sip final report

SCOPE OF REAL ESTATE

AND RETAIL FORMATS IN AHMEDABAD

PREPARED BY

Arpi Shah (020101012)

Manali Pandya (020101057)

Rohin Mattoo (020101092)

Swapnil Ambre (020101118)

Scope Of Real Estate And Retail In Ahmedabad

2 Globsyn Business School - Ahmedabad

ACKNOWLEDGEMENT

This dissertation could not have been written without Prof. Haresh Kothari who not

only served as our college mentor but also encouraged and challenged us

throughout first two months of our Summer Internship Project (SIP). Prof. Hardik

Gandhi and Archana Dutta our SIP college mentor for remaining one month

guided us and helped us with their best knowledge. We would also appreciate the

co-operation given by other faculty members, Dr. Shalini and Pallavi Mittal.

We would like to thank Mr. Harit Kothari and Mr. Pranav Patel, our Industry

Mentors for sharing their knowledge about retail and real estate in Ahmedabad and

helping us in our project.

We appreciate the co-operation by the management and staff of each and every

retail and real estate format.

Through this acknowledgement, we express our sincere gratitude toward all those

people who have helped us in the preparation of this project, which has been a

learning experience.



DECLARATION

We: Arpi Shah, Manali Pandya, Rohin Mattoo and Swapnil Ambre hereby declare

that the project report on ―SCOPE OF REAL ESTATE AND RETAIL FORMATS

IN AHMEDABAD‖ has been prepared with best of our knowledge and the details

in the project are according to the survey and research work which we did.



EXECUTIVE SUMMARY

The trend and demand of application oriented studies have increased in the past

decade dramatically and hence the demand of an MBA degree to which the

inclination of the industries has also increased.

The following project deals with ―Scope of Real Estate and Retail in

Ahmedabad‖

We collected our data by exploratory research technique.

After analysing the real estate, we came to know its different formats in which real

estate is categorized. It includes formats like residential, Commercial, IT PARKS,

Shopping Malls, SEZ, etc.

To understand each format we went and spoke with different real estate developers

of Ahmedabad. After having spoken to them we came to know, how each

developer was working, their target segment of people and their interested formats.

Each developer had its own style of working. Regarding real estate, we came to

know how real estate works in Ahmedabad.

It is governed by two authorities:

1) AUDA – Ahmedabad Urban Development Authority

2) AMC – Ahmedabad Municipal Corporation

Ahmedabad is divided into three zones, namely:

R1 – High Rise

R2 – Low Rise

R3 – Bungalows

At the end we could analyze the scope of real estate in Ahmedabad. Scope of real

estate in Ahmedabad has surely increased in some specific formats and at the same

time decreased in some because of recession. Residential format is evergreen

according to every developer. Real Estate is the best in terms of Investment.

Having analyzed Scope of real estate we started working on second part of our

project which was scope of retail in Ahmedabad. To start with we tried to



understand what retail is? How and in which different formats it works. After some

study we came to know that retail is mainly divided into two main sectors:

1. Organised

2. Unorganised

Because of time constraint we only studied organised sector of retail which had

many formats in it.

1. Super Market

2. Hyper Market

3. Shopping Mall

4. Convenience Store

5. Speciality Store

6. Franchisee Outlets

To understand each format we visited each store of different format and carried our

research. We spoke to some store managers and did some survey by discussing and

filling some questionnaires by customers. We also visited main malls of

Ahmedabad and carried our research over there. It helped us to find scope of malls

in Ahmedabad. We visited company store outlets and carried its comparative study

with standalone store outlets to know which format is doing well.

We concluded that because of oversupply and improper management, malls are not

doing well but there were some standalone outlets that are exclusively doing well

because of their location and footfalls.



SCOPE

The scope of our research was limited to real estate and organized retail. We have

confined our research to Ahmedabad city only. Our study was limited to new city

only. Our study include following

1) For real estate research

- Iscon Group

- Parshwanath Realty Pvt. Ltd.

- Pacifica Companies

- Shivalik Group

- Savvy Infrastructures Ltd.

- Bakeri

- Safal

2) For retail research

- Iscon Mega Mall

- Himalaya Mall

- Gallops

- Gulmohar Park

- Dev Arc

- Pantaloons

- Westside

- Levis

- Jade Blue

- Big Bazar

- Vishal Mega Mart



LIMITATIONS

Limitations for our project are as follows:

We concentrated our research work only on west Ahmedabad as it is hub for

various retail formats.

Also we were not able to survey all outlets situated on CG road as we were

not given the permission to do so.

We limited out study to organized retail formats only

Time constraint



TABLE OF CONTENTS

Serial

No. Particulars

Page

No.

1. Research Design 10-12

2. Real Estate 13-27

2.1 Macro-Economic Overview 14

2.2 Real Estate Scenario in India

Commercial Real Estate

Residential Real Estate

Retail Real Estate

Hospitality Real Estate

Special Economic Zone

FDI in Real Estate

14-17

2.3 Overview of Real Estate in Ahmedabad 18

2.4 About : NG Realty Pvt. Ltd. 19

2.5 Big Players & their findings

Iscon Group

Parshwanath Realty Pvt. Ltd.

Pacifica Companies

Shivalik Projects

Savvy Infrastructures

Bakeri

Safal

20-27

3. Retail Industry 28-85

3.1 Introduction to Retail Industry 29-30

3.2 Indian Organized Retail Market 31-32

3.3 Growth of Retail Companies in India 33



3.4 Formats in Indian Organized Retail Sector

Shopping Malls

Super Markets

Hyper Markets

Convenience Stores

Specialty Stores

Franchisee Outlets

34-42

3.5 SWOT Analysis 43-44

3.6 Retail in Ahmedabad 45-46

3.7 Malls & their Analysis

Iscon Mega Mall

Himalaya Mall

Gallops Designer Mall

Gulmohar Park

Devarc Mall

47-81

3.8 Study of Standalone Outlets

Levis Store

Pantaloons

Jadeblue

Westside

Pepe Jeans

United Colors Of Benetton

82-85

Conclusion 86

Questionnaires 87-89

Appendix 90-104

Bibliography 105



1. RESEARCH DESIGN

A research design is a framework or blueprint for conducting the marketing research

project. It details the procedures necessary for obtaining the information needed to

structure or solve marketing research problems. There are following kinds of research

design.

We used exploratory research for our project. The objective of exploratory research is to provide

insights and understanding. Information needed is defined only loosely. Research process is

flexible and unstructured. Sample is small and non-representative. Analysis of primary data is

qualitative. Finding of exploratory research are Tentative. It is generally followed by further

exploratory or conclusive research. Methods to do exploratory research are Expert surveys, Pilot

surveys, qualitative analysis and Qualitative research.



Research design of our project report is as follows:

1.1 Research Objective

Secondary objective

Our secondary objectives are as follows:

1. interview the concern people associated with real estate to know their experience and

view points

2. interview of mall managers and store managers

3. to know consumer behavior about retail format

Primary objective Our primary objective is to know the scope of real estate and various retail format in

Ahmedabad.

1.2 Collection of Primary Data

Primary data is data originated by the researcher for the specific purpose of addressing the

research problem. It can be collected by the various methods like survey, observation and

experiments. In our project, we have collected primary data by survey, observation made at the

time of making survey and industrial visit.

1.3 Collection of Secondary Data

Secondary data is the data which is collected for some purpose other than problem at hand. It can

be collected by various methods like published materials, computerized database and syndicated

services. In our project, we have collected secondary data by various pamphlets and brochures

given by the company, newspapers, Internet and magazines.



2. REAL ESTATE

2.1 Marco-economic Overview

The pace of economic growth is usually regarded as the primary indicator of a country‘s

macroeconomic health. By this measure India has done very well in this decade, especially in the

most recent five years, with GDP growth averaging an unprecedented 8.8 percent a year.

In recent years, the broad based growth in services sector has been a principle driver of the GDP

growth.

Business services (including Information Technology (IT) and IT Enabled Services),

communication services, financial services, hotels and restaurants and trade (distribution)

services are among the fastest growing service sectors

The growth of service exports has been strong throughout the period, especially of IT software.

Software exports increased more than six fold from $ 5.7 billion in 2000/01 to $ 37 billion in 2007/8,

raising their ratio to GDP from 1.2 percent to 3.2 percent.

Manufacturing Industries like textiles, automobiles, cement, steel, petrochemicals, Infrastructure

(civil aviation, roads, and ports), electronics, beverages and tobacco products have been the prime

drivers in India‘s Industrial growth.

2.2 Real Estate Scenario in India

The size of the Indian real estate market is estimated at USD 12 billion and it is currently

growing at rate of about 30% annually.2009 will be a year where we will see the results of the

active government intervention in fending off the global crisis and real estate crisis in India.

While there is still a lot more that the government can and claims that it will do, the fact that

customers still need homes will set in. This, complimented with lower real estate rates, lower

interest rates and better incentives to customers to purchase homes will go a long way in

rebuilding the entire real estate industry.

The drop in interest rates from 11.5% to 9.25% combined with a reduction of 15% in real estate

rates has resulted in an increase in purchasing power of 33%. The same EMI would, at a lower

interest rate provide for a higher loan. The higher loan used to purchase a home at a lower price

would enable the customer to purchase more square feet.

Although the initial real estate boom was concentrated in places like Bangalore and the National

Capital Region of Delhi (including Gurgaon), more recently the geographical spread has

widened. There has been a significant shift in real estate market from metros to its suburbs and to



tier II and tier III cities. Lease rentals and occupancies have been picking up steadily and there is

an increasing demand for quality infrastructure across various segments of the real estate sector.

There are following types of formats in India.

Commercial Real Estate

The demand for new office space in India has grown from an estimated 3.9 million sq. ft in 1998

to over 16 million sq. ft in 2004-05. 70% of the demand for office space in India is driven by over

7,000 Indian IT and ITES firms and 15% by financial service providers and the pharmaceutical

sector. Cumulative demand for office space in India over the next two years (2006-08) is

estimated to be in excess of 45 million sq. ft.

The Indian IT-ITES Industry, estimated at USD 36.3 billion in 2006 has grown at a CAGR of

36% over the last decade and by 2008, is expected to account for over 7% of India‘s GDP and

30% of foreign exchange inflows. In 2005 alone, IT/ITES sector absorbed a total of approx 30

million sq. ft and is estimated to generate a demand of 150 million sq. ft. of space across major

cities by 2010. South Indian cities like Bangalore, Chennai and Hyderabad along with NCR

(National Capital Region) continue to attract the major share of IT/ITES and business investment.

However, secondary cities, like Pune, Chandigarh, Indore, Kochi and Kolkata are now emerging

as the new preferred destinations for these companies due to their cost and infrastructure

advantages.

Residential Real Estate

The residential property market in India constitutes almost 75% of the real estate market in terms

of value. Low per capita housing stock, rising disposable income coupled with easy availability

of finance from the housing finance companies and banks are driving demand in this sector. Also,

Average age of housing loan borrowers has decreased to 30- 35 years from 40- 45 years a few

years ago, indicating a younger buying threshold. The housing sector is currently growing at 30-

35% per annum. A proportion of demand is also being driven from investors who view housing

as an attractive investment option as compared to mutual funds and stocks. The demand for

housing is geographically widespread with townships being built in both the metros and the tier II

and III cities. In India, there is a housing shortage of 19.4 million units out of which 6.7

millionaire in urban areas alone. This translates into very high opportunities for investors in the

residential sector.

Retail Real Estate The Retail industry in India continues to be dominated by individual small format stores with

floor space of less than 500 sq.ft. Total number of retail outlets is estimated to be around 12 -15

million, indicating a retail density of 12-14 outlets per 1,000 people, which is one of the highest

in the world.



The Indian retail market, which is the fifth largest retail destination globally, was ranked second

after Vietnam as the most attractive emerging market destination for investment in the retail

sector. Organised retail segment would see an investment of USD 70 billion by 2010. By 2015,

the retail sector is projected to overtake the USD 650 billion mark, and organised retail will cross

the USD 130 billion mark. The consumer spending in India has increased by an impressive 75

per cent in the last four years and will quadruple in the next 20 years. Of the 12 million retail

outlets present in the country, nearly five million sell food and related products. Mall space, from

a meagre one million square feet in 2002, is expected to touch an estimated 35 million square

feet by end 2008 in the top seven cities in India. At a time when the Indian consumer space is

undergoing a metamorphosis, with increasing spending power and changing purchase habits,

consumer space is getting slowly but surely better defined.

Hospitality Real Estate

For India, Hospitality Real Estate is very important in terms for revenue generated from it. India

has always been a tourist place for foreigners and they have visited India for its rich and diverse

culture.

Hospitality industry in India is growing at an annual rate of over 8%. The number of foreign

tourists‘ arrivals (a major driver of hospitality industry) in the country increased to approx. 4

million in 2005. Over 55% of the total demand for hotels in the country is generated by foreign

leisure tourists and business travellers (domestic and foreign). A large proportion of lodging

demand in commercial cities such as Bangalore, Mumbai, and Delhi etc. comes from business

travellers. This category also accounts for the major proportion of demand for five star or five

star deluxe hotels. However, against the total current supply of 96,000 rooms, five star category

accounts for just a quarter of the supply. With the expected growth in demand for rooms at 18%,

another 65,000 – 80,000 hotel rooms will be needed till 2010. This demand – supply gap is

expected to result in high level of activity in construction of hotels. The established brands in this

sector such as Asian Hotels, Indian Hotels, ITC, Le Meridian etc are in expansion mode with

many new players such as Accor Group, Marriot, Choice, IHG Group keen to establish their

footprint.

