?

 The presence of anchor stores affects the footfall and the

conversion.

86
  Can malls with a total covered space of more than 1, 00,000 sq feet

be feasible?

 Location of mall effects the foot fall and the conversion.

 There should be restriction on entry in malls based on some

criterion.

Sample Design:

The study is conducted upon the Sample survey is conducted in Delhi and

National Capital Region with the help of Simple random sampling

method.

Sample Size: 100 people

Data Collection Sources:

Primary Source-

• Sample Questionnaires

• Personal Interviews of Mall Managers

• Interaction with Mall Designers, Space planners

• Communication with Facility Managers at Shopping Arcades.

87
88
SECONDRY SOURCE-

• Newspapers

• Magazines

• Trade Journals

• White Papers

• Web Portals

Tools of Analysis:

• Pie charts

• Graphical representation

• Tabulated Data

89
Future of Indian Retailing

The unorganized retail market at present is Rs. 583,000 crores. The

Organized market: Rs.5,000 crores. Growth in organized retail will

likely to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2010. From

2006 to 2010; the Mall Culture is expected to grow at the 49.53% per

annum. Hypermarket is emerging as the most favorable format for the

time being in India and over 5,000,000 sq. ft. of mall space under

development. The top 3 modern retailers control over 750,000 sq. ft. of

retail space. Over 400,000 shoppers walk through their doors every

week

90
 Analysis and
data
interpretation

91
 Analysis and data interpretation
After the attainment of these data, a profound analysis with regards

to the Mall Mechanism is the result of this report which leads to the

completion of the project.

92
 Analysis of Data Collected through Sample

Questionnaires

Purchase Preference Status

Malls

Local M arket

Both

ELUCIDATION:

Data elucidation study shows that maximum people prefer both Local

markets as well as Malls for purchasing their apparels and accessories

scenario.

Anchor Store Status

40 Vishal Megam art

30 Big Bazaar

20 Food Bazaar

10 Spencer

0 Shopper's Stop

ELUCIDATION:

93
Data elucidation study shows that majority anchor store customers of a

mall prefer Multi Utility Stores like Big Bazaar, Spencer and then comes

apparel marts like Vishal Mega mart and Shopper’s Stop.

Mall Preference Status:

50
Every merchandise under one roof
40

30

20 Customer Service

10

0 Wide Variety
1st Qtr

ELUCIDATION:

Data elucidation study interprets the prime reason behind people visiting

Malls for purchasing is because inside a mall everything is available

under one roof, and efficient customer service is also a very important

aspect. Some people also prefer shopping at because of the huge variety.

94
Local market preference:

50

40 Cost Effective

30
Easy Acces sibility
20

10 Bargain Pow er

ELUCIDATION:

It was observed and analyzed by the elucidation study that public is

inclined towards local markets due to Cost effective merchandise,

bargaining power of the customer and easy accessibility.

95
Mall visit status:
Daily

Weekly
Occasionally
50 Monthly
Monthly

Weekly Occasionally
Daily
0

ELUCIDATION:

Maximum footfalls in the Malls are in the weekend i.e. Saturday and

Sundays mostly to watch a movie and enjoy good food. Apart from it

there is also a section from the society that visit mall for purchasing their

monthly grocery and daily need items from stores like Spencers,

FoodMart etc.

Study shows a very nominal amount of people visit occasionally to the

malls for entertainment, shopping spree etc. and there also exist a small

sub section of the young crowd those who visit malls almost daily.

96
Mall Section Status:

Anchor Store

Apparel Store

Food Court

Multiplexes

0 5 10 15 20 25 30 35

ELUCIDATION:

The elucidation study analyses that maximum footfalls of people is in the

Multiplexes and anchor stores like Big Bazaar, Spencer’s, Shopper’s Stop

etc. Second most priority is of the delicious delicacies i.e. the food courts,

restaurants, coffee shops etc. The minimum footfalls are counted on

Brand Retail Stores.

97
Mall Visiting Reason Status:

Quality Merchandise
Huge Variety
Spraw ling Stores
Plas tic Money Accessibility
One Shop Stop

ELUCIDATION:

The elucidation study observed that one shop destination, huge variety

and sprawling retail stores entice more and more consumers to visit the

Malls and today plastic money accessibility also provides them strong

purchasing power and which results in buying merchandise, and enjoy the

shopping spree.

