Professional Documents
Culture Documents
THESIS
SUBMITTED TO THE UNIVERSITY OF LUCKNOW
FOR THE DEGREE OF
Doctor Of Philosophy
IN
COMMERCE
By
SAUKAT ANSARI
Under the Supervision of
DEPARTMENT OF COMMERCE
UNIVERSITY OF LUCKNOW
LUCKNOW
2013
Department of Commerce
University of Lucknow
Lucknow
CERTIFICATE
(Prof. S. K. Shukla)
Supervisor
PREFACE
It was great experience writing this thesis. I got an opportunity
through this work to conduct a comprehensive study of the subject
that is still in evolutionary phase in the country in all the respects.
Going by the contribution of retail in the GDP of the country, it is the
single biggest source of employment and income for the people of
India.
The business of apparel retail in India has seen significant changes in
the last few years. We have seen the emergence of new formats and
application
of
global
concepts
and
constructs
albeit
with
ii
fashion trends still a concern and may continue to affect the smooth
growth of fashion industry-if it is not taken seriously.
The mindset of the retailers especially those involved in organized
part of retail needs to understand the role of customers that will be
helpful in the development of the business. Customers are confronted
umpteen numbers of alternatives in front of them. Sensing the
importance of matter at hand, it was taken by me as a subject of study
in the present thesis.
The study is focusing on apparel retailers perception about
challenges and prospects in the industry. Subject like apparel retailing
is broad in scope and nature. For the sake simplicity and readers
convenience, thesis has been developed chapter wise. There are eight
chapters. First chapter deals with introduction of apparel retailing.
Second chapter is concerned with retail formats. Content of third
chapter is related with emerging trends in apparel retailing. Fourth
chapter deals with challenges and prospects in apparel retailing. Fifth
chapter is concerned with analytical study. Chapter seven is related
with bibliography. And finally chapter eight deals with appendices.
As a researcher, I hope that the present work shall prove to be highly
effective one for an in-depth study of the subject which is yet to get
an industry status in India.
In the present research, I find utter lack of words to express my
indebtedness to my supervisor Prof. Somesh Kumar Shukla,
Department of Commerce, University of Lucknow, Lucknow whose
continuous guidance and help encouraged me a lot in completing the
study in time. Further, I am thankful to the Almighty for keeping me
iii
Date:
(SAUKAT ANSARI)
iv
CONTENTS
Page No.
Certificate
Preface
ii
List of Tables
xiv
List of Figures
xvi
xviii
1. Introduction
1-52
1.1 Apparel
1.1.1 Features of Apparel
1.1.2 Functions of Apparel
1.2 Retailing
1.2.1 Retail and Retailing
1.2.2 Place of Retailing in a Distribution Channel
1.2.3 Organized and Unorganized Retailing
1.2.4 Significance of Retail Industry
1.2.5 Characteristics of Retailing
1.2.6 Activities Performed by Retailers
1.2.7 Challenges in Retail Business
1.2.8 Evolution of Retail in India
1.3 Apparel Retailers
1.3.1 Departmental Stores in the Apparel Category
1.3.2 Apparel Retailing in India
1.3.3 Indian Apparel Retail Scenario
v
53-79
80-133
134-183
184-233
234-245
7. Bibliography
246-250
8. Appendices
251-253
***
xiii
LIST OF TABLES
Table No. Title
Page No.
1.1
3.1
26
86
4.1
141
5.1
184
5.2
Types of Retailers
186
5.3
189
5.4
192
5.5
195
5.6
198
5.7
201
5.8
204
5.9
207
5.10
210
5.11
5.12
213
217
5.13
5.14
223
5.15
226
5.16
229
5.17
232
***
xv
LIST OF FIGURES
Figure No. Title
Page No.
1.1
1.2
1.3
Activities of Retailers
1.4
14
1.5
Classification of Apparel
25
2.1
57
2.2
58
2.3
2.4
59
2.5
59
60
2.6
2.7
4.1
139
5.1
Types of Retailers
187
5.2
190
xvi
5.3
193
5.4
196
5.5
199
5.6
202
5.7
205
5.8
208
5.9
211
5.10
5.11
214
218
5.12
5.13
5.14
5.15
230
5.16
233
***
xvii
224
ATM
BPO
CAGR
CIFA
CII
CPRF
DIPP
ECR
EDI
EDLP
ERR
EU
European Union
FDI
FEMA
FIPB
FPSs
GDP
GRDI
IBEF
IT
Information Technology
ITMF
LAN
LSM
MBOs
PDS
PO
Purchase Order
POS
Point of Sale
PSS
QR
Quick Response
RBI
RMDs
RFID
SIA
SKNL
TMC
TUFS
UPC
VAT
WAN
***
xix
Chapter-1
INTRODUCTION
1.1 Apparel
Apparel means clothing, especially outerwear; garments and attire.
Apparel is a term that refers to a covering for the human body that is
worn. The working of clothing is exclusively a human characteristic
and is a feature of nearly all human societies. The amount and type of
clothing worn depends on physical, social and geographical
considerations.1
1.1.1 Features of Apparel
Physically, clothing serves many purposes; it can serve as protection
from the elements, can enhance safety during hazardous activities
such as hiking and cooking. It protects human from rough surfaces by
providing a barrier between the skin and the environment. Clothes can
protect humans from insect bites. Clothes can regulate temperature in
the cold or heat. Further, it can provide a hygienic barrier, keeping
toxins away from the body and limiting the transmission of germs,
clothing also provides protection from harmful ultra violet radiation.
1.1.2 Functions of Apparel
The primary function of clothing is to improve the comfort of the
wearer. In hot climates, clothing provides protection from sunburn or
wind damage, while in cold climates its thermal insulation properties
are generally more important. Shelter usually reduces the functional
need for clothing.
Clothing performs a range of social and cultural functions, such as
individual, occupational and sexual differentiation, and social status.
1
1.2 Retailing
Retailing is the final connection in the marketing channel that brings
goods from manufacturers to consumers. In other words, retailing is
the combination of activities involved in selling or renting consumer
goods and services directly to ultimate consumers for their personal
and household use. In addition to selling retailing includes different
and diverse activities like buying, advertising, data processing and
maintaining inventory.
Retailing includes all the activities involved in selling goods or
services directly to finals consumers for their personal, non-business
2
(2)
Manufacturer
Manufacturer
Feef back
Wholesaler
(3)
Manufacturer
Retailer
Retailer
Consumer
Consumer
Consumer
Organised Retailing
Unorganised Retailing
Kirana
Shops
Owner Manned
General Stores
Convenience
Stores
Paan/Beedi
Shops
Retail
Chains
pace.
eradication and is intended to serve as a safety net for the poor whose
number is more than 330 million and are nutritionally at risk. PDS
with a network of about 4.78lakh Fair Price Shops (FPS) is perhaps
the largest distribution network of its type in the world.3 PDS is a
crucial part of life in many parts of India. PDS is operated under the
joint responsibility of the Central and the State Government. The
11
12
14
This was in a sense the beginning of a new era for retail in India. The
fact that post liberalization the economy had opened up and a new
large middle class with spending power had emerged, helped shape
this sector. The vast middle class market demanded value for money
products.
managed her home and work led to a demand for more products, a
better shopping ambience, convenience and one stop shopping. This
has fuelled the growth of departmental stores, super markets, and
other specialty stores. The concept of retail as entertainment came to
India with the advent of malls. The development of malls is now
visible not only in the major metros but also in the other parts/other
districts of the country.
domestic
19
RNCOS
(market
research
consulting
company)
20
Indias masses, and set the popular fashion trend. Bollywood fashions
have become pan Indian. They affect various sectors of the market
including clothing, weddings and fashion accessories.
With the advent of modern format retailers and the growth of plastic
cards, affluent urban Indian women are shopping like never before.
They spend morning browsing in stores looking for
deals or latest
styles. Upper income urban women are adopting ethnic chic. These
are designer clothes that incorporate Indian motifs, ethnic fabric and
are a fusion of western and Indian styles.
In the large urban centres, apparel retailers, like Shoppers Stop,
Westside and Pantaloon have popularized their private labels, which
have attracted urban shoppers. Westside carries only its own private
labels, while for other stores, 20% to 30% of their apparel turnover is
from private labels. Customers have loyalty to a store rather than any
particular garment brand. This has led to thriving unbranded or local
brand market for ready-to-wear clothes leading to serve competition.
Hence organized retailers like Lifestyle, for instance, has loyalty
program called ` The Inner Circle`, while Pantaloons offers a` Green
Card` Rewards programmes, Westside has `Club West` to woo
customers. Customers look to design and fit of the clothes, and use
the shops name as a quality standard.
According to a report by Data Monitor (2006)
12
, global apparel,
Apparel
Womens wear
Menswear
Shirts
Trousers
Blazers/
Jackets
Suits
T-shirts
Shirts
Jeans
Casual
Trousers
Kurta
Pyjama
Dhoti
Kurta
Sherwani
Childrens
wear
Track
suits
Shorts
T-shirts
Belts
Ties
Socks
Handkerchiefs
Denims
Sports wear
Arrow
Allen Solly
Levis
Reebok
Louis Philippe
Color Plus
Lee
Nike
Van Heusen
Dockers
Wrangler
Adidas
Park Avenue
Benetton
Pepe
Wills Sports
Ruf n Tuf
Table 1.1
26
27
The Indian state of Uttar Pradesh borders with Nepal and the Indian
states of Bihar, Jharkhand, Madhya Pradesh, Chhattisgarh, Rajasthan,
Haryana, Uttarakhand and National Capital Territory of Delhi.