Special Economic Zones The upcoming realty trend in India after multiplexes and mega housing projects are the Special

Economic Zones (SEZ). Currently, 28 SEZs are operational in the country, including those

converted from Export Processing Zones (EPZ) to SEZ. Approx. 189 proposals have already

been granted approval since the SEZ Act, 2005 came into force. These include SEZs in various

segments such as multi-product, Information Technology, Bio-technology, Gems and Jewellery,

Textiles and technology intensive industries. Both developers and corporate have shown

tremendous interest in developing SEZs in the country. Reliance Industries, for instance, is

planning a 25,000 acre SEZ in Gurgaon and is also the main partner in twin SEZs coming up at

Navi Mumbai and Maha Mumbai, with a combined size of 35,000 acres. The Adani group is also



setting up an SEZ at Mundra, covering 30,000-35,000 acres, and it proposes to invest Rs 7,300

core on infrastructure. Other corporate who are in process of setting up SEZs include TCG

Refineries of the Chatterjee Group (SEZ refinery at Haldia in West Bengal), Suzlon

Infrastructure (hi-tech engineering products and services near Coimbatore in Tamil Nadu, Udupi

in Karnataka and Vadodara in Gujarat), Hindalco (aluminium SEZ at Sambalpur in Orissa),

Genpact (IT SEZ at Bhubaneshwar in Orissa, Jaipur in Rajasthan and Bhopal in Madhya

Pradesh), Vedanta Alumina (aluminium SEZ at Orissa). Seeking the permission for SEZs is also

a number of real estate developers, including DLF, Ansals, Omaxe, Parsvnath, Shipra Estate and

Sunny Vista Realtors.

FDI in Real Estate

With the opening of the sector for 100% FDI under automatic route, the real estate sector is

Estimated to capture about 18-20% of the total FDI coming to India in 2005-06. The FDI in Real

Estate is expected to have a favorable multiplier effect on the economy. As an indicator, for every

rupee spent on construction, an estimated 75-80% gets added to the GDP. The spill-over effect of

this initiative can also be witnessed in important sectors like the cement and construction

industries, where the key players are expanding capacity to meet the soaring demand. With the

relaxation of the FDI limit, the country saw an influx of global real estate developers like Dubai-

based Emaar Properties (the largest listed real estate developer in the world) – which entered

India in a joint venture with Delhi based MGF Developments. Other groups showing interest in

India include insurance company American International Group Inc (AIG), High Point Rendell of

the UK, Edaw-US, Japan's Kikken Sekkel, Lee Kim Tah Holdings and Cesma International from

Singapore.

SOURCES OF INFORMATION

-- Indian council for research on international economic relations by Shankar Acharya

-- Rohit Gera, Executive Director, Gera Developers posted his article on Expressindia.com

-- Images Retail magazine, March 2009 issue

-- http://www.dtz.com/portal/site/en-in

-- www.inrnews.com/indianrealestate/reports/dtz_india_real_estate_overview



2.3 Overview of Real Estate in Ahmedabad

Amidst all the cities of Gujarat, Ahmedabad is the largest and in India it is the seventh largest

city. That‘s why Ahmedabad real estate market and property market is on boom and going in a

full flow. You‘ll be amazed to know that Ahmedabad‘s economy is ever prospering due to the

huge growth in the industrial sector. Ahmedabad is one of the most populated cities of India

that‘s why real estate demand of housing is on high. Since the dawn of the development phase in

India, real estate Ahmedabad got the maximum exposure and witnessed highest developments.

The real estate sector in Ahmedabad is also flourishing due to major developments by builders in

Ahmedabad. Majority of the big builders are constructing properties in Ahmedabad which are not

only residential but also for the commercial purposes. It means every kind of property is being

catered to.

Real estate Ahmedabad is divided into two core sectors that are residential and commercial.

Residential real estate sector mainly comprises of flats in Ahmedabad, apartments in

Ahmedabad, serviced apartments in Ahmedabad, bungalows in Ahmedabad, penthouses and

townships in Ahmedabad. Whereas commercial complexes include shopping malls in

Ahmedabad, multiplexes in Ahmedabad etc. it means an overall development is in full swing.

Ahmedabad is a spacious land and if you want to buy a property in Ahmedabad then it will

surely provide you good facilities be it educational or housing. In short your property will be

amidst the best state-of-art designed property. But the prices of properties in Ahmedabad vary

depending on the location and the facilities provided and also they keep on fluctuating from time

to time.



2.4 About N.G.Realty Pvt.Ltd.

The NG Realty Pvt. Ltd. is a part of N.G. Group of companies, one of the reputed and

established Real Estate Developers, Organizers and Builders in Gujarat. The Group is in

existence for nearly two decades in Ahmedabad and has successfully completed a

number of residential, commercial and land development projects. The estimated

present market value of the projects independently completed by the group is

approximately Rs.700 cores. The world class shopping Mall at Ahmedabad, named

Gallops promoted by the group has caught the attention of international retail shopping

chain giants like Life style and Globus who have shown keen interest in the project by

booking large space.

The Promoters of NG Group are reputed and eminent ent repreneurs with required

resources in terms of investment capabilities and abilities to undertake the commercial

construction and development project of any size and dimension.

The Group has interest in InfoTech, Automobiles, Stock broking and Finance industry.

The Group has been providing customized solutions to the Government and reputed

institutions in the field of E Governance and smart card based solutions. One of the

Group concern is the sole dealer of GM (General Motors) in western part of Gujara t for

sales and services of cars and utility vehicles manufactured by them.

In line with Mission and objective statement, The Group concern NG Realty Private

Limited, is setting up a Special Economic Zone near Ahmedabad for Engineering Sector

in the first phase. The Group plans to expand the SEZ in near future to make it a multi -

product SEZ as per the Government policy and guidelines.



2.5 Big Players in Ahmedabad

Over the years, Iscon Group has built an enviable reputation for quality even as they built homes,

commercial centers or malls. Iscon Group goes beyond exceptional value, quality and customer

service to create a lifestyle that is rich in beauty, comfort and luxury.

The Group ensures investment of best talent, maximum energy & quality resources in planning,

design and implementation of projects. Best known for timely completion of projects,

architectural expertise, superior quality of construction & efficient property management; the

Group has pioneered the concept of centrally air-conditioned malls in Ahmedabad, Surat &

Rajkot.

Iscon Group has developed over 50 lakh sq ft of residential, office & retail space in Gujarat. It is

an ISO 9001:2000 certified organization and has also received an award from the esteemed Tata

Group for the quality & timely completion of projects.

Iscon Group has now acquired properties at prime location around the country including

Ahmedabad, Mumbai, Bangalore, Jaipur, Vadodara, Surat, Rajkot, Bhavnagar, Anand, etc for an

epic construction drive of Townships, Malls, Hotels, IT Parks, Residential & Commercial

properties.

They skilfully bring together hundreds of engineers and thousands of workers to complete

projects ‗on time‘, always maintaining an uncompromising focus on quality and safety. Setting

high benchmarks for ourselves, they have consistently broken new ground, achieved a long list

of targets and yet aiming high for betterment of lives.

They, at ISCON, are engaged in the property development, property management, and

relationship building, satisfying every customer‘s smallest of needs and developing exclusive

commercial and residential projects across the major cities of India. Having witnessed the

phenomenal infrastructure revolution in the country, they have applied the latest technology and

trends in all our undertakings.

FINDINGS:

Iscon group has their existence in both new and old Ahmedabad. This was one of the reason to

make their hotel in old Ahmedabad as they wanted to enter that area as well. Other reason behind

it was, 1- it is near to the air port, and 2- there are no five star hotel in that area. Location is

selected by the higher authority. They decide location as per the need of the project. They also



keep flexibility and keep necessary changes as per the change in demand. Rates are decided as

per the location and format. Rates are decided before starting of any project, it increases with the

completion of the project. They have to follow the rules made by the government like AUDA as

per zone. They usually have their in-house engineers. They could not give us the information

about finance. According to them residential format will work in near future.

―It takes hands to build a house, but only hearts can build a home‖ & then…in true sense it will

be ―Ghar nu Ghar!‖

With this inherent philosophy of creating dwellings that bring heartfelt joy, four decades ago, in

the year 1967, Parshwanath Construction started realizing the dreams of millions by offering the

abodes that truly brought peace of mind for them.

Their journey, started with a sole mission to provide residential offerings to the people of

Ahmedabad, took another turn when it ventured into commercial construction arena with many

successful and noteworthy commercial projects. As the pioneers of in construction in

Ahmedabad, Parshwanath Group has adorned the city with more than 118 successful projects &

many novel & first of its kind initiatives. It was the first company in Gujarat to introduce mass

housing activities, with special repayment plans.

In the journey of 40 years, Parshwanath Group is associated with 120 glorious projects, 20,000

designed spaces, 1, 07, 00,000 sq.ft. Of built up spaces & 2, 60, 00,000 sq.ft of land

development. From one end of Ahmedabad to other end, every area bears testimony of unique

Parshwanath identity.

FINDINGS:

Being very old firm of Ahmedabad since 1967 they have spread in both old and new

Ahmedabad. They make every project as per the demand of the location. Location is being

decided as per the locality and income group. For example they have made metro city for royal

class people and Royal Park for middle class people especially for ONGC people.75% of

construction is done by them in Chandkheda.

They are able to send their projects at lower rate than other builder‘s reason behind it that they

have their own purchased land on which they are making their project which is not the case for



other builders. They also have to follow government polices made as per the location. They

normally have their in-house engineers but they do hire them on contact basis if they want more.

Most of the finance is also in-house and if they want more then they can go for bank loan (no

particular bank). They are not much affected by the recession. They also said that SG high way is

most suitable for the five star hotels though it is far from the air port. According to them people

won‘t mind to travel if they get proper comfort and service. Residential is the format which will

work well in near future, as one person is having more than 1 house nowadays. Even commercial

format will also work as it gives more return than residential.

Pacifica companies started its Indian operation in 2004-05, with the head office in Ahmedabad &

regional offices in New Delhi, Bangalore, Hyderabad and Chennai. These offices are well poised

to meet their vision of establishing a national leading position in the real estate industry,

spanning the spectrum of all real estate development. Pacifica brings along with itself 30 years of

experience in real estate to India. With the rationalized Foreign Investment Policies in India, the

real estate/property developer has targeted several Indian Cities for its projects.

Declared as no.1 builder of the year 2005 in San Diego. Courtyard by Marriott in Ahmedabad is

the biggest 5 Star hotel in Gujarat in its category with 160 + rooms. Pacifica signed an MOU of

100 Cores for Courtyard Marriott during Vibrant Gujarat Global Investors Summit '07 with

Government of Gujarat & Tourism Corporation of Gujarat Ltd. (TCGL). Pacifica signed an

MOU of 1000 Cores for residential and townships, projects with Government of Gujarat during

Vibrant Gujarat Urban Summit '07. 1500 Cores Investments already done in various Projects in

India & other Projects Worth 1500 Cores are in pipeline.

FINDINGS:

Pacifica does not have any project in old Ahmedabad. They mainly have ample land in new

Ahmedabad, but they need to think what kind of project should be made. Rates are decided

before the project is made. AUDA has given them permission of R1 and R2 zone which are high

rise and low rise building resp. in certain areas. They are not interested to make any retail format.

They are fully into residential and hospitality. Their main target customers are upper middle

class. Right now they have 3 projects namely, hotel Country yard, Satellite; Green Arc,

Prahaladnagar and La habitat, Thaltej.



They have their own team of engineers even they have own architectures and team which works

as their consultants. They use mix of their own and bank loan for the finance of any project.

Main source of loans are SBI, SEZ and FDI. They also agreed that they are affected by recession.

They prefer residential format to other formats. Reason behind it is they believe demand is still

there, everybody is looking for best price with best quality. Earlier there was culture of joint

family but now that has totally changed to nuclear family. The age of buyer has decreased and

come down to 25-40 years. According to them land in Maninagar area was more in demand then

it shifted to Ashram Road then to CG Road and right now it is SG Highway.

The company has a vision to go global envisaged through its current expansion, in different cities

of Gujarat and India, starting from Rajkot.

Currently the group consists of 25 companies, with aggressive marketing and efficient operation,

the group has forayed in the first five prominent positions among the real estate developers in the

city.

The organization sternly believes in making and sustaining relationships. It strongly believes that

relationship cannot be established on hollow things. It is the quality which has brought the group

to such an esteemed platform. The company follows stringent rules for quality assurance. Never

to compromise on quality irrespective of market conditions is a theme of the success is the motto

of the company. The group has been certified and has obtained ISO 2001 Certificate

from Bureau Veritas.

