My Kirana Store (mom-and-pop Store)

I come from Ranchi, a small industrial town in India. There was a small kirana store; small by the standards of the new mega retail formats. Shop owner knows every one in the neighborhood by name, their birthday, and anniversary. He mostly offers the regular customers good discount and extend credit for a few weeks.
The kirana store, till late eighties was doing good business but it started losing customers a decade back, as first generation employees of Heavy Engineering Corporation Ltd., started moving to suburbs on retirement. The new modern retailers had also eaten up some of his customers. The kirana store was losing customers and finding it difficult to win new. The Kirana Store owner discussed his problem with Mr. Rabindranath Choubey, an employee of Heavy Engineering Corporation Ltd. and a good friend of the shop owner. He suggested kirana store owner to take the trouble of making home deliveries. This small gesture not only helped him win back his old customers but also helped him attract a few new one.

This story clearly identifies that the kirana store will continue to coexist with the modern forms of retailing, but will need to innovate and change strategies. The kirana store will co-exist for three key reasons:

Relationship: Kirana stores enjoy very close relationship with their consumer. In India Kirana store always enjoy deeper relationship than just the buyer-seller relationship

Credit: The Kirana shop keeper also offers credit for a couple of days to weeks for the purchase
made at his outlet. He can afford to do so since he himself enjoys credit from his suppliers.

Convenience: The majority of India’s urban consumers have the convenience of buying small lots & ordering everything over the phone. They even have the luxury of ordering a single small item like a toothbrush delivered at their home at 9:00pm. Until convenience stores like 7-Elevens proliferate though, the kirana stores will continue to play an important role.

Retailing - Report

In India, after agriculture, retail is the largest single sector both in terms of turnover as well as employment. Globally Retailing is the largest industry with annual sales of over US$6.6trn. There are nine retailers in the Fortune 100, which highlights the importance of the retail sector. While writing this report I could manage to get latest data of Image retail which shows that the Food and Grocery is the biggest segment of the Indian Retail Market, followed by the clothing, Jewellery, Catering, Consumer Durables, Pharma, Furniture and Home Decor, Entertainment, Telecom, and others.

Overall retail market scenario:
Food and grocery 59.5% share, valued at INR 7,92,000 crore
Clothing and accessories with a 9.9% valued at INR 1,31,300 crore.
Out-of-home food (catering) services valued at INR 71,300 crore with 5.4% market share
Jewellery valued at INR 69,400 crore
Consumer Durables valued at INR 57,500 crore
Health and pharmaceuticals valued at INR 48,800 crore
Entertainment valued at INR 45,600 crore
Furniture, furnishings and kitchenware valued at INR 45,500 crore
Mobiles and accessories valued at INR 27,200 crore
Leisure Retail valued at INR 16,400 crore
Footwear valued at INR 16,000 crore
Health and beauty care services valued at INR 4,600 crore and
Watches and eyewear valued at INR 4,400 crore



The fastest-growing segment in the overall retail pie in 2007
Clothing & fashion accessories registered growth of 22.7%
Mobile and accessories registered growth of 25.6%
Out-of-home food (catering) services registered growth of 25.1%
Books, music & gifts leisure category registered growth of 23.3%
Jewellery retail registered growth of
Footwear retail registered growth of 12%
Furnishings and furniture retail registered growth of 7%
Food and grocery retail registered growth of 2.3%


The modern Indian retailing which is still in the evolution phase accounts for around 4.6% of an estimated US$230-280bn Indian retail market. It is estimated that the segment will realize a 30-35% CAGR over the next five years to gain an 11% share of the retail market. Apart from metros and mini metros India’s top 69 cities, with populations of over one million, will drive this retail revolution.

Organized retail market scenario:
Clothing and fashion accessories has a market share of 38.1% valued at INR 29,800 crore,
Food and grocery with 11.5% valued at INR 9,000 crore,
Footwear 9.9% valued at INR 7,750 crore
Consumer durables 9.1% valued at INR 7,100 crore
Time wear (48.9%)
Footwear (48.4%)

The fastest-growing segment in the organised retail pie in 2007
Health and beauty care services category registered growth of 65%.
Entertainment registered growth of 53.8%
Mobile phones and accessories registered growth of 55.2%
Food and grocery retail registered growth of 55.2%.
Fashion and accessories retail registered growth of 35.5%.
Jewellery retail, registered growth of 31%
Timewear category registered growth of 16.6%,
Footwear retail registered growth of 42.3%
Health and beauty care registered growth of 57.5%
Furnishings and furniture retail registered growth of 29.7%

Emergence of Multiplex in India

In 1979, world’s first multiplex ‘Eaton Center’ in Toronto, Canada was opened for the general public. The Eaton Center has 18-screen movie theater complex. Eaton’s movie centers, which were a craze during the 1980s and 1990s, faded slowly and closed finally in March 2001.