28
1.4.3 Economy
The economy of Lucknow city was earlier based on the tertiary sector
with about majority of the workforce being employed as government
servants. Large-scale industrial establishments are low compared to
other north Indian state capitals like New Delhi and Chandigarh.
Currently the economy is growing with the contributions from more
professionals in the fields of IT, Manufacturing and processing and
Medical/Bio-Technology. Business-promoting institutions viz. CII
and EDII have a presence in city. On October 2010, Lucknow ranked
6th among all the cities in India for fastest job-creation, City has
steadily grown into a competitive IT centre.
Lucknow has a great potential in handicraft sector and it accounts for
60% of the total exports from the state. The state has emerged as a
hub for IT and ITES industries including software, BPOs and
electronics. The major export items from are marble products,
textiles, handicrafts, art pieces, gems and jewellery, textiles,
electronics, software, computer, hardware & software, apparel, brass
work, silk, leather and leather goods, glass items, art metal,
chemicals. City has promoted PublicPrivate Partnerships in big way
in various sectors such as power, roads, expressways, education.
1.4.4 Demographics
According to the 2011 Census Lucknow district has a population of
45,88,455. This gives it a ranking of 31st in India (out of a total of
640). The district has a population density of 1,815 inhabitants per
29
square kilometer. Its population growth rate over the decade 20012011 was 25.79 %. Lucknow has a sex ratio of 906 females for every
1000 males and a literacy rate of 79.33 %.
flowering stems, lotus and the paisley motif are the most popular.
Chikan work has very light, gossamer - like quality. This makes it
very suitable for the seemingly hot climate.
30
Some of the popular motifs are Kairi; dhaniya patti; phanda; dhum
patti; ghas, patti; murri; kangan; joda murri; maharaki; sadi-maharaki;
daraz/ katub; pechani; tanire; gitti; phanda; keel; kangira.
A Chikan suit is a regal treasure in any fashion connoisseur's
wardrobe. Really the great thing about this form of embroidery is that
it never goes out of fashion and it suits women/ men of all ages. If
you are going to invest in a few pairs of elegant wear, try adding
chikan to your wardrobe. If you wear chikan you really are wearing a
piece of history, as it is a form of embroidery that has been art part of
India for centuries.
Chikan embroidery in Lucknow is the biggest artisan cluster of India.
There are about 5 lakhs artisans of hand embroidery associated with
this cluster. Apart from this, the artisans from other fields such as
cutting, stitching, Hand Block Textile Printing, jali work and washer
men are also a part of this cluster. The total number of artisans
associated with Chikan Embroidery, Cluster, other than Chikankari
artisans, is about 5000.
There are about 4000 manufacturing units in Lucknow having
individual turnover of Rs.10 crore to 10 lakhs. The total turnover of
industry is about Rs.1000 crore including export out of India of about
Rs.200 crore.
31
Regions
Grant
Fund
Programme
(BRGF).
32
1.4.10 Economy
In 2006 the Ministry of Panchayati Raj named Lakhimpur Kheri one
of the country's 250 most backward districts (out of a total of 640). It
is one of the 34 districts in Uttar Pradesh currently receiving funds
from the Backward Regions Grant Fund Programme (BRGF).
Known for its sugar cane industry, it satisfies a huge part of the
world's sugar demands. Some of the biggest sugar mills are in the
district Bajaj sugar mill in Gola Gokarnath and Bajaj sugar mill in
Palia Kalan and DSCL sugar mills (Ajbapur), Kumbhi sugar mills
Kumbhi, (Mohammdi) are the four largest sugar mills in Asia.
Balrampur Industries also runs its sugar mills from Lakhimpur.
Lakhimpur is also famous for cottage industries of incense sticks.
33
1.4.14 Demographics
According to the 2011 census Raebareli district has a population of
3404004. This gives it a ranking of 97th in India (out of a total of
640). The district has a population density of 739 inhabitants per
square kilometre .Its population growth rate over the decade 20012011 was 18.51 %. Rae Bareli has a sex ratio of 941 females for
every 1000 males, and a literacy rate of 69.04 %.
1.4.15 Unnao District
The town of Unnao is the headquarters of Unnao District in Uttar
Pradesh, India between Kanpur and Lucknow. It is approximately
18 km from Kanpur & 60 km from Lucknow . It is connected to these
two cities by roadway as well as by railway. The nearest airport is at
Amausi about 50 km from Unnao. Unnao district is a part of Central
Ganges Plain of the state covering an area of 4558 square km.
1.4.16 Economy
In 2006 the Ministry of Panchayati Raj named Unnao one of the
country's 250 most backward districts (out of a total of 640). It is one
of the 34 districts in Uttar Pradesh currently receiving funds from the
Backward Regions Grant Fund Programme (BRGF).
1.4.17 Demographics
According to the 2011 Census Unnao district has a population of
3110595. This gives it a ranking of 112th in India (out of a total of
640). The district has a population density of 682 inhabitants per
35
square kilometre.Its population growth rate over the decade 20012011 was 15.19 %. Unnao has a sex ratio of 901 females for every
1000 males and a literacy rate of 68.29 %.
1.4.18 Hardoi District
Hardoi is a riyasat and a municipal board in Hardoi district in the
Indian state of Uttar Pradesh. It is the administrative headquarters of
Hardoi District.
1.4.19 Economy
In 1901, the main activities were wood-carving industry, saltpetre
works and grain trade. The district exported grain, sugar, hides,
tobacco and saltpetre.
Agriculture is the main activity in the district and many people
depend on it. 3980.45 square km. of Hardoi district are devoted to
agriculture. The main crops are paddy, sugarcane, wheat, vegetables,
pulses and oilseeds. A small proportion of the total cultivated area is
used for horticulture: guava, mangos, some herbs, etc. Irrigation is
made possible by the presence of the Hardoi and Lucknow branches
of the Sarda Canal.Generally people of the district depend upon the
Agriculture based economy.
1.4.19 Demographics
As of 2011 India Census, Hardoi district had a population of
4,091,380. Males constitute 54% of the population and females 46%.
Average literacy rate of Hardoi in 2011 were 68.89% compared to
36
14
37
38
20
21
on
26
27
through moderate human skills. India has skilled labour and does
better in this sector as compared to others. This will also increase the
employment and the social structure will be better off.
To quote Panthaki (2005),30 the textile industry in India is vital to the
economy of the country as it contributes to over 6% of the gross
domestic product to India and earns 18% of the total foreign exchange
earnings of the country.
The present garment segment of the textile industry provides
employment to around seven million people (Apparel Talk, 2005).31
Fashion as part of history repeats itself and is defined as the
prevailing style in clothing at any given period of time write Amaden
and Crawford (2005).32
Paromita Goswami (2007)33 conducted a study on how college
students in urban areas shopped for apparels. The factors investigated
for the study were brand conscious and needed variety and best
quality for their apparel purchase. Furthermore, parents influence
their purchase behavior the most, followed by peer store approval,
friends influence and peer product influence.
According to Kunz and Garner (2007), 34 the textile and the apparel
business provides employment for more than any other business
segment, directly providing a livelihood for many millions of people,
including 37 million individuals in India alone.
Dr.Biradar et.al. (2008)35 in their article pointed out that the
organized retail sector is registering tremendous growth fuelled by
41
37
42
seen as a
fashion forward statement in the 80s is now a universal trend that has
become mainstream fashion and these versatile fashions are the
fashion worlds latest obsession (Apparel Online, 2011).43
Considered as one of the largest employment generator, the Indian
textile industry provides employment not only to people involved in it
but also to various ancillary sectors like agriculture and recent survey
has revealed that the textile industry contributed twelve million jobs
in the year 2010 (Indian Textile Journal, 2011).44
In this contemporary world of fashion, where dressing is a powerful
form of expression, more and more youngsters are adopting
character inspired merchandise by wearing their favorites cartoon
and comic characters on their T-shirts (Apparel Online, 2011).45
48
49
References
1. dictionary.reference.com/Apparel
2. Mc Kinsey & Company
3. http:/fcamin.nic.in
4. http:/fcamin.nic.in
5. www.kvic.org.in
6. http:/india.gov.in/citizen/cooperatives/cooperatives
7. www.indiaretailing.com
8. www.indiaretailing.com
9. AT Kearney.com
10. Global Retail Development Index (GRDI) 2013
11. Consumer Lifestyles in India, EuromonitorInternationalConsumer
Lifestyles Database (2005)
12. Global Apparel, accessories and luxury goods, Data Monitor,
(2006)
13. www. darliekoshy.com/publication/htm
14. shodhganga.inflibnet.ac.in/jspui
15. www.iimb.ernet.in/chandra
50
16. www.emeraldinsight.com/journals
17. www.esocialsciences.org
18. shodhganga.inflibnet.ac.in/jspui/bitstream
19. www.eu.ldc.org
20. www.emeraldinsight.com/journals
21. www.emeraldinsight.com/journals
22. onlinelibrary.wiley.com
23. www.ibm.com./businesscenter/au
24. www.ijsrp.org/research-paper
25. shodhganga.inflibnet.ac.in/jspui/bitstream
26. shodhganga.inflibnet.ac.in/jspui/bitstream
27. shodhganga.inflibnet.ac.in/jspui/bitstream
28. shodhganga.inflibnet.ac.in/jspui/bitstream
29. shodhganga.inflibnet.ac.in/jspui/bitstream
30. shodhganga.inflibnet.ac.in/jspui/bitstream
31. shodhganga.inflibnet.ac.in/jspui/bitstream
32. www.amazon.com
51
33. shaktipublication.org
34. www.abeebooks.com
35. shaktipublication.org
36. shodhganga.inflibnet.ac.in/jspui/bitstream
37. www.indiantextilejournal.com/articles
38. shodhganga.inflibnet.ac.in/jspui/bitstream
39. www.indiantextilejournal.com/content/viewpoint/articles
40. www.emarketer.com/apparel
41. www.textileintelligence.com
42. shodhganga.inflibnet.ac.in/jspui/bitstream
43. www.emarketer.com/apparel
44. www.indiantextilejournal.com/content/viewpoint/articles
45. www.emarketer.com/apparel
-----:o:-----
52
Chapter-2
RETAIL FORMATS AND
RETAILERS
53
54
2.2.3 Kiosks
Kiosks are box-like shops which sell small and expensive items like
cigarettes, toffees, newspapers and magazines, water packets and
sometimes, tea and coffee. These are most commonly found on every
street in a city and cater primarily to local residents.
demand,
opening
up
of
markets,
technological
the distance between the manufacturer and the consumer has seen
many of the worlds leading entrepreneurs successfully walk down a
particularly profitable road.