Shivalik Plaza, one of the landmark projects has been nominated in the category of best

commercial building for the year 2006 by G.I.H.E.D

FINDINGS:

Shivalik is totally into commercials format right now. Their preferable location for any project is

in new Ahmedabad for 2 reasons: 1) it is more expensive than old Ahmedabad. 2) They prefer to

have their project near their competitors. Their main motto is to make mindset of people that

they should come to their place by the name of Shivalik. They decide the height of project as per

R1, R2, and R3 area. Rates do not depend on zone. Higher building gives fewer amounts. The

whole team of engineers is of Shivalik. Their finance is not fixed. Sometimes it is of own;

sometimes of project loan (bank loan also depends upon market rates and project). They do not

compromise with the rates. They start making their project after at least 40-50% of the booking

is done.



They choose the location as per the need of project. They also told that right now SG Road is the

place which is cheap and spacious than other area to build any project. Their MD decides which

venture should be made. They do not consider what others are doing. Being an ISO certified

company help them but on the other side they have to look for good management. According to

them mall is not for middle class as many people just come for roam around in the mall. Mall

concept will not work near future. The rates will be decreasing. Residential format will definitely

work. As per them everyday 4 families buy house. That is also right that there is more money in

commercial format but demand is more in residential format. Even government is also helping in

residential format.

Savvy is a progressive construction company that believes in changing the paradigm of

construction business practices adopting innovative technologies. It is with this approach that

made them the first developers in Gujarat to be ISO: 9001 certified and first construction

company to have CRISIL rating in Gujarat.

At Savvy it is always their endeavour to provide value for money to their customers. They

believe in making safe, clean, efficient and technologically advanced buildings. They design

their buildings from inside out. Their focus is on providing sound building utility systems which

forms the backbone of their buildings.

FINDINGS:

The selection of land is done as per the requirement of project; it is mainly done by higher

authority. Rates are being decided as per the location of the project at the time of finalizing the

plan of project. They are also bond to follow the rules given by the government. They also have

their own team of engineers. They use mix of in-house and loan for finance of project it depends

upon project. They are also affected by the recession. They said residential and commercial is the

format which will be giving more returns.



Bakeri - a name that spells trust, has given to Gujarat the nuances of architecture with three

generations. Set up in 1959, Bakeri is one of the oldest real estate developers in India. The

company has in its fold a team of skilled architects, civil engineers and contractors.

The vision of the company is to be able to live up to the expectations that the people have from

the Baker‘s, keeping in mind the fundamentals of providing a comfortable customer relationship

that ensures transparency, trust, quality, commitment and prudent business policies.

The brand speaks for itself. It was the first one in India to be awarded the highest PA-1 rating by

CRISIL for SAKAR-III project in October 1995. The Bakeris brought the corporate brand

buildings concept to Gujarat by bringing in the Sakar Series of branded corporate communes.

The Bakeris have introduced affordable housing schemes, with the aim to be able to reach out to

all sectors of society. They have experimented with new forms of architecture and built more

than 11 million square feet of exceptional architecture that symbolizes the city and its beauty.

The company brings with it knowledge and experience from the golden past and works towards

delivering a bright future to all its clients. It doesn‘t only build structures it also builds relations.

Dedicated architects, techno-savvy engineers and an experienced legal team form the nucleus of

Bakeri group. The people at Bakeri have blended creativity with utilitarianism to carve out

masterpieces that are today benchmarks in real estate development, office construction,

residential complexes, country resorts, industrial estates, etc.

FINDINGS:

Being an old company for more than 50 years they have spread their root to both new and old

Ahmedabad. Up till now their main focus was on residential which included townships, villas

etc. The selection of location is done by the demand in the market and target audience. Their

team will analyse these and on the basis of that they will select the land. Their rates are decided

as per the demand and location, client have to pay rates before the project is completed. Being an

old name it has got a brand name which is giving tough competition to Parshwanath. They have

their own team of engineers which look after every project. They did not give us information

about their finance. They also said that they are not much affected by the recession. According to

them real estate and commercial are two format which will be helpful to get proper return in near

future.



Established in 1995, we at SAFAL have never believed in creating mere brick and mortar

structures. Instead, we believe in creating masterpieces in concrete woven around the great

outdoors and with plenty of nature‘s colours.

Their philosophy is described by their baseline, ‗beyond walls‘, which aptly depicts their value

offerings and commitment to innovations and quality. They believe that every structure be it a

home, an office or any other place where one spends time, should be replete with nature‘s

wonders. They believe in creating comfortable bonding by not shutting out nature but by being

surrounded with it. Reason why, all their projects --commercial, residential and plotted lands,

offer a tranquil home, a peaceful office or a serene retreat for all our customers.

Over 20 million sq. feet of land in & around Ahmedabad is filled with projects created by us.

Some of them have become benchmarks, not to mention. Their corporate client list includes

many prestigious names and so are our individual clients.

SAFAL has always believed in constructing innovative properties for its clients. Their logo, a

carving, has been a symbol for shelter and construction since time immemorial and represents

their commitment to the industry. Since their inception, we have grown steadily and rapidly but

have always maintained our focus on construction and improving quality of life through it.

Their group has seen many a business cycle long with catastrophe of nature such as earthquake.

They have survived all these challenges, because of their construction quality, integrity, honesty

and sheer determination.

Consistency has also been a key word at SAFAL. Over the years they have grown steadily and

rapidly, but they never lost our focus. They have always been committed in improving and

enhancing quality of life. Their approach is always customer friendly which has only improved

with time, and they still thrive to be the best.

FINDINGS:

Safal is working successfully in last few years in the market. The selection of land is done

through the higher authority. Rates are decided as per the project. They have to follow the

government rules as per the location. They have their own team of engineers and can hire from

outside if they require more. They could not give us information about finance. They also agree

that they are somewhat affected by the recession like other firms. They believe that commercial

is the format which will work in near future.



FORMATS

ISCON PARSHWAN

ATH

PECIFICA SHIVALIK SAVVY BAKERI SAFAL

Malls Residential Residential Commercial Homes Residential

Malls

Hotels

SEZ

Corporate

Park

Commercial

Commercials Offices Commercial Residential Shopping

Malls

Plotted

Developme

nt

Residential Shopping

Malls

Hotels Hospitality Offices Residential

Hotel IT Parks

IT Parks Township



3. RETAIL INDUSTRY

3.1 Introduction to Retail Industry

The Indian retail market, which is the fifth largest retail destination globally, has been ranked the

second most attractive emerging market for investment after Vietnam in the retail sector by AT

Kearney's seventh annual Global Retail Development Index (GRDI), in 2008. The share of retail

trade in the country's gross domestic product (GDP) was between 8–10 per cent in 2007. It is

currently around 12 per cent, and is likely to reach 22 per cent by 2010.

A McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer

market is likely to grow four times by 2025. Commercial real estate services company, CB

Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion.

Banks, capital goods, engineering, fast moving consumer goods (FMCG), software services, oil

marketing, power, two-wheelers and telecom companies are leading the sales and profit growth

of India Inc in the fourth quarter of 2008-09. India continues to be among the most attractive

countries for global retailers. At US$ 511 billion in 2008, its retail market is larger than ever and

drawing both global and local retailers. Foreign direct investment (FDI) inflows as on January

2009, in single-brand retail trading, stood at approx. US$ 25.18 million, according to the

Department of Industrial Policy and Promotion (DIPP).

India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion

by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a democratic country

with high growth rates, consumer spending has risen sharply as the youth population (more than

33 percent of the country is below the age of 15) has seen a significant increase in its disposable

income. Consumer spending rose an impressive 75 per cent in the past four years alone. Also,

organised retail, which accounts for almost 5 per cent of the market, is expected to grow at a

CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013.

India has emerged the third most attractive market destination for apparel retailers, according to

a new study by global management consulting firm AT Kearney. It further says that in India,

apparel is the second largest retail category, representing 10 per cent of the US$ 37 billion retail

market. It is expected to grow 12-15 per cent per year. Apparel, along with food and grocery,

will lead the organised retailing in India. India has one of the largest numbers of retail outlets in

the world. A report by Images Retail estimates the number of operational malls to grow more

than two-fold, to cross 412, with 205 million square feet by 2010, and a further 715 malls to be

added by 2015, with major retail developments even in tier-II and tier-III cities in India

Source: http://www.ibef.org/industry/retail.aspx



3.2 Indian Organized Retail Market

Indian organized retail market is growing at a fast pace due to the boom in the India retail

industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for about

10% to the country's GDP. The organized retail market in India out of this total market

accounted for Rs 350 billion which is about 3.5% of the total revenues.

Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010.

Traditionally the retail industry in India was largely unorganized, comprising of drug stores,

medium, and small grocery stores. Most of the organized retailing in India have started recently

and is concentrating mainly in metropolitan cities.

The growth in the Indian organized retail market is mainly due to the change in the consumer‘s

behavior. This change has come in the consumer due to increased income, changing lifestyles,

and patterns of demography which are favorable. Now the consumer wants to shop at a place

where he can get food, entertainment, and shopping all less than one roof. This has given Indian

organized retail market a major boost.

Retail market in the organized sector in India is growing can be seen from the fact that 1500

supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian

companies are entering the Indian retail market which is giving Indian organized retail market a

boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in

the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets.

Pantaloons is another Indian company which plans to increase its retail space to 30 million

square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks

with Tesco a global giant for a £ 750 million joint venture. A number of global retail giants such



as Walmart, Carrefour, and Metro AG are also planning to set up shop in India. Indian organized

retail market will definitely grow as a result of all this investments.

Indian organized retail market is increasing and for this growth to continue the Indian retailers as

well as government must make a combined effort.

Source: http://business.mapsofindia.com/india-retail-industry



3.3 Growth of Retail Companies in India

Growth of Retail Companies in India exhibits the boom in the retail industry in India over the

years. The increase in the purchasing power of the Indian middle classes and the influx of the

foreign investments has been encouraging in the Growth of Retail Companies in India.

Growth of Retail Companies in India is still not yet in a matured stage with great potentials

within this sector still to be explored. Apart from the retail company like Nilgiri's of Bangalore,

most of the retail companies are sections of other industries that have stepped in the retail sector

for a better business. The Growth of Retail Companies in India is most pronounced in the metro

cities of India; however the smaller towns are also not lagging behind in this. The retail

companies are not only targeting the four metros in India but also is considering the second

graded upcoming cities like Ahmedabad, Baroda, Chandigarh, Coimbatore, Cochin, Ludhiana,

Pune, Trivandrum, Simla, Gurgaon, and others. The South Indian zone have adopted the process

of shopping in the supermarkets for their daily requirements and this has also been influencing

other cities as well where many hypermarkets are coming up day to day.

Reasons for the fast Growth of Retail Companies in India:

The retail companies are found to be rising in India at a remarkable speed with the years and this

has brought a revolutionary change in the shopping attitude of the Indian customers. The Growth

of Retail Companies in India is facilitated by certain factors like –

Existing Indian middle classes with an increased purchasing power

Rise of upcoming business sectors like the IT and engineering firms

Change in the taste and attitude of the Indians

Effect of globalization

Heavy influx of FDI in the retail sectors in India




3.4 Formats in Indian Organized Retail Sector

Formats in Indian Organized Retail Sector and its subsequent successful operation are credited to

India Economic System reform earnest in July 1991. Formats in Indian Organized Retail Sector

are at its nascent stage. The Central Government has ultimately realized the need to remove the

insulation out of the Indian retail sector. Skeptics opine opening up Indian retail industry would

jeopardize way of income for the poor small retailers. In fact, the actual story is quite heartening

for the small time retailer and its vendors.

It is the second fastest growing economy of the world

Potential to be the third largest economy in terms of GDP in next few years

It ranks high amongst the top 10 FDI destinations of the world

Fastest growing tourist market in Asia

World bank states, India to be world‘s second largest economy after China by the

year 2050

Stable and investor friendly Central Government at the helm of affairs

Introduction of Value Added Tax or VAT and tax reforms

High degree of professionalism and corporate ethics

Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high

returns on investments

To invest US $130 billion for the development of infrastructure, by year 2010

To attract US $ 10 billion FDI for infrastructure development by the end of year 2008

Bullish stock markets

Hordes of foreign investors are thronging in to invest in Indian retail markets

Highly educated English speaking young workforce

Vibrant and multi cultured cities

Huge opportunity exists, especially in semi-rural and rural areas

Till date the second largest employer after agriculture sector, for the huge semi-skilled Indian

population

Offers highest shop density in the whole world

Having almost 1,20,000 shops, across the length and breadth of the country

In a nascent stage of development as an organized industry




SHOPPING MALLS

Shopping malls are an emerging trend in the global arena. The first thing that comes in our mind

about the shopping malls is that it is a big enclosed building housing a variety of shops or

products. According to historical evidences shopping malls came into existence in the Middle

Ages, though it was not called so. The concept of departmental stores came up in the 19th

century with the Industrial Revolution. Consumers wanted a better shopping experience and this

demand gave rise to the emergence of shopping malls in India.

Originally the first of the shopping malls was opened in Paris. Then the trend followed in the

other metros over the world, and there was a spree of shopping malls coming up at various

places. In this age of mass production and mass consumption, the concepts of shopping malls are

most modern method of attracting consumers. The concept of shopping was altered completely

with the emergence of these shopping malls.

