Scope of the Indian Retail Market

8/8/2019 Scope of the Indian Retail Market

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RETAILING: Retailing is the business activity that involves sellingproducts/services to customers for their non-commercial, individual or familyuse. Normally, retailing is the final stage of the distribution

Retailer - A retail sales company or salesman

A Brief History of Retailing

At some time during the beginnings of civilization, groups began to trade with oneanother. How or why this occurred is not known, but various explanations have beengiven. Let's take a look at the history of retail.

B ut when and how did it all begin? The answer is probably to do withsurpluses. As we got better at cultivating the land, some people found thateven after feeding their families and animals and putting food into storage,there was some left over. Rather than waste this surplus, it was traded forother surpluses or perhaps tools or other objects.

Those that had enough land and were particularly good at producing foodfrom it would have realized that they were on to a good thing by deliberatelyproducing surpluses. Eventually the informal trade in goods would havebecome more organized, with central markets being formed where theseproducers could get together on a regular basis in order to exchange goods.

Of course, trading goods for other goods is all very well until you have justabout everything you are likely to ever need, or the product you want hasyet to be produced. In order to get around this, people started to owe goodsto other people. Early forms of credit may have just been verbalagreements. As time passed, some traders and producers decided to keep arecord of what was owed. One way this was done was by the debtor leavingsome collateral with the creditor - some object or an animal that was held bythe creditor until the debt was paid. This was OK until the debtor needed thetool or animal in order to produce the very goods that were owed. Analternative way of denoting credit was to use a symbolic object, such assmall animal. Since small animals are not very portable, it became morenormal to use small inanimate objects such as pebbles. Over time these


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small object became more decorated and valued and eventually metal coinsand paper notes became more and more familiar. So early trading gave riseto money.

As time passed, some producers would have found they were better at

selling the goods than growing them (or perhaps enjoyed it more!). Otherspreferred to stick to growing. So there was a gradual separation of theproducers and the traders.

And it was not just food that was sold. Tools, trinkets, jewelry, cups, platesand many other objects would have been traded as well.

The informal markets would, over time, become more formal and morepermanent. So shops began. Other traders would prefer to travel aroundselling their goods. These became known as peddlers. Selling from a regularmarket, from a permanent shop or peddling goods are known collectively asretailing.

Scope of the Indian Retail Market

The scope of the Indian retail market is immense for this sector is poisedfor the highest growth in the next 5 years. The India retailindustry contributes 10% of the countries GDP and its current growthrate is 8.5%. In the Indian retail market the scope for growth can be seen

from the fact that it is expected to rise to US$ 608.9 billion in 2009 fromUS$ 394 billion in 2005.

The organized retailing sector in India is only 3% and is expected torise to 25- 30% by the year 2010. There are under construction atpresent around 325 departmental stores, 300 new malls, and 1500supermarkets. This proves that there is a tremendous scope for growth inthe Indian retail market.

The growth of scope in the Indian retail market is mainly due to thechange in the consumers behavior. For the new generation havepreference towards luxury commodities which have been due to thestrong increase in income, changing lifestyle, and demographic patternswhich are favorable.

The scope of the Indian retail market have been seen by many retailgiants and thats the reason that many new players are entering the Indiaretail industry. The major Indian retailers are:


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y Pantaloons Retail India Ltdy Shoppers Stopy B ata India Ltdy M usic World Entertainment Ltd

Judging the scope for growth in the India retail industry many global retailgiants are also entering the Indian retail market. They are :

y Tescoy M etro AGy Wal- M art

The scope for growth in the Indian retail market is seen mainly inthe following cities:

y M umbaiy Delhiy Puney Ahmedabady B angalorey H yderabady Kolkatay C hennai

The scope of the Indian retail market is very vast. And for it to reach its

full potential the government and the Indian retailers will have to make adetermined effort.