The retail industry is the worlds largest private industry and accounts
for over 8 percent of the GDP in western countries. Now, it is Indias
turn. Today, we stand at the crossroads of a retail revolution. After 50
years of unorganized retailing and fragmented kirana stores with very
basic offerings, fixed prices, zero usage of technology and little or no
ambience the industry has finally begun to move towards
modernization, systematization and consolidation.
Retailers in India like abroad are diverse in forms such as street
vendors to large groups line ABRL, Bharati, Trent, Reliance Retail,
Shoppers, Life style, Future Group, RPG to multiplex chains like
Adlabs, Cinemax, PVR, Inox, FR, or food courts i.e., Blue foods,
SRS, Gigabytes, Spices and vices are few names in long list and
different formats.
The new formats give the customer the choice of picking up a
product, comparing it with others and then taking a decision on
buying. This requires that the products are displayed and packaged
attractively. It also becomes necessary to provide all the information
with respect to price, date of manufacture, weight, expiry, etc on the
product itself to aid decision-making. The world of retail changed,
when in 1995, Amazon.com opened its doors to a worldwide market
on the Web.1
56
Dynamic
ccc Consumer
Behaviour
Consumers
Demography
Modern Retail
Formats
Retail
Attributes
Retail Marketing
Strategies
57
Proprietorship
Partnership
Limited Company
(Private or Public)
Independent
Traders
Chain Stores
(Multiples)
Co-operatives
Variety Stores
(Departmental
Stores)
Specialty Stores
(Niche Retailers)
59
(Low)
Self Service & Self
Selection
(High)
Large No. of Consumer
such as high credit, home
high involvement of sales
attending customer needs
help in selection etc.
Services
delivery,
staff in
such as
60
they will generate business on the basis of some other attribute such
as convenient location or exclusive image.
Lower Price
(Discount Stores)
High Price
(Convenience Stores)
61
Small Stores
Surplus Stores
Hyper Markets
67
68
69
70
71
72
2.6.5 Franchising
Franchising is the granting of sole selling rights within a given
geographical area. The franchising company (the franchiser) supplies
equipment and/ or raw materials for a license who either pays a
franchise fee or a percentage of turnover, or contracts to buy supplies
from the franchiser( or a mixture of these methods of payment). The
licensee is also helped in finding a location and is trained in all
aspects of the business. Generally, franchises are distinguished by
three characteristics:
The franchiser owns a trade or service and licenses it to
franchises in return for royalty payments.
The franchiser pays for a part of the system. This is normally in
two parts, one initial fee, which is only a small part of the total
amount. Second, service fee on turnover on monthly or
quarterly basis.
The franchiser provides its franchisee with marketing and
operations systems for doing business.
Franchising is beneficial to both franchiser and franchisee. Benefits
to franchiser are:
Covering new territory.
The franchisees familiarity with community and conditio ns.
Hard work of persons who are entrepreneurs rather than
employees.
74
75
77
78
REFERENCES
1. Amazon.com
2. Middle-East Journal of Scientfic Research
3. Global Retail Development Index
4. retailyatra.com
5. retailindia/asia.com
-----:o:----79
Chapter-3
EMERGING TRENDS
IN APPAREL RETAILING
80
81
1) Party wear
2) Sports wear
3) Clothes for hanging out at the mall.
Not long ago, for example, men from Indias northern regions only
required a good dark suit or Sherwani, the traditional long coat, to
cover big occasions and important celebrations. But over the past
several years, men have begun to supplement those staples with
expensive Western style jackets, and collared shirtssome in
funky patterns and cut for a night on the town, others in stripes or
checks for casual meetings with important business associates. Today,
Indians are more inclined than consumers in other markets to buy
apparel for a specific purpose. Indeed, 38 percent of Indian
respondents to a recent McKinsey Study2012 said they were highly
likely to buy apparel for special eventsa significantly higher
proportion than in Brazil (5 percent), Russia (3 percent) or China (6
percent). Family celebrations and weddings continue to eat up an
enormous share of Indian consumers clothing budgets.2
3.1.4 Growth in the Womens Segment
Historically, the mens apparel market in India has been significantly
larger than the womens apparel market. With only 20 percent of
Indias urban women in the workforce, womens wardrobes have
traditionally been limited to home wear and items for special
occasions. Now, women are more willing to dress differently when
they venture beyond the hometo shop, for example, or visit a
school or office.
82
84
100 percent organic lines made of cotton, linen, and natural dyes.
3.1.9 Focus on Inventory and Markdown Management
Today, apparel is one of Indias most attractive business segments
due to its high margins. Looking at an index based on the cost of a
basic white shirt, we have found that Indian apparel prices have
doubled over the last decade, and tend to be 25 to 30 percent higher
than in China as a result of supply chain inefficiencies and restricted
competition.
Apparel is the most profitable segment of the Indian retail
market today
Category
Typical
Description
retailer
margins
Food
15-20%
Apparel
35-50%
Electronics 5-10%
86
retailers cannot ignore the smaller cities, which will drive apparel
growth opportunities, even for more expensive brands. Benetton, for
example, recently hit $100 million in sales in India, and is targeting
$250 million within the next 3-4 years, largely by targeting smaller
cities, which are already contributing about 20 percent to the
companys growth and growing much more quickly than in the larger
markets.4 Winners who want to build real scale in India will be those
who understand the market in a granular manner, and then own the
customer throughout their lifecycle with a portfolio of brands, price
points, and formats.
89
Family stores are becoming hot favorite shopping hub for the middleclass and upper middle class shoppers. These stores sell garments of
nearly all age groups and sexes. Apparels of various brands can be
found in family stores. They are being considered as one-stop
shopping destination. Roopam, Big Bazaar, Fashion station, V-mart,
Maxx, etc are examples of some family stores.
3.2.2 Boutiques
Another aspect seen in the changing face of Indian garment industry
is the increasing popularity of 'Boutiques'. A boutique is a small shop
or departmental store selling designer, unique and trendy products. A
wide range of items can be displayed in a boutique like watches,
eveningwear, sportswear, t-shirts, tuxedos, etc. Boutiques are
generally specialty stores. Exclusive designer items can be purchased
from such stores. High profile designers of India mainly merchandise
through their personal boutiques. However it is not mandatory that
only famous designer open a boutique. Even common person could
do it and make it big in this field. It could be started even with small
investment of money. More and more Indians are inclining towards
designer wear outfits due to increase in income of the people. India's
first boutique was opened in Mumbai in 1965 named 'Dagina' by Mr.
Chandu Morarjee. Boutiques are operated both online and offline, this
concept is yielding positive outcome for the retailers.
The emergence of fashion boutiques started from Mumbai, them
spreading onto Delhi, Chennai and other metropolitan and big cities
of India. Also to support this concept, art galleries came up which
90
92
buying designer wear outfit was a very costly affair and upper class
people could only afford them. But now it is possible for the common
people to wear designer clothes, this change occurred due to
popularity of diffusion of fashion.
largest retailer is also the largest real estate developer, as they own
most of their stores across the world. This implies that a well
integrated real estate strategy forms a critical part of the Wal-Marts
success story.
The success of Indias first three malls namely, Spenders Plaza in
Chennai, The Asnal Plaza in Delhi and The Crossroads Malls in
Mumbai has given a boost to the market. Simultaneously, Indian
consumers especially the cash rich middle class have changed the
face of retailing, with malls becoming the norm for shopping.
In fact, it is said that organized retail growth is at 35 percent
compared to a 6 percent growth of unorganized retail. On the basis of
a white paper prepared by KSA Technopak, India needs to create at
least 110 million square foot of additional retail space per year on the
prediction of a sustained GDP growth rate of about 6 percent. The
following reasons can be attributed to the growth of malls in India:
A fast growing middle class with higher discretionary income.
It is estimated that the middle class of 300 million will increase
to 520 million in 5 years.
The Indian economy is growing at 6.5 percent per annum
while the population is growing at 1.7 percent per annum.
There will be an increase in the number of double income
households.
Focus on the youth as a target market.
Researchers reveal that consumer spending grew at a rate of 6
percent per annum in the last 10 years.
