MKTG/114

IBS Center for Management Research

Organized Retail Industry in India

This case was written by Komal Chary, under the direction ofVivek Gupta, IBS Center for Management Research. It was
compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either
effective or ineffective handling of a management situation.

2006, IBS Center for Management Research. All rights reserved.

To order copies, call +91-08417-236667/68 or write to IBS Center for Management Research (ICMR), IFHE Campus,
Donthanapally,
Sankarapally Road, Hyderabad 501 504, Andhra Pradesh, India or email: info@icmrindia.org

www.icmrindia.org
 MKTG/114

Organized Retail Industry in India

“We believe that India is a rising star at the beginning of a growth cycle , with consumer spending
increasing at a strong rate, and people seeking and demanding a better quality of life. India is
going to be one of the fastest-growing regions of the future. All conditions are right to invest in
India.” 1
- Jeff Immelt, Chief Executive,
“FDI in retail trade can not only organize GE. a significant part of the largely unorganized domestic
retailing, but also invite established global retail brands into the Indian market, thereby creating
greater outlets for outsourcing and marketing Indian products.”
2
- Recommendations from Economic of 2004-05.
Survey
INTRODUCTION

Retailing is the second largest industry in the US in terms of number of people employed. Wal-
Mart, the largest retailer in the world with annual sales of US$ 284 billion is also the largest
employer in the US (Refer Exhibit I for share of organized retailing across the globe and Exhibit II
for top retailers in the world). The retailing industry in the US employs more than 22 million
Americans and generates more than $3 trillion in sales annually. Like the US, many developed and
developing economies rely on this sector for growth.
In India, the retail industry is broadly divided into the organized and unorganized sectors. The total
market in 2005 stood at Rs. 10,000 billion, accounting for about 9-10% of the country s gross
domestic product (GDP). Of this total market, the organized sector accounted for Rs. 350 billion
3
(about 3.5 % of the total) of the total revenues. According to AT Kearney , the organized retailing
industry is expected to cross Rs. 1000 billion revenue mark by 2010 (Refer Exhibit III for share of
organized retailing in India and Exhibit IV for percentage contribution of different sectors to
organized retailing in India).
Traditionally, the retail industry in India comprised of large, medium and small grocery stores and
drug stores which could be categorized as unorganized retailing. Most of the organized retailing in
India had recently started and was mainly concentrated in metropolitan cities. The retailing
industry seems poised for a significant growth in the coming years owing to the presence of a vast
market, growing consumer awareness about product quality and services, higher disposable
income of consumers and the desire to try out new products (Refer Exhibit V for shopping trends
in India).

1 “Wal-Mart Assault: India May be Forced to Open its Protected Retail Sector, but Wal-Mart for the First
Time Will Face Real Communists in India,” www.indiadaily.com, July 12, 2005.
2 The Economic Survey of India studies the performance of Indian economy across different industrial
sectors. It also studies important parameters like production, investments and s avings, employment and
poverty.
3
Established in 1926, AT Kearney is a global management consulting firm based at Chicago, US with a
presence in 35 countries across the world.

1
 Organized Retail Industry in
India
In the past couple of years, the organized, multi-outlet retailing concept had gained acceptance in
India. Leading global retailers such as Wal-Mart, Tesco and others are keen to enter the Indian
retailing industry. The Chicago-based Sara Lee Corporation is planning to enter the Indian apparel
market. Dior, the well known watch brand from the Louis Vuitton Moet Hennessy (LVMH) group,
is planning to include India among its top 12 world markets. The Rosy Blue Group, the world s
largest diamond manufacturer, is planning to invest Rs 900 million in setting up 40 exclusive Orra
diamond jewelry showrooms in India over the next three years. Since foreign direct investment
(FDI) in the retailing sector was not permitted as of mid 2005, most global players were opting for
the franchisee route.
4
According to the Global Retail Development Index of 2005 conducted by AT Kearney, India was
ranked #1 among 30 'most attractive' retailing destinations across the globe. Kamal Nath, Union
Minister for Commerce and Industry in India, expressed optimism with regard to the retail sector
in India. In a seminar conducted by the Federation of Indian Chambers of Commerce and Industry
(FICCI) 5 in February 2005, he said, “The importance of the retail sector in the national economy is
not in dispute. All economists have agreed that giving the retail sector a thrust will not only result
in boosting the economy, but also that the retail sector has the potential to be leveraged in order to
rejuvenate specific targeted sectors, including the rural economy.” 6

ORGANIZED RETAILING IN
INDIA
According to Euro Monitor International, a leading provider of global consumer market
intelligence, sales from large format stores (supermarkets and hypermarkets) is expected to
increase by 30% in 2005. In the year 2002, food-related items accounted for nearly 71% of retail
sales in India. However, it was interesting to note that there had been a decline in the purchase of
food-related items. These had earlier registered a 73% sale in 1999.
In recent years, there has been higher spending on non-food items. The main factors for this
change are:

Rising incomes and a consequent increase in disposable incomes (Refer Exhibit VI for
household income across India).

Better infrastructure.
Rise in consumer awareness.

Consumer keenness to buy branded products.

Consumer desire to purchase quality products and services.
The retail sector in India employed about 8% of the population in 2005 and was next only to the
agricultural sector in terms of employment generation. However, employment in the organized
sector was still very low at 21 million or about 2% of Indian population, since the organized sector
comprised only 3.5% of the total retail industry in India. In comparison, about 80% of the US
market was organized, while, the corresponding figure in Thailand was 40% and 20% in China,
Hence, in these countries there is a higher number of people working in the organized sector. Thus

4
AT Kearney developed the Global Retail Development Index (GRDI). This annual survey ranks
emerging countries based on four key variables – country risk, market attractiveness, market saturation
and time pressure.
5 Established in 1927, FICCI represents over 1500 corporates and over 500 chambers of commerce and

business associations. It undertakes research and interactions at the national political level and through
global networks. FICCI also expresses its views to the government on major economic policies of the
country.
6 “Retailing in India: FDI and Policy Options for Growth,” www.ficci.com, February 23, 2005.

2
 Organized Retail Industry in
India
there is huge potential for employment generation in organized retailing in India. According to
Arvind Singhal, Chairman and Managing Director, Technopak, the modern retail sector had the
potential of generating over two million direct jobs in the next six years assuming a share of 8-
10% of the retail market for the organized sector (Refer Exhibit VII for the leading job generating
sectors in India in 2004).

ENTRY OF LARGE BUSINESS HOUSES

Organized retailing in India started picking up in South India in cities like Chennai and Hyderabad,
where real estate at prime locations was available at cheaper rates than in cities like Mumbai and
Delhi. In the early 1990s, leading Indian business houses started taking a keen interest in the
retailing sector. Several business houses like Tatas, Piramals, RPG Group and Rahejas forayed into
this sector.
As in 2005, organized retailing was restricted to metros and some large towns. However,
marketers were looking keenly at smaller towns and also the rural belt across India to expand their
businesses (Refer Exhibit VIII for number of small towns in India). Organized retailing in India
can be classified based on the products or services offered. These include:
Apparel retailing (Westside, owned by Tata s Trent and Shopper s Stop owned by the Raheja
Group).
Food retailing (Foodworld of the RPG Group and Food Bazaar of Pantaloon Retail India
Limited).
Health and Beauty products retailing (RPG Group retails beauty and health related products
such as creams, ointments, face packs, etc through their retail chain „Health and Glow. Health
& Glow retails skin care, hair care, herbal products, perfumes and also provides medicines
through their pharmacy).