Shopping was no longer limited to a mere buying activity - it has become synonymous with

splurging time and money. People simply go about roaming through the shopping mall in order

to peep through the window of the shop and often ending up buying something they like. The

consumers desire a combination of comfort and suitability which the shopping malls cater to, and

so this format of shopping has become so popular all over the world, and especially so in India.

The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more

crowds to shopping malls that are considered family hangout zones.

ADVANTAGES OF SHOPPING MALLS:

Increase in the growth of the organized retail sector

Monumental increment in economic growth

Employment generation by the organized retail sector

Good competition means better products & services

DISADVANTAGES OF SHOPPING MALLS:

The companies with superior resources would muscle out the ones inferior to them.

Monopolization of the organized retail sector

In India, the emergence of shopping malls has mostly altered the lifestyle of the consumers. With

the growth in income, changing attitudes, and also the demographic patterns favor the emergence

of shopping malls.



The trends to follow in the future:

The shopping malls favor a growth in the Indian organized retail sector by 10% within

2010

There would be different formats of shopping malls depending on the region.

GROWTH OF MALLS:

The Indian Retail Sector is booming and the growth of shopping malls is being seen as a clear

indicator of the economic prosperity in India. These shopping cum entertainment complexes are

getting bigger and better, sporting multiplexes and food courts to woo shoppers. Dominant retail

activity is visible in the top cities but tier II and III cities are also witnessing change.

Of late, global recessionary trends have not spared India, and its robust growth figures have

slipped to the region of 6%. Although India may not have been directly impacted, the global

trends have made the Indian shopper wary.


SUPERMARKETS

The concept of Supermarkets is not new to Indian consumers. Actually, the British colonial

government introduced the idea of Supermarkets to facilitate its officers with access of all

household goods under one roof. Supermarkets in India houses varied shops selling different

types of essential commodities along with luxury items. These Supermarkets are mainly

concentrated in urban areas or semi-urban areas. Supermarkets operating in India typically have

a heterogeneous mixture of large and small individual retailers. Most of these Supermarkets sell

branded products of both, domestic and international manufacturers. Supermarkets of India offer

products with different price bands for each and every sections of urban society.

THE ADVANTAGES SUPERMARKETS

Ranks 5th on global retail development index


Going to be the third largest economy in terms of GDP in next few years



World bank states, India to be world's second largest economy after China by the year

2050






Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and

high returns on investments








Till date the second largest employer after agriculture sector, for the huge semi-skilled

Indian population


Having almost 1,20,000 shops, across the length and breadth of the country


HYPERMARKETS

The concept of Hypermarkets is new to Indian consumers. Actually, the British colonial

government introduced the idea of Supermarkets to facilitate its officers with access of all

household goods under one roof. This led to the development of super-supermarket or modern

supermarket or Hypermarket. Hypermarkets in India houses varied shops selling different types

of essential commodities along with luxury items. These Hypermarkets are mainly concentrated

in urban areas only. Hypermarkets operating in India typically have a heterogeneous mixture of

large and small individual retailers. Most of these Hypermarkets sell branded products of both,

domestic and international manufacturers. Hypermarkets of India offer products with different

price bands for each and every sections of urban society.

THE ADVANTAGES OF HYPERMARKETS








2050













Huge opportunity exists, especially in urban and semi-rural areas

Till date the second largest employer after agriculture sector for the huge semi-skilled segment of

the Indian population

These Hypermarkets in India sells products like -

Electronic goods

Groceries

Vegetables and fruits

House hold items

Stationeries,

Pharmaceuticals and health care products

Consumer durables

Vegetables

Dress materials

Furniture‘s

Furnishings etc.

Hypermarkets in India - the first choice places

Delhi

Noida

Gurgaon

Hyderabad

Bangalore

Ahmedabad

Chandigarh

Hypermarkets in India - the operators

Reliance retail

Bharti-Wal-Mart retail




CONVENIENCE STORES

The successful launch and operations of convenience stores in India is credited to the Indian

economic reforms in July, 1991. Convenience stores in India are still at a nascent stage but are

headed for stupendous growth in the near future. The central government has ultimately realized

the need to open up the Indian retail sector.

The key advantages of convenience stores in India are:

India ranks 5th on global retail development index

India is the 2nd fastest growing economy of the world

India is poised to become the 3rd largest economy in terms of GDP in next few years

India ranks high among the top 10 FDI destinations of the world

India is the fastest growing tourist market in Asia

World bank states that India will become the world's 2nd largest economy after China by

2050

India has a stable and investor-friendly central government at the helm of affairs

It has introduced Value Added Tax (VAT) and tax reforms

It has a high degree of professionalism and corporate ethics

It has excellent investment opportunities in the retail sector and allied markets

India is to invest US$ 130 billion for the development of infrastructure by 2010

India will attract US$ 10 billion FDI for infrastructure development by 2008

It has bullish stock markets


Highly educated, English speaking, young workforce

Vibrant and multi-cultured cities

Huge opportunity exists in semi-rural and rural areas

Till date, India is the 2nd largest employer for the huge semi-skilled Indian population

Offers highest shop density in the whole world - has almost 1,20,000 shops across the

length and breadth of the country

In a nascent stage of development as an organized industry.

Types of convenience stores found in India are:

Specialty Stores

Supermarkets

Franchisee Outlets

Hypermarkets

Skeptics opine that liberalizing the Indian retail industry would jeopardize the income of small

retailers. However, small-time retailers and vendors also stand to gain from the launch of

convenience stores in India. Indian and international market leaders are flocking to the Indian

market to cash in on the specialty stores retail boom. Some industry leaders operating in other

sectors are also diversifying into the specialty stores sector.




SPECIALTY STORES

Specialty Stores of India and its subsequent successful operation is credited to India Economic

System reform earnest in July 1991. Specialty Stores of India is at its nascent stage and heading

for a stupendous growth in the near future. The Central Government has ultimately realized the

need to remove the insulation out of the Indian retail sector. Skeptics opine that opening up of

the Indian retail industry would jeopardize the way of income for the poor small retailers. In fact,

the actual story is quite heartening for the small time retailer and its vendors. Both, Indian and

international market leaders are pouring into the Indian market to Ancash on the specialty stores

retail boom. In fact, some industry leaders operating in other sectors are also diversifying into

specialty stores sector.

Specialty Stores of India - the key advantages are:



to be the third largest economy in terms of GDP in next few years




2050













Till date the second largest employer after agriculture sector, for the huge semi-skilled

segment of the Indian population


Having almost 1,20,000 shops across the length and breadth of the country


Specialty Stores of India like -

Pantaloons,

Steel junction,

Metal junction,

Food bazaar,



Haldiram bhujiwala,

Music world,

Nokia world,

Sony world,

Khadims,

Adidas,

Bata,

Raymonds,

Ganguram,

KC Das,

Bausch and Lomb,

Apollo pharmacy,

Sifyiway,

Are doing good business and the profit margin of these Specialty Stores of India are rising every

year.


FRANCHISEE OUTLETS

Franchisee outlets in India are predominantly unorganized and considerably new in concept. For

an international company with a famous product or service to sell, Franchisee outlets can provide

huge opportunity for fast expansion and deep market penetration. Opening up of Franchisee

Outlets saves initial capital investment. Franchisee outlets in India can effectively help in the

distribution process of goods and services in lesser time but creating similar effects on balance

sheet. The greatest advantage of opening Franchisee outlets in India is that it offers full

commitment from franchisees. And as a matter of fact the franchisees are more committed than

employers or staff since they own a share of the main business and are accountable for losses.

ADVANTAGES OF FRANCHISEE OUTLETS:

Franchisee enjoys liberty of self employment

The most successful way of starting a new business

Franchising opportunities exists in every area of business and trade

Low or no initial capital investment for the franchiser

Quality and reputation of the parent company is maintained

The license for franchise is renewable after or before the expiry of the term of contracts

Liabilities of parent companies are less

The Franchisee outlets have better commitments and responsibilities to discharge

Huge income opportunity for the franchiser and franchisee

No introductory advertisement is needed for the Franchisee outlets for the establishment

of the brand



SOME WELL KNOWN OUTLETS ARE:

Macdonald's

Kentucky Fried Chicken

Subway

Monginis

Sugar and spice

Coca cola

Pepsi

Frito lays

Perfetti

OPPORTUNITIES OF FRANCHISEE OUTLET:











Retail industry to attract US $ 10 billion FDI for infrastructure development by the end of

year 2008



Huge employment scope for the semi-skilled segment of the Indian population




3.5 SWOT ANALYSIS

A SWOT analysis of the Indian organized retail industry is presented below:

Strength:

1. Retailing is a " technology-intensive" industry. It is technology that will help the organized

retailers to score over the unorganized retailers. Successful organized retailers today work

closely with their vendors to predict consumer demand, shorten lead times, reduce inventory

holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building

competitive advantage through distribution & information systems in the retailing industry. They

introduced two innovative logistics techniques cross-docking and EDI (electronic data

interchange).

2. On an average a super market stocks up to 5000 SKU's against a few hundreds stocked with an

average unorganized retailer.

Weakness:

1. Less Conversion level: Despite high footfalls, the conversion ratio has been very low in the

retail outlets in a mall as compared to the standalone counter parts. It is seen that actual

conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other hand, a

high street store of retail chain has an average conversion of about 50-60%. As a result, a stand-

alone store has a ROI (return on investment) of 25-30%; in contrast the retail majors are

experiencing a ROI of 8-10%.

2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for

the mall outlets. Since the stand-alone outlets were established long time back, so they have

stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base.

Opportunity :

1. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010

making India one of the largest consumer markets of the world. The IMAGES-KSA projections

indicate that by 2015, India will have over 55 Crore people under the age of 20 - reflecting the

enormous opportunities possible in the kids and teens retailing segment.

2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at the

rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.

3. Percolating down: In India it has been found out that the top 6 cities contribute for 66% of

total organized retailing. While the metros have already been exploited, the focus has now been

shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been concentrated in

the metros is beginning to percolate down to these smaller cities and towns. The contribution of

these tier-II cities to total organized retailing sales is expected to grow to 20-25%.



4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for

new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse

range of products from FMCG to electronic goods to automobiles, attempting to provide farmers

a one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram group

which provides farm related inputs & services. The Godrej group has launched the concept of

'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed

along with the required knowledge for effective use of the same to the farmers. Pepsi on the

other hand is experimenting with the farmers of Punjab for growing the right quality of tomato

for its tomato purees & pastes.

Threats :

1. If the unorganized retailers are put together, they are parallel to a large supermarket with no or

little overheads, high degree of flexibility in merchandise, display, prices and turnover.

2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are just

a place to hang around with family and friends and largely confined to window-shopping.



3.6 Retail in Ahmedabad

What was a mere trickle a couple of years ago are fast turning into a flood? Cautious till recently

on Gujarat, organized retail biggies are now turning on their investment taps in the state and it‘s

not just Ahmedabad but also Surat, Vadodara and Rajkot are on their shopping lists and SG

Road, Satellite Road, CG Road, Ghod Dod Road, Dumas Road, Parle Point, RC Dutt Road, Race

Course Road and Kalawad Road are fast becoming a part of their vocabulary.

While Pantaloon Retail India Ltd, which made an entry into Gujarat four years ago, plans to

pump Rs 100 core in adding 7 lakh sq ft of retail space over two years, eager debutants like

Piramyd Retail, Shopper‘s Stop and Dubai-based Lifestyle, too, are shopping big.

"Queries from players like Big Bazaar and Shopper‘s Stop are coming in, ―says Vadodara realtor

Sachin Shroff. Adds Vadodara builder Chetan Dedia: "Few years ago, no one had expected such

a drastic change in the retail scenario. Now it is not just big names with deep pockets, smaller

players are driving in too."

Swinging the pendulum in Gujarat‘s favor is easy availability of low-cost realty, rapidly

expanding cities and a good base of high spending consumers.

"Real estate cost is reasonable and building laws are conducive to good growth which is why

cities here have expanded faster than others like Pune and Hyderabad, ―explains Rakesh Biyani,

director, Pantaloon Retail India Ltd. Pantaloon, which had an initial plan to open a mall in

Ahmedabad only, now plans to take it to Surat (1 lakh sq ft) and Vadodara, where it has signed a

1.3 lakh sq ft space at Race Course Circle. Also afoot are a Big Bazaar each in Rajkot, Vadodara

and Surat, two more Pantaloons in Ahmedabad (SG Road and Maninagar) and one each in Surat

and Rajkot.

Ahmedabad Retail is the large format retailing development in India. These large format retail

outlets are on increasing and now more and more coming from retail big names. The Organized

retail big names like Amdavadi wallet, Piramyds, Shopper's Stop and lifestyle retailing were

launched their malls in Ahmedabad Retail Sector. As well as the chain retailers like Pantaloons

and Big Bazaar were already have multiple outlets in Ahmedabad. These companies are eager

turning on their investment taps in Gujarat.