95
102
103
104
105
3.5.3 Monthly
At the end-of-month, the system should produce a snapshot of the
month, reporting on: sales, including real sales and costs of sales,
ending inventory levels, number of items received during the month,
zero sold items, etc.
3.5.4 Ease of Creation of New or Computer Recommended
Purchase Orders
While building a Purchase Order (PO) you would like the ability to
add new inventory, view receiving and sales history and view
previous Pos for a given item, the software should have capacity to
allow this. Your computer should offer auto-generated POs based on
pre-determined model stock levels or using seasonal sales data,
critical levels, special order data and average vendor fill time etc.
3.5.5 Electronic Data Interchange (EDI)
Once your purchase order has been created, you may be able to
transfer it directly into your vendors computers through electronic
data interchange. This provides quicker turnaround and vendors
chance of errors (nobody at the vendor location has to type in your
data). EDI is becoming increasingly important as businesses are
embracing new technology.
3.5.6 Comprehensive Information Receiving
One can expect comprehensive information and data transfer through
the network; such as update the inventory, send information to
106
accounts payable and print the price tags for the merchandise, corelate with the PO, etc.
108
able to re-order products, the retailer needs to know the quantities, the
types, colours, sizes and other characteristics of the product sold. It is
not humanly possible to remember all these varieties over a period of
time. Even if attempted, it is a time consuming exercise and could be
error ridden. Thus, a need was felt for developing a machine readable
system which could help identify the product across various retail
locations and provide all information associated with it quickly.
The Universal Product Code (UPS) or Barcode as it is popularly
known was developed from this need. While the first barcode patent
was issued in 1952, the retail industry adopted it much later, since to
implement a barcode system, hardware to produce the codes and
software to interpret the information contained in them was required.
Once this was developed, the grocery retailers were the first to adopt
the barcode(UPS).
Barcode is one of the IT tools used for automatic data capture. As
opposed to manual data entry, which is tedious and prone to in
accuracies and errors, bar coding enable data capture with 100%
accuracy and in micro-seconds. Barcodes can be used to represent
information related to product attributes, other supplementary
information
turn before emerging onto the common market. The interest in RFID
picked up due to initiatives of the retail giant, Wal-Mart, who has
made it mandatory for its suppliers to tag shipments and goods
coming into distribution centres and stores with RFID tags by 2005,
with an extension into 2006. Metro Group, the worlds fifth largest
retailing firm, is also following the lead of Wal-Mart.
Radio Frequency Identification (RFID) can be described as a wireless
bare code which provides wireless communication between objects
and readers. RFID uses tags or transponders that collect data and
manage it in a portable, chargeable database. It has the ability to
identify and track products and equipment real-time, without contact
or line-of-sight. These tags, unlike bar codes, offer the possibility of
reading, writing, transmitting, storing and updating information.
While there are a great of similarities between the barcode and RFID
tag, the chief differentiation is the level of technology used. Bar
coding scans a printed label with either optical laser or imaging
technology, while RFID scans or interrogates a semiconductor tag
using radio frequency (wireless) technology.
Apart from inventory tracking, this technology enables the retailer to
track the task being performed by the employees within the store and
also enables them to be more productive and responsive to customers
needs by enabling the tracking of customer profiles, transaction
histories, levels of stocks and other data which may affect the actual
sale from taking place. For example, a customer selects the last of a
particular item on the store shelf; a restock notice instantly on a sales
111
112
Production
Formalwear,
casual
wear,
active
113
second, the fabric quality that Siyaram's has, which guarantees that
the buyer gets the high quality at a cheaper price.
In accordance of its venture into men's readymade clothing line,
Siyaram's Monday to Sunday Dressing would include casuals, semiformals, formals, club wear in the middle and premium segments,
targeting the youth. At first the Monday to Sunday Dressing line
would be introduced in Southern and Western India, and would be
sold through its retail outlets.
The leader in the suiting segment, S. Kumars Nationwide Limited
(SKNL) is the newest to join the rat race. It has launched a brand;
"Belmonte" the exclusivity of the brand is that it is only brand in the
economy section, which brings both fabric and readymade garments
under single label. The brand has been targeted towards the young
group. The brand offers a wide range style with perfect fitting.
The other growing strategy major textile players adapted is
'Acquisition'. Many of companies have used this strategy to dive into
readymade garment segment. Raymond's acquired Colorplus to jump
in casual-wear, adding brands like Raymond's, Parx and Park Avenue.
Opting the similar strategy, Indian Rayon acquired garments division
of Madura Coats, "Madura Garments" and entered the luring apparels
market with the successful brands like Van Heusen, Allen Solly, Peter
England and Louis Philippe. Textile leader, Bombay Dyeing also gets
hold of Proline to dive in the sportswear segment as well as adding
Vivaldi range to its formal menswear.
115
The above initiatives taken by the major brands depicts that the textile
players now started opting strategies to mark their presence in the
readymade garment segment. Their sheer benefits laze in substantial
production capacities, which can launch new products in minimum
lead-time, offering high quality.
Despite the smaller players in the unorganized market are in much
more advantageous situation, in the long run they might lose out. The
following are few problems faced by smaller players:
Smaller Market: There few cities and towns that they can concentrate
on, since these cities holds about 50 percent of the Sec A&B of
population that have a disposable income. As a result, very few
opportunities are there for smaller players.
Limited Capacities: The restriction that these smaller players have is
that they cannot emerge beyond a definite level. Additionally,
inadequate logistics and improper supply chain managements created
huge problems for the smaller players.
Inadequate Logistic & Strength: For advertising and brand building,
these smaller players are forced to extend their reach geographically,
which makes supply chain management more complex. To match
with increasing demand in competitive markets, stress on producing
volumes also increases. To sustain existence these players will have
to inject in more investments to their businesses in the areas of
designing capabilities, brand making and retailing.
116
Shapes, Ruff Kids, Koutons, LFC, Upper Class etc. are performing
well in cut throat competition in the readymade garment. A
Hyderabad based player, Priyadarshini Spinning foray the readymade
garment segment by establishing a shirt manufacturing unit at the
Garment Park in Hyderabad. It is also collaborating with local and
international players for marketing its shirts range.
Creation and focusing in the value chain strengthens the smaller
players. The main factors where the brands need more concentration
are designing, production, quality and merchandising. But, the
designing is the most significant of the value chain, which requires
maximum focus. The merchandising is noteworthy factor stage for
the smaller players, as involvement, creation and fabric selection adds
value to the creation. The retailing is also an important factor for the
smaller players. They may face problem if their merchandize remain
for long on retail shelves, since the value of the fashion drops,
resulting increase in inventory costs.
Today, the buyers of readymade garment segment are aware of the
running trends, and demand the newest in fashion and products at a
reasonable cost. At the front position of this evolution are the smaller
players, which private labels that are thoroughly transforming the
dressing way of men, women and children. With the supply chain
limitations eased, organization in real estate markets, and rationale tax
structure, the readymade garment segment has become more lucrative
and it is anticipated that the readymade garment segment will be the
main segment in the next five years.
118
121
122
b)
c)
2.
Single brand retailers such as Apple and Ikea, can own 100%
of their Indian stores, up from previous cap of 51 %.
3.
4.
5.
6.
7.
utilize the enormous manpower and wide customer base available that
has led to a rapid growth of the sector. Today, its retail sector is the
second largest (in value) in the world with global retailers such as
Wal-Mart, 7-Eleven and Carrefour comprising 10% of the total
merchandise/goods.
Multi-brand retail, if allowed, is expected to transform the retail
landscape in a significant way:
Firstly, the organized players would bring in the much needed
investment that would spur the further growth of the sector.
This would be particularly important for sustenance of some
of the domestic retailers that don't have the resources to ride
out the storm during an economic slump such as the case with
Vishal, Subhiksha and Koutons, which couldn't arrange for
funds to sustain their growth.
The technical know-how, global best practices, quality
standards and cost competitiveness brought forth through FDI
would augur well for the domestic players to garner the
necessary support to sustain their growth.
Indian has also been crippled by rising inflation rates that have
refused to come within accepted levels. A key reason for this
has been attributed to the vastly avoidable supply chain costs
in the Indian food and grocery sales which has been estimated
to be a whopping US$ 24 billion. The infrastructure support
extended to improve the backend processes of the supply
chain would enable to eliminate such wastages and enhance
the operational efficiency.
130
Tier-II
and
Tier-III
cities
where
the
organized
131
decision to allow Multi brand retailers to open stores rests with the
state governments.
Minimum amount to be brought in by the foreign investor would be
$100 million and outlets may be set up only in cities with a
population of more than 10 lakhs.
India Inc. hailed the government's decision to implement FDI in multi
brand retail and voiced that it will give a strong message to investors
that the government means business and stands firm on its initiatives.
This decision is a right step and will go a long way in capital infusion
and is expected to strengthen the farmer's community.