In 1997 PVR established, first multiplex in India – PVR Anupam at Saket, New Delhi. The PVR Anupam changed the Indian movie exhibition landscape. Movie exhibition till mid nineties was dominated by Cinema halls – the traditionally single screen halls. Cinema halls witnessed a surge of customers mostly during the festive season and on weekends. The emergence of multiplexes changed the movie exhibition business in India. Today, all eyes in the entertainment industry have turned towards multiplexes, as they generate a larger share of revenue though they accommodate less number of seats per theater.

The emergence of new multiplexes has reduced the audience for traditional cinemas, thereby prompting some of them to transform themselves into multiplexes. The multiplex business is not only prompting traditional cinema theater owners to convert their property into multiplex but in recent times has also attracted many international players to venture into the business. No wonder the multiplex business is so lucrative that foreign entertainment giants like Time Warner, South Korean multiplex operator Megabox, and Australia’s Hoyts are in talks with real estate developers such as the DLF group, the Raheja Group and Sobha Developers to set up chains of multiplexes across the country. We should not forget that roughly a dozen Indian players have entered in the business in small or big way.

New players are trying to enter this sector and the existing players are busy expanding their horizons. In recent times the multiplex has gone beyond the metros to redefine entertainment in Tier 1 and Tier 2 cities like Lucknow, Indore, Nasik, Aurangabad, Kanpur, Amritsar. The good news for most of the movie exhibitors is that at present roughly 70 percent of the total box office collections in the country come from non metros.

These multiplex has multiple screen movie theater complex which also offers lifestyle shopping. It offers brand new experience of watching movies. Today multiplex are considered not just a part of the entertainment, it is an opportunity for family outing which include movies, shopping, eating out, gaming parlors, buying books, buying groceries, etc. Most of the multiplexes malls in India have common structure, which I believe is structure of the ideal multiplex. Ideal multiplex malls have a four to five floors with various leisure and recreation options for customers. The top floor has multiplex and rest of the floors offer facilities like shopping, eating out, gaming parlors, book shops, groceries, etc. The structure of the multiplex mall explores the consumer psychology, where customers who come with the intention of watching a movie are made to pass all the floors in the shopping mall. It increases the possibility of their making some impulsive purchases. I don’t know about other but I end up buying something every time I go to watch movies. Moreover, the multiplexes do not allow outside food and beverages into the movie theaters which offer them opportunities to sale of their own products at a premium.

The decade old Indian multiplex industry has definitely changed the movie exhibition industry in India. The multiplex industry, in India, is still in an early growth stage, and is way behind the size and scale reached in the developed countries.

Retail Schools for Traditional Trade

Its not that only modern retail is organized the traditional trade is also trying hard to be systematic and organized. The traditional trade which in recent times has faced competition from retail giants is setting up ‘Retail Schools' in the country to educate small time traders about ways to boost their business. The proposed school would teach about visual merchandise, servicing customer, marketing and monitoring retail operations.

The traders body has joined hands with Indian Retail School as knowledge partners. The schools will be established by the umbrella body of small time traders, and Confederation of All India Traders (CAIT). The proposed schools will seek to change the traditional outlook of the traders and educate them to adopt a contemporary approach in business to retain customers and increase profitability.

According to report the association is planning to set up as many as 500 such schools in the next one year. The first school is expected to come up in Delhi by the end of this month and the second one in Nagpur later.

FDI in Retail – Positives I can see

And with one billion people, it is the second largest population in the world offers tremendous opportunity for retailers. According to A T Kearney’s report, the estimated $350 billion retail market is expected to grow 13% and the top five retailers account for less than 2% of the modern retail market. It is obvious that India holds future of global retailing. The most advantageous side of India is, it is least saturated as compared to the global market and it has a tremendous market size, excellent potential for foreign players.

The opportunity is still under wrap as Indian retailers don’t have sufficient funds and technology to encash the opportunity in totality. The Indian government has to allow FDI into retail market for the growth of the Indian retail sector. The government needs to understand the simple economics of the retail FDI. I believe that the Wal-Mart effect will help business innovation in the Indian retail sector and will also encourage exports. As a result of that, production of the goods and services will increase, which leads to increase in GDP of an economy. The growth of GDP leads to increase in per capita income. The per capita increase in income will also lead to consumers spending more on goods and services. The more income will also lead to more savings and investments which would leads to more employment opportunities and reduction of poverty. Moreover as real income of the population is increasing, the tax-paying population in the country will be increasing. On the other hand, the government will be benefited through lesser incidence of tax evasion.