Ahmedabad increased activity during this quarter across Retail Markets. The insisting for real

estate was first and foremost motivated by retail players. The demand for Gandhinagar-Sarkhej

Highway and C.G. road was primarily driven by medium and large size format spaces. The

demand and supply additions for shopping cum office spaces of nearly 3 lakh ft to 9 lakh ft are

probable in these areas. With extra supply inflowing into the market, the costs are probable to

steady in the medium term.

The Ahmedabad City has improved leasing actions in the last quarter, which is first and foremost

motivated by the retail sector. The tendency is probable to go on in the next coming quarters as a

demand for Retail Spaces. IT locations continue to remain floating. The Retail Market in

http://timesofindia.indiatimes.com/articleshow/1139550.cms






Ahmedabad is observed a part in drift from pay for leasing. These Retail sectors, which are likely

to force retail growth in medium term, F&B, Apparel, Financial Services, Entertainment and

Jewellery. The retail market in Ahmedabad is familiarity go faster change from high street

retailing to organized retailing formats.

Source: http://www.ahmedabadretail.com



3.7 Malls and their Analysis

Iscon Mall, located in West Ahmedabad, is one of the most popular malls in the city. All the

famous international and domestic brands in categories of garments, electronics, cosmetics,

accessories, shoes and more are housed under one roof. Westside, Reliance Mega Mart,

Revolution, Tommy Hilfiger, and Esprit are some of the brands available here. Two huge central

atriums are perfect areas to host festivals. Ample parking and escalators leading up from the

parking lot all make this a very convenient shopping destination.



Ques: 1 What attracts you to visit Iscon Mega Mall?

1. Location

2. Outlets

3. Ambience

4. Spacious

46%

30%

10% 14%

Factors of Attraction

Location

Outlets

Ambience

Spacious



Ques: 2 What is your average spending per visit?

1. < 500

2. 500-1000

3. 1001-2000

4. > 2000

16%

36%12%

36%

Avg.spending(in Rs.)

<500

500-1000

1001-2000

2000>



Ques: 3 Rank these Malls according to your preference.

____ ISCON MEGA MALL

____ HIMALAYA MALL

____ GALLOPS MALL

____ GULMOHAR MALL

____ DEV ARC MALL

62%

26%

6% 4% 2%

Ranking

IsconMega Mall

Himalaya Mall

Gallops Mall

Gulmohar Mall

Dev Arc Mall



Ques: 4 According to you where does Iscon Mall lacks in?

1. High Prices

2. Confusion between Atrium:1 & Atrium:2

3. Nothing.

36%

16%

48%

Where Iscon Lacks?

High Prices

Confusion between Atriums

Nothing



SWOT

Strengths:

Location

Good Brand Mix

Food courts and Gaming zone

Weakness:

Atriums 1 and 2 confuse people and therefore less number of people enter Atrium 2

Reliance Mart

Prices are high

Opportunities:

Get a Multiplex so that more people come in

Organize events or workshops for children during vacations

Use space available for other brands

Threats:

Reliance Mart

Other Malls in vicinity



ANALYSIS AND SUGGESTIONS

People visit Iscon Mall because of its Location and variety of Outlets

According to them Iscon is a complete mall in terms of having all basic

necessities like food court, gaming zone and perfect brand mix

We found in our survey that around 30-40% people just come to spend time

Some students come here just to access free Wi-Fi

We saw that those who made purchases, their avg. spending was above Rs.2000

Many people come here just for food court

In our survey we found that more than 50% of the respondents preferred Iscon

over other malls

Most of the people suggest that the prices here are high

Also find difficulty in finding their preferred outlet because of Atrium 1 & 2

Few of them wanted some activities in the mall

The Map is difficult to understand

Around 50% of respondents are satisfied with the facilities provided by the mall



Himalaya Mall is one of the most happening malls in the city of Ahmedabad located on Drive in

Road. A Pot-pourri of entertainment, shopping and food outlets makes it a Pièce de résistance.

National and International brands like McDonalds, Adidas, ADLABS, Big Bazaar, Croma, Peter

England, Planet M, Crossword, K-Lounge etc are present in the mall.

The BRAND mix of Mall lives up to its positioning as "One Mall Fits All" i.e. catering to all the

segments of the society. With a parking capacity of over 230 cars and 700 two wheelers, 7

escalators & 5 lifts, Special ramps & toilets for handicap, makes it one of the most convenient/

hassle free places to visit. On an average13000 and 80000 people throng the mall on a weekday

and weekends respectively making it the favorite hangout place

Himalaya Mall is a part of Himalaya Group promoted by Modi Build Well Ltd which is a well

established company in Building and construction in Gujarat since 1992.



Ques: 1 What attracts you to visit Himalaya Mall?

1. Location

2. Outlets

3. Ambience

4. Spacious

50%

30%

10%10%


Location

Outlets

Ambience

Spacious




1. 1.< 500

2. 500-1000

3. 1001-2000

4. > 2000

17%

30%40%

13%

Avg.Spending(in Rs.)

<500

500-1000

1001-2000

>2000





____ HIMALAYA MALL

____ GALLOPS MALL

____ GULMOHAR MALL

____ DEV ARC MALL

34%

27%

17%

12% 10%

Ranking

Iscon Mega Mall

Himalaya Mall

Gallops Mall

Gulmohar Park

Dev Arc Mall



Ques: 4 According to you where does Himalaya Mall lack in?

1. Parking Facility

2. International Brands

3. Nothing

20%

50%

30%

Where Himalaya Lacks

Parking Facility

International Brands

Nothing



SWOT

Strengths:

Location

Adlabs , Mc Donalds and CCD

Stores like Croma and Big Bazaar

Gaming zone

Weakness:

Less number of international Brands

Less conversion ratio

Pay and park facility

Opportunities:

Get in international Brands

Fill empty spaces with good brands

Threats:

Recession

Unorganized retail outlets (Moonlight)

Brand awareness is less among people visiting the Mall




Centrally located Mall

Highest number of footfalls

Anchor Stores like Big Bazaar and Croma

It has like Adlabs, Mc Donalds, CCD and Scary House

Has separate Food courts and Gaming zone

Lot of events are organized

Pay and Park facility affects footfalls

Mall caters to middle class

Most of people come in to just roam around

Few of outlets are closed



GALLOPS

The 'GALLOPS', India's first designer mall is situated on Satellite Highway Cross Roads. The

'GALLOPS' spreads over 350,000 sq ft area with offering of almost 225,000 sq ft area is the first

mall of Ahmedabad.

'The 'GALLOPS' mall has been specifically designed to enable a large number of visitors to have

an interesting environment right through the day without any compromise of ease, comfort,

convenience or safety. By providing the best in shopping facilities in the city, the 'GALLOPS'

Mall promises to generate a lot of excitement amongst its patrons who are exposed to

international malls.

Four anchor stores such as Lifestyle, Max, Globus and Shoe Factory have made the GALLOPS

Mall already a 'MUST VISIT' place. The one of the most unique features of the Mall is its huge

parking space with facility to park over 700 cars.

http://news.oneindia.in/2006/06/14/gallops-unique-designer-mall-launched-in-ahmedabad-1150299369.html





Ques: 1 What attracts you to Gallops Mall?

1. Location

2. Outlets

3. Ambience

4. Spacious

50%

20%

20%10%


Outlets

Location

Ambience

Spacious




1. 1.< 500

2. 500-1000

3. 1001-2000

4. > 2000

10%20%

30%

40%


<500

500-1000

1001-2000

2000>





____ HIMALAYA MALL

____ GALLOPS MALL

____ GULMOHAR MALL

____ DEV ARC MALL

40%

25%

20%

10% 5%

Ranking

Iscon Mega Mall

Himalaya Mall

Gulmohar Park

Gallops Mall

Dev Arc Mall



Ques: 4 According to you where does Gallops Mall lack in?

1. High Prices

2. Less number of Outlets

3. Nothing.

40%

30%

30%

Where Gallops lacks?

High Prices

Less Outlets

Nothing



SWOT

Strengths:

First Mall in Ahmedabad

Anchor Stores like Lifestyle and Globus, which are only in Gallops

Weakness:

Location, it is not on the main road

No Gaming Zone

Less number of Food courts

Second floor is empty, only Banquet hall is there

Opportunities:

Get in more outlets

Get variety of food outlets

Do promotional Activities, like organize events for the people

Threats:

Recession





It being the First Mall in Ahmedabad, people know it very well

It laid the foundation for Malls in Ahmedabad

People come in for Lifestyle and Globus

Also people said that the structure is simple and attractive

Few of the people said that prices are high

Also people want more outlets

They also said second floor is empty and needs to be filled up to attract customers

Few of them also wanted food courts inside the mall

People also wanted activities to be held in the mall



GULMOHAR PARK

Gulmohar Park is the only mall by Retail Company i.e. Kshitij, which is the subsidiary company

of Pantaloons retail India Ltd. Gulmohar Park, is branded as lifestyle mall. Pantaloons and E

zone are its anchor stores. It has got unique brands like Sworski and Ethinicity which are the

only stores in Gujarat.

It is one of the better managed malls in Ahmedabad. It has perfect brand mix. Also the structure

is simple and attractive as a result people step in for the purpose of shopping rather than roam

around.



Ques: 1 What attracts you to visit Gulmohar Park?

1. Location

2. Outlets

3. Ambience

4. Spacious

27%

47%

20%

6%


Location

Outlets

Ambience

Spacious




1. 1.< 500

2. 500-1000

3. 1001-2000

4. > 2000

14% 6%

27%53%


<500

500-1000

1001-2000

2000>





____ HIMALAYA MALL

____ GALLOPS MALL

____ GULMOHAR PARK

____ DEV ARC MALL

40%

27%

13%

13%

7%

Ranking

Iscon Mega Mall

Himalaya Mall

Gallops Mall

Gulmohar Park

Dev Arc Mall



Ques: 4 According to you where does Gulmohar Park need to improve?

1. Gaming Zone/Kids Area

2. Sitting Place

3. Nothing

47%

33%

20%

Where Gulmohar Lacks?

Gaming zone/Kids Area

Sitting Place

Nothing



SWOT

Strengths:

It is Mall of a Retail Company i.e. Kshitij group

Stores like Ethinicity, Pantaloons and Ezone

It is Lifestyle Mall

Structure is Simple

Weakness:

High Prices

No seating space

No facility of drinking water

Gaming zone for children not enough

Opportunities:

Get more games for children

Make seating place available

Organize events during weekends

Also can reduce prices

Threats:

High Prices

Recession





People visit Gulmohar Park because of its Location and Variety of Outlets.

We saw that those who made purchases, their avg. spending was above Rs.1500

People also said that the structure is simple, small and it is easy to locate outlets.

It being a Lifestyle Mall people comes in for shopping only and not to just roam

around.

Most of the People come in for Pantaloons.

Though it has outlets which are First in Ahmedabad (Swarovski, Ethnicity) people are

not aware of it.

Most of people said that there is no sitting place.

Also Drinking water facility is not there.

Parents also said that there should be Gaming zone/Kids area for the kids.

Few of the people said that prices are high.



DEVARC MALL

Dev Arc Mall is situated on SG Highway. It is Mall which has a multiplex, retail and commercial

outlets. Its anchor store is Marks and Spencer and Bose. It is Mall which has everything for

people coming to visit it like food courts, theatre, gaming zone, events, etc.



Ques: 1 What attracts you to Dev Arc Mall?

1. Location

2. Outlets

3. Ambience

4. Spacious

47%

20%

6%

27%


Location

Outlets

Ambience

Spacious




1. 1.< 500

2. 500-1000

3. 1001-2000

4. > 2000

27%

40%

27%

6%


<500

500-1000

1001-2000

>2000





____ HIMALAYA MALL

____ GALLOPS MALL

____ GULMOHAR PARK

____ DEV ARC MALL

40%

20%16%

14%10%

Ranking

Iscon Mega Mall

Himalaya Mall

Gallops mall

Gulmohar Park

Dev Arc Mall



Ques: 4 According to you where does Dev Arc Mall need to improve?

1. More Outlets

2. Events

3. Gaming zone

4. Food courts

55%

10%

15%

20%

Where Dev Arc Lacks?

Outlets

Events

Gaming Zone

Food Courts



SWOT

Strengths:

Location

Anchor store like Mark and Spencers and Bose

Cinemax

Commercial area

Weakness:

Improper Brand Mix

Most of the stores are empty

Mall Management not good enough

Opportunities:

Reopen Indiabulls and Magnet

Get more outlets

Promote the Mall

Threats:

Low conversion ratio

Recession





Dev Arc is a complete mall with all Good brand mix, multiplex and food courts,

along with commercial area.

Also has stores like Mark and Spencers and Bose which very well known.

Location of Mall is good.

Had held activities for customers.

Though it is a good mall, but it didn‘t work because it was not marketed properly.

Also the stores were sold by the developer and the stores themselves had to

survive.

Also stores are not satisfied with the Mall Management.

India Bulls has also shut down.

Lots of Stores are empty.

On other had commercial area is doing well.



3.8 Study of Standalone Outlets

We visited the following Standalone outlets at CG road, Ahmedabad. The data we found

are as following:

We started our survey with Levi‘s which is at CG Road, It is Asia‘s 3rd

largest store in

terms of store size which is approx. 4500 sq ft. We found that sales at this store were

more as compared to its other outlet in Iscon Mall.