98
RECOMMENDATION

&

SUGGESTIONS

99
 THE ULTIMATE PRESCRIPTION

For the Mall Developers and Organized Retailers

Customer is King:- It is clear that consumers have changed and they are

looking for something different. Understanding their evolving needs,

aspirations and lifestyles is the underlying key to success for every Mall

Management. The primary emphasis should be on access, experience and

service and the secondary emphasis on product and price. There should

be an effort to improve service by having better trained sales staff, better

availability of products.

Brand the store: -branding the store will increase volume and enhance

customer loyalty. Branding is critical to maintaining competitive

differentiation in an increasingly challenging retail environment.

However, the brand needs to be clearly communicated to the customer.

Develop private label brand:- Private labels act as margin generators,

increasing sales Volume by positioning the label as providing higher

100
perceived value to consumers. In the long run, they also increase the

retailers’ bargaining power with national brand suppliers.

Private labels generate customer loyalty by providing exclusive products,

which works towards differentiation strategy, much sought after by the

retailers.

Mall Format:- Malls have a sustainable competitive advantage over

other formats. Consumer preferences are shifting towards malls from

traditional markets. As a result of consumer shifts, retailers also prefer to

be located in malls in anticipation of higher footfall and increasingly

consumers prefer "All Under One Roof” destination for shopping as

well as eating out and entertainment.

These findings together indicate an excellent potential for a mall with the

following features:-

 A superior well-managed leisure experience

 Targeted at all members of the household

 Comprising of shopping, dining and entertainment, all under one roof

 A wide range of products and services

101
 Proximity to homes

As Indians keep discovering malls, the retailers should also discover

what they want and how to evolve the malls. In the near future, there

will be a clear-cut categorization of malls. There will be premium,

luxury and value malls and existing formats will change radically

according to size and category.

102
EPILOGUE

Retail business strategy aimed at marketing of retail stores, positioning of

retail outlets ('small' to mall), branding of store to targeted customers,

development of appropriate customer-centric marketing, in-store facility

and counter sales staff grooming, data collection drive to understand

customers better, application of store's customers data to increase sales,

ongoing customer communication, auditing the retail outlet from 'outside

in' as well as 'inside out', keeping a tab on the changing customer

behaviour leading to footfalls mathematics, economics and statistics is

the need of the hour. Those who can solve the footfall equation correctly,

in time and efficiently, will win the great retail war.

103
LIMITATIONS

104
Limitations

• Survey is restricted to Delhi and NCR only.

• The study is limited by time constraint.

• The sample size chosen may be considered as small to represent

the entire Mall visiting population.

• The sample size chosen on a random basis thus the results of the

study may vary with actual scenario.

105
 BIBLIOGRAPHY

INTERNET PORTALS:

 WWW.COBRAGROUP.COM

 WWW.INDIANRETAILER.COM

 WWW.RETAILINDIA.COM

 WWW.WIKIPEDIA.ORG

 OFFICIAL WEBSITE OF RPG RETAIL

BOOKS:

 Real Estate & the Retail Scenario: The Impact of Mall Revolution

 Retail Branding: From Stopping power to Shopping power by

Michael Tang Oren

 Retail Geography and Intelligent Network Planning: Graham

Clarke

 Ronald W. Hasty (1997), “Retail Management”, McGraw Hill.

106
 

PUBLISHED JOURNALS:

 Times Journal of Construction and Design.

 Morgan Stanley Research, India Retail, June 6th, 2006

 David, Marshal “ India’s Malls-Overcapacities and Oversights”,

Images Retail, September 2006, p. 106

 Ronald W. Hasty (1997), “Retail Management”, McGraw Hill.

107
ANNEXURE

108
 QUESTIONNAIRE

Name: ________________________________________

Profession: ________________________________________

Age: ________________________________________

Location: ________________________________________

1. Have you ever visited any Shopping Mall?

Yes No

2. Which Anchor store do you visit very frequently in a mall?

Big bazaar Food bazaar

Pantaloons Vishal Megamart

Spencer Shopper’s Stop

109
3. Where do you prefer purchasing apparels and accessories?

Malls Local market Both

a) If Malls, why?

Every merchandise under one roof

Wide Variety

Better Customer Service.

b) Local Markets, why?

Cost effective

Easy Accessibility

Bargain Power

110
4. How often do you visit shopping malls /retail stores?

Daily Weekly Monthly Occasionally

5. Which section of Malls you visit mostly?

Multiplexes

Apparel Stores

Food Courts

Anchor Stores

6. What drives you to visit retail stores in big malls?

Huge Variety Quality Merchandise

Sprawling Stores Plastic Money Accessibility

One shop stop

111
7. Will this Organized Retailing concept of malls will last long?

Yes No

8. What is your perception about this emerging Mall Culture?

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(Signature)

112