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    Institute of Professional Education and Research: Project of "Business Economics" Topic: - The Indian Retail Sector

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    - Production costs increased significantly due to rises in raw material and labor costs, forcing retailers to raise prices of goods like trousers, pants, and clothes by 100-200% over the last few years. - Higher prices reduced consumer demand and purchasing volumes in the retail sector. As goods became less affordable, consumers bought fewer items. - Volatile commodity markets and speculation contributed to dramatic price swings that created economic instability for both businesses and consumers worldwide. Spikes in global goods prices had widespread political and social impacts.

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    Institute of Professional Education and Research: Project of "Business Economics" Topic: - The Indian Retail Sector

    Uploaded by

    rahu01
    52 views14 pages
    - Production costs increased significantly due to rises in raw material and labor costs, forcing retailers to raise prices of goods like trousers, pants, and clothes by 100-200% over the last few years. - Higher prices reduced consumer demand and purchasing volumes in the retail sector. As goods became less affordable, consumers bought fewer items. - Volatile commodity markets and speculation contributed to dramatic price swings that created economic instability for both businesses and consumers worldwide. Spikes in global goods prices had widespread political and social impacts.

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    - Production costs increased significantly due to rises in raw material and labor costs, forcing retailers to raise prices of goods like trousers, pants, and clothes by 100-200% over the last few years. - Higher prices reduced consumer demand and purchasing volumes in the retail sector. As goods became less affordable, consumers bought fewer items. - Volatile commodity markets and speculation contributed to dramatic price swings that created economic instability for both businesses and consumers worldwide. Spikes in global goods prices had widespread political and social impacts.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    52 views14 pages

    Institute of Professional Education and Research: Project of "Business Economics" Topic: - The Indian Retail Sector

    Uploaded by

    rahu01
    - Production costs increased significantly due to rises in raw material and labor costs, forcing retailers to raise prices of goods like trousers, pants, and clothes by 100-200% over the last few years. - Higher prices reduced consumer demand and purchasing volumes in the retail sector. As goods became less affordable, consumers bought fewer items. - Volatile commodity markets and speculation contributed to dramatic price swings that created economic instability for both businesses and consumers worldwide. Spikes in global goods prices had widespread political and social impacts.

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    of 14

    INSTITUTE OF PROFESSIONAL

    EDUCATION AND RESEARCH

    Project of “Business Economics”

    Topic: -

    The Indian Retail Sector

    SUBMITTED TO:- SUBMITTED BY:-


    ARVIND
    WARKE

    DR. RESHAM CHOPRA


    ACKNOWLEDGMENT

    This assignment is done with the help and superb guidance


    of DR. RESHAM CHOPRA And we would like to give
    thanks our department who has given us this opportunity. to
    reveal our theoretical knowledge in real life situation.

    We would like to give thanks to my family member who


    gives a proper support in term of money and my friends
    also.

    TABLE OF CONTENTS
    CHAPTER I: - Introduction
    • Introduction of Retail Sector
    • Retailing formats in India
    • Industry Evolution

    CHAPTER II: - No. Of Players, (Major Retailers)

    CHAPTER III: - Production /Supply pattern of product


    • Hangzhou Buxing Dress Company

    CHAPTER IV: -Price variations of the product.

    CHAPTER V: - Causes and effects of variations


    in price and volume of goods

    CHAPTER IV: - Biblography

    Introduction of Retail Sector


    India has the highest shop density in the world and the
    present retail market in India is estimated to be US$ 200 billion of
    which only 3% (around US$ 64 billion) is in the organized Sector.

    This organized retail sector is poised for a take off. India is


    ranked second in the global retail development index out of 30 by
    AT Kearney.

    The comparative penetration of organized retail


    in India.

    With the organized retail segment growing at the rate of 25-


    30 per cent per annum, revenues from the sector are expected to
    triple from the current US$ 7.7 billion to US$ 24 billion by 2010.
    The share of modern retail is likely to grow from its current 3 per
    cent to 15-20 percent over the next decade. 85 per cent of
    organized retailing is taking place in India’s urban areas while 66
    per cent of it taking place in India’s 6 main cities alone.

    The growth is much faster in south India than in northern


    states. The total retail market in south India is $94 billio and of this
    organized retail is $8.5 billion. In southern part of India the
    organized retail market grow this estimated as 35 per cent per
    annum.

    In Chennai the growth rate is 12 percent while in Hyderabad


    it is 7 percent and in Kerala it is 3-4 percent per annum. As per
    Technopark study the sales in the organized sector forfood,
    beverage and tobacco is $195

    Retailing formats in India


     Malls:
    The largest form of organized retailing today. Located mainly
    in metro cities, in proximity to urban outskirts. Ranges from
    60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal
    shopping experience with an amalgamation of product, service and
    entertainment, all under a common roof.Examples include
    Shoppers Stop, Piramyd, Pantaloon.

     Specialty Stores:
    Chains such as the Bangalore based Kids Kemp, the Mumbai
    books retailer Crossword, RPG's Music World and the Times
    Group's music chain Planet M, are focusing on specific market
    segments and have established themselves strongly in their sectors.

     Discount Stores:
    As the name suggests, discount stores or factory outlets, offer
    discounts on the MRP through selling in bulk reaching economies
    of scale or excess stock left over at the season. The product
    category can range from a variety of perishable/ non perishable
    goods

     Department Stores:
    Large stores ranging from 20000-50000 sq. ft, catering to a
    variety of consumer needs. Further classified into localized
    departments such as clothing, toys, home, groceries, etc.

     Department Stores:
    Departmental Stores are expected to take over the apparel
    business from exclusive brand showrooms. Among these, the
    biggest success is K Raheja's Shoppers Stop, which started in
    Mumbai and now has more than seven large stores (over 30,000
    sq. ft) across India and even has its own in store brand for clothes
    called Stop!.

     Hypermarts/Supermarkets:
    Large self service outlets, catering to varied shopper needs
    are termed as Supermarkets. These are located in or near
    residential high streets. These stores today contribute to 30% of all
    food & grocery organized retail sales. Super Markets can further
    be classified in to mini supermarkets typically 1,000 sq ft to 2,000
    sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000
    sq ft. having a strong focus on food & grocery and personal sales.

     Convenience Stores:
    These are relatively small stores 400-2,000 sq. feet located
    near residential areas. They stock a limited range of high-turnover
    convenience products and are usually open for extended periods
    during the day, seven days a week. Prices are slightly higher due to
    the convenience premium.

     MBO’s :
    Multi Brand outlets, also known as Category Killers, offer
    several brands across a single product category. These usually do
    well in busy market places and Metros.

    Industry Evolution
     Traditionally retailing in India can be traced to
    – The emergence of the neighborhood ‘Kirana’ stores
    catering to the convenience of the consumers
    – Era of government support for rural retail: Indigenous
    franchise model of store chains run by Khadi & Village
    Industries Commission

     1980s experienced slow change as India began to open up


    economy.

     Textiles sector with companies like Bombay Dyeing,


    Raymond's, S Kumar's and Grasim first saw the emergence of
    retail chains
     Later Titan successfully created an organized retailing concept
    and established a series of showrooms for its premium watches
     The latter half of the 1990s saw a fresh wave of entrants with a
    shift from Manufactures to Pure Retailers.
     For e.g. Food World, Subhiksha and Nilgiris in food and
    FMCG; Planet M and Music World in music; Crossword and
    Fountainhead in books.
     Post 1995 onwards saw an emergence of shopping centers,
    – mainly in urban areas, with facilities like car parking
    – targeted to provide a complete destination experience for
    all segments of society
     Emergence of hyper and super markets trying to provide
    customer with 3 V’s - Value, Variety and Volume
     Expanding target consumer segment: The Sachet revolution -
    example of reaching to the bottom of the pyramid.
     At year end of 2000 the size of the Indian organized retail
    industry is estimated at Rs. 13,000 crore
    No. Of Players
    (Major Retailers)
     India’s top retailers are largely lifestyle, clothing and apparel
    stores
     This is followed by grocery stores
     Following the past trends and business models in the west
    retail giants such as Pantaloon, Shoppers’ Stop and Lifestyle
    are likely to target metros and small cities almost doubling
    their current number of stores
     These Walmart wannabes have the economy of scale to be
    low –medium cost retailers pocketing narrow margin
    Production / Supply pattern of
    product
    Taking example of Hangzhou Buxing Dress Company

    Company Name: Hangzhou Buxing Dress Co., Ltd.

    Manufacturer, Trading Company, Agent,


    Business Type:
    Distributor/Wholesaler, Other

    Trousers, pants, cloths, shorts, men's pants, men's


    trouser, ladies' pants, ladies' trousers, cotton
    Product/Services: pants, polyester trousers, wool pants, wool
    trousers, leisure pants, west-style pants, corduroy
    pants, denim pants, rayon pants, spandex pants

    Registered Jiangjiadou Village, Sandun Town, Xihu,


    Address: Hangzhou, Zhejiang, China Zip: 310030

    Brands: Buxing

    Number of
    501 - 1000 People
    Employees:
    Supply pattern of product
    Export Percentage:
    They have more than 600 units of professional
    equipment. More than 80% products are exported to oversea
    countries all over the world. Foreign customers show their great
    interests in our products, and frequently contact us for cooperation.

    They are working to set up a world


    fabrication center of trousers articles, while they are dedicated to
    developing multiple business scopes. The objective is to build a
    world grade brand, therefore they are strict in the management,
    technique and product quality. And they have successively passed
    the certification of ISO9001:2000, which upgrades the quality
    management of the company.

    Discount retailer:
    They has opened its new Showroom at Hualian Village, covering
    an area 20,150 sq. ft, which takes the tally of total number of stores
    of the company to 131. Hangzhou Buxing Dress Co., Ltd. has
    widely spread network across China, with an area of 24,43,000 sq.
    ft. (approx). In this showroom they start making business through
    giving some extent of discount to their consumer,
    Price variations
    Product/Services prices have exploded worldwide. Prices of
    Product has risen100%-200%in one year alone. like price of
    Trousers 114% , pants 125% and cloths about 200% in last two to
    five years .The years 2007- 2008 saw dramatic rises in world
    goods prices creating global crisis and causing political and
    economical instability social unrest in both poor developed nations

    • Explanations that don't persuade Hypothesis:

    The spike in world goods prices is caused by increased demand in


    China, particularly the shift towards consumption of high quality
    cloths as people get richer. With the help of this explanation we
    can find that the price index for major products and service was
    stable at 100 from 1990 to till 1998 and spiked thereafter. This
    shows that China had a massive transformation of incomes and the
    structure of the cloths products basket from 1990 to 1998.

    Hypothesis:
    It's the evil speculators. Speculators who
    anticipated higher prices would have held more inventories. But
    the graph shows that inventories have dropped from 2000 onwards.
    There was less hoarding, not more. The bulk of trading on futures
    markets is speculative: but for every buyer on a futures market
    there's an equal and opposite seller (by definition). A bigger
    futures open interest has no net effect on prices.

    More generally, futures markets have been around for over


    a century and grown steadily over the 1990-1998, period: it's hard
    to blame them for the spike in prices starting in 2005.
    Yes, there's a new phenomenon of commodity funds and
    hedge funds trading in commodities. But these numbers are just
    tiny when compared with the global trade. And if they had held a
    lot of inventory, it would have shown up in the inventory series
    above - but total global inventories went down and not up.

    Recent Trends
    Causes and effects of variations in
    price and volume of goods
    produced.

    Causes: several factors that cause price rice in


    commodities.

    • World population:- As population is growing so demand of


    cloths increasing.
    • Rise in the price of row materials .
    • Natural calamity causes price rice as extended drought in
    China.
    • Leather outfit consumption also cause food crisis.
    • High price of cotton, which is importing from other
    countries.
    • More then 68 million square feet of mall space is not to be
    available by end of 2005, Though which they might not lead
    to over-capacity of malls
    • Lack of differentiation among the malls. One option may be
    to look at specialization.
    BIBLIOGRAPHY

    WEBSITES
    • www.google.com
    • KPMG-FICCI Report
    • http://www.indiainbusiness.nic.in/

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