Advantages/Disadvantages

Advantages

y Convenient

Convenience includes the overall ease of finding a pr oduct, time spenton sh opping, minimizati on of overall sh opp oing e ffort (Schaupp &Belanger, 2005). Online sh opping all ow s consumers t o shop at theconvenience of their ow n h ome, and t o save traveling time t o retailstores and spend their time on other imp ortant tasks and h obb ies.Researchers iden fity convenience as a ' fundamental objective' related t o


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online sh opping (Schaupp & Belanger, 2005). This is relevant t o 72% of online sh oppers' claim that they wo uld rather sur f online than g o to retail st ore to attain in formati on about a pr oduct (L okken et al., 2003).According t o a study, 72% of online sh oppers ch ose convenience overprivacy (Bhatnagar, Misra, & Ra o, 2000). In additi on to ease of findingpr oducts online and sh opping time reducti on, consumers can sh opw ithout time limitati on w ith 24-hr access at their c onvenience becausethe W orld Wide We b never cl osees. Lokken menti ons 24-hr access as abene ficial characteristic of online sh opping (L okken et al., 2003). Als o,consumers can exchange in formati on online thr ough chatting anddiscussi on forums t o help them make w ise consumer decisi ons.

y N o need for vend ors and n o pressure t o buyOnline sh opping bene fits bo th the s ociety as a whole and individuals.The s ociety can save human res ources when c onsumers help themselvesby brow sing freely online instead of asking for assistance from vend ors.In additi on, consumers are freed from the pressure t o buy from thevend ors and can spend m ore time t o make w ise purchase decisi ons. Butit is im orpant that We b sites have g ood pr oduct descripti ons because itis one of the signi ficant c onditi on that satis fy consumers (Limayem, M.,Khali fa, M., & Frini, A., 2000).

y "Infinite shel fspace " availa bleConsumers desire a variety of pr oducts because they l ook for the rightpr oduct that w ill fully satis fy them. There is in finite variety of pr oductsavaila ble online because online sh opping all ow s consumers t o brow sethr ough pr oducts that are made all ar ound the wo rld w ithoutgeographical boundaries.

y Able to compare pr oduct price and features

With the online t oo ls that ena ble pr oduct c omparis on, consumers cancompare pr oduct prices and features t o make a better decisi on w ith lesseffort. M ore details are included in s oluti onssecti on.


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Disadvantages/ Concerns

y En joyment of retail sh opping l ostMany en joy sh opping w ith others and it is often a g ood way to make

social connecti ons. When sh opping independently online, theen joyment is l ost.

y Privacy and security issuesPrivacy is the num ber one reas on that n on-online sh oppers d o not sh oponline. Alm ost 95% of We b users have declined t o pr ovide pers onalinformati on to We b sites at one time or an other when asked (H offman,N ovak, & Peralta, 1999). An other recent study has found that privacywas the t op concern of cust omers while security ranked bo ttom

(Schaupp & Belanger, 2005). This pr oves that many d o not trust theprivay of the Internet and are c oncerned w ith their credit card fauds,un wanted s olicitati on, and use of their in formati on for other purp oses.Security of We b sites is n ot the t op concern because many sh op on We b sites that they trust s o that other factors appear t o be more imp ortantthan security.

y Access t o the Internet and c omputer necessaryBecause one needs m oney t o buy a c omputer and t o have internet

connecti on, online sh opping seems t o be limited pe ople of reas ona bleam ount of income. Als o, since it is harder t o learn c omputer at an olderage, the elderly pe ople tend sh op at traditi onal retail st ores.

y Product categ ory riskProduct categ ory risk is related t o functi onal pr oducts such as apparel,per fume, and electr onics, that have functi ons that cann ot fully beexpeirenced online. Online sh opper are wo rried that the pr oducts w illnot be what they have expected by vie w ing online. This is a cleardisadvantage of onlins sh opping because it sh ow s that "[t]he likelih oodof purchasing on the Internet decreases w ith increases in pr oduct risk " (Bhatnagar, Misra, & Ra o, 20000, p. 100). Apparels in particular hadnegative rating in online sh opping because of it is di fficult t o feel andsee the texture of color online that is inc ompara ble to going t o a retailstore, even w ith magni fying t oo ls online. Als o, one cann ot try on


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clothing before buying it online, s o it wo uld be very inc onvenient i f thesize did n ot fit the pers on and he/she had t o return it.

y Too many ch oicesAlth ough having access t o a very large num ber of pr oducts is highlydesira ble, consumers have limited c ognitive res ources and may simplybe una ble to pr ocess the p otentially vast am ounts of informati on aboutthese alternatives (Hau bl & Tri fts, 2000). Online st ores need t o pr ovidethe variety in an organized way that w ill facilitate sh opping online.

Scope of the Indian Retail Market

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