132
References
1. Ministry of Textile
2. McKinsey&Company
3. Census of India, 2011
4. Economic Times,April 15,2010 Benetton India revenue likely to
touchUS$250m in 4 years
5. www.Fibre2Fashion.com
6. KSA Technopak
7. A.C.Nielson Centre for Marketing Research
8. Data Monitor Global Internet Report
9. www.Fibre2Fashion.com
10. www.Fibre2Fashion.com
11. Technopak Indian Textile&Apparel Compendium,2010
12. Hemant Batra, Retailing Sector in India Pros Cons 9Nov 30,
2010) http://www.legallyindia.com
13. Notification No. FEMA 20/2000-RB dated May 3, 2000
14. FDI_Circular_02/2010,DIPP
15. http:/siadipp.nic.in/policy/changes/pn3 2006
16. http:/siadipp.nic.in/policy/changes/pn3 2006
17. Discussion Paper on FDI in Multi Brand Retail Trading,
http//dipp.nic.in/discussion Papers/DP FDI Multi Brand Retail
Trading_06July2010
18. India Brand Equity Foundation
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Chapter-4
CHALLENGES AND
PROSPECTS
IN
APPAREL RETAILING
differential tax rates for various states leading to increased costs and
complexities in establishing an effective distribution network.
Stringent labor laws govern the number of hours worked and
minimum wages to be paid leading to limited f1exibility of operations
and employment of part-time employees. Further, multiple clearances
are required by the same company for opening new outlets adding to
the costs incurred and time taken to expand presence in the country.
The retail sector does not have 'industry' status yet making it difficult
for retailers to raise finance from banks to fund their expansion plans.
Government restrictions on the FDI are leading to an absence of
foreign players resulting into limited exposure to best practices.
Non-availability of Government land and zonal restrictions has made
it difficult to find a good real estate in terms of location and size. Also
lack of clear ownership titles and high stamp duty has resulted in
disorganized nature of transactions.
4.1.1Retail in India - Getting Organized to Drive Growth
Although India has emerged as one of the worlds most attractive
markets, the country is grappling with critical infrastructure and
policy issues. The Confederation of Indian Industry (CII) engaged
A.T. Kearney to conduct research to better understand the challenges
facing organized retail in India today, and to develop specific,
actionable recommendations.
136
137
138
Process
Output
Raw material
Ginning
Fibre
Spinning
Yarn
Weaving/Knitting
Fabric
Processing
Processed Fabric
Garments/
Apparel Production
Fig. 4.1
139
Advantage India
Raw Material Production
India has the largest area under cotton cultivation-9 million hectaresconstituting 25 per cent of the worlds total cultivation area. India is
the second-largest producer of silk in the world.
Sourcing Hub
Several international retail giants such as Marks & Spencer are
leveraging India as a key global sourcing destination.
Availability of Skilled Workforce
The industry is the second- largest employment generator after
agriculture. Several centres of excellence are available for
providing an impetus to academics and research in textiles
Favourable Government Policies
Initiatives such as the Technology Upgradation Fund Scheme
(TUFS) and Technology Mission on Cotton (TMC), among
several others, aid the development of the domestic industry
and attract potential investors.
Favourable Climatic Conditions
Coastal regions favour growing and processing because of
availability of optimum humidity. Necessary humidity reduces
shrinkage and rupture in fabrics hence reduces wastage.
140
Product
State
Woolen knitwear
Punjab (Ludhiana)
Handloom, made-ups
Haryana (Panipat)
Handblock
printing,
apparel
manufacturing
Rajasthan (Sanganer)
Hand processing
Rajasthan (Jodhpur)
Defence-related textiles
Powerloom
weaving
and
processing
Gujarat (Surat)
Cotton hosiery
Maharashtra (Sholapur)
Cotton ginning
Home furnishings
Kerala (Kannur)
Cotton knitwear
Table 4.1
141
142
145
2-3 years, and over Rs. 20,000 crore by the end of 2010. Stocks
in the retail sector are also becoming increasingly attractive from
an investor's point of view. On the strength of the strong industry
dynamics, listed retail companies like Pantaloon and Trent are
trading at twice the levels than what they were at the beginning
of the year. These stocks also enjoy price-earnings ratios (P/E
ratios) and market capitalization-to sales ratios that are
significantly higher than those of even international retailers
indicating the positive investor expectations from these
companies. Successful development of value based concepts
such as Big Bazaar, Giant and Vishal Mega Mart as well as
development of retail space in smaller cities and towns will drive
organized retail into the next level of cities. Small towns with a
population of 5-10 lakh are witnessing a defined increase in
disposable income coupled with high aspirational levels leading
to enhanced spending on consumer goods along with lesser
aversion to credit.
Thus, the 'retail boom', 85% of which has so far been concentrated in
the metros is beginning to percolate down to smaller cities and towns.
The contribution of these tier-II cities to total organized retailing sales
is expected to grow to 20-25%.
Mall developers across the country are creating superior real estate
options at a frenzied pace. From 35-40 operational malls currently
occupying approximately 6 million sq ft of retail space, India is
expected to have over 200 new malls by 2006-end, thereby adding
retail space to the tune of35-40 million sq ft. Further, by 2010,500600 malls occupying approx 120 million sq ft are at various stage of
planning. Of the 200 malls expected to be launched by 2006-end,
about 50% are estimated to come up in 6 metros - NCR, Mumbai,
Bangalore, Kolkata, Hyderabad & Chennai with NCR & Mumbai
alone accounting for almost 60 of these new malls. However, by
2010, mall developments are anticipated to spread across 60 cities in
the country. The fast-paced growth of mall development has been
further fuelled by government authorities like the Delhi Development
Authority (DDA) beginning to release real estate space for retail
development in prime retail areas like Vasant Kunj and Saket in New
Delhi. In fact, DDA made a whopping Rs. 740 crore from the sale of
three plots in Vasant Kunj.
149
Mexico
(US$2.l9),
Tunisia
(US$2.05),
Thailand
(US$1.29), and the Philippines (US$1.12). They were also lower than
in China's coastal region (US$0.76). Admittedly they were higher
than in Indonesia (US$0.55), inland China (US$0.48), Sri Lanka
(US$0.46), Pakistan (US$0.37), Vietnam (US$0.28), and Bangladesh
151
SWOT
Analysis
for
India:
Strengths,
Weakness,
153
154
155
161
162
165
in
antiquated
state-run
warehouses.
Cost-conscious
delighting
customers
and
caring
about
the
171
channels, but they may have to accept lower margins for greater
volumes /large scale.
4.5.7 Farmer Groups
Various farmer associations in India have announced their support for
the retail reforms. For example:
Shriram Gadhve of All India Vegetable Growers Association
(AIVGA) claims his organization supports retail reform. He
claimed that currently, it is the middlemen commission agents who
benefit at the cost of farmers. He urged that the retail reform must
focus on rural areas and that farmers receive benefits. Gadhve
claimed, "A better cold storage would help since this could help
prevent the existing loss of 34% of fruits and vegetables due to
inefficient, systems in place." AIVGA operates in nine states
including Maharashtra, Andhra Pradesh, West Bengal, Bihar,
Punjab and Haryana with 2,200 farmer outfits as its members.
Bharat Krishak Samaj, a farmer association with more than 75,000
members says it supports retail reform. Ajay Vir Jakhar, the
chairman of Bharat Krishak Samaj, claimed a monopoly exists
between the private guilds of middlemen, commission agents at
the sabzi mandis (India's wholesale markets for vegetables and
farm produce) and the small shop keepers in the unorganized retail
market. Given the perishable nature of food like fruit and
vegetables, without the option of safe and reliable cold storage, the
farmer is compelled to sell his crop at whatever price he can get.
He cannot wait for a better price and is thus exploited by the
175
176
Sharad
Joshi,
founder
of
Shetkari
Sangathana
(farmers
177
178
180
The Chief Minister of the state of Maharashtra - the state with the
highest GDP in India and home to its financial capital Mumbai - has
also welcomed the retail reform.
Tarun Gogoi, the Chief Minister of Assam, an eastern state in India,
announcing his support to the retail reform, claimed "this will go a
long way in bringing about a sea change in rural economy. The
decision will boost agriculture and allied sectors, manufacturing,
logistics, integrated cold chains, refrigerated transportation and food
processing facilities in a big way." Criticizing the BJP-organized
opposition, Gogoi claimed that these parties, who had just a few years
ago dubbed opening up retail as good for India, are now singing a
different tune.
4.5.10 Current Supermarkets
Existing Indian retail firms such as Spencer's, Foodworld
Supermarkets Ltd, Nilgiri's and ShopRite support retail reform and
consider international competition as a blessing in disguise. They
expect a flurry of joint ventures with global majors for expansion
capital and opportunity to gain expertise in supply chain management.
Spencer's Retail with 200 stores in India, and with retail of fresh
vegetables and fruits accounting for 55 per cent of its business claims
retail reform to be a win-win situation, as they already procure the
farm products directly from the growers without the involvement of
middlemen or traders. Spencer's claims that there is scope for it to
expand its footprint in terms of store location as well as procuring
farm products. Food world, which operates over 60 stores, plans to
181
ramp up its presence to more than 200 locations. It has already tied up
with Hong Kong-based Dairy Farm International. With the relaxation
in international investments in Indian retail, India's Food world
expects its global relationship will only get stronger. Competition and
investment in retail will provide more benefits to consumers through
lower prices, wider availability and significant improvement in supply
chain logistics.
182
References
1. Ministry of Textile 2008-09 Annual Report.
2. Ernst & Young Research
3. India in the Global Textile Ecosystem 2007 Ernst & Young, CII
4. Technopak Reports, 2012
5. Business Standard
6. KSA Technopak India Retail Report 2005.
7. Technopak Reports, 2012
8. Textile Intelligence Limited(U.K.)
9. Ernst & Young India
10. Compendium of Textile Statistics, 2006.
11. Compendium of Textile Statistics, 2006.
12. KPMG India.
13. Mc Kinsey & Company.
14. FDI in Multi Brand Retail, Ministry of Commerce.
15. A good retail decision badly sold India Today, 3Dec. 2011.
16. Singh criticism mounts after retail U-turns The Financial Times
4 Dec. 2011.
17. Ministry of Commerce & Industry, GOI.
18. Enter, Farmer with an FDI in retail query Calcutta, India
The Telegraph.