The FDI will not only help government but will also impact economy of the nation in direct and indirect ways. The benefit of FDI includes:

The entry of retailers like Wal-Mart into India will benefit consumers by providing access to a large variety of products sourced from around the world, all at extremely competitive prices. This will also increase the purchasing capacity of the consumer. The global players will also come with advanced technology which would reduce the cost of production and saving time. Moreover, greater investment in technology will enhance the operations in production cycle and distribution.

In Indian commodity market, a significant portion of the commodity is being wasted due to lack of cold storage facility. But now, after investment in technology the cold storage chains solve this acute problem of wastage.

The Indian products will have greater exposure to the global retailers. The impact will be more in the case of food processing business. The Indian food processing is becoming a promising business, which is able to earn more foreign currency through increase in export. This is possible by increasing investment in the food processing sector.

Foreign direct investment in Indian retail sector will increase food safety, improve farm, and food processing business. FDI would positively impact the rate of investment in retail market which will impact production, create more job opportunities, and satisfied consumers. It will help in developing the small and medium-sized industries as well as modernizing the agricultural sector. It would also be instrumental in investment in education which will helps improve the “human capital”. No wonder it will be beneficial to government in various ways.

Fundamental Principles of Retailing

The retailers regard Sam Walton as the God of Retailing. He has written rules of retailing and rewritten them for the continuous growth. In 1962, Sam Walton founded his company with the three guiding principles that is regarded as the fundamental principles of success. These fundamental principles are relevant to retailer’s business across geography:

Respect the Individual
Our people make the difference – is a reality at Wal-Mart. The company believes that at Wal-Mart the groups of dedicated, hard-working, ordinary people coherently being teamed up, accomplish extraordinary things.

Service to the Customers
Customers are welcomed as messengers of Pluto – The Greek God of wealth and prosperity – at Wal-Mart. It is the continuous effort on the part of the earnest Wal-Mart’s employees to provide the best customer service at the lowest price. At Wal-Mart employee believes that they are nothing without customers and they make sure customer’s hard-earned money stretch further by offering quality merchandise at the lowest price and with the best customer service possible.

Strive for Excellence
Sam Walton believed in striving for excellence before it became fashionable. No wonder Wal-Mart is growing continuously in a large volume and can offers high quality products for low price, which is deserved by the customers. At Wal-Mart employees try to find innovative ways to push boundaries and constantly improve and innovate. They know that Sam Walton is never satisfied with the fact that prices are as low as they could be or that the products’ quality at Wal-Mart is as high as customers deserved.

These three fundamental principles has not only fueled the growth of the Wal-Mart but also help them innovate the way retailers do business. In my views if any retailers want to grow and make big in India or global landscape need to follow the basics of rule. I have seen many Indian retailers trying their hands with technology for success instead of sticking with the fundamentals. Probably they need to understand that technology is one of the elements of the fundamental principles not the mantra of growth.

Retailing in India a Three Dimensional Matrixes

Retail has always been an alluring business proposition and the corporate in recent times has shown keen interest in Indian retailing. The size of India's retail trade is estimated at $330* billion and growing at five per cent annually, according to KSA Technopak, retail advisory which closely tracks the trade. The size of Indian retail is not only attracting domestic players but also attracting international players to India.

The Indian retail scenario is booming and Indian retailers are doing well across the board. Current profits in the organised retail trade are good and the future seems even more alluring. There is evidence that the average urban consumer is saving less today than he did a few years ago and importantly, spending his income on a wider array of goods than earlier. Moreover, the increase in the income level, ever growing double income group, is helping retail grow as consumers is willing pay premium for the newer and better brands. Having discussed this I must mention that there is other segment which is still highly price sensitive and is always looking out for the bargain. There is yet another segment who is daily wages earners. These sets of people buy their grocery based on their requirements, daily.

Retailing in India is developing on three dimensional matrixes where retailers operate as a local, regional and global player. Irrespective of the format and size there is scope for growth for each set of players which widely depend on the needs of the market. Having said this I believe that the Indian retail is not offering equal opportunity to players in the market be it tradition retailers, modern retailers or the international players. As per the rule, foreign retailers cannot yet start operations in their name in India. However, with Minister for Commerce and Industry Kamal Nath announcing that foreign investment would soon be allowed in retailing is a big savior. The traditional trade is finding it difficult to survive in the race of modern retailing. And the domestic modern retailers are facing their own set of problems. It is always difficult to manage and establish equilibrium in the three dimensional plane – the plane in which Indian retail operating.

* The Indian retail market, which is the fifth largest retail destination globally, according to industry estimates is estimated to grow from the US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by