Footwear retailing (The Loft and Bata).

Music and Entertainment retailing (Music World of the RPG Group and Planet M of The
Times of India Group).
Book retailing (Crosswords, Landmark and Oxford bookstores).

Watches and jewelry retailing (The Tata-owned Tanishq and Titan).

Petrol and Diesel retailing (Indian Oil Corporation Limited, Bharat Petroleum Corporation
Limited and Hindustan Petroleum Corporation Limited).
Home Furniture (Durian and Gautier India).

Luggage (VIP and Samsonite).

A PROFILE OF MAJOR INDIAN RETAILERS

PANTALOON RETAIL INDIA LIMITED

(PRIL)
Headed by Kishore Biyani (Biyani), Pantaloon Retail India Limited (PRIL) is one of the leading
retail outlets in India. The retail chains which are a part of PRIL include Pantaloons, Big Bazaar,
Food Bazaar, Gold Bazaar and the Central Mall. PRIL was incorporated in October 1987 as Manz
Wear Private Limited. It became a public limited company in September 1991. The company sold
products under the Bare, Pantaloons and John Miller brand names. The first menswear Pantaloons
Shoppe outlet was set up in 1993. The company s name was changed to Pantaloon Retail India
Limited when it made an entry into the retail sector under Pantaloon Family Stores. Since then,

3
 Organized Retail Industry in
India
PRIL had set up several retail outlets in different formats (Refer Exhibit IX for a note on the
different formats of retail outlets and Exhibit X for a break-up of retail outlets in India).
In 2005, PRIL had 16 Pantaloon departmental stores, 21 Big Bazaar hypermarket discount stores,
33 Food Bazaar (retail outlet selling food items and groceries) and 3 Central Malls across India
with almost 2 million square feet of retail space. PRIL aimed at providing quality and wide variety
of products at affordable rates. The company registered revenues of about Rs. 6.58 billion in the
fiscal 2003-04, a 48% increase over the previous year. The cash profit generated by PRIL was Rs.
285.7 million. The number of stores of PRIL increased from 22 in 2003 to 42 in 2004. In 2005, the
number of stores further increased to 73 (Refer Exhibit XI for PRIL s financial performance over
the last six years).
„Pantaloons offered a wide range of clothing options to Indian consumers. It stocked garments,
accessories and lifestyle products. The target audience for Pantaloons was the upper and upper-
middle class urban population in India. Pantaloons stores were divided into different sections –
Men s formal wear, Men s casual wear, Men s knitwear and Kid s and Women s wear. Each of these
sections was assigned a manager who was responsible for generating sales and meeting fixed costs.
The manager was given the authority to decide on the usage of shelf space and stocking of different
brands. For instance, at the Pantaloons outlet at Crossroads in Mumbai, „Color Plus is a prominent
men s brand on display as it caters to the up-market section of the population, whereas in Kolkata,
„Color Plus is off the shelves as there are more middle class shoppers. Since retail business
generates low margins, PRIL introduced in-house labels where the gross margins were in the range
of 25 to 30 per cent, compared with 5 to 15 per cent for branded apparel. Another advantage is that
with in-house labels, the company has better control over the design and the brands.
PRIL s central warehouse and manufacturing unit are located at Maharashtra Industrial
Development Corporation (MIDC), Tarapur, in Maharashtra. Pantaloon s manufactures trousers at
this unit. The unit has an installed capacity of 1400 pieces of trousers a day. Besides this unit,
PRIL also has a plant that manufactures denim jeans at Mumbai, with an installed capacity of 700
jeans per day. The central warehouse at MIDC is spread over 25,000 square feet with a provision
for additional warehousing space. In addition to the central warehouse, PRIL also had zonal
warehouses at Hyderabad, Chennai, Kolkata and Mumbai spread across 10,000-15,000 square feet
each to cater to demand in the respective regions. PRIL s in -house garments became an instant
success as the quality was at par with branded apparel, and yet available at a much lower cost.
Almost 80% of sales came from Pantaloons in-house products.
Customer feedback and customer satisfaction were the key focus at PRIL. The company relied
heavily on information technology (IT) for collecting customer data and opinions. IT also
streamlined the process of stock keeping and stock movement at the stores. It helped the
management understand fashion trends. Based on consumer data, PRIL launched a customer loyalty
program called „Green Card The Card offered several benefits such as travel offers, invitation to
special events, schemes, etc. Customers could also redeem points for any product. PRIL launched a
similar program for children as well; this was known as Kids Bank and had the slogan „Learn to
Earn. Through this scheme, children would earn points or Kids Money (KM) for purchases made by
their parents on kid s stuff. Children could save these points and buy toys and gifts.
PRIL was early to realize the potential of the huge middle-class population in India. Hence, apart
from retailing lifestyle products, it ventured into value retailing by launching the Big Bazaar
hypermarket chain. Big Bazaar is a chain that stocks all home need products under one roof,
spread over 30,000 square feet of land, across different cities in India. It has been positioned as „Is
se sasta aur acha kahin nahi, (No thing cheaper and better anywhere) indicating value for money
stores. Big Bazaar stocks over 200,000 products that include apparel, food products, home
appliances and cosmetics. Products are cheaper than the market price by as much as 5 to 60%.
Apparels are cheaper by 25 to 60%, while the price difference on other products varies between 5
and 20% (Refer Exhibit XII for performance of Big Bazaar and Pantaloons in 2004).

4
 Organized Retail Industry in
India
Analysts attribute the success of PRIL to cheaper sourcing of products and lower distribution
costs. Pantaloons sourced its products through „consolidators. There was a consolidator for each
product category. These consolidators were responsible for procuring quality goods at the cheapest
possible price, and were paid commissions on their sale at the store. The consolidators dealt
directly with manufacturers, and as a result the distribution costs could be slashed as no
intermediates were involved. In addition to discounts on products through the year, Big Bazaar
also held events such as „Kitchen Mela', „Trouser Mela , etc. to attract customers.
In addition to Big Bazaar, PRIL also started „Food Bazaar . These outlets are targeted at all
segments of the Indian population. It had over 50,000 stock keeping units (SKU) that covered a
range of products like cereals, pulses, sugar, rice, juices, milk products and FMCG products,
besides stocking vegetables and fruits. Most products were sold at discounts ranging between 2
and 20%. In addition to branded products, both Big Bazaar and Food Bazaar introduced in-house
products that gave huge margins to the company. The in-house brands were marketed under the
name „Premium Harvest for pulses, rice, flour, etc, while ready to cook or eat products were sold
under the „Tasty Treat brand. The products at each Food Bazaar went into six sections or „Hot
Shops to make it easy for shoppers to locate them, and to encourage buying (See Table 1 for
details of the six Hot Shops).
Table I
The Six Hot Shops at Food
Bazaar
Farm : This hot shop provides fresh vegetables and fruits. Vegetables and fruits are sold
Freshso that customers can choose what they want. Good quality products are sold at low prices
loose
in this section. This is one of the most popular sections at Food Bazaar.
Chill Station : This hot shop provides dairy products, aerated drinks, juices and frozen foods.
Golden Harvest : This section stocks 20 varieties of rice, 5 varieties of wheat, different types of
pulses, cereals, flour, oils, tea, spices, etc. These products are sold both loose and pre-packed.
Chef : This section stocks products that are meant for instant cooking like soups, instant
Zone mixes, etc.
gravy
Hungry Kya !: In this section, ready to eat food stuff like biscuits, chocolates, chips, snacks are
sold.
Head-to-Toe : The Head-to-Toe section deals in personal care items such as shampoos,
cosmetics, talcum powder, etc.
Source: www.pantaloons.com.

