MANAGERIAL AND POLICY PERSPECTIVES IN INDIA
Abstract – The composition of the retail sector in a country has immense power on company marketing planning or marketing practices. The retail division in India has entered a very significant point. New stores have appeared in urban areas, but most retail sales are in traditional retail formats. Marketing scholars, experts and policymakers are very interested in developing modern retailing. This paper analyzes retail trends in the country. A market literature review is being undertaken in-country or several recently developed nations. Factors that promote modernization will be mentioned, and inevitable consequences for management and policy will be extracted.
1 INTRODUCTION
Retailing is characterized as market practices involved in the sale for personal, household or family use of products and services to customers (Berman and Evans, 2002). Even though retail has been approximately for millennia, there have been many changes in the retail division, particularly in the developed countries, in the 20th century. New models have been developed including department stores, grocery shops, superstores, expediency stores, fast food chains, chain stores, wholesale retailers or hypermarkets. Retailers have become more organized, and chains at the expense of independent businesses are growing. The sequences use advanced IT or communication to control their activity and contain expanded exponentially, even in their nations, such as the United States, the United Kingdom, France, Germany and the Netherlands. In 2002, Wal-Mart Stores, the American retailer, was ranked the most significant selling company on Fortune magazine’s list of 500 world’s most influential businesses. Modern retail formats now expand beyond the developed countries and in NICs and developing countries are becoming more relevant.
2 MODERNIZATION IN INDIAN RETAILING
In recent years, the advent of new models or the growth of modern retail in-country involved interest. In the past three years, the Indian business press has focused on a variety of papers and news reports concerning new formats (Shukla 2002; Anand and Rajshekhar 2002; Bhattacharjee 2002). KSA Technopak, the consultancy company, arranged business meetings and summits in significant metros that were attended by both national and multinational retailers as well as by manufacturers. Venugopal (2001) addressed the market research organization ORG MARG’s census surveys of retail stores in the 1990s. The census released details and forecasts for a variety of Indian retail requirements including the number and size of locations and the growth of outlets in developed and developing countries over time, respectively. Because of these surveys and events, much information on what is happening in Indian retail is available. Even so, the Indian retail sector received little coverage using scientific studies with the relation of a few papers and also some case studies in scientific journals.
The goal of this study is to learn about the factors that affect the development of new systems in Indian retailing or to focus on the consequences of management processes and policies. The paper consists of three parts. The first segment of the scholarly journal reviews papers on Indian retailing to classify existing effects on Indian retailing. The second segment consists of a summary of the literature on modern retail growth in a few recently developed countries to investigate whether retail development trends in those countries could occur in India. The third segment analyzes the transformation procedure in the Indian retail market, forecasts the possible trajectory of future retail growth in government, furthermore has consequences for performing or approach.
3 OVERVIEW OF INDIAN RETAIL SECTOR
Indian supermarkets are enduring an evolutionary cycle and are about to face a drastic transition. The retail industry employs more than 9% of the national population but is distinguished by a high level of heterogeneity by over five million outlets, 97% deficient and less than 50 m2 (Aggarwal, 2000). Between 1978 and 1996, the retail universe doubled more than, and the number of outlets per 1000 people in the country rose from 3.8 in 1979 to 5.7 in 1997. The store density rose from 4 to 1000 persons in 1978 in the urban sector alone to 7.7 per 1000 in 1997 (Venugopal, 2002). Due to its small size, Indian retailers contain little negotiating power with suppliers and only have only several marketing channels, unlike retailers in developed countries (Sarma, 2001).
The turn store or “Kirana” shop is a core item of India’s retail since the housewife is not able to go far for regular transactions. Sinha et al. (2002) performed an observational analysis to determine factors that affected the option of a store by shoppers. Even though expediency and products were the two fundamental causes to pick a supermarket, the quality criterion differed in and product category. Consumers were indicated as the most critical factor for preferring food products, fruits, chemists and leisure products. At the same time, commodities were specified as the most significant element in durables, books or clothing.
The old formats, such as hawkers, grocery shops and paan stores, co-exist in new forms, such as superstores or other distribution outlets such as multi-level marketing and teleshopping. New models include shops such as Akbarallys, supermarkets and Grocery World, franchise stores such as Van Heusen and Lee, discount shops such as Subhiksha, shop-in-shops, factory outlets and retailers (Nathan, 2002). Modern stores strive to be larger and have more stock facilities with training and self-service. New formats do tend to have higher volume, product turnover and margin sales, but lower net margin levels than traditional designs (Radhakrishnan, 2003). Retail technologies transformation will likely occur faster in fields such as dry food, electronics, clothing, books and music. Any change and adjustment occur in fresh fruit, women’s clothes, fast food and personal care goods (Fernandes et al., 2001).
In recent years, shopping chains have been expanding slowly in many forms, such as supermarkets, convenience stores, malls and discount shops. Availability of quality products at low prices, increased retail performance, easiness to shop and view, and mixing of shopping and entertainment are reasons to promote chain distribution and entry into shops of developed houses such as Goenkas, Rahejas, Piramals, or Tatas (Ramaswamy and Namakumari, 2003).