-----:o:-----
183
Chapter-5
ANALYTICAL STUDY
Sample Size
Lucknow
100
Hardoi
50
Lakhimpur Kheri
50
Raebareli
50
Sitapur
50
Unnao
50
Total Sample
350
184
They have
185
Observation2.
Local Retailer
Market Retailer
Total
Lucknow
13
87
100
Hardoi
06
44
50
Lakhimpur
11
39
50
Raebareli
13
37
50
Sitapur
16
34
50
Unnao
04
46
50
Total
63
287
350
186
350
300
250
200
Local Retailer
150
Market Retailer
100
Total
50
0
Market Retailer
Lucnkow
Lucknow
16%
12%
Local Retailer
6%
Hardoi
30%
25%
Lakhimpur
21% 17%
14%
Hardoi
Lakhimpur
Raebareli
Sitapur
Raebareli
13%
21%
15%
Unnao
Sitapur
10%
Unnao
Figure 5.1
Under present study, 63 local apparel
appa retailers have been surveyed.
287 market
arket retailers have been surveyed.
Local retailers do not have enough resources and aspirations
aspiratio to move
to market places where
wher there is larger scope. They
The have various
constraints
ints such as capital, their scale
scal off operations, high rent, etc.
Local retailerss are doing their business on small scale and content.
They are using
sing their
their infrastructure and family labour
labo to run their
187
Small apparel
Consequently, apparel
industry.
Observation1. Small places/ districts need small amount of
investment initilly.
Observation2. Retailers started business with up to Rs. 5 lakhs and 6
to 10 lakhs. They outnumber Rs. 11-50 lakhs and above 50 lakhs.
They are 288 against 62.
Having the right product is also essential. Fashion trends change
frequently, and companies need to adapt to varying consumer tastes
188
quickly. If you love fashion, and are good with people, you can open
up a retail clothing store. Opening your own retail business may look
like an expensive project.
Table 5.3
Amount invested initially?
(Rs. Lakhs)
District
Up to 5L
6-10 L
11-50 L
Above 50
Total
Lucknow
04
35
54
07
100
Hardoi
11
39
00
00
50
Lakhimpur
15
35
00
00
50
Raebareli
25
25
00
00
50
Sitapur
33
17
00
00
50
Unnao
22
27
01
00
50
Total
110
178
55
07
350
350
300
250
Up to 5L
200
6-10 L
150
11-50 L
100
Above 50
50
Total
189
Upto 5
10
6 -10
Lucknow
3% 10%
20%
14%
Lucknow
15%
Hardoi
20%
9%
Lakhimpur
30%
23%
20%
Raebareli
Sitapur
22%
14%
Raebareli
Unnao
11
11-50
Above 50
Lucknow
0%
0%
Hardoi
Lakhimpur
98%
Lakhimpur
Sitapur
Unnao
0% 2%
Hardoi
Lucknow
Hardoi
Lakhimpur
100%
Raebareli
Raebareli
Sitapur
Sitapur
Unnao
Unnao
Figure 5.2
Amount of investment depends upon scale of operations,
operations, location of
outlets, etc.
Lucknow Division
ivision has six districts
dis
namely-Luc
Lucknow, Hardoi,
Lakhimpur,
akhimpur, Raebareli, Sitapur and Unnao.
Lucknow district is comparatively more
more developed. Here retailers
retailer
need higher amount of capital to start business.
Surveyed data reveal that 110 retailers started business with investing
up to Rs. 5 Lakkhs, 178 opened outlets by investing 6--10 Lakhs which
is highest. Retailers who opened shops by investing 11-50Lakhs are
190
77. Only 7 retailers said that they opened shops by investing above 50
Lakhs.
5.2.3 Dou you deal in?
Apparel is classified into three categories Menswear
Womens wear
Kids wear
Some retailers specialize in particular categories. But offering all
categories prove profitable and it helps in promotion as a complete
shop selling everything for everyone.
There are many types of womens apparel, including depresses, social
apparel, suits, outerwear, sportswear and active wear. There are also
specialty categories, such as bridal gowns and maternity clothes.
Observation 1.Most of the sample surveyed sell/deal in all categories
of apparel. 244 outlets sell menswear, womens wear and kids wear.
Observation2. Kids wear does not have many outlets. They are sold
with menswear, womens wear. They are just 12 in sample survey.
Thus we can classify womens wear on the following bases:
Size ranges
Age
Economic status/price
Season
191
Style
Occasion
Garments for children in the commonly acknowledged size ranges
include styling and construction features specifically dedicated to the
clothing needs of that wearer population.
Mens apparel continues to be the largest segment in apparel retail in
India. It has the presence of a large number of international brands.
The childrens wear market is growing rapidly and has seen many
international brands entering India.
Table 5.4
Do you deal in?
District
All
Total
Lucknow
19
37
11
33
100
Hardoi
03
01
00
46
50
Lakhimpur
00
00
00
50
50
Raebareli
06
03
00
41
50
Sitapur
02
02
00
46
50
Unnao
12
09
01
28
50
Total
42
52
12
244
350
192
350
300
250
Menswear
200
Womenswear
150
Kidswear
100
All
50
Total
Menswear
Womenswear
Lucknow
29%
45%
Hardoi
Lakhimpur
6%
Raebareli
5%
14%
0% 7%
Lucknow
4% 17%
Sitapur
Hardoi
Lakhimpur
71%
0%
Raebareli
2%
Sitapur
Unnao
Unnao
Kidswear
0%
0%
8%
0% 0%
All
Lucknow
Lucknow
11%
Hardoi
14%
19%
Lakhimpur
92%
Hardoi
19%
20%
Raebareli
17%
Sitapur
Unnao
Lakhimpur
Raebareli
Sitapur
Unnao
Figure 5.3
193
Indian shoppers often like to shop at one place. Keeping this in mind
Indian apparel retailers try to sell all categories at one place. In this
study, they are 244 who are selling all categories. There are 42
outlets that are exclusively selling menswear. 52 outlets are selling
womens wear only. There are 12 outlets selling kids wear. There is
tendency to focus specialization as marketing tool. They like to
promote themselves as only for men, ladies or kids, sariwala,
suitwala, etc.
5.2.4 Do you deal in branded apparel?
Use of readymade garments (RMG) has been increasing. This has
also brought the use of branded apparel. Indian companies and
foreign companies are in process bringing more and more brands in
the market.
Economic growth and high disposable income have created
favourable conditions for readymade garments and hence branded
cloths. Apparel tags, labels and specialty trim play an essential role in
todays supply chain. Not only do they promote brand recognition,
communicate important consumer information such as size and price
or point of sale data like the barcode, but they also help protect
against theft and counterfeiting.
Yes
No
Total
Lucknow
97
03
100
Hardoi
41
09
50
Lakhimpur
50
00
50
Raebareli
49
01
50
Sitapur
40
10
50
Unnao
50
00
50
Total
327
23
350
195
350
300
250
200
Yes
150
No
100
Total
50
0
Yes
No
Lucknow
15%
12%
0%
Lucknow
13%
Hardoi
30%
Hardoi
44%
Lakhimpur
Lakhimpur
39%
Raebareli
15%
13%
15%
Raebareli
Sitapur
4% 0%
Unnao
Sitapur
Unnao
Figure 5.4
There are forces which have increased
increased the use of branded apparel.
apparel
These include high economic
economic growth, high disposable income, high
urbanization, cloth as means of self-expression etc.
327 respondents said that they sell
sell branded apparel against 23 of
those who sell non-branded
non
apparel. Readymade
eadymade garments (RMGs))
have been becoming popular day-by-day.
day
Theree are big Indian and
foreign players in this segment.
196
Growth in
Unorganized
Organized
Both
Total
Lucknow
01
54
45
100
Hardoi
00
14
36
50
Lakhimpur
00
08
42
50
Raebareli
00
06
44
50
Sitapur
01
03
46
50
Unnao
00
09
41
50
Total
02
94
254
350
Unorganized
150
Organized
100
Both
50
Total
198
Unorganized
Lucknow
0%
50%
Organized
50%
Hardoi
10%
6% 3%
Lakhimpur
9%
Lucknow
Hardoi
57%
Raebareli
0%
0%
Lakhimpur
Raebareli
15%
Sitapur
Sitapur
Unnao
Unnao
0%
Both
Lucknow
16%
18%
Hardoi
14%
18%
17%
17%
Lakhimpur
Raebareli
Sitapur
Unnao
Figure 5.5
Healthy competition is necessary for
for growth of any industry. Large
part of the apparel retailing is done in unorganized sector.
As far as competition is concerned, respondents replied that they face
competition from both organized and organized sectors. The number
is 254 who said they have competition from both.
Emerging
Table 5.7
How do your competitors affect you?