REASONS: 1. Its prime location i.e., being at a High Street.

2. Since years CG Road is known for its ambience and variety of outlet it offers.

3. Brand conscious segment of customers prefer this standalone outlet as it offer

latest and more varieties.

4. It gets customers who are just in mood of purchasing what they have come

for.

Next we visited Pantaloons which is in Abhijit III: Law Garden.

We found that this outlet of Pantaloon was doing best among all other

Pantaloons in the city.

We even found that Pantaloons in Abhijeet III was doing better in terms of

sales when compared to Pantaloons (Inox) at Vadodara.

REASONS: 1. Again reason was same, its prime location and it being a standalone outlet.

2. Talking to some customers we came to know, that they preferred a standalone

outlet of Pantaloons to its other store which is in Gulmohar Park and 10 Acre

Mall.



Jadeblue: Pariseema Complex, C.G.Road, Ahmedabad

It started from a tailor‘s shop of a meagre 250 square we are now a team of over

200 skilled workers working towards a common goal of excellence, a goal that

would be possible because it is a team.

Four in house brands namely Jade Blue, Jb Studio, Greenfibre, and Metal.

It‘s a grand store, covering 13000 sq. feet of area, at a prime location on C. G.

road of Ahmedabad.

Having started from a tailor‘s shop of a meagre 250 square we are now a team of

over 200 skilled workers working towards a common goal of excellence, a goal

that would be possible because it is a team.

Four retail outlets in the city, a few more coming up in very near future,

prominence in the fashion scene of Baroda and Rajkot, plans of strategic

expansion in other cities of Gujarat and the entire country.

REASONS:

Jade Blue produces in house labels which are totally different in design and

looks, which has resulted in its brand loyalty for some customers.

Its store has a wonderful ambience along with variety of price range which fits in

pocket of everyone.

They believe in maintaining good relationship with their loyal as well as new

customers by serving them in respectable manner.

Westside: Abhijeet – V

Established in 1998 as part of the Tata Group, Trent Ltd. operates Westside, one

of India's largest and fastest growing chains of retail stores.

The Westside stores have numerous departments to meet the varied shopping

needs of customers. These include Menswear, Women‘s wear, Kid‘s wear,



Footwear, Cosmetics, Perfumes and Handbags, Household Accessories, lingerie,

and Gifts.

The company has already established 36 Westside departmental stores

(measuring 15,000 - 30,000 square feet each) in Ahmedabad, Bangalore,

Chennai, Delhi, Gurgaon, Ghaziabad & Noida (to be considered as 1 city),

Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Lucknow, Mumbai, Mysore,

Nagpur, Pune, Rajkot, Surat, Vadodara and Jammu.

Trent ventured into the hypermarket business in 2004 with Star Bazaar, providing

an ample assortment of products made available at the lowest prices, aptly

exemplifying its ‗Chota Budget, Lambi Shopping‘ motto.

.

Pepe: CG Road

According to its store manager, he told us that both outlets of Pepe are doing well

in Ahmedabad.

Area wise footfalls are being shared.

He even told us that upto 40% of customers in Ahmedabad are Brand conscious,

they will never get attracted to discounted formats.

United Colors of Benetton: Crystal Square

United Colors of Benetton better known as UCB is doing better in Mall.

Speaking to its store manager at Crystal Square, we came to know that UCB‘s

store in Iscon Mega Mall was doing better than other UCB store outlets.



REASONS:

Format like UCB is not known by everyone; even the brand awareness is quite

low with the customers.

But slowly they are coming up with different varieties and formats like UCB Kid,

UCB Adult etc.

Being an international brand it is doing better than other famous international

brands like ESPIRIT.



CONCLUSION

About Real Estate:

After 8 weeks of our research work we came to know about different formats of real estate in

Ahmedabad. They are Residential, Commercial, IT Parks, Retail Real Estate, SEZ, etc.

After speaking to concerned people of various real estate developers we came to know which

format is likely to work in near future in Ahmedabad. We also came to know that Ahmedabad is

dived into various zones namely R1, R2, R3.

R1 --- High Rise

R2 --- Low Rise

R3 --- Bungalows

Older Ahmedabad comes under AMC (Ahmedabad Municipal Corporation)

New Ahmedabad comes under AUDA (Ahmedabad Urban Development Authority)

Most of them said that Residential would work in near future followed by Commercial.

About Retail Sector:

Different formats in Retail sector are:

1. Shopping Malls

2. Convenience Stores

3. Hyper Market

4. Super Market

5. Specialty Stores

6. Franchise Outlet

In Ahmedabad we found that standalone outlets were doing better when compared to Malls.

Reason being improper management and oversupply of malls. We also found that S.G Highway

is over supplied by Malls, because of which footfalls are being shared and therefore none of the

Mall is doing good. Also one of the reasons of Malls not doing well is Recession, which has

affected nearly every sector.

Malls will surely do well in near future only if they are less in number, proper management and

proper brand mix. Also city like Ahmedabad demands such format of Shopping because in



whole country organized retail has gained good momentum and Ahmedabad is one of the target

cities which can surely cater to this format.

QUESTIONNAIRES

For Real Estate Developers:

1. Different format made by your company

2. Is your existence is in both new and old Ahmedabad? Reason behind it.

3. How the location is been selected of any plot?

4. How the rates are decided of any place? Is that according to format or location rates?

5. At what time rates are decided before or after the project are completed?

6. Do you have to follow government policy and limitation while making building? If yes,

what are they?

7. Your team of engineers is in house or hired for particular project?

8. Finance is in house or taken through loan or any other source?

9. Are you affected by the recession?

10. According to you what is the scope of real estate? And which format will work in near

future?

For Mall Managers:

1. Since how long you are with this Mall?

2. Being a Mall Manager what are your duties and what‘s your working profile?

3. According to you, what does mall Management include?

4. What things are to be seen while designing a Mall?

5. What are prime necessities of Mall

6. Does a Mall approach a particular brand for their mall or it‘s vice versa?



For Store Manager of an Outlet:

1. Since when are you in Gallops/Himalaya/Devarc/Iscon/Gulmohar Park?

2. Did Mall Management approach you or you approached the mall?

3. How well is the store doing?

4. Has recession affected your sales? If yes then what are you doing to overcome it?

5. What is your conversion rate? And what is your average ticket size?

6. How many outlets do you have in the city? Having multiple outlets, does it benefit?

7. Who are your competitors in the mall? Who is doing well?

8. According to you what is preferred an outlet in a mall or a standalone outlet?

9. If not Gallops/Himalaya/Devarc/Iscon/Gulmohar then which would have been your

second option?

For Customers:

Name: _________________

Age: ____Occupation:_____________

Area of Residence: __________________

Q1 what attracts you to Gallops/Himalaya/Devarc/Iscon/Gulmohar Park?

1. Location

2. Outlets

3. Ambience

4. ____________

Q2 what is your average spending when you make a visit?

1. < 500

2. 500-1000

3. 1000-1500

4. 1500 and above

Q3 which are the outlets you like here in Gallops/Himalaya/Devarc/Iscon/Gulmohar Park?



---------------------------------------------------------------------------------------------------------------

Q4 Rank the following Malls. (1 – Most preferred and 4- least preferred)

_____Gulmohar Park

_____Iscon Mega Mall

_____Gallops

_____Himalaya Mall

_____Devarc Mall

Q5 Any suggestions for Gallops/Himalaya/Devarc/Iscon/Gulmohar park.

__________________________________________________________________________

________________________________________________________________________



Appendix

Malls losing brands to high street

8 Jan 2009, 0323 hrs IST, Avinash Nair & Yamini Dhall, ET Bureau

AHMEDABAD: Indian malls, like their US counterparts, are loosing brands to high street.

Retailers grappling with issues of viability, visibility

And branding is now quitting malls. Recent months have seen a gradual, but noticeable exodus

of brands from malls to single-format stores on high street.

This trend has added to the stagnant spaces in new malls, which have already been finding it

difficult to get initial bookings from retailers. According to a report by global real-estate

solutions firm Cushman & Wakefield (C&W), the mall vacancy rate in urban India touched a

high of 16% by the end of 2008.

The survey was carried out across eight major cities—NCR, Mumbai, Kolkata, Ahmedabad,

Bangalore, Chennai, Hyderabad and Pune. The reports attribute the vacancy levels to

inconsistent mall supply and revival of the high street as the most sorts after retail destination.

The highest level of vacancy in malls was witnessed in Delhi and Pune, with vacancy levels of

24% and 15%, respectively.

―There is a gradual but noticeable exodus from malls to single-format stores on high street.

Today, retailers seek viability in stores and give lesser importance to stores for branding

purposes,‖ says JLLM (Jones Lang LaSalle Meghraj) MD (retail) Shubhranshu Pani.

―The retailers are preferring the high street because of higher visibility, independent access and

the greater comfort level as compared to the malls,‖ Cushman & Wakefield retail services

director Rajneesh Mahajan adds.

http://economictimes.indiatimes.com/



Emergence of Malls

- By Deepak Verma

Source: http://www.coolavenues.com/images/deepak-malls-1.gif

Malls as we understand, is a form of organized retailing. They lend an ideal shopping experience

with an amalgamation of product, service and entertainment, all under a common roof. Before

going into the details of emergence of malls, let's see how the Indian retail sector has evolved

over the years and how the concepts of malls came into being.

The era of rural retail industry could be categorized into two formats: weekly markets and village

fairs. Primarily, weekly formats catered to the daily necessities of villagers. Village fairs were

larger in size with a wide variety of goods sold from food, clothing, cosmetics and small

consumer durables. The traditional era saw the emergence of the neighborhood 'Kirana' store to

cater to the convenience of the Indian consumers. The era of government support saw indigenous

franchise model of store chains run by Khadi & Village Industries Commission.

The KVIC has a countrywide chain of 7000 plus stores in India. This period also witnessed the

emergence of shopping centers with car parking facility. The modern era has a host of small and

large formats with exclusive outlets showcasing a complete range of products. The department

stores and shopping malls targeting to provide a complete destination experience for all segments

of the society. The hyper and super markets are consistently trying to provide the customer with

the 3 Vs (Value, Variety & Volume). Over the last three years, this sector has witnessed an

exorbitant growth due to the establishment of numerous international quality formats to suit the

Indian purchase behavior, the improvement in retail processes, the development of retail specific

properties and the emergence of both domestic and international organizations has witnessed the

emergence of malls.

The story of great Indian mall boom started from the emergence of Gurgaon, a sleepy little

suburb of Delhi. In a development that surprised many town planners, Gurgaon transformed

itself overnight by first housing the headquarters of many multinational corporations and banks,

and then calling itself the "shopping-mall capital of India".

Each mall in Gurgaon is about 300,000 square feet in size, with every leading retailer, or, to use

a trade parlance, "anchor", occupying anything between 60,000-80,000 square feet.



It is not just the north of the country that is seeing a furious construction of malls.

Visakhapatnam, a fast-growing city in the southern state of Andhra Pradesh, is witnessing a huge

demand for shopping malls. The biggest of them, CMR Shopping Mall, occupies 60,000 square

feet over five floors. The throngs of buyers who visit the mall are working class and office

employees of the numerous public and private sector outfits that are based in Visakhapatnam.

Similarly, Ahmedabad in western India is slowly becoming a magnet for shopping malls. More

than half a dozen malls have sprung up in Ahmedabad, known as a fading city of dying textile

mills until a few years back. The biggest of them, aptly called Super Mall, occupies a gargantuan

90,000 square feet and has 200 shops in its folds.

But the biggest mall-construction activity in India is taking place, as expected, in Mumbai, the

country's financial and business capital. In all, 25 malls are under construction, each measuring

anything between 90,000 and 600,000 square feet. A hefty Rs. 4 billion (US $87 million) is

being pumped into these projects by 20 investors. About a dozen malls are already up and

running in the up-market south side of the city, as well as the down market distant suburbs.

The anchors that first pull the crowds here - and at other malls all over the country - are as varied

as they come. There are the US and European chains such as McDonald's, Lacoste, Pizza Hut,

Benetton, Subway, Marks & Spencer and Mango.

Their success has spawned the emergence of successful Indian chains such as Pantaloon, Globus,

Shoppers' Stop, Giant, Lifestyle and Big Bazaar. Stores named after popular branded

merchandise also act as effective anchors. These include the likes of Tommy Hilfiger, Swatch,

Arrow, Louis Vuitton and Nike.

Foreign mall operators cannot enter India as foreign companies are not allowed to own real

estate in India. Companies like Nike, McDonald's and Reebok sell at mall outlets through their

Indian subsidiaries or franchisees. McDonald's, for example, has appointed two master

franchisees in India, and these in turn have appointed numerous sub-franchisees all over the

country. A sub-franchisee, therefore, could open a McDonald's outlet either as a stand-alone

store or as one of the many stores in a mall.

Making the job easier for the anchors is a gradual change in the Indian economy from a

socialistic to a capitalistic one. This has led to a rise in the numbers of middle-class consumers,

their wallets stuffed with more disposable income. According to one estimate, over the past three

years, consumer spending has increased at a respectable rate of 12% per annum.

