Ciba - the Indian Retail Market

the type of retailers industry is divided into organised and unorganised sectors:-

1.. Organised retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sales tax, income tax, etc." These include the corporate-backed hypermarkets and retail chains, and also the privately owned large retail businesses.

2. Unorganised retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hand cart and pavement vendors, etc. Most Indian shopping takes place in open markets and millions of independent grocery shops called kirana.

On the basis of consumer buying habits, purchase decisions can be separated into two categories:

1. Status-oriented: - Consumers in the status category buy because they need to maintain a position in their social group. CTVs/LCDs, refrigerators, washing machines, dishwashers, microwave ovens and DVD players fall in the status category. When it comes to the festival shopping season, it is primarily the status-oriented segment that contributes largely to the retailer's cash register.

2. Indulgence-oriented :- Indulgence-oriented buying happens with those who want to enjoy life better with products that meet their requirements .Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems, iPods, high-end digital cameras, camcorders, and gaming consoles...

THE INDIAN RETAIL MARKET

There are over 12 million outlets operating in the country and only 4% of them being larger than 500 sq ft in size .Organized retail such supermarkets accounts for just 4% of the market as of 2008.

Indian market has high complexities in terms of a wide geographic spread and distinct consumer preferences varying by each region necessitating a need for localization even within the geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail space per capita at 2 sq ft (0.19 m2)/ person is lowest in the world Indian retail density of 6 percent is highest in the world.[9] 1.8 million households in India have an annual income of over 45 lakhs (US$100,350).

While India presents a large market opportunity given the number and increasing purchasing power of consumers, there are significant challenges as well given that over 90% of trade is conducted through independent local stores. Challenges include: Geographically dispersed population, small ticket sizes, complex distribution network, little use of IT systems, limitations of mass media and existence of counterfeit goods.