PRIL s Central Malls are typically targeted towards the up-market segment of the urban
population. In 2005, PRIL had three Central Malls located at Hyderabad, Bangalore and Pune.
Each Central Mall has different departments for home products, fashion, leisure, food, health with
different floors dedicated to women, men and kids. The Central Malls also offer restaurant
services, beauty parlours, a pub and a nightclub. Central is promoted as a one -stop destination for
shopping, eating and entertainment. With its four format retail outlets, PRIL caters to a large
section of the Indian population, right from the middle to the upper market segments.

RPG
GROUP
The Rama Prasad Goenka or RPG Group registered a turnover of Rs. 84 billion in the fiscal 2004-
05. The group has more than 20 companies in seven different industries – Power, Tyres, Retail,
Transmission, Entertainment, Technology and the Specialties sectors (Refer Exhibit XIII for
contribution of business sectors to RPG Group s turnover). The RPG Group was one of the early
entrants into the organized retail sector in India. They launched the „FoodWorld (FW) chain of
grocery stores in 1999. By 2005, there were more than 90 FW stores across India, making it the
largest food and grocery retail chain. This chain was a Rs. 3 billion company.

5
 Organized Retail Industry in
India
FW was started in May 1996 in Chennai, as a part of Spencer and Company, belonging to the RPG
Group. It was hived off as a separate company in 1999 with 51%-49% joint venture between
7 8
Spencer & Company and Dairy Farm International of the Jardine Matheson Group from the
FoodWorld has been growing at a compound annual growth rate (CAGR) of 30% over the last five US.
years and holds a 62% market share in the organized retail sector in the cities in which it operates.
FW has operations in 12 metro cities mainly in Western and Southern India, and is expanding to
other Class I towns as well.
FW stocks almost 5000 items (fresh vegetables and fruits, cereals, pulses and FMCG products) in
each outlet. An outlet generally ranges between 3000-3500 sq. ft in size. Each of these outlets
9
handles on an average about 600 customers everyday. FoodWorld operates on the hub and spokes
model. It opens a centralized warehouse to cater to every city it operates in. Suppliers can deliver
products directly to this warehouse. Products can then be distributed from this warehouse to
individual FW outlets. This shortens the distribution channel, resulting in savings for the company.
These savings are passed on to the customer, providing them with quality goods at lower costs.
In June 2002, FW started selling its own brands (in-house) in the value-added food and non-food
segments in India. The in-house products were sold under the „Foodworld brand name. The
company had more than 150 items under its private label. These items offered consumers value for
money since they are priced 10-15% lower, with quality as good as the brand leaders. These
products were also backed by a 100% „No Questions Asked Replacement Guarantee, the first of
its kind in India. These products under the Foodworld label were well received by consumers and
gave FW nearly 22% of its total business.
RPG too used IT for running operations smoothly. In December 2001, it became the first Indian
10 11
retailer to use the reverse auction mechanism in association with Sify . The reverse auction was
first held for plastic carry bags that FW provided to customers to carry food items purchased
through them. This process resulted in a saving of over Rs. 1 million for FW over a one-year
period. Observing the success of this process, similar auctions were held for other items like rice,
etc. RPG was also among the first companies to introduce hi-tech cash registers and bar-code
scanners for an entirely new bar coding system it had introduced. This was because there were no
rules for bar coding in India during the mid 1990s.
RPG also owns Spencer s Hypermarket, a chain of retail hypermarkets in India. The first
Spencer s Hypermarket was set up in Hyderabad in 2001. Spencer's Hypermarkets stock a wide
range of products right from groceries, food items, home needs, fresh food, garments and
consumer durables. All these products are sold at prices lower than the market price, which is
possible because of economies of large scale operations. The prices are even lower on the purchase
of multiple packs of the same item. In Hyderabad, Spencer s Hypermarket is spread over 1, 20,000

7 Dairy Farm International was set up in 1886 by Sir Patrick Manson. It is a leading Hong Kong based
retail company. The company reported total revenues of US$ 5.11 billion in 2004 and net profit of US$
251 million.
8
The Jardine Matheson Group is an Asian-based conglomerate. Its business interests include Jardine
Pacific, Jardine Motors Group, Hongkong Land, Dairy Farm International, Mandarin Oriental, Jardine
Cycle & Carriage and Jardine Lloyd Thompson. These companies are leaders in the fields of engineering
and construction, transport services, motor trading, property, retailing, restaurants, hotels and insurance
broking. The company was established in 1832 by Scotts- William Jardine and James Matheson. In 2004,
it reported revenues of US$ 8.97 billion with net profit of US$ 1.483 million.
9
In the hub and spokes model, a large store acts as the central point or hub for servicing (inventory,
logistics, etc) a number of smaller stores or spokes scattered in a geographical area.
10
In a reverse auction, the price paid by the buyer is determined through bids submitted by the sellers over
a pre-determined period. The auction is won by the supplier who offers the most competitive terms to the
buyer.
11 Sify is a leading Internet Service Provider (ISP) in India.

6
 Organized Retail Industry in
India
sq. ft. area and stocks more than 20,000 products across a 50,000-sq. ft. single level shopping
space. It employs around 160 people. The second Spencer's Hypermarket is located at Malad in
Mumbai, with an area of 50,000 sq.ft and stocks over 25,000 products. It also has a bakery, a
Music World Express outlet and a gift store.
„MusicWorld is another RPG retail venture. It is the largest music retail chain in India, with over
170 outlets. It stocks music videos, audios, accessories and also houses a music station where
customers can sample the music on offer. The music offered includes regional, national (Hindi)
and international artists, devotional, pop, hard rock, rap, Hindustani classical, Carnatic classical,
Arabic and many more. The first MusicWorld outlet was opened in November 1997 in Chennai. A
year later, the second store was started at Cochin. By 2005, there were 170 stores in nine cities in
India, with more than 13,000 customers walking in everyday.
MusicWorld stores hold a market share of 15-25 per cent in the cities in which they operate. The
company offers three different formats to the consumers (Refer Exhibit XIV for break-up of
MusicWorld store formats in 2003). These formats and its reach have helped MusicWorld cater to
different sections of the population.
MusicWorld Destination stores: 14 in number. It caters to all sections of consumers. These
are typically 4000 sq. ft stores and stock all music related material.
MusicWorld Express outlets: 29 in number. These outlets are typically 300 to 600 sq. ft in
size and located in large departmental stores to cater to the immediate requirements of the
customers. The product basket generally consists of new releases and chart busters. Special
requests are captured through a CRL (Customer Request Log) which is then serviced from the
Destination Store.
MusicWorld Unplugged 129 in number. A single gondola is placed in high traffic
outlets:
outlets and caters to the impulse customer. The product portfolio contains only chartbusters
and just released titles.
The store ambience and presentation of products have contributed strongly to MusicWorld s
success. Audio cassettes, audio CDs and Video CDs are laid out according to different genres. In
each of these genres, products are further arranged in alphabetical order to provide customers with
a convenient and easy shopping experience.
„Health & Glow is a joint venture between the RPG Group and Dairy Farm International. It is the
first retail chain catering exclusively to the health and beauty requirements of Indians. The Health
& Glow outlets offer cosmetic and medicinal products and services, all under one roof. The first
store was launched in 1997. The chain now has 18 stores in all, across four cities: Bangalore (9
stores), Chennai (7 stores), Pune (1 store) and Hyderabad (1 store). Besides retailing quality
branded products (such as Lakme, Chambor, Maybelline and Shahnaz Hussain), some Health &
Glow outlets also offer beauty salon services. Customer loyalty has steadily been improving since
the launch of this value added service. The management is now planning to introduce this service
at other outlets as well, and use it as its unique selling proposition.