District
By decreasing
By decreasing
By increasing
sales
margins
competition
Lucknow
10
24
66
100
Hardoi
11
18
21
50
Lakhimpur
15
15
20
50
Raebareli
12
31
07
50
Sitapur
14
31
05
50
Unnao
12
32
06
50
Total
74
151
125
350
Total
Source:
ource: Primary Data
350
300
250
200
By decreasing sales
150
By decreasing margins
100
By increasing competition
50
Total
201
By decreasing sales
By decreasing
margins
Lucknow
14%
16%
Lucknow
Hardoi
15%
16%
21%
Hardoi
Lakhimpur
20%
12%
21%
Raebareli
19%
20%
Sitapur
16%
10%
Lakhimpu
r
Raebareli
Unnao
By increasing competition
5%
4%
5%
Lucknow
Hardoi
16%
53%
17%
Lakhimpur
Raebareli
Sitapur
Unnao
Figure 5.6
Competition is manifested by respondents in different forms.74
respondents said that due to competition, their sales have been
decreased. They are struggling for their survival. A large number of
respondents agree that they have reduced their profit margins to
remain in the market. They are 151 in number.
125 respondents said that they face competition in one form or
another due to changing markets and consumer buying habits.
Increasing urbanization and mobility of consumers have changed the
shopping behaviour.
202
187
Personnel
at
franchisee
outlets,
outlets
in
better trained labour force has led several players mulling over the
possibility of setting up their own training institutions.
203
Table 5.8
What do you think about your employees?
District
Unskilled
Training on Job
Highly Skilled
Total
Luck now
02
49
49
100
Hardoi
07
27
16
50
Lakhimpur
13
26
11
50
Raebareli
18
22
10
50
Sitapur
14
30
06
50
Unnao
03
33
14
50
Total
57
187
106
350
350
300
250
200
Unskilled
150
Training on Job
100
Highly Skilled
Total
50
0
204
Unskilled
Training on Job
Luck now
5% 3%
25%
12%
Luck now
18%
Hardoi
Hardoi
26%
Lakhimpur
23%
32%
Lakhimpur
Raebareli
Raebareli
Sitapur
16%
Unnao
12%
14%
14%
Sitapur
Unnao
Highly Skilled
6%
Luck now
13%
46%
10%
Hardoi
Lakhimpur
10%
Raebareli
15%
Sitapur
Unnao
Figure 5.7
Apparel retailing is facing problems due to shortage of skilled
manpower.
There are institutional
institutional and organizational problems thereby not
producing skilled and trained personnel. There are lacks of adequate
technical and professional institutions in India.
57 respondents said that their employees are unskilled. Data reveal
that 187 outlets having personnel
personnel who are taking training on job itself.
Only 106 agree that their employees are highly skilled.
205
A unique
year
saw
the
emergence
of
supermarkets
and
hypermarkets.
Lack of adequate infrastructure with respect to roods, electricity and
ports has led to the impediment of a pan India network of suppliers.
Due to these constraints, retail chains have to resort to multiple
vendors for their requirements, thereby raising costs and prices.
Observation1. 250 respondents said yes they have problems because
of their locality.
Observation2. Before opening the shop, location should be studied
properly.
Observation3. After opening the shop, locational shortcomings
should be minimized.
Retailers want to be located where there are many shoppers but only
if that shopper meets the definition for their target market. Small
retail stores may benefit from the traffic of nearby large stores.
206
Table 5.9
Do you have the problems because of locations?
District
Yes
No
Total
Luck now
54
46
100
Hardoi
36
14
50
Lakhimpur
36
14
50
Raebareli
46
04
50
Sitapur
41
09
50
Unnao
37
13
50
Total
250
100
350
207
350
300
250
200
Yes
150
No
100
Total
50
0
Yes
No
Luck now
13%
Hardoi
16%
15%
22%
9%
4%
14%
Lakhimpur
Raebareli
14%
Sitapur
18%
46%
Unnao
14%
Luck now
Hardoi
Lakhimpur
Raebareli
Sitapur
Unnao
15%
Figure 5.8
Location is very important in retailing. There may be advantages and
disadvantages of a particular location. 250 retailers responded that
they have problems because of their location.
location.
209
District
Table 5.10
If yes, what kind of problems?
High
High
Parking
High cost if
rent maintenance problems
shop is
charge
owned
Total
Lucknow
12
01
38
03
54
Hardoi
17
02
14
03
36
Lakhimpur
12
05
14
05
36
Raebareli
24
02
19
01
46
Sitapur
30
00
11
00
41
Unnao
23
00
14
00
37
Total
118
10
110
12
250
250
High rent
200
150
High maintenance
charge
100
Parking problems
50
High cost
Total
High rent
14%
20%
10%
High maintenance
change
10%
Lucknow
Lucknow
Hardio
20%
26%
0%
0%
20%
Lakhimpur
20%
Hardio
10%
Lakhimpur
Raebareli
Raebareli
50%
Sitapur
Sitapur
Unnao
Unnao
Parking problems
Lucknow
13%
0%
8%
Hardio
10%
34%
Hardio
Lakhimpur
25%
42%
Raebareli
17%
13%
13%
Lucknow
0%
Sitapur
25%
Lakhimpur
Raebareli
Sitapur
Unnao
Unnao
Figure 5.9
211
212
Helpful
Harmful
No Idea
Total
Lucknow
31
25
44
100
Hardoi
01
34
15
50
Lakhimpur
03
29
18
50
Raebareli
03
34
13
50
Sitapur
03
36
11
50
Unnao
05
27
18
50
Total
46
185
119
350
213
350
300
250
200
Helpful
150
Harmful
100
No Idea
Total
50
0
Helpful
Harmful
Lucknow
Lucknow
7%
Hardoi
11%
7%
6%
15%
19%
Lakhimpu
r
Raebareli
67%
2%
14%
Lakhimpur
18%
18%
16%
Sitapur
Hardoi
Raebareli
Sitapur
Unnao
No Idea
15%
9%
37%
11%
15%
13%
Figure 5.10
214
Lucknow
Hardoi
Lakhimpur
Raebareli
Sitapur
Unnao
Indian economy has been opened. India has been following LPG
Model (Liberalization, Privatization and Globalization Model).
Government has opened the economy for foreign companies and
retail is not the exception.
46 respondents expressed that presence of foreign companies would
prove helpful. They have introduced and will introduce new formats
and marketing tools that will prove advantageous for apparel retail
and hence their own growth.
A large number of retailers perceive that foreign companies will harm
them in one way or another. 119 respondents have no idea about
effects of foreign companies.
In this globalized world, Indian retailers should learn how to do
business in presence foreign players. In fact, they are helping
organized retail growth and modernizing the apparel industry/sector.
5.2.11 What prospects do you perceive in apparel retailing?
Indian apparel business is anticipated to reach a growth rate faster
than that of the overall retail market. In Indian market, apparel is
second largest retail segment after food and groceries. The growth is
triggered by a number of influential factors:
Rise in average household income
Increasing trends of special occasions.
Growth of women empowerment
Self expression.
Rapid urbanization and modernization
215
branded
retail
outlets
where
merchandises
are
Excellent
Good
Average
Poor
Total
Lucknow
34
49
17
00
100
Hardoi
14
25
11
00
50
Lakhimpur
13
17
16
04
50
Raebareli
12
28
10
00
50
Sitapur
09
25
10
06
50
Unnao
12
32
06
00
50
Total
94
176
70
10
350
350
300
250
Excellent
200
Good
150
Average
100
Poor
50
Total
217
Excellent
Good
Lucknow
13%
9%
14%
18%
Hardoi
36%
Lucknow
Hardoi
28%
Lakhimpur
Lakhimpur
Raebareli
13%
14%
Raebareli
Sitapur
15%
16%
14%
10%
Unnao
Unnao
Average
Poor
Lucknow
9%
24%
0%
0%
Lakhimpur
60%
Raebareli
16%
Lucknow
Hardoi
40%
Lakhimpur
23%
14%
0%
Hardoi
14%
Sitapur
Raebareli
Sitapur
0%
Unnao
Sitapur
Unnao
Figure 5.11
Apparel retailing is growing rapidly. There is bright future is this
sector.94 respondents see excellent prospects. Largest numbers agree
that being the apparel retailer they
they have good fortune now and in
future. 70 said that future is average. Only 10 responses are for poor.
Organized retail is booming.
The composition of
219
Yes
No
Total
Lucknow
100
00
100
Hardoi
38
12
50
Lakhimpur
40
10
50
Raebareli
48
02
50
Sitapur
37
13
50
Unnao
45
05
50
Total
308
42
350
350
300
250
200
Yes
150
No
100
Total
50
0
220
Yes
No
Lucknow
15%
12%
Lucknow
12% 0%
Hardoi
32%
28%
Lakhimpur
31%
Raebareli
16%
13%
12%
24%
Sitapur
5%
Unnao
Hardoi
Lakhimpur
Raebareli
Sitapur
Unnao
Figure 5.12
Rising national income and per capita income have created new
consuming classes.
disposable income.
221
Upper class customers are those customers who are very rich and elite
in the society. Upper middle class falls between upper class and
middle class. Middle class represents those who have very humble
living. They do not have much and same time they do not have less to
spend.
222
Table 5.14
If yes, who are your main customers?
District
Upper
Upper
Middle
All
Class
Middle Class
Class
Segments
Luck now
23
36
40
01
100
Hardoi
03
21
14
00
38
Lakhimpur
00
10
18
12
40
Raebareli
05
20
23
00
48
Sitapur
03
13
21
00
37
Unnao
06
23
16
00
45
Total
40
123
132
13
308
Total
350
300
250
Upper Class
200
150
Middle Class
100
All Segments
50
Total
223
Upper Class
Luck now
15%
8%
Luck now
19%
Hardoi
57%
Hardoi
11%
29%
Lakhimpur
17%
Raebareli
0%
16%
Sitapur
13% 7%
8%
Unnao
0%8% 0%
Hardoi
30%
Lakhimpur
92%
Raebareli
14%
Luck now
Hardoi
Lakhimpur
17%
11%
Sitapur
All Segments
Luck now
16%
Raebareli
Unnao
Middle Class
12%
Lakhimpur
Raebareli
Sitapur
Sitapur
Unnao
Unnao
Figure 5.13
Data reveals that 40 retailers said that upper class
clas is their main
customers, 123 for upper middle class and 132 the highest for middle
class. Only 13 respondents said that all segments shop from their
outlets.
It is observed that retailers focus on a particular segment in belief that
they can serve this segment better. Requirements and paying capacity
of different segments are different.
224
Age
group
between
36-50
years
has
low
225
sectors
such
as
IT
IT-enabled
services,
vices,
retail,
food
services,
15
15-25
yrs 26-35 yrs 36-50 yrs Above 50
Total
Luck now
08
80
12
00
100
Hardoi
00
42
08
00
50
Lakhimpur
00
31
19
00
50
Raebareli
00
44
06
00
50
Sitapur
00
36
14
00
50
Unnao
00
39
11
00
50
Total
08
272
70
00
350
350
300
250
15-25 yrs
200
26-35 yrs
150
36-50 yrs
100
Above 50
50
Total
226
15--25 yrs
0%
0%
35 yrs
26-35
Luck now
Luck now
Hardoi
Lakhimpur
Raebareli
Sitapur
Unnao
100%
14%
13%
Hardoi
30%
Lakhimpur
Raebareli
16%
16%
11%
Sitapur
Unnao
36-50 yrs
Luck now
16%
17%
Hardoi
11%
20%
9%
27%
Lakhimpur
Raebareli
Sitapur
Unnao
Figure 5.14
Age is the one of the important demographic factors taken into
account while studying the consumer behavior.
Respo
Respondents
are
227
In the highly
competitiveness
fashion
retailers
are
adopting
technology.
228
High
Low
Not sure
Total
Luck now
100
00
00
100
Hardoi
41
08
01
50
Lakhimpur
39
07
04
50
Raebareli
49
01
00
50
Sitapur
37
13
00
50
Unnao
47
02
01
50
Total
313
31
06
350
350
300
250
200
High
150
Low
100
Not sure
Total
50
0
229
High
Low
Luck now
Luck now
6% 0%
15%
12%
Hardoi
Hardoi
32%
26%
Lakhimpur
42%
23%
Raebareli
16%
13%
12%
Sitapur
Lakhimpur
Raebareli
Sitapur
3%
Unnao
Unnao
Not sure
0%
0%
Luck now
0%
17%
16%
Hardoi
Lakhimpur
Raebareli
67%
Sitapur
Unnao
Figure 5.15
Apparel industry is fashion driven. Fashion has very short life. It
plays very important role in shopping. 313 respondents said that
fashion has high role in apparel shopping. As against this, only 31
said that fashion has low role. There are 6 respondents who are not
sure about the role of fashion.
In India, mainly Bollywood invents and spreads
spreads fashion. And teens
and young generations are main followers. Adults and aged parsons
are promoted by film stars.
230
Helpful
Harmful
No idea
Total
Luck now
30
56
14
100
Hardoi
01
28
21
50
Lakhimur
00
18
32
50
Raebareli
03
31
16
50
Sitapur
02
30
18
50
Unnao
07
25
18
50
Total
43
188
119
350
350
300
250
200
Helpful
150
Harmful
100
No idea
Total
50
0
232
Helpful
Harmful
Luck now
5%
16%
Hardoi
7%
0%
Hardoi
16%
30%
Lakhimur
70%
Lakhimur
16%
Raebareli
2%
Luck now
13%
Raebareli
15%
Sitapur
10%
Unnao
Sitapur
Unnao
No idea
Luck now
Hardoi
15% 12%
18%
15%
13%
Lakhimur
Raebareli
27%
Sitapur
Unnao
Figure 5.16
Malls have provided ideal place for retailing. Real estate developers
are focusing in developing malls in metros and big cities.
43
respondents
ndents said that they think malls as helpful for their business.
Whereas 188 said that these malls are harmful. A good number of
respondents have no idea about effect of malls. They are 119 in
numbers.
-----:o:-----
233
Chapter-6
CONCLUSIONS AND
SUGGESTIONS
arranging
235
Top
2.1 The origins of retail are as old as trade itself. Barter was the
oldest form of trade. For centuries, most merchandise was sold by
peddlers. Retailing in its initial period was witnessed at the weekly
haats or gathering in a market place where vendors put on display
their produce (goods). Mon-and-pop stores are small family-owned
businesses, which sell a small collection of goods to the customers.
They are individually run and cater to small sections of the society.
2.2 The retail business operates is a dynamic environment, the
changing customer demand, opening up of markets, technological
236
3.1 Rapid growth and rising urbanization have spawned a new class
of consumers with more money to spend, and a growing passion for
fashion. In Indias high growth, fast-changing retail clothing market,
we see significant new growth opportunities for foreigner and
domestic players.
237
Radio Frequency
239
These
are the high cost of real estate, high stamp duties, lack of
infrastructure multiple and complex taxation system.
4.2 The retail industry is booming. The reasons include favourable
demographics, rising customer incomes, real estate developments,
especially the emergence of new shopping malls, availability of better
sourcing options both from within India and overseas and changing
lifestyle.
4.3 The last few years have seen rapid transformation in any areas
like, scalable and profitable retail models are well established for
most of the categories; Indian consumer are rapidly evolving and
accepting modern formats; India is on the radar of global retailers;
suppliers/ brads are willing to partner with retailers.
4.4 The Govt. has introduced reforms in retail sector. India will allow
foreign groups to own up to 51 per cent in multi- brand retailing.
Single brand retailers can own 100 percent of their Indian stores.
5.1 Apparel retailers are of two types: local retailer and market
retailers.
The apparel
241
reduced their profit margins. These steps have been helping them
little. These help for their survival only.
5.7 Employees play very important role in functioning of any retail
outlet.
242
Suggestions
Based on the observations and data collected following are the
suggestions:
Parking is becoming a complex problem of present and futures.
Before the construction of shops and malls starts, maximum
space for parking should be earmarked on lane basis so that
large number of vehicles could be arranged without problem.
243
244
-----:0:-----
245
Chapter-7
BIBLIOGRAPHY
Books
1. Bajaj, Chetan, Tuli,Rajnish and Nidhi, Srivastava, Retail
Management,2nd Edition 2008,Oxford University Press.
2.
Joseph,
Mathew
and
Soundararajan,Nirupama,Retail
in
246
11. International Journal of Retail & Distribution ManagementMultidimensional Investigation of Apparel Retailing in India,
Vol.No.36, Issue: 9, pp676-688, Emerald Group Publishers Ltd.
12. Middle-East Journal of Scientific Research
13. Vyas H.Preeta, 2007, Sales Promotion Practices in Apparel Retail
Sector and Challenges Ahead, W.P.No.2007-11-02
Articles
14. Hindustan Times 2011,A Guide to FDI in Retail Sector Nov.30
15. Hindustan Times 2011,Re-tailing:A close Look at some basic
issues,Nov.30
Websites
16. dictionary.reference.com/Apparel
17.www.business.mapsofindia.com/top-brands-india/top-apparelbrands-in-india.html
18.www.cygnusindia.com
19.www.dipp.nic.in/discussionPapers/DPFDIMultiBrandRetailTradin
g_06 July, 2010
20.www.en.wikipedia.org/wiki/Retailing_in_India
21.www.fashionunited.in/news/fashion/indias-apparel-retail-to-touchrs-470-lakh-cr-by-2020-080920101106
247
22. www.fcamin.nic.in
23. www.fcamin.nic.in
24.www.Fibre2Fashion.com
25.www.fibre2fashion.com/industry-article/7/697/organized-retailingin-india1.asp
26. www.icrier.org/pdf/working Paper222.p
27.www.kvic.org.in
28.www.pinnaclejournals.com/setup/socialscience/paper26.pdf
www.siadipp.nic.in/policy/changes/pn3 2006
29.www.wiki.answers.com/Q/What_are_the_existing_apparel_brands
_in_India
30. A.C.Nielson Centre for Marketing Research
31. AT Kearney.com
32. Census of India, 2011
33. Compendium of Textile Statistics, 2006.
34. Consumer Lifestyles in India, Euromonitor International
Consumer
35. Lifestyles Database (2005)
36. Data Monitor Global Internet Report
248
Magazines
54. Business Today
55. Business World
56. India Today
57. Outlook
Newspapers
58. Business Standard
59. Financial Express
60. The Economic Times
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Chapter-8
APPENDICES
Appendix 1
1. Types of Retailers?
Local Retailer
Market Retailer
Rs.11Lakhs-Rs.50 Lakhs
Womens wear
Kids wear
No
Both
6. How do your competitors affect you?
By decreasing sales
By decreasing sales
By increasing competition
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Training on Job
Highly
skilled
8. Do you have the problems because of location of your shop?
Yes
No
Parking problems
Harmful
No idea
Good
Average
Poor
No
Middle Class
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26-35 Years
36-50 Years
Above 50 Years
Low
Not sure
Harmful
No idea
Name of Retailer:
Location:
Any suggestion from the Retailer for improvement in Apparel
Retailing:
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