Description
India's largely rural population has also caught the eye of retailers looking for new areas of growth.
Rural Vs Urban Retail Trends
India's largely rural population has also caught the eye of retailers looking for new areas of
growth. ITC launched the country's first rural mall ‘ Chaupal Sagar' , offering a diverse product
range from FMCG to electronics appliance to automobiles, attempting to provide farmers a one-
stop destination for all of their needs. There has been yet another initiative by the DCM Sriram
Group called the ‘ Hariyali Bazaar' , that has initially started off by providing farm related
inputs and services but plans to introduce the complete shopping basket in due course. Other
corporate bodies include Escorts, and Tata Chemicals (with Tata Kisan Sansar) setting up agri-
stores to provide products/services targeted at the farmer in order to tap the vast rural market.
Commenting on the Rural Retailing chapter in INDIA RETAIL REPORT 2005, Mr. Adi B.
Godrej, Chairman, The Godrej Group (India's one of the leading corporate majors) said that his
group had also launched the concept of agri-stores named 'Adhaar', which served as one-stop
shops for farmers selling agricultural products such as fertilisers & animal feed and also
providing farmers knowledge on how to effectively utilise these products. "There are 8 stores
already operating in Maharashtra and Gujarat and further expansion is very much on the cards.
He added.
FDI could indeed do a lot in this sector as entry of international retailers would bring in the
required expertise to set the supply chain in place which would result in elimination of
wastage, better prices and quality for consumers and higher income for farmers besides of course
farm produce retailing getting a facelift, said Mr. Godrej.
Tapping the fresh farm produce sector, the group plans to take its recently launched retail
concept – Nature's Basket - to newer cities steadily. Godrej Group's Agro and Food division,
Godrej Agrovet Ltd. (GAVL) operates the format, selling a variety of vegetables, fruits and
herbs - both local and exotic thereby introducing the concept of 'farm-to-plate' to urbanites.
Godrej plans to open four more Nature's Basket stores in Mumbai before taking them national.
Setting up cost of a store is about INR 5-10 million and per stores sales are expected in the range
of INR 30- Rs 50 million a year.
Interestingly, the world's largest corporation, Wal-mart, also had its roots in rural America.
Unlike many other retailers who started from urban centres and then trickled down to rural areas,
Wal-mart had started from rural areas and then came closer to cities over a period of time. Many
more such concepts are likely to be tested in the future as marketers and retailers begin to
acknowledge that the rural consumer is more than a ‘poor cousin' of the urban counterpart. The
IMAGES KSA Report avers that these concepts are likely to go a long way in bringing a huge
untapped population within the purview of organized retailing, thereby, increasing the size of the
total market
The above chart makes it clearly evident why the rural retail market has been attracting the big
giants to invest in it.
Urban Trends
The urban retailing has been experimenting with many formats like the supermarkets,
hypermarkets, specialty stores, multi branded outlets etc. and of latest it seems to be embracing
the trend of mall culture. It is a rich man's world too, with multi-screen cinemas, restaurants,
games and branded shops - well out of the reach of many of the country's one billion people. But
India's middle-classes, widely travelled and with deep pockets, are flocking to malls.
RAPID GROWTH:
India's organized retail industry accounts for just 3% of the country's total retail sales, though it
is poised to grow by 97% per year in the next five years to a staggering $24bn. Fuelling this
growth are India's sprawling shopping malls, which are increasingly challenging High Street
stores, corner shops and village markets alike. Just five years ago, there were shopping arcades
but no malls. Today there are nearly 100 big shopping malls in the country, more than half of
them in Delhi and Mumbai alone. And in two years there will be 360 malls across the country.
More than 20 are in various stages of development in Delhi and Mumbai. Among them is India's
biggest shopping mall, Ambi, which is being built in Gurgaon, near Delhi. Spread over 3.2
million square feet, it is set to become a virtual town, where multi-screen cinemas, recreational
facilities for adults and children, food courts and branded outlets will fill the space. It will have
exclusive showrooms of international brands, where, according to the developers, customers will
have to shop by prior appointment. Analysts comment that this is just the beginning and this is
going to experience a ‘sea change’ once the platform is opened up for the FDI.
doc_180259817.docx
India's largely rural population has also caught the eye of retailers looking for new areas of growth.
Rural Vs Urban Retail Trends
India's largely rural population has also caught the eye of retailers looking for new areas of
growth. ITC launched the country's first rural mall ‘ Chaupal Sagar' , offering a diverse product
range from FMCG to electronics appliance to automobiles, attempting to provide farmers a one-
stop destination for all of their needs. There has been yet another initiative by the DCM Sriram
Group called the ‘ Hariyali Bazaar' , that has initially started off by providing farm related
inputs and services but plans to introduce the complete shopping basket in due course. Other
corporate bodies include Escorts, and Tata Chemicals (with Tata Kisan Sansar) setting up agri-
stores to provide products/services targeted at the farmer in order to tap the vast rural market.
Commenting on the Rural Retailing chapter in INDIA RETAIL REPORT 2005, Mr. Adi B.
Godrej, Chairman, The Godrej Group (India's one of the leading corporate majors) said that his
group had also launched the concept of agri-stores named 'Adhaar', which served as one-stop
shops for farmers selling agricultural products such as fertilisers & animal feed and also
providing farmers knowledge on how to effectively utilise these products. "There are 8 stores
already operating in Maharashtra and Gujarat and further expansion is very much on the cards.
He added.
FDI could indeed do a lot in this sector as entry of international retailers would bring in the
required expertise to set the supply chain in place which would result in elimination of
wastage, better prices and quality for consumers and higher income for farmers besides of course
farm produce retailing getting a facelift, said Mr. Godrej.
Tapping the fresh farm produce sector, the group plans to take its recently launched retail
concept – Nature's Basket - to newer cities steadily. Godrej Group's Agro and Food division,
Godrej Agrovet Ltd. (GAVL) operates the format, selling a variety of vegetables, fruits and
herbs - both local and exotic thereby introducing the concept of 'farm-to-plate' to urbanites.
Godrej plans to open four more Nature's Basket stores in Mumbai before taking them national.
Setting up cost of a store is about INR 5-10 million and per stores sales are expected in the range
of INR 30- Rs 50 million a year.
Interestingly, the world's largest corporation, Wal-mart, also had its roots in rural America.
Unlike many other retailers who started from urban centres and then trickled down to rural areas,
Wal-mart had started from rural areas and then came closer to cities over a period of time. Many
more such concepts are likely to be tested in the future as marketers and retailers begin to
acknowledge that the rural consumer is more than a ‘poor cousin' of the urban counterpart. The
IMAGES KSA Report avers that these concepts are likely to go a long way in bringing a huge
untapped population within the purview of organized retailing, thereby, increasing the size of the
total market
The above chart makes it clearly evident why the rural retail market has been attracting the big
giants to invest in it.
Urban Trends
The urban retailing has been experimenting with many formats like the supermarkets,
hypermarkets, specialty stores, multi branded outlets etc. and of latest it seems to be embracing
the trend of mall culture. It is a rich man's world too, with multi-screen cinemas, restaurants,
games and branded shops - well out of the reach of many of the country's one billion people. But
India's middle-classes, widely travelled and with deep pockets, are flocking to malls.
RAPID GROWTH:
India's organized retail industry accounts for just 3% of the country's total retail sales, though it
is poised to grow by 97% per year in the next five years to a staggering $24bn. Fuelling this
growth are India's sprawling shopping malls, which are increasingly challenging High Street