TATA
GROUP
The Tata group is one of India s largest business houses. In 2005, the group owned 93 companies
in seven business sectors, namely information systems and communications; engineering;
materials; services; energy; consumer products; and chemicals, and employs nearly 220,000
12 13
people. In 1997, the Tata s sold their Lakme business to Hindustan Lever Limited (HLL) . The

12
Lakme is a popular cosmetics manufacturer. Its product range includes lipsticks, nail enamel, powder and
shampoos.

7
 Organized Retail Industry in
India
group started its retail business in 1998 with the purchase of the Littlewoods retail stores,
originally owned by a UK-based firm, in Bangalore. The company was renamed Trent Limited and
the Littlewoods store was called Westside (Refer Exhibit XV for the financial performance of
Trent Limited over the last five years). By mid 2005, Trent Limited had outlets in Mumbai,
Hyderabad, Chennai, New Delhi, Pune, Kolkata, Nagpur and Ahmedabad. As of 2005, there were
16 Westside stores across India, with each store about 20,000 sq. ft in size.
Westside offered customers an international shopping experience with value-for-money. The
Westside outlets are essentially into apparel and accessories retailing. Westside stores offer quality
products with the latest designs. The merchandise in the stores, (except cosmetics and perfumes)
bears the Westside label. Trent was one of the first c ompanies to recognize the benefits of in-house
labeling and has benefited immensely from it. Before embarking on their retail journey, the Tatas
conducted an extensive survey on retailing trends in the domestic market and in the global
markets. The survey results showed that globally, major retailers pushed in-house products to
achieve better margins. And so, they decided to sell in-house brands.
In its initial years, Westside took retail space on lease. The products were arranged in a boutique
store layout 14 . Thus, all products catering to women were presented at one location in the store. For
example, all the products catering to women including apparel, cosmetics and accessories like
handbags, were stocked in one section and not in separate sections as wa s the case at other retail
outlets. This allowed the shoppers to locate their products easily and complete their shopping
quickly.
Each Westside store has two divisions, the apparel division and the product division. These
divisions are further classified into seven departments (catering to men, women, kid s wear and
home needs). Each of the departments was further broken down into different sections. For
instance, the Menswear department comprised of the „informal and „formal sections. Each
department was headed by a manager who in turn reported to the head of merchandising. Under
the department manager were assistant buyers and merchandisers. Each assistant buyer catered to
the stocking needs of a section of the department. The merchandiser looked afte r product
distribution in the store and inventory needs. The merchandiser also played a role in procuring new
designs for the store. Along with in-house brands, Westside started offering clothes created by
popular designers like Wendell Rodericks, Krishna Mehta and others. Some Westside stores have
a coffee shop, Café Taj that is managed by the Taj Group.
In addition to Westside, Trent launched a hypermarket „Star India Bazaar in Ahmedabad in
October 2004. It plans two more hypermarkets in Mumbai and Bangalore by 2006. To further
consolidate its position in the retail market, in August 2005, Trent bought a 76% stake in
Landmark, a leading books and music retailer in India. Hemu Ramiah (Ramiah), who created the
Landmark brand, will have the remaining 24% stake. Ramiah said, “Trent is one of India s most
stylish retailers with a unique business model. We see a strategic fit between Trent and Landmark
and hence our decision to partner with them. We are looking at an aggressive growth over the next
15
few years and this partnership will help us in achieving our expansion.”

13 Hindustan Lever Limited (HLL) is a 51%-owned subsidiary of Anglo-Dutch giant Unilever and has been
in India since 1888. India s largest consumer goods company, HLL markets products such as beverages,
food and home and personal care goods. Its brands include Kwality Wall s ice cream, Lifebuoy soap,
Lipton tea, Pepsodent toothpaste and Surf laundry detergent. HLL markets maize, rice, salt and specialty
chemicals, and its export division ships castor oil and fish. The company also sells bottled water and
over-the-counter healthcare products.
14 A boutique store layout is used primarily in small specialty stores or within the boutiques of large stores.

Fixtures and aisles are arranged asymmetrically.

15 “Trent buys Landmark for Rs 103 crore,” Business Standard, August 31, 2005.

8
 Organized Retail Industry in
India
Besides Trent, Titan Industries is another Tata company which is in the retailing business.
Established in 1984, Titan Industries (Titan) (Refer Exhibit XVI for the financial performance of
Titan Industries) is a joint venture between the Tata Group and the Tamil Nadu Industrial
Development Corporation (TIDCO). It is India s leading watch manufacturer and retailer, and
retails watches, clocks and jewelry. Titan markets its range of watches under the „Titan and
„Sonata brands. It holds a 25 per cent market share in the watch industry in India, more than three
16
times the size of its nearest competitor, Timex .
17
When Titan was established, Hindustan Machine Tools (HMT) was its main competitor, apart
from the watches that were sold in the unorganized sector that included grey market and local
manufacturers. HMT and the other local players concentrated on the functional utility of the watch.
Titan decided to differentiate itself by introducing „style to the marketing of watches in India in
order to create an edge for itself. Titan projected the watch as a fashion accessory, while also
18
concentrating on technological leadership. It manufactured only quartz watches and not
19
mechanical watches . Titan also decided to manufacture watches that would cater to every section
of the population. Titan s series of watches included Fastrack, Edge, Nebula, Raga, Sonata,
Regalia, Dash, Bandhan and Steel. The Fastrack series was launched in 1998 and projected as
„Cool Watches from Titan. Fastrack watches were targeted at the youth (the age group of 22 to
30). Following the success of Fastrack, Titan diversified into fashion eyewear in 2004 by
launching „Fastrack I -Gear sunglasses.
In 1998, Titan Industries launched Sonata. Sonata was targeted at middle class consumers, who
were both price conscious and quality conscious. Through Sonata, Titan Industries looked at
fending off its competitors HMT and Timex, and also the smaller players in the watch industry.
Sonata watches are available in plastic, all-weather leather, stainless steel and elegant gold plated-
straps. All watches are water and shock-resistant and carry a one-year guarantee.
In 2002, Titan launched Edge, the slimmest watch in the world. The Titan Ultra Slim watch had a
slim movement of 1.15 mm with a slimness measure of 3.6 mm. This watch is made from
non-
allergic stainless steel. It has a sapphire crystal that makes it scratch resistant and sports a strap that
is pure leather. It is water resistant up to 30 meters, a feature that is hard to find in slim watches.
Besides these watches, Titan also offered premium watches under the brand name „Nebula . Nebula
watches made use of 18 carat gold, precious stones and pearls. The strap was made from Italian
leather. The range is targeted at the top end of the market. Titan also teamed up with Rohit Bal, a
popular designer to launch the Nebula Rohit Bal collection. In December 2003, Titan acquired a
license from global brands like Tommy Hilfiger to add to its premium fashion watches segment.