3.1 Retail development in NICs
Thailand is one of the nations with a rapidly developing economy in recent years. There is a tradition in Thailand of self-owned shops called shophouses. This outlet was operated by families with a store on the ground floor and a private housing room (Feeny et al., 1996). Families managed these outlets. The first department store in Thailand opened in 1956 and the first in 1967. The first brand-name grocery stores opened in the mid-80s, but they did not survive as well. Thai retail patterns and investments were already associated with traditional shophouses, and disposable incomes were not adequately essential to take off. However, economic prosperity, growing retail spending and the growing westernization of lifestyles have resulted in the rapid development of convenience stores since the 1990s. The 7-11 master franchise in Thailand is CP, a big Thai firm, whose reputation, power and expertise are crucial to Thailand’s success from 7-11. In 1989, the Dutch company Makro launched discounts and supermarkets in a joint venture with CP and became a big hit. The existence of the retail system was nevertheless small because of the entrenched shopping patterns of fresh items. Retailers in convenience stores make the bulk of purchases in this style. Speciality shops, especially killers of the group, were only established in Thailand in the mid-1990s. The growth of the new retail market in Greece has been studied by Bennison and Boutsouki (1995). While not a traditional NIC, Greek shops were run by small independent and controlled shops and new shops appeared only after 1991 in Greece in reaction to the need for harmonization of regulations for a single European economy. Greek retail was intensely concentrated 17 outlets per 1000 people between 1951-1990 compared with 5.9 for Germany and 6.1 for the UK. During this time, the number of outlets more than doubled, as scarce options for jobs and low entrance costs rendered retail attractive. In the 1990s, Greek stores saw drastic shifts. A new store was opened in 1991. The Greek businesses were eventually linked to big cash and shipping shops, such as Makro, regional Department Stores, such as Marks and Spencers, supermarkets and multinationals such as McDonald’s, Bennetton, Pizza Hut and the Body Shop.
4 FACTORS UNDERLYING EVOLUTION OF MODERN RETAIL IN INDIA
The previous evaluations provide a few other information that allows the building of the retail growth analysis framework in India. The powerful forces for growth can usually be described in Table 1 below, and a description of each of the driving powers follows.
Table 1 Factors underlying modernization in retailing
4.1 Economic Development
For the growth of the Indian retail industry, the development of the Indian economy is essential. The Thailand example indicates that the economic boom in Thailand provided the catalyst for retail transformation (Feeny et al., 1997).
Output increases the disposable income of people and reduces the proportion of spending on discretionary non-food products. Economic growth also first use families to be future buyers in modern retail and to increasing individual transportation ownership by shoppers, which in turn increased their ability to travel long distances to store in new format stores. Economic development will also generate income for those who will generally enter the retail sector in sectors such as hawking, roadside sale and other related inexpensive entries. Rapid economic growth can also affect the foreign retailers’ views on market opportunities and attractiveness of investment in a nation. However, a high level of monetary inflation does not lead to market modernization. In Brazil, actual retail development was seen only after economic recovery and inflation management (Alexander and Silva, 2002). Technology also affects the regions and cities where new models are initially developed. Modern models initially emerged in the critical cities in the Greek, Thai and Brazilian examples. This is the case in India, and new models appeared for the first time in the subways like Delhi, Mumbai, Chennai and mega-metro systems such as Bangalore and Hyderabad since the spending power in these cities was comparatively higher.
4.2 Improvements in civic situation
In terms of the civic condition, considerations such as health and protection in the city and the numerous local laws regulating the operation, location and operating of shops and public transportation are included. A clean and protected atmosphere would facilitate shopping expeditions and the development of 24-hour grocery stores and the creation of retail areas within the city. Adequate parking or excellent public transit would allow customers to be more flexible in visiting a supermarket. The town or state policies on opening or closing dates, rent control laws, sufficient electric power or zoning requirements may affect the time needed for starting up a new store, as well as the expense and feasibility of storage operations. Many of the above mentioned civic considerations will depend on the area’s economic growth and administrative policies. The implications of the civic situation may affect the option of towns, states and regions where investments in industrialization are made.
5 CONCLUSIONS
The Indian retail division is predominantly conventional, but shops are evolving in a modern arrangement. Regulated retailers make a relatively limited contribution to India’s share of retail revenue. It can be inferred, based on the study of retail trends in nations like Thailand, Brazil, and Greece and a few knowledge in-country, that a few significant factors would affect the modernization of retail industry in India. These include industrial development; developments in the community situation; changes in customer preferences, mentality and behaviour; changes in administration procedure; greater than before retail spending and increased retail control. New retail technology would have a variety of impacts on management experience in manufacturing organizations. To meet the demands of healthy retailers, businesses need to evaluate proactively and their distribution processes, business strategies, logistical practices and pricing structures.