Retail in India -Revolution or Evolution

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Executive Summary

Retailing in India came with evolutionary patterns from Kirana store to Super market. This sector was un-organized in the initial stage, and after that it carried forward by the textiles industries through the dealer model. Now it is growing as supermarket and hypermarket. The main drivers of the retail evolution in India are buying behavior of the customer, increase in disposable income of middle class, infrastructure development and changing customer choice. The target segments of retailers are the younger middle class earners which belong to more than 20% of total population. The growth in retail sector also comes through innovative ideas. As retailers are providing the innovative buying options at different store like as cash & Carry, lowest price day (Sabse Sasta din) which help to increase the customer base. Initially organize retail was involve in the apparels and footwear. Now retail has included the food chains, book & CD store (landmark) and electronics (CROMA store a Tata retail chain). These all changes occurred at a passage of time so; it is an evolution rather than revolution. This paper help to give information about the journey of retail in India, different formats of retails chains, drivers of the retail industry, and finally the barrier in the growth of Indian retail.

Retail in India: Revolution or Evolution

Evolution of Retail in India:

The journey of retail started long back through the Kirana store in India. This is first effort by local shopkeeper. The shopping centre concept comes into the existence in year 1869, with Mumbai Crawford market and Kolkata’s New Market in year1874. The underground shopping complex Palika Bazaar in New Delhi was established in the late 1970s and mini malls on the Banglore’s Brigade Road come into existence in 1980s.

Government of India entered into the rural India by franchisees called Khadi Bhandar. These stores serve as outlets for products made by village industry i.e. Khadi, matchsticks, incense sticks, decorative items made from wood and earth, ahinsak (non-violent) honey, ahinsak leather items etc.

The industries came in the retailing in 1980s through dealer network. In 1980s, the big group of textile industry i.e. Raymond, S.Kumar, Bombay dyeing and Grasim came with this concept of retailing. In the manufacturing sector, the pioneers were DCM group & Bata. Titan came with an organized retail concept and establishes number of showroom for premium watches.

All the above effort for retailing came by the manufacturer. But the pure retailer approach came in the existence in 1999s with the establishment of “Ansal's Plaza” in Delhi and Crossroads in Mumbai. After the 2003, many other organizations either planning to come into the retail market through the retail store or initiated the establishment work. Currently some popular groups which are operating the organized retail in different formats are following.

Table-1: India’s leading retailers and their format
RetailerFormat
RPG RetailHyper market(Spencer's),Specialty Store(Health & Glow) Piramal'sDiscount store(Trumart)
Pantaloon RetailSuper Market(Food Bazaar), Hyper market(Big bazaar),Mall(Central) K Raheja GroupSupermarket(TBA), Hyber market(TBA)
Tata/TrentHyper market(star Bazaar India)
Landmark GroupHyper market(TBA)
Reliance GroupSuper market
OthersDiscount store(Subhiksha, Margin free, Apna Bazaar),Super market(Nilgiri's), Specialty Electronics(Vivek's, Vijay sales)

From the above long journey shows that organized retailing in India came through a long path and many changes. It means it is an evolution rather than sudden, revolutionary change.

Drivers of Evolution:
Accelerating Household Income in India:

After the 1991, the income of the educated middle class houses is increasing at the rate of 3.6%. It is expected that this rate will be 5.3% in future. The rate of growth in the...
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