16
Timex was established in 1854 as The Waterbury Clock Company. The first Timex wristwatch was
introduced in 1950 and quickly became the generic name in the field. Timex has watches ranging from
the sporty and high-tech to the dressy. It is headquartered in Middlebury, Connecticut, US and is one of
the world s leading watch brands.
17
Hindustan Machine Tools was incorporated in 1953 by the Government of India as a machine tool
manufacturing company. Over the years, it diversified into Watches, Tractors, Printing Machinery, Metal
Forming Presses, Die Casting & Plastic Processing Machinery & Bearings.
18 Quartz watches use the nature of the quartz crystal to provide a very accurate resonator which gives a

constant electronic signal for timekeeping purposes. Quartz crystals are piezoelectric, which means that
they generate an electrical charge when mechanical pressure is applied to them. They also vibrate if an
electrical charge is applied to them. The frequency of this vibration is a function of the cut and shape of
the crystal. Quartz crystals can be cut at a consistent size and shape to vibrate at thousands of times per
second, making those extremely stable resonators for keeping very accurate time.
19 A mechanical watch is a device for keeping time, which uses the energy from a wound spring, and keeps

time through the highly regulated release of that energy through a set of gears. It differs from the typical
quartz watch in that it uses purely mechanical components to keep time. Mechanical watches typically
can run for about 40 hours on one full winding of the mainspring, with a few designs available that run up
to 8 days, or even 10 days.

9
 Organized Retail Industry in
India
Titan manufactures almost all its watch components. The company s manufacturing plant is at
Hosur, near Bangalore, occupying an area of 50,000 sq meters. It also has an assembling plant at
Dehradun. It employs around 3,700 personnel. This watch manufacturing facility was set up in
1987, with technical know-how from Europe and Japan. The company manufacturers watch
movements, watchcases in steel and brass, and bracelets in solid and sheet steel.
Titan entered into the jewelry segment under the brand name „Tanishq in 1995. Tanishq jewelry is
sold exclusively by 69 outlets spread over 53 Indian cities. It is also exported to Europe, the US,
the Middle East and Australia.
Besides segmentation of its watches based on the population, distribution was another factor that
Titan had to consider. Titan developed an extensive domestic distribution network, with one of the
largest retail chain consisting of exclusive retail showrooms called „The World of Titan with 164
showrooms and multi-brand outlets named Time Zones with 144 outlets. At these Time Zones,
more than 70% of the watches sold were Titan brands. In addition to these outlets, Titan opened
more than 600 service centers across India where watches can be repaired, straps changed and new
batteries could be bought. In addition to its exclusive showrooms and Time Zones, Titan sold its
watches through a network of dealers. More than 50% of watch sales came from its dealers. To
ensure that the dealers gave best services to customers, Titan introduced a „Franchisee
Management Programme where the franchisees were trained about the culture of Titan and also
provided product training. The effectiveness of a franchisee is gauged through customer feedback.
Titan introduced a customer loyalty program called „Titan Signet. The Titan Signet club members
are given exciting rewards and benefits in recognition of their loyalty to Titan and the World of
Titan showroom. The Titan Signet also provides a platform for direct feedback from customers.
Any customer at The World of Titan can become a member of The Titan Signet on purchasing:
Any Titan watch priced at Rs. 2000/- or more.

Any Titan Raga Watch.

Any Titan clock priced at Rs. 875/- or more.

Titan Gift Vouchers worth Rs 3000/- or more.

The Signet membership is valid for a period of three years from the date of enrollment. Each time
a Signet member made a purchase at a Titan store, the member is awarded points. And on
accumulating points, the member can redeem it for Gift Vouchers from leading brands and stores.
The strategies implemented by Titan have catapulted it to the position of a leader in the Indian
watch industry. The company s technological brilliance and wide range have also found takers in
global markets, especially in Europe. In 2005, it was among the top six watch manufacturers in the
world.

RAHEJA
GROUP
The K. Raheja group of companies is among India s largest real estate players. They launched
Shopper s Stop way back in October 1991. This was the first mega apparel retail outlet to be
established in India. Shoppers Stop is projected as a Fashion & Lifestyle store for the family.
From a single store in 1991, Shopper s Stop has today grown into a 16 store retail chain in major
metropolitan cities across India. Shopper s Stop outlets stock apparel, accessories, household
items, perfumes and cosmetics. It also houses coffee shops and book stores to give the consumers a
complete shopping experience. Shopper s Stop registered a turnover of Rs. 5.11 billion for the
fiscal year 2004-05, an increase of 26% from the previous year. It also registered a profit of Rs.
190 million, an increase of 58% (Refer Exhibit XVII for Shopper s Stop s financial performance
for the last five years).

10
 Organized Retail Industry in
India
Shopper s Stop was among the first retailers in India to realize the importance of supply chain
management in the operations of a retail business. Hence, the company developed process manuals
for each part of the logistics chain. These modules include vendor management, purchase order
management, stock receiving systems, purchase verification and inventory build up, generation
and fixing of price and store tags, dispatch of stocks to the retail floor and forwarding of bills for
payment. Shopper s Stop is also one of the few stores in India to use retail Enterprise Resource
Planning (ERP) 20 software, which is now being integrated with Oracle Financials and the Arthur
Planning System 21 , considered one of the best retail planning systems in the world. With the help
of ERP, they are able to replicate stores, open new stores faster and get information about
merchandise and customers online.
Shopper s Stop initiated India s first retail loyalty program called “The First Citizen.” This
program offers exclusive privileges, benefits and rewards to regular customers. The total
membership for this program increased from 2, 54,000 in March 2004 to 4, 29,000 in March 2005.
This program contributed to more that 50% of Shopper s Stop s annual sales.
Crossword Bookstores Limited, a subsidiary of Shopper s Stop, has 22 stores across India.
Shopper s Stop had a 51% stake in Crossword Bookstores Limited. It generated revenues of Rs.
4.5 billion in 2004. Shopper s Stop plans to acquire the remaining 49% from ICICI Emerging
Sectors Fund to expand its book retailing business.

RETAIL IN INDIA – A CHALLENGE

The retail industry in India is growing at a significant pace. However, there are several problems
faced by the industry. The major challenges for the organized sector include:
Taxation laws that favor small retailers.
Different structure of sales tax in different states.
Multi-point octroi collection.
Lack of trained workforce.
Problems of supply chain and logistics.
High cost of real estate.
Limited land available at prime locations.
According to analysts, for this industry to thrive, Indian retailers need to emulate worldwide retail
practices such as accuracy in financial reporting, increased levels of corporate governance and
greater accountability among employees. Retailers need to use the latest techniques to enhance the
consumer's shopping experience. They also need to go in for aggressive advertising and
promotions to increase awareness and make efforts to develop loyal customers. They must
constantly monitor the needs of the consumers and launch new products accordingly.
Another important drawback that exists in the industry is the lack of FDI. This restricts global
players to entering India only through joint ventures or franchises, keeping the much required
funds uninvested in the industry. Global giants have the funds to support the supply chain and
logistics infrastructure in retailing, which the Indian retailers lack. FDI investment in retailing

20 ERP software integrates departments and functions across a company into one computer system. ERP
runs off a single database, enabling various departments to share information and communicate with each
other.
21
Arthur planning system is an advanced retail planning system designed to assist retailers, direct
merchants (catalog, Internet, electronic) and manufacturers in effectively using inventory to achieve
corporate and local objectives. The Arthur applications guide retailers through merchandise planning
lifecycle in a systematic way, from space and inventory planning to merchandise allocation and analysis.

11
 Organized Retail Industry in
India
industry has been an issue of debate for over a decade. Most global players and Indian economists
are advising the Indian Government on the advantages of liberalizing the sector. In 1993,
Manmohan Singh, then the finance minister of India, had changed the law to permit FDI in the
retail sector. However, the next finance minister, P. Chidambaram (between 1996 and 1999) of the
then United Front Government banned FDI in this sector. However, there were loopholes in the
law and some foreign players did operate in the market through JVs or franchises. For instance,
Foodworld was established in a joint venture with Dairy Farm International.
According to industry analysts, allowing FDI in retailing has become an imperative for the Indian
22
government, with India agreeing to WTO norms and signing the agreement in 1995. The WTO
mandate required that India should lift the ban on FDI or face retaliation from WTO, such as
23
withdrawal of privileges on tariff and trade that India enjoyed under the new GATT . The Indian
government seems to be making efforts to protect the interests of players in the organized and
unorganized sectors. Analysts opined that no Indian retailer in the organized sector would be able
to take on giants as Wal-Mart and Tesco, if they were allowed to enter India. With their financial
strength, these mega-stores will be able to sustain losses for many years till their immediate
competition is wiped out. This is a normal predatory strategy used by these large players to drive
out competition. Analysts comment that the government definitely has a huge task ahead of it. On
the one hand, every large economy needs to associate with the WTO for trade benefits and
transactions globally, and on the other hand it has to contend with pressure from protectionists and
local retailers.
Biyani of PRIL argues that the retailing sector in India is in its first stage of evolution and should
not be liberalized for foreign players since the industry is too young to compete on a level playing
field. He says, “We should be allowed to grow and then compete,” 24
drawing a parallel with the
high degree of protection that the Reserve Bank of India has extended to local banks, which cannot
be taken over by foreign groups until 2009.

THE ROAD AHEAD

According to the 2005 Global Retail Development Index, a report by AT Kearney, India tipped
Russia from the #1 spot as the most attractive destination for retail investment. At a retail
convention held in September 2005 in Mumbai, European and the US experts urged the Indian
government to lift the ban on FDI and allow the entry of foreign retailing companies. During the
convention, Bernd Hallier 25 said, “In Germany and Europe we have reached saturation. India and
Russia are emerging markets, and in India there is an explosion in the economy. It s a market for
big investment.” 26
Several retail companies such as Wal-Mart and JC Penney of the US, Germany s Metro AG and
Hong Kong s Giordano International Limited have expressed interest in entering the Indian
market. Since 2000, the Indian economy has been growing more than 6% on an average and has a

22
The World Trade Organization (WTO) is a global international organization dealing with the rules of
trade between nations. The WTO agreements are negotiated and signed by the bulk of the world s trading
nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters,
and importers conduct their business.
23
GATT is an agreement signed at Geneva in 1947 by 23 nations with the aim of reducing tariff barriers
and quota restrictions and liberalizing trade between the participant countries. Since January 01, 1995, the
WTO has come into effect to replace the GATT.
24 “Wal-Mart Assault: India May be Forced to Open its Protected Retail Sector, but Wal-Mart for the First

Time will Face Real Communists in India,” www.indiadaily.com, July 12, 2005.
25 Bernd Hallier is the president of Euroshop, the world s leading retail trade fair, which is held annually in

Germany.
26 “Expert Urge India to Lift Ban in Place,” www.biz.yahoo.com, September 16, 2005.

12
 Organized Retail Industry in
India
middle class that is estimated to be as large as 300 million people (Refer Exhibit XVIII for fact
sheet about India). Rising consumer awareness has increased the demand for Western consumer
goods and other products amongst the middle class. About 300 new malls are being built in Indian
cities and there are plans for 1,500 new supermarkets and 325 large departmental stores.
27
According to Confederation of Indian Industries (CII) , these retail outlets will be operational
between 2006 and 2008. However, the Indian market will prove to be a challenge for most global
players. India is a big and diverse country, with different cultures and practices followed within the
same city. Hence, a single model of retailing will not be successful across the length and breadth
of the country. The retailers will have to provide for variation in their stores and offerings so as to
cater to the economics and peculiarities of consumers, even within a city.
After being successful in the metropolitan cities, a few domestic retailers have ventured into
smaller Indian towns and rural areas. The early brands to have entered small towns are Zodiac,
Arrow and Louis Phillips (apparels). Retailers believe that there is a felt need for supermarkets and
department stores in small towns. This had prompted entrepreneurs like Biyani to set up outlets in
Kanpur and Meerut (Refer Exhibit XIX for Marketer s Choice: T he top 20 small towns where
marketers would like a presence). Biren Vaidya of Mumbai-based Egana Watch Company has
embarked upon a plan to set up 25 Watches & More (W&M) stores stocking multi-brand life-style
products. He adds, “People of Raipur in Chattisgarh are considered to be least fashion conscious,
but they are now experimenting with lifestyle products. With a new model of business unfolding
28
before us, we feel like going into more number of smaller towns.”
There are some advantages that may arise from the entry of big global and domestic players.
Indian consumers will have more choice and price benefits, as these players compete with each
other to garner market share. Good quality products and excellent service will be on offer.
Suppliers may also benefit through direct transactions with the major retailers, which may enable
them to make more profits on their products by doing away with middlemen. The supply chain
will become more streamlined.
The quality of real estate, good retail management practices like better documentation, use of
information technology, and a strong supply chain will be the critical elements affecting the
growth of the retailing industry. Standardized real estate norms, transportation norms and other
regulatory issues across different states in India are important for attracting foreign as well as
domestic investors. The state government and the central government can work together to reduce
the existing bottlenecks. The growth of the industry will mean millions of new jobs, better
products and services and a better standard of living for consumers.

27
Established in 1895, CII is a non-government, not-for-profit organization. It works with the government
on policy issues, enhancing efficiency, competitiveness and expanding business opportunities for industry
through a range of specialized services and global linkages.
28 “Small Towns Big Brands,” Business India, July 4-17, 2005.

13
 Organized Retail Industry in
India
Exhibit I
Share of Organized Retailing Across the Globe
(In US$ billion)

1999 2002 2005

(Estimated)
Total Retail 150 180 225
Organized Retail 1.1 3.3 7
% Share of Organized Retail 0.7 1.8 3.2
Adapted from „Retail Scenario in India: Unlimited Opportunity, CII Report, (CSO, MGI Study), 2003.

Exhibit II
Top Retailers in the
World
Rank Retailer Home Country
1 Wal-Mart s Store Inc US
2 Carrefour Group France
3 The Kroger Company
US
4 The Home Depot Inc.
US
5 Metro AG Germany
Adapted from „Retail Scenario in India: Unlimited Opportunity, CII Report, (Stores/Delloitte Touche Tomahatsu
Report), 2003.

Exhibit III
Share of Organized Retailing in
India
(In billion Indian Rupees)
1999 2002 2005
Total Retail 7000 8250 10000
Organized Retail 50 150 350
% Share of Organized Retail 0.70% 1.80% 3.50%
Source: „India Retail Report 2005, www.imagesretail.com, 2005.

14
 Organized Retail Industry in
India
Exhibit IV
Contribution of Different Sectors to Indian
Organized
Retailing Industry (%)

Clothing, Textiles & Fashion

accessories
Footwear

Jwellery & watches

En t e rt a in me nt
Ph a rma
1% Mobile hand sets & accessories
2%
Ho me
Health & Beauty (including services)
C lo t hi ng , Tex t ile s & Fas h io n
Bo o ks, Mu s ic & Gif t s3%
a cc e s so ri es
3% Food & Grocery
D u ra b le s 39 %
13%
Durables
Foo d & Gro c e ry
18% Books, Music & Gifts
Mo b ile h a nd s et s & Fo o t w e a r
a c c es s o rie s
Home
9%
3% Jw el le ry & w a t c he s
H ea lt h & B ea u t y ( in cl ud in g Pharma
s e rv ic e s ) 7%

2%
Entertainment

Source: „India Retail Report 2005, www.imagesretail.com, 2005.

Exhibit V
Shopping Trends in
India
Shopper’s Usage of Store Formats in
India
Type of Store Percentage of People
Hypermarkets 1
Supermarkets 17
Convenience stores 10
Personal care/drug stores 52
Others 20

Indian Shopper’s Attitude for Trying New

Things
Percentage of Indians
Love to try new things 48
Don t waste time on new things 13
Keep up with things but don t go out of their way to try new things 39
Shopper Type by Gender: The Main
Shopper
Male: 26% Female:
74%
Shopper Type by Gender: The Key
Influencer
Male: 34% Female:
66%
Shopper’s
Awareness
Aware of Private Brand: 47% Bought Private Brand: 30%
Base: All Hypermarket and Supermarket Shoppers
Source: „AC Nielsen s Asia Pacific Retail Shopper Trends 2004, Business Today, July 4, 2004.

15
 Organized Retail Industry in
India
Exhibits VI
Household Income across India (%)

80

70
67.8
61.3 62.3 HIGH INCOME
60 (1.8
>Rs.
Lacs/annum)
53.7
50
MIDDLE
42.7
40 INCOME
(Rs.45,000-Rs1.8
37
32.5 Lacs/annum)
32.2
30
LOW
INCOME
(<Rs.45000/annum)
20

10

0 0.6 1.6 3.6 5.2

1989-90 1994-95 2001-02 2005-06

Year

Source: Brian Carvalho, „Small Towns Big Business, Business Today, July 18, 2004.

Exhibit VII
Leading Job Generating Sectors (2004)

Industry
Numbers
IT Services 1,00,000
BPO 2,00,000
Telecom 2,00,000
Retail (Direct and Indirect) 5,50,000
Financial Services 50,000
Pharma Research 10,000
Hotels 10,000
Healthcare 10,000
Source: „Job Mania, Business Today, March 14, 2004.

Exhibit VIII
Number of Small Towns in
India
Regions of India Number of
Towns
North 17
South 12
East 3
West 8
Total Number of Small Towns
40 small towns have population ranging between 0.5 and 1 million people.
Note: These
Adapted from Business Today Survey, July 18, 2004.

16
 Organized Retail Industry in
India
Exhibit IX
Different Formats of Retail Outlets

There are a variety of retail outlets one can make a purchase from. These are:

Supermarket : A supermarket is typically a store that sells a wide variety of goods including
food and alcohol (where permitted), medicine, clothes, and other household products that are
consumed regularly. It is often part of a chain that owns or controls (sometimes by franchise)
other supermarkets located in the same or other towns; this increases the opportunities for
economies of scale. The chains themselves are often supplied from the distribution centers of a
larger business. There are two types of supermarkets: Mini Supermarkets – (1000-2000 sq.ft)
and Large Supermarkets – (3500-5000 sq.ft). Examples in India include Foodworld of RPG
Group and Food Bazaar of Pantaloon Retail India Limited)

Convenience Stores: A convenience store is a small store or shop, generally accessible or local.
They are often located alongside busy roads, or at gas/petrol stations. This can take the form of
gas stations supplementing their income with retail outlets, or convenience stores adding gas to
the list of goods on offer. Railway stations also often have a convenience store. These stores are
generally open for longer hours and stock some staple food items, medicines and snacks.
Examples are Twenty Four-Seven promoted by KK Modi group.

Discount Stores : A discount store is a retail store offering a wide range of products, many
branded, at discounted prices. Examples are Subhiksha Trading Services Limited and Trinethra
Super Retail Limited.

Hypermarkets : Hypermarket is a store which combines a supermarket and a department store.

The result is a gigantic retail facility which carries an enormous range of products under one
roof, including full lines of fresh groceries and apparel. Consumers can ideally satisfy all of their
routine weekly shopping needs in one trip to the hypermarket. Examples are Spencer s of RPG
Group and Big Bazaar of Pantaloon Retail India Limited.

Malls: A Mall is a group of businesses, usually retail, that have individual managements but are
also managed under one administrator. Typically, in India malls are owned by the builder or the
developer and individual spaces or rooms are rented out or sold to retailers. Crossroads was the
first mall to be established in Mumbai, in the year 1999. MGF Metropolitan at Delhi, The
Forum and Garuda mall at Bangalore, Hyderabad Central at Hyderabad, Phoenix High Street
and Crossroads at Mumbai are examples of malls in India.
Adapted from various sources.

17
 Organized Retail Industry in
India
Exhibit X
Break-Up of Retail Stores in India (2003)

Trade Sectors Number of Stores

A Drug Stores
i Traditional/Medical Shops 276058
ii Cosmetic stores 129685
Total 405743
B Grocery Stores
i Traditional Kirana shops 5273310

ii Supermarkets 2314
iii Others 762114
Total 6037738
Source: „AC Nielsen s Asia Pacific Retail Shopper Trends 2004, Business Today, July 2004.

Exhibit XI
Pril’s Financial Performance (2000-05)
(In Rupees Million)
Year ending June 30 2000 2001 2002 2003 2004 2005
Net Sales 1370 1810 2850 4450 6580 10840
Profit after Tax 49.2 64 70.3 114.1 197.8 385.5
Source: „ Pantaloon Retail India Limited Annual Reports, 2002-05.

Exhibit XII
Business Performance of Big Bazaar and Pantaloons (2004)
(In Rupees Million)
Profit Contribution
Sales Growth (yoy %) Sales Contribution
(%)
(%)
Big Bazaar 568 118 41 33
Pantaloons 502 23 36 67
Other 318 31 23
Source: „ Pantaloon Retail India Limited Annual Reports, 2004.

18
 Organized Retail Industry in
India
Exhibit XIII
Contribution of Business Sectors to RPG Group’s
Turnover

7% 2% 11%

RETAIL
16%
POWER
ENTERTAINMEN
T
TYRES
32%
TRANSMISSIO
N
TECHNOLOG
Y
SPECIALITIE
S
31%
1%

Source: http://www.rpgnet.com.

Exhibit XIV
Break-Up of Music World Store Formats (2003)

Location Destination Store Unplugged

Express
Chennai 2 43 5
Cochin 1 6 4
Bangalore 2 21 6
Hyderabad 3 36 3

Delhi 2 7 5
Chandigarh 1 - -
Kolkata 1 5 5
Pune 1 11 1
Siliguri 1 - -
Source: http://www.rpgnet.com.

19
 Organized Retail Industry in
India
Exhibit XV
Financial Performance of Trent Limited (2001-05)
(In Rupees Million)

Year ending March 31 2005 2004 2003 2002 2001

Net Income 2307.5 1520.2 1117.6 810.6 489.9
Net Profit 190.6 172 168.9 98.3 99.8
Compiled from Financial Report of Trent Limited (http://www.tata.com).

Exhibit XVI
Financial Performance of Titan Industries (2001-05)
(In Rupees Million)
Year ending March 31 2005 2004 2003 2002 2001
Net Income 10826.4 8974.9 7400.1 6688.5 6408.5
Net Profit 249.5 111.8 62.1 130.9 234.8
Compiled from Financial Report of Titan Industries (http://www.tata.com).

Exhibit XVII
Financial Performance of Shopper’s
Stop
(In Rupees Million)
Year ending March 31 2005 2004 2003 2002 2001

Gross Retail Sales 5112 4044 3030 2495 2194

Profit after Tax 190 120 106 1 -230
Compiled from Financial Report of Shopper s Stop (http://www.shoppersstop.com) .

20
 Organized Retail Industry in
India
Exhibit XVIII
Fact Steet about India

th
India is the 4 Largest economy in terms of Purchasing Power Parity after USA, China &
Japan
rd
India is touted to become the 3 largest economy in terms of GDP in next 5 years.
nd
It is the 2 fastest growing economy in the world.
India, in 2003-2004 grew at 8.2%

Among top 10 FDI destinations

Stable Government with 2 nd stage reforms in place

Growing Corporate Ethics (Labour laws, Child Labour regulations, environmental

protection lobby, intellectual and property rights, social responsibility).

Major tax reforms including implementation of VAT.

US $ 130 billion investment plans in infrastructure in next 5 years

2 nd most attractive developing market, ahead of China

Has the largest young population in the world- over 867 million people below 45 years of
age!
More English speaking people in India than in the whole of Europe
300 million odd middle class - the Real consumers - is catching the attention of the world,
and with over 600 million effective consumers by 2010, India will emerge as one of the
largest consumer markets of the world.
Source: „ India Retail Report 2005, www.imagesretail.com, 2005.

Exhibit XIX
Marketer’s Choice of Top 20 Small
Towns
Town
Town
1 Chandigarh 11 Patna
2 Jalandhar 12 Nashik

3 Thane 13 Vizag
4 Coimbatore 14 Rajkot
5 Madurai 15 Guwahati
6 Jodhpur 16 Mysore
7 Cochin 17 Meerut
8 Trivandrum 18 Gwalior
9 Agra 19 Kota

10 Vijayawada 20 Amritsar
Adapted from „Small Towns Big Business, Business Today, July 18, 2004 (Based on Synovate India s poll of 35
marketers across India).

21
 Organized Retail Industry in
India
Additional Readings and References:

1. “FDI In Retail Sector Soon: Sharad ” , www.sify.com, September 28, 2005.

Pawar
2. Andrew Ward, “ India's Chidambaram Says Budget Deficit May Grow This ”,
Year
www.bloomberg.com, September 21, 2005.
3. “More Malls To Swamp ”, www.rediff.com, September 17, 2005.
India
4. “ Expert Urge India to Lift Ban in ”, Economic
Place
September 16, 2005. Times,www.biz.yahoo.com,

5. “Trent buys Landmark for Rs 103 ”, Business Standard, August 31, 2005.
crore
6. “ Small Towns Big ” Business India, July 4-17, 2005.
Brands,
7. Wal-Mart Assault: India May Be Forced To Open Its Protected Retail Sector,
But
Wal-Mart For The First Time Will Face Real Communists In ”,
India
www.indiadaily.com, July 12, 2005.
8. Hiral Sheth, “ Entertaining Possibilities, ” Business India, June 20- July 3, 2005.
9. K Subramanian, “ The Retail Road to ” www.blonnet.com, June 20, 2005.
Nirvana,
10. Anu Saraf, “ The Great Mall Melted ” Business India, May 9-22, 2005.
Down,
11. “Wal-Mart to Visit India On Cusp Of Retail Shake- ” The Financial Express, May 06
Up,
2005.
12. Gouri Shukla, “ Who Will Win India's Retail ?,” www.rediff.com, May 03, 2005.
War
13. “Govt Plans 49% FDI Cap in ” The Economic Times, April 22, 2005.
Retail,
14. “FDI In Retail Must Be ” www.rediff.com, February 24, 2005.
Allowed,
15. “ Mall Mania, ” Business Today, January 30, 2005.
16. Mohan Guruswamy, “ FDI in Retailing — Short-changing the Kirana ?” ,
Store
www.blonnet.com, January 06, 2005.
17. “ India Retail Report 2005, Images – KSA Technopak ” www.imagesretail.com,
Study,
2005.
18. AT Kearney Report - The Global Retail Development 2005.
Index,
19. “ Quantum ” Business India, December 6-19, 2004.
Leap,
20. “CEO Speak- Interview with Arvind ” , www.indiainfoline.com, November 11
Singhal
2004.
21. Management Speak -- Interview with Raghu Pillai, MD, ”
FoodWorld,
www.indiainfoline.com, November 11, 2004.
22. “ Durables Fail To Make A Mark At Shopping ” The Economic Times, September
Malls,
02, 2004.
23. Money, The Rural ” Business India, August 30-September 12, 2004.
Way,
24. “ Acting on ” Business India, August 16-29, 2004.
Impulse,
25. Hemangi Balse, Reeba Zachariah, “ Reliance Plans to do a Wal-Mart in ”
www.rediff.com, July 30, 2004. India,

26. Brian Carvalho, “ Small Towns Big ” , Business Today, July 18, 2004
Business
27. “The Buying ” Business Today, July 04, 2004.
Game,

22
 Organized Retail Industry in
India
28. TR Vivek, “ Retail Giants' Shopping Bill to Hit US$ 10 www.rediff.com, July 01,
2004. billion,

29. Brian Carvalho, “ Job Mania, ” Business Today, March 14, 2004.
30. “Piramals Plan Tech Tie-Ups With Overseas Retail ” The Economic
Chains, 28, 2004.
February Times,

31. “ Piramals Chart Rs 100-Cr Retail ” The Economics Times, February 14, 2004.
Expansion,
32. “The Retail ” www.ibef.org, 2004.
Industry,
33. “Pantaloon Retail India ” www.indiainfoline.com, November 2003.
Limited,
34. “ Pantaloon Retail India Ltd: The Best Bet In ” www.indiainfoline.com, February
Retail,
25, 2002.
35. Kaushik Poddar, “ Pantaloon Retail India Ltd: The Best Bet In ”
Retail, 25, 2002.
www.indiainfoline.com, February
36. “Winds of Change Sweeping Through Retail y,” www.indiainfoline.com,
Industr 21, 2001.
September
37. The PC ” www.indiainfoline.com, September 19, 2001.
Market,
38. “Leader Speak-Interview With Urvi ” www.indiainfoline.com, June 02, 2001.
Piramal,
39. Dunne Patrick , Lusch F Robert, “ Retailing ,” 1999.
40. www.mahamaza.com
.
41. www.rpgnet.com.
42. www.tata.com
.
43. www.mywestside.com
.
44. www.titanworld.com.
45. www.tanishq.in.
46. www.pantaloon.com.
47. www.shoppersstop.com.
48. www.wikipedia.org.
49. www.vpsource.com.
50. www.etretailbiz.com.

23