Another reason for the ongoing boom in mall activity is the opportunity to retailers for a greater

accessibility to real estate at affordable prices. Part of this is due to easier availability of bank

and institutional finance. And in places such as Mumbai, the freeing up of much-needed real

estate. This has happened with the many closed textile mills in the central part of the city now

being allowed to exploit their real estate for other commercial purposes. Investors are attracted



by the 14% returns in the malls business, compared to 11% in the office segment and 6% in the

residential segment.

For the young crowd, malls have become areas in which to "hang out", to catch up with friends

in stores like Cafe Coffee Day and Barista, each vying to be the Starbucks of India. There's also

an entertainment factor, with more and more of the youngsters beginning to see shopping as an

enjoyable passtime.

Real estate market could recover by Diwali

23 May 2009, 0952 hrs IST, Sandeep Sadh,

After a long time we are witnessing real estate developers taking pride in reducing or slashing

rates in Mumbai, Thane and Navi Mumbai to Ancash on the existing demand in the real estate

market.

The good deals may be offered for a few weeks or for the first ten properties or for a killer deal

for a time-bound two days or similar schemes but yes, the writing is clear on the wall that the

willingness to connect with the "real" pricing has dawned on the developers to sell at reduced

prices to encourage more and more sales.

With the new UPA government there are a lot of hopes and it will be interesting to see how the

next few months unfold for the property market. We still need a great deal of transparency to be

infused in the way we deal in the property market.

The sales teams in the builder/ developer offices are at their all-time creative best with sales

tactics. This is also a good sign and a dawning that if the wheel stops there will be a crisis of

sorts of the kind witnessed earlier this year, when sales plummeted big time.

They now understand clearly that with buyers unwilling to relent on unrealistic pricing, there is

an even greater need to price competitively, maybe with a lower profit margin, than holding on

to the price and project as the interest meter runs. The mantra for developers in the present times,

I guess, is to be aware of the markets (realistic demand and supply) and the competition, which

the buyers know today.

For a buyer to understand the market more clearly before making a decision he/she must

understand at which juncture the market is hovering; also, with fresh developments in the

political arena, what the impact will be in coming months. An important point to note would be

that, yes, there has been a correction up to 15 to 30% already in the market post December 2008

and prices have come to September 2008 levels, which were already high in any case and up on

account of the festival demand which happens nearly post monsoons by default.




After a correction, slowdown, or a 30% reduction, one should not expect the markets to gallop

again, but the next couple of years at least will be stable, as after a correction you cannot go up

again quickly. With a stable government we can expect more rational policies but a stock market

kind of jerk in prices will be unrealistic in the property prices and may be termed speculative. Let

us be sensible for once; just when things have just started moving a little, let us not think of

killing the golden hen and taking out all eggs at one time.

A good 2BHK in the suburbs is not less than Rs 6 to 8 million, which is not cheap by any

standards. Our city still does not have the appropriate infrastructure to support high pricing in the

suburbs, especially with connectivity issues, and with a lot of developers under a liquidity crunch

it is essential to send out the right signals. The buyer today is under tremendous pressure even

when it comes to documentation and with many banks tightening the belts on approvals, it is

essential to invest in a project which offers 100% complete paperwork.

All of us know that with the archaic legal systems we live in, there are always loose ends

somewhere and this is one area all developers should focus on. Nearly 78% of buyers in today's

market would opt for a loan to procure the new property and most would prefer a loan to-value

ratio (LTV) of around 80-85%, which typically means that if the title is not clear and

transparency of the paperwork is missing, the deal will not happen.

The uncertainty and fear factor still weighing heavily on a buyer's mind gets manifested in the

fact that 59% of respondents on a survey would like to buy only a ready possession property or a

property nearing completion as past trends have shown delays in construction.

With the current economic slowdown, they are more concerned today about possession

timelines. Only about 20% home buyers are keen to invest in properties at their launch stage at

attractive prices, and even that, only of selective developers who have a track record. This is as

per a survey that a leading bank conducted after the recent Thane exhibition. The developers

need to work very hard to win this confidence.

In order to capture the client who is looking to buy a home in today's market conditions, one

should look at microanalysis on both demand and supply first. The maximum demand is in the

price range of Rs 40 lakh, going up to the Rs 1 core bracket, and that too, for ready-to-move into

homes.

Looking at the buyer's mind, if he is looking at Malad, he wants to try to find a house in Andheri,

or similarly, if he is looking at Navi Mumbai, he wants to experience Chembur or Ghatkopar or

any other location where he can compromise and get it within a particular price range.

Of course, when he is out on the field he wants to know if rates have bottomed out in the

location, project or surrounding location. This typically means a delayed decision of the

informed buyer; from the time he puts together his first potential shortlist, it can easily be a

period of a month or two. If builders start telling them they will increase prices, they will go to

the nearest competitor. In a buyer's market, they know they can pit one against the other.



The coming weeks will be interesting, with stock markets climbing, recession clouds

disappearing and the hopes that the new UPA government will bring in fresh policies for the

housing industry. With all this, there is a strong chance that there may be a great deal of

movement during the Diwali period.

The cycle had slowed down in Diwali 2008 and can come back with a bang September 2009

onwards, but this depends on prices being stable. It may be an opportune moment through the

end of the year to sell as much and increase liquidity and focus on new projects. So, let us hope

with this competition, the buyer encases.

(Sandeep Sadh is CEO, Mumbai Property Exchange. The views expressed are personal.)

India retail sector reboots as slowdown pinches

17 Apr 2009, 1254 hrs IST, REUTERS

MUMBAI: An economic slowdown is prompting India's retailers to sharpen their focus, while

foreign firms are pausing after scrambling to enter a

Market named most attractive retail destination three years running.

As economic growth picked up to more than 9 per cent in recent years, a swelling middle class

attracted big Indian corporate such as Reliance, Tata Group, Aditya Birla group and Bharti

Enterprises to the retail sector.

Global retailers Wal-Mart, Tesco and Germany's Metro AG also felt the pull.

But the lure has dimmed as economic growth has slowed to below 7 per cent and spending has

tightened.

Retailers are closing stores, curbing spending and repositioning themselves to ride out the tough

times. But the shake-out should leave the sector in a stronger position to take advantage of any

rebound in growth, analysts say.

Brokerage Edelweiss Securities expects the upheaval to last 12-18 months.

"This will test the resilience of business models and operational efficiencies. Players who can

continue to attract consumers with attractive discounts and maintain efficiencies in the system

will emerge winners," Edelweiss analyst Priya Ayyar said in a report. "We expect value retailers

like Pantaloon Retail to fare better."

A T Kearney, which ranked India the most attractive retail destination from 2006 to 2008 in its




annual Global Retail Development Index, last year valued the Indian retail market at $511

billion.

It sees this rising to $833 billion by 2013. But in a market dominated by small-scale owner-

operators, often using basic and temporary premises, organized retail is estimated at less than 5

per cent, offering huge potential for growth.

CHANGING STRATEGIES

Subhiksha Trading Services, which operated about 1,600 discount stores across India, ran out of

cash last October. The unlisted company's operations are nearly at a standstill and it is

undergoing a "debt restructuring exercise."

The setback for retailers in India is seen as a necessary one after companies opened outlets at a

furious pace in unviable locations at exorbitant rents, charting out ambitious expansion plans

relying on debt.

"They will now look at how to run a fundamentally sound business with a proper store format,

proper location and headquarter support," said Anand Raghuraman, partner and director at

Boston Consulting Group (BCG).

Retailers are starting to put their houses in order. India's largest listed retailer, Pantaloon Retail,

faced with falling sales in various products and high inventory costs, is reworking its strategy.

It is focusing on cost and supply chain efficiencies, high-margin private labels, better credit

terms and prices from vendors and re-negotiating lease rental agreements, Fitch Ratings said.

Pantaloon sales, which dipped in February from the previous month, saw an uptrend in March

due to aggressive discounts and promotions. Its shares have risen some 60 per cent from a record

low hit on March 9.

Despite slowing sales Pantaloon Retail still figures in buy recommendations by brokerages.

Cash-strapped Vishal Retail is closing stores and has no plans to open more next year, but will

expand through the franchisee route, says Manmohan Agarwal, Chief Executive, Corporate

Affairs.

British retailer Marks and Spencer, facing falling sales at home, is repositioning itself in India,

and is looking at larger format stores to attract more people.

"We have not been able to take advantage of the opportunities we had so far," said Nandini

Sethuraman, head of marketing at Marks and Spencer, India.

Bigger stores with a good catchment area are seen attracting more customers, she said. "Lower

rentals help us identify more viable properties."



Others are more cautious -- Britian's Home Retail pulled out of an Indian mail-order catalogue

venture in January because its expectations had not been met.

French retailer Carrefour, which, media reports say is searching for a joint venture partner for its

India retail operations, plans to open its wholesale outlets in the country by the end of 2009 or

early 2010.

OPTIMISM

India's retail sector has been growing at 30-40 per cent annually over the past decade, according

to KPMG. It is now expected to grow at a more sedate 15-20 per cent for the next 2-3 years, but

the India retail story is still intact.

Real estate rentals, a high component of cost, have fallen by up to a quarter from their peaks in

November 2007, which will work in the retailers' favour, analysts said. Consumer spending

meanwhile is expected to pick up later in the year.

Analysts say the economic slowdown is likely to lead to more focus on value-retailing in

clothing and food in coming months and a shift away from lifestyle retailing, a strategy that

should benefit local retailers.

"Value-retailing players like Pantaloon, Reliance, etc, are more likely to benefit in the current

scenario than lifestyle players like Shoppers Stop," Angel Broking said in a report.

Reliance Retail, a subsidiary of top conglomerate Reliance Industries Ltd, had announced plans

in recent years to spend more than $5 billion to roll out hundreds of supermarkets across India.

Though a thin margin business, the food and beverages sector is seen doing well, BCG's

Raghuraman said.

Nestle, with its wide portfolio of products including the popular Maggie noodles, is seen

enjoying brand preference.

"The segment which Nestle caters to is unlikely to see any down trading," broker K.R. Choksey

said in a report.

Overseas retailers are still keen on India but prefer to wait for a year or more.

Restricted foreign investment in Indian retail puts off overseas firms, who prefer coming in on

their own. Single brand foreign retailers are allowed to take up to 51 per cent in a venture with a

local firm, while multi-brand retailers are limited to franchise or license operations.

"The demographics ... are there, there is still opportunity," said Anshuman Magazine, Chairman

and MD, CB Richard Ellis, South Asia Pvt. Ltd.



Reduction in Rent

This could be the flip side to the slowdown story which modern retailers are welcoming with

open arms. At a time when growth has slowed down, large retailers like the Future group,

Reliance Retail and Aditya Birla Retail are in the midst of furiously renegotiating rentals to bring

down costs. A correction in the real estate industry has been long overdue, and taking advantage

of the situation, modern retailers have called a war on costs to tide over the slowdown. Most of

the modern retailers either purchased or rented properties at the peak of the real estate market.

This has seriously dented their ability to make profits from the retail business, especially at the

time of an economic slowdown.

Said a Reliance Retail spokesperson: ―We are actively renegotiating rentals across formats and

hope that, on an average, this would bring down costs by about 20%-30%.'‘ According to Pranay

Vakil, chairman of of real estate services company Knight Frank: ―The headroom for reducing

rentals could be anywhere between 10-35%. In exceptional cases, it could even go up to 40%.

The exact amount would depend on the location.'‘ Aditya Birla Retail, which is expected to more

than double its turnover from Rs 500 crore last year to Rs 1,200 crore this financial year, is quite

clear that if a real estate owner does not bring down the rentals of a certain store, it would not

hesitate to relocate.

―We hope to garner a very sizeable amount from renegotiating rentals. We are hopeful there will

be softening of rentals. If this does not happen, in certain cases we will move out if the rental to

sales ratio is not good enough,'‘ said Thomas Varghese, CEO, Aditya Birla Retail. There are

nearly 660 stores under Aditya Birla Retail, which has relocated or closed down some 50-odd

stores since September 2008, due to various reasons, including the fact that these stores did not

fully meet good retail principles –such as right location, right catchment area — or were weighed

down by high rentals.

For leading retailer the Future group, group rentals account for 6% of sales. It plans to bring this

down by another percentage point or so in the immediate future. ―Given that all the players are in

the midst of renegotiating rentals, among other plans, to tide over the current slowdown, we are

also trying to bring it down, even though we are already on the lower side,'‘ said Kishore Biyani,

CEO, Future group. Biyani said that since most of its properties were signed in a different era,

the group has benefitted from this. The Future group is currently collaborating with developers to

work out a win-win model and a revenue sharing deal. According to commercial real estate

services company, CB Richard Ellis, India‘s retail market is currently valued at $511 billion.

Organised retail currently accounts for less than 5% of the total retail market.



Retailers on terror edge

Every time there is a terror attack, or a threat of one, it‘s bad news for shopping malls and large

retail outlets that not only see a drop in visitors and sales, but also come under greater scrutiny of

security agencies.

The serial bombings in Bangalore and Ahmedabad through Friday and Saturday hit weekend

sales at retail hubs of these two cities as several shopping malls were ordered to shut early and

people were kept away fearing more explosions. Retail trade was also hit in other parts of the

country, but to a lesser extent.

―There has been a definite fall in business especially in areas such as Bangalore, Ahmedabad,

Gujarat and Surat,‖ said Rajan Malhotra, CEO of Big Bazaar. ―We were asked to shut our stores

early in Indore and Surat. Overall, there was a 10 per cent fall in business as apart from fear

psychosis, business also got affected due to heavy rains in many major cities.‖

Grocery and food retailer Subhikha saw a 20 to 30 per cent drop in footfall at its stores in

Bangalore and major cities of Gujarat, but elsewhere business was as usual, said R Subramanian,

managing director of the company.

Vishal Retail, which is mostly into apparels and home furnishing, said its sales were down 20 to

30 per cent compared to a normal weekend.

The drop in visitors is the most immediate impact, but in the longer run retailers have to step up

security-related spending, including insurance cover against terror attacks.

―We spend close to Rs 14-15 crore on security every year,‖ said Subramanian. ―We also have an

insurance policy in place worth about Rs 1,500 crore.‖

Shoppers Stop, which has not yet taken any specific insurance policy against terrorism, said it is

reviewing its security needs. ―We have made all the necessary investments we needed to for

purpose of security,‖ said BS Nagesh, managing director of the company. ―We will be in

discussions today to take appropriate decisions to beef up security.‖

July 28, 2008

Source: Hindustan Times

Mall hoppers don’t spell sales

Mall developers and retailers in India may be on an expansion spree but signs that everything is

not right with the retail industry in Gujarat are beginning to show. Picture this — Around 50 per

cent of the branded store outlets have shut down at India‘s first designer mall Gallops, located

off the Sarkhej-Gandhinagar Highway, while a furlong away, Reliance Mart, the first in India

inaugurated by Mr Mukesh Ambani on August 15 last year, attracts mostly tourist crowds.



These shoppers do not spend money at the mall. They are a new breed of tourists who hop from

mall to mall ‗just to see‘ what it is like or simply to beat the heat in the fully-air-conditioned

atrium.

They are different from the youngsters who hang out at malls with friends or frequent the food

courts. Most people seen at the Iscon Mall, which houses Reliance Mart as well, are either

tourists from other cities or local people visiting the mall for the first time, shop-keepers admit.

―We have just come to see what it is like here. When we came to Ahmedabad, people told us that

this was a must-see place, as it is the biggest in Asia,‖ said Ms Geeta Parikh of Jamnagar,

visiting the mall with her son.

The retail scene of Ahmedabad, which used to be concentrated on the business artery of CG

Road, has begun to shift to other areas of the city, of which SG Highway is one. Malls such as

Big Bazaar, Dev Arc and Vishal Mega Mart are jostling for space on the Highway, leaving the

customer spoilt for choice. That is the reason why some of the malls, such as the 3.5 lakh sq.ft

Gallops, set up at an investment of Rs 80 crore, wear a deserted look. ―As many as 50 per cent of

the shops have shut down here. Of the 12 outlets opened two years ago at the food court, only

four are operational today,‖ says painter Mohsin Shaikh, whose art gallery Spandan is located on

the second floor of Gallops.

He has an interesting theory about retail in Gujarat. ―People in Ahmedabad are new to mall

culture and mostly prefer shopping from places they are comfortable with,‖ he says. For

instance, if a customer living in Maninagar wanted to visit Gallops he would have to cross

Manek Chowk, Lal Darwaja, C G Road, etc, all of which are major shopping destinations where

he would get whatever he wants at a lower price than in a mall on the highway; moreover, he

could even bargain at the shops. If this theory holds good, then, it would mean good footfalls,

with lower conversion to sales.

He goes on to add, ―Mostly, the retail outlets that are shutting down are small brands. The

national retail chains situated at the outskirts of the city are thinking of 10 years down the line,

when real-estate prices will soar. The city will also expand, bringing the customers closer to

them.‖

July 27, 2008

Source: Hindu Business Line

Retailers bet on entertainment activities to lure customers

As spiralling inflation dents buyer sentiment, leisure and entertainment forays seem to be big

retailers‘ weapons to fight flagging sales.

Leading the way is Kishore Biyani-led Future Group that is opening unisex salons, gaming

centres and family entertainment centres at its nine Big Bazaar Supercentres. Similarly, Vishal

Retail is planning to start salons within the premises of its 120-odd outlets.



Shoppers Stop has introduced its brand of cafes, bookstores and spas within its stores to make

consumers spend more time and entice them to buy more.

Shoppers Stop vice-president (marketing) Vinay Bhatia feels such options are important to retain

customers. ―A customer now looks for more than just shopping. We realise that convergence of

retail and entertainment is the way to enhance a shopper‘s experience. We are constantly trying

to get things that are ‗shopping plus‘. So we have Crossword, our bookstore, Cafe Brio &

DesiCafe and other such specialty stores within Shoppers Stop stores to enrich consumer

experience.‖

The Raheja Group-promoted Shoppers Stop is putting its best foot forward to attract shoppers.

The company has added small spa centres, allowing consumers a quick foot massage. Then there

are bookstores and cafes along with several other initiatives to attract customers and make them

spend more time inside the store. It has also introduced a ‗Monsoon Makeover‘ offering that

promises free makeover for people who walk in.

Following suit is Vishal Retail that will begin by opening salons within the premises of its stores.

Says Vishal Retail chairman RC Agarwal, ―The initiative is in the planning stage. There is a

definite market for these services.‖

Spencer‘s Retail is also going the extra mile to ensure visitors stay longer and are entertained

well. Across the stores, there are live kitchens on weekends that have Japanese, Thai and Italian

chefs.

Then there is Books & Beyond, Spencer‘s brand of bookstores that has periodic book reading

sessions and launches. Stores are also lined with interactive LCD screens that have both original

and borrowed content entertaining people.

―We do a business of Rs 100 crore every month. This is 5% of our revenues. Today, consumers

expect to feel relaxed and entertained. This is important for a chain like ours that wants to be

differentiated. This concept, however, may not have much potential with discount chains,‖ says

Spencer‘s Retail marketing V-P Samar Singh Sheikhawat.

There are still others like Subhiksha Retail MD R Subramaniam who think it wise to continue

retailing what they currently do. ―We are staying focused on what we sell, groceries, mobile

phones and medicines. There will be a foray into consumer durables and IT products soon.‖

Gaining Share

Future Group is opening unisex salons, gaming centres and family entertainment centres

at its nine Big Bazaar Supercentres.

Vishal Retail is planning to start salons within premises of its 120-odd outlets.

Shoppers Stop has introduced its own brand of cafes, bookstores and spas within its

stores to make consumers spend more time at the store and entice them to buy more.



Spencer‘s Retail has set up live kitchens and book stores to ensure customers spend more

time.

Smaller players like Subhiksha Retail think it wise to continue retailing what they

presently do.

July 26, 2008

Source: Economic Times

Discount retailers make hay while inflation shines

Everyone loves a good discount. And it comes in as an incentive especially during times of

inflation. For apparel discount retailers, inflation has proved to be a blessing. Arvind‘s branded

discount retail chain Megamart has seen an improvement in walk-ins of 15% in the past few

weeks.

―During inflation, customers always prefer to shop in a value retail outlet,‖ says K E

Venkatachalapathy , business head of Megamart. The increased footfall is reflecting in the sales

figure of Megamart as well. While he refuses to divulge exact numbers, Venkatachalapathy says

there has been a 20% increase in sales compared to the corresponding period last year. Discounts

here vary from 10% to 30%.

―Inflation and discount retailing are directly proportional. Customers normally tend to flock to

value retail stores where they are assured of good quality at reasonable prices,‘‘ says Raghunath

Narayanan, MD of Chennai based discount retailer Europa.

Discount retailing, a post World War II phenomenon, is an established market practice in

countries like the US. This concept is now picking in India, where customers are extremely price

sensitive. Discounts have always worked well with apparel and factory outlets in the suburbs of

many Indian cities and shopping hubs like Fashion Street in Mumbai and Maratahalli in

Bangalore bear testimony to this. Now inflation has come to the aid of these retail majors.

The Loot, a discount chain, has seen footfalls increase by at least 10% in the last few weeks

across its 35 stores in 15 cities. ―In Mumbai alone, our footfalls are up by 17% in the last three

weeks. In the first quarter, we had sales of Rs 15 crore. In the next quarter, we expect this to

climb upto Rs 25 crore,‖ says Jay Gupta, MD of The Loot.

In apparel, children‘s wear seem to be the biggest beneficiary. ―As children, especially toddlers,

normally outgrow their clothes pretty fast, parents are flocking to discount stores such as ours

more than ever before,‖ says Narayanan. While the discount offered by Europa is between 25

and 30%, in kids wear it‘s 30% - 40%.

The consumer base is also widening. ―From largely middle class audiences, I now see people

getting out of cars like Honda Accord and Mercedes Benz outside our stores,‖ says Gupta. The

rush to such outlets is also due to the fact that regular apparel retailers and multi-brand outlets

mostly offer off season sale only twice in a year. ―But in times of inflation and continued price



rise, the consumer is looking to cut spends across categories on a daily basis,‖ says

Venkatachalapathy.

Brand Factory too has seen a 5% - 7 % increase in our sales over the past few months. ―While

we cannot say that entirely due to inflation, we cannot rule out that it has played a role,‖ says

Vishnu Prasad, CEO of Brand Factory.

July 26, 2008

Source: Economic Times

Big players - plans and investments

Reliance Retail to bring in 250-year-old Hamleys

Reliance Retail has clinched a deal with the world‘s largest toy shop, Hamleys. India‘s largest

private conglomerate will be the partner in one of the biggest international expansions by the

250-year-old Hamleys till date.

Sources said Hamleys and Reliance have struck a franchise deal to open large format stores. ET

first reported on the discussions between the two players on March 21. Reliance Retail is

believed to have pipped the Wadias and Kishore Biyani‘s Future Group in snapping up the deal.

The Mukesh Ambani-led Reliance and the Icelandic investor Baugur Group-controlled Hamleys

are expected to make a joint announcement shortly. Reliance had also explored an arrangement

with the US chain Toys ‗R Us before deciding to strike a deal with Hamleys.

Hamleys‘ foray into a potentially big market like India could be interesting. The seven-storey

Hamleys store on London‘s Regent Street is one of the top tourist draws. Despite its cult appeal

globally, Hamleys has largely restricted itself to the UK market.

It is believed that Reliance plans to open four standalone Hamleys stores in the first 24 months,

which is a significant expansion move for the marque UK brand. Baugur is also working on

expanding Hamleys to Middle-East, Russia, Turkey and China. Hamleys operates a standalone

store in Jordan‘s capital Amman.

While the local stores may not be as big as the London flagship, it will surely be unlike anything

seen before in India‘s toy retailing space. The Indian stores will be around 25,000 sqft and will

be opening doors in metros like Delhi, Mumbai and Bangalore initially.

With Hamleys selling toys of several brands besides its own, Reliance had little elbow room to

work on an equity structure. Indian regulations don‘t allow foreign players to hold stakes in

Indian companies that sell multiple brands. It, however, allows foreign retailers to hold up to

51% in a company in India if it sells goods under a single brand only.



The Hamleys deal marks Reliance‘s third engagement with a major international brand in recent

times. It has unveiled JVs with iconic apparel retailer Marks & Spencer and optical chain Vision

Express.



Bibliography

Books referred:

Sources of Information:

www.economictimes.com

www.businessworld.com

www.realtyplusmag.com

www.naukrihub.com

www.gihed.org

www.safalengineers.com

www.iscongroup.com

www.gallops-sez.com

www.savvygroup.in

www.bakeri.com

www.parshwanath.co.in

www.himalayamall.in

www.pacificacompanies.co.in

www.ahmedabadretail.com

www.business.mapsofindia.com/indian-retail-industry

www.dtz.com/portal/site/en-in

www.inrnews.com/indianrealestate/reports/dtz_india_real_estate_overview

Sr.

No. Name Of Book/Magazine

Book/ Magazine Author Edition

1 Marketing Management

Book Tapan K. Panda

2nd

Edition(2007)

2 Business India Magazine May 3,2008

3 Businessworld Magazine May 18,2008

4 Retailer Magazine May 31,2008

http://www.economicstimes.com/

http://www.businessworld.com/

http://www.realtyplusmag.com/

http://www.naukrihub.com/

http://www.gihed.org/

http://www.safalengineers.com/

http://www.iscongroup.com/

http://www.gallops-sez.com/

http://www.savvygroup.in/

http://www.bakeri.com/

http://www.parshwanath.co.in/

http://www.himalayamall.in/

http://www.pacificacompanies.co.in/

http://www.ahmedabadretail.com/

http://www.business.mapsofindia.com/indian-retail-industry

http://www.dtz.com/portal/site/en-in

http://www.inrnews.com/indianrealestate/reports/dtz_india_real_estate_overview

sip final report

Documents

cb richard ellis

ng realty pvt

vishal mega mart

aditya birla retail

international market leaders

industry leaders operating

opening unisex salons

big bazaar supercentres