next gen retail

Next Gen Retail Market in India

Project Guide - Prof. Mrs. Mahima Mishra

Project In charge – Prof. Suryakant Lele

Submitted By – Samar Saha and Alok Singh

Semester – 2nd , Exec.MBA

Indian Retail market at a glance

The contribution of retail industry to India’s GDP is more than 13%.

The retail industry in India is of late often being hailed as one of the sunrise sectors in the economy.

India's retail sector is on its way of modernization. Traditional markets are making way for new formats such as departmental stores, supermarkets and specialty stores.

India's retail sector is estimated to touch US$ 833 billion by 2013 and US$ 1.3 trillion by 2018

Unorganized Retail sector • The unorganized sector

consists of all private enterprise, having less than ten total workers, operating in proprietary or partnership basis.

• Unorganized sector includes low-cost retailing such as the local kirana shops, owner-manned general stores, paan/beedi shops, convenience stores, handcart and pavement vendors.

• They don’t even have a proper calculation for their taxes. Hence they are un-organized.

Characteristics of unorganized retail market The traditional formats of low-cost retailing

Small-store (kirana) the easiest ways to generate

self-employment

Generally family run business

Purchase from kirana store in credit

The convenience store for the customer.

Organized Retail sector

The organized sector, identified as malls/multiplexes/supermarkets is still at a nascent stage, and is unlikely to prove a threat to the unorganized sector for many, many years to come.

There are a number of reasons which clearly vouch for the fact that India will continue to be dominated by small retailers for a long time to come. Such as - Even the biggest of domestic players in organized retail lack the muscle and resources to cater to significant proportion of Indian population. It takes a lot of time and money for an organized retailer to show decent profits in Indian situations, and the weaker ones will continue to fall by the wayside.

Research Methodology

For our survey we adopted primary data collection, where we decided to plan a questionnaire with some qualitative and quantitative questions.

We went store by store and also online. We gave options in the questions wherever possible

and the other questions (qualitative), we made it too simple, so that the kiranawalas understand better.

Questionnaire

All questions were having suitable options along with additional input box “Other (please specify)” if they don’t feel any of the option provided to be appropriate.https://www.surveymonkey.com/s/L3QLZD2 Area of the shop? Tenure of shop in years? Type of customers? Number of customers daily? Number of employees in shop? Effect on demand in recent times due to online and

organized retail market? Why customers are opting for Malls/Online substitute? Effect on demand due to location? What schemes are you currently offering? What are your plans, schemes, strategies to attract more

customers?

https://www.surveymonkey.com/s/L3QLZD2



Analysis of Data

It shows, that majority of shops are located near some societies, so reach to people is limited.

Most of the shops having tenure of 5-10 yrs. So, they have good scope to try out new opportunities to increase their customer reach.

Analysis of Data (Cont.)

Daily customer count on an average ranges from 75-200, which shows their limitation to customer reach.

Customer are almost from every aspect of age, type. Household holding the max. share.


This result shows the lack of man power in kirana shops where mostly 1-2 workers are present.

This clearly indicate the decrease in business for Kirana shopkeepers where their demands have been dropped to even 50%.


This results shows mixed response with almost every aspect holds equal share.

Shopkeepers knows that location is the most important factor for the demand to decrease or increase. Now, location is something that is mostly not very easy to change.


Shopkeepers are very limited when it comes to services they currently provide such as home delivery and goods on credit which is actually not beneficial for their business.

Shopkeepers are willing to increase their range of products and provide more customer attractive deals which would be generally difficult as per their current infrastructure in India.

Conclusion from Analysis Seeing the responses we received, below are some of

the major concerns that local shopkeepers have – They are unable to reach mass customer base. Not have clear idea which products are on demand

and what are out dated. Do not have correct list of products to be available in

shop. Are not clear how to attract more customers. Location constraint. They are actually helpless to stand against organized

retail chains.

Proposal/ Business Idea(Merakirana.com)

We propose an online grocery bazaar with a local twist. It lets you shop for your groceries online but through

your neighborhood kirana store. We aspire to give a technology edge to the Kirana

business to attract this generation. Each local Kirana Store gets to create its own shops by

listing items, prices, discounts, delivery and payment options, etc.(We understand that Local Kirana shops are not tech savvy and hence we will have to help them doing that initially. Computer infrastructure needed for this can be made available @ a very economical cost of Rs. 3000 and monthly recurring expense of 500.)

Business Idea Cont.…. Delivery of items will be made by shop owners as they

are already doing so (based on range of service). Each customer gets his/her own login which will

maintain his history of lists, choices of his shops, history of his expenses, his location, address and other important details.

A customer can also set and alarm, reminders and use or amend the previous list.

This will also help them track the rates of each individual items over the period and will help them analyze expenses over the period.

Other Benefits Location of Kirana shops on Maps, with the reviews and

rating. It will categorize customer’s list on “Packaged and branded”

items and “Loose and unbranded items”. For a customer, just like Super markets, everything will be

available single roof. Offer discounts for customers to encourage usage. It will also prevent retailers to give their goods on credit to

large extent.

Do we earn!!! How?

AdvertisementsOur site contains a wealth of information, resources and services that we provide free. Now also, we have to start thinking about generating income because our costs to manage the site will keep on increasing. Banner programs - that is paid either on cost per

click (CPC) or per impression basis. An impression is a banner being displayed to a user once, a click is someone clicking the banner and visiting the site being advertised.

Demand and Market analysis

Kirana/Grocery is a basic need of every house hold.

Independent kirana stores control about 95 per cent of FMCG sales in India. However, their share has been dipping in recent years. According to a report by HUL, 20 to 25 per cent of trade in urban centres has moved to large format retail stores. Add to this the growing presence of online grocery retail and these stores are up for some real competition.

710 Kirana shops in Pune are present on Sulekha.com. Our estimate is there are more than 2000 shops.

Pune has sizable number of technology savvy population with easy access to computers and internet.

Urban lifestyle, more time spent on road, lesser quality time for family demands such services.

Location Selection

Pune

The population of Pune mentioned here is from PMC’s website; however we anticipate it be ~90 Lacs.

We intend to start with Pune; however soon want to go to other cities once this concept has made foot hold in Pune.

Pune Population Literacy Rate

82 lac 81%

Marketing Plan

Segmentation – Identify population which has access to computer and internet and target them. Working women, men, youths.

Place – Majorly web space, Viral tools like emails, links, Social networking sites. Also, pamphlets can be kept @ local kirana stores.

Price – This is a free service for customers.

Promotion – Discount coupons/Codes, Loyalty points, tie ups, etc.

Risk Analysis

Market risks - New concept and hence resistance from Customers and Grocery shops, existing online grocery shops, Super markets from cash rich corporate enterprises, new entrants to the market, slower than expected adoption.

Operational risks - Complicated Portal, space management on portal, up time of the portal, Performance of the portal, Poor Customer service, staffing risks.

Financial risks - Liabilities, poor contract negotiations with Vendors, customers and investors causing investor pull outs, poor accounting practices.

Managerial Risk - Unclear Vision, poor planning and improper executions

We have considered these risks while Marketing and Portal planning.

What Next

Other Cities – Once this concept has gathered foot hold in Pune, we intend to go to the other cities with the help of local experts in that city and launch it in cities across India.

Smart Phones and Tablets – Almost parallel to this, we intend to launch an application which will be native to smart phones and tablets to enable customers to use this app on the Go. A B2C flavor .

Consulting for shops – While the data pertaining to a particular shop will always be available to the shop; however we understand that not all the shop owners are tech Savvy and hence we can offer consulting them on stocking, delivery options, etc. at a minimal price.

Thank You!!