Retail Formats

09 Apr 2010

India is in the throes of a retail revolution that is leading the New World Order and taking everyone by surprise. We endeavor to help our clients make the most of this tsunami that is striking our shores. The country’s dynamic retail landscape presents a grand opportunity to investors within the country and from across the globe, to use India as a strategic business and consumer hub. With the changing face of retail, the Indian consumer industry is in for radical growth. Let us begin with a primer on the various formats that retail outlets come in. A ‘Vibrant Economy’, India topped A T Kearney’s list of emerging markets for retail investments for three consecutive years and stood 2nd only behind Vietnam this year. The 2nd fastest growing economy in the world, the 3rd largest economy in terms of GDP in the next 5 years and the 4th largest economy in PPP terms after USA, China & Japan, India is rated among the top 10 FDI destinations. Over the last few years Indian retail has witnessed rapid transformation in many areas of the business by setting scalable and profitable retail models across categories. Indian consumers are rapidly evolving and accepting modern retail formats. There is strong emergence of India specific retail formats irrespective of the size. For example, hypermarkets, supermarkets or convenience stores that are emerging in India today are specifically designed for the Indian consumer. New and indigenised formats such as departmental stores, hypermarkets, supermarkets, specialty and convenience stores, and malls, multiplexes and fun zones are fast dotting the retail landscape. Following are the kinds of retail formats found in India:

Mom-and-pop stores

These are generally family-owned businesses catering to small sections of society. They are small, individually run and handled retail outlets.

Category killers

Small specialty stores have expanded to offer a range of categories. They have widened their vision in terms of the number of categories. They are called category killers as they specialize in select fields.

Department stores

These are the general merchandise retailers offering various kinds of quality products and services. These do not offer full service category products and some carry a selective product line. These stores have further categories, such as home and décor, clothing, groceries, toys, etc.

Malls

These are the largest form of retail formats. They provide an ideal shopping experience by providing a mix of all kinds of products and services, food and entertainment under one roof.

Specialty Stores

The retail chains, which deal in specific categories and provide deep assortment within the category in them are specialty stores.

Discount stores

These are the stores or factory outlets that provide discount on the MRP items. They focus on mass selling and reaching economies of scale or selling the stock left after the season is over.

Hypermarkets/ Supermarkets

These are generally large self-service outlets, offering a variety of categories with deep assortments. These stores contribute 30% of all food and grocery organized retail sales.

Convenience stores

They are comparatively smaller stores located near residential areas. They are open for an extended period of the day and have a limited variety of stock and convenience products. Prices are slightly higher due to the convenience given to the customers.

E-tailers

These are retailers that provide online facility of buying and selling products and services via Internet. They provide a picture and description of the product. A lot of such retailers are booming in the industry, as this method provides convenience and a wide variety for customer. But it does not provide a feel of the product and is sometimes not authentic.

Vending

This kind of retailing is making incursions into the industry. Smaller products such as beverages, snacks are some the items that can be bought through vending machines. At present, it is not very common in India.

Wedding Malls

A box-office phenomenon in India, wedding malls stock everything from clothes, accessories, jewellery to the paraphernalia that builds the grand picture that is the Great Indian Wedding.

Khadi Plazas

Khadi Plaza were launched by the Khadi and Village Industries Commission, a Government of India enterprise which occupies a unique position in India’s rural economy by ontributing towards economic strength and by utilising untapped resource and significant manpower. Rural and tribal handicrafts are packaged to woo the the attention of urban lifestyles and attitudes.

Village Malls

Just like their urban counterparts, they provide multiple services and outlets in a single location. Spearheaded by the Gujarat government, village malls grow on the age old concept of the government fair price shop revamped to cater to the greater needs of the people.

Excerpts from ‘India Retail Report 2009 by IMAGES F&R Research’ and ‘NaukriHub’

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2 Responses to “Retail Formats”

hoodia says:
April 10, 2010 at 10:06 am

Just wanted to tell you that your post is not showing up properly on the BlackBerry Browser. Anyway, I’m now on the RSS feed on my laptop, so it shows!
Emory Legeyt says:
March 5, 2011 at 3:19 pm

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