Indian Retail Sector Research Articles

Emerging Trends in Retail Marketing and Threats from MNCs

“Retail marketing” is the sale of goods in relatively smaller quantities to the public. Retail is the sunshine industry. Perhaps sometimes it is in shade, but definitely the fact is that the future is bright. As the Indian economy has entered a new growth phase, the retail industry is witnessing unprecedented growth. Changing life style and rising disposable incomes are driving the growth of the Indian retail sector. The Indian retail sector is highly fragmented in nature and has the highest density in the world. The traditional retail stores are undergoing a dynamic change as the new formats and channels are emerging rapidly. Shopping is no longer seen as a humdrum chore, but it is now a much more thrilling and appealing prospect. Shopping malls, self-service stores and services are all emerging quickly to fulfill this need for an enjoyable experience. But, these new experiences bring some threats to the local general or ‘kirana’ stores. India has around 12 million neighbourhood stores (also called kirana stores) Retail today is the combination of revolution and evolution. The key trends in modem day retailing will be urbanisation, changing family structures and demographic changes, and the real growth is taking place in small and medium towns. In the context of the sweeping changes taking place in India in organised retail today, growth is not the issue. The issue is how to manage the growth.” Calling for India-specific retail models, we are at a stage where we have to by-pass many intermediate stages which pose bigger challenges for us. However, the ubiquitous Indian kiranawallah, big or small, would remain till at least 2015, after which he too would need to change his business model. The likely impact on smaller retailers around the country because of the emerging hypermarkets is, some 5 lakh small retailers could be hit. But, because of growing disposable incomes among the burgeoning Indian middle class, there would be no serious threat as such till at least 2015. According to a survey, out of 12 million retail outlets, 78 per cent are owned by small family businesses. In fact, retail is the second largest employer in India after agriculture. It is true that in the early 2000s retail expanded at an average rate of seven per cent and it is poised for bigger growth at an expected rate of 10 per cent. Surprisingly, only 2 to 3 per cent is organised retail. Retail outlets have various versions like one store, chain of stores, outlets run by co-operatives, franchisee outlets and the most recent form of malls.

Data Warehousing and Business Intelligence at Shoppers' Stop: a case study

In today's competitive environment, analysing data to predict market trends and to improve organisational performance is an essential business activity. As businesses continue to use Information Technology (IT) for a growing number of functions, the firms face the challenge of processing and analysing huge amounts of data and turning them into profits. In response, the retail industry in particular is trying to revisit and upgrade its business strategies by introducing Business Intelligence (BI) and Data Warehousing (DW). DW is becoming necessary nowadays for the retail sector in India and is widely accepted for state-of-the-art decision support. This paper analyses the case study of current practices in the area of BI and DW at the retail giant Shoppers' Stop in India. The paper offers the case handling, DW and BI architecture of Shoppers' Stop by focusing on and identifying the business challenges to maintain its vision of becoming a global retailer in India.

FDI in Indian Retail Industry

India is one of the largest emerging markets, with a population of over one billion. India is one of the largest economies in the world in terms of purchasing power and has a strong middle class base of 300 million.Around 70 per cent of the total households in India (188 million) reside in the rural areas, where mostly traditional retail outlets, commonly called kirana stores exist. These are unorganized, operated by single person and runs on the basis of consumer familiarity with the owner. However, recently organized retailing has become more popular in big cities in India and most of the metropolitan cities and other big cities are flooded by modern organized retail stores. Many semi-urban areas also witnesses entry of such organized retail outlets. Till now, entry of foreign retailers was restricted in Indian retail market because of the ban on Foreign Direct Investment in Indian Retail Sector. But recently, as government has changed its policy and the cabinet has allowed 51 per cent FDI in single-brand retail, the prospects of foreign players entering India became high.

The Case for FDI in the Retail Sector in India

Services sector has emerged as the largest and fastest-growing sector in the world economy in the last two decades, providing more than 60 per cent of global output and, in many countries, an even larger share of employment. Not only has the services sector grown in terms of its share in global output and employment, its share in total trade has also grown rapidly in this period. Along with this, we find that global FDI is also shifting away from manufacturing towards services sector. Now services trade grew at the same rate as goods trade in the 1990s, i.e., about 6.5 per cent. In the FDI mode, share of services investment in the global annual flow of FDI has been over 50% in the late 1990s. Consequently, the importance of service activities in the global stock of FDI has risen to a share of about 43 per cent. According to the WTO, the value of commercial services has grown sevenfold as compared to fivefold increase in trade in goods during the period 1980 to 1999. Accordingly, we find that the share of services in GDP has increased steadily in both developed as well as developing countries in the last two decades. This study tries to build a case for, FDI in the retail sector in India by evaluating current FDI regime and looks at the Market size, market potential of the retail in the future and how this industry can grow at a very fast rate provided FDI is opened up.

Measuring Retail Service Quality: An Empirical Assessment of the Instrument

Retailing in India is growing at the rate of about 18-20 per cent per annum. As part of its strategy to gradually open it up to foreign competition, the government is also in the process of increasing foreign direct investment in the retail sector. At the same time, the urban consumer is becoming more discerning and demanding as far as the lifestyle is concerned. Urban Indian household income and purchasing power are also on the rise. Under such circumstances, the success of organized retailing in India mainly depends on delivery of services through quality improvements. In service organizations, customer-perceived service quality is considered as one of the key determinants of business performance. So far, in the Indian context, there is a dearth of tested instruments which can measure customer-perceived service quality of a retail store. At the same time, instruments developed in other countries have not been tested for their applicability in the Indian retail industry. It is in this context that this paper reports on the application of Dabholkar, Thorpe and Rentz's (1996) retail service quality scale in measuring the gap between the customers' expectations and their perceptions about the service quality of retail stores in India. Statistical analyses were performed to test the dimensionality of service quality and to examine the reliability of the scale. Finally, the analysis of the gap scores was used to suggest relevant improvements in the retail store service quality. The results indicate the following: Although the instrument was found to be quite reliable, the gap scores did not merge into five dimensions of service quality as proposed by the scale developers; rather, the gap scores roughly merged into nine dimensions. The instrument and the five dimensions of service quality may need considerable restructuring. A few statements which showed considerable reliability problems should be restated or substituted by more relevant statements. The instrument may not be applicable to the retail sector in India without further restructuring. Further research is necessary to understand retail store service quality in India. The analysis of the gap scores indicates that the highest perceived service gap lies in the policies of the retail stores, particularly, parking facilities provided by them. Apart from this, all other statements also show a negative gap implying the need for considerable improvements in retail service quality. Therefore, as organized retailing develops in India, retail stores in India will have to improve the quality of their services significantly in order to compete successfully in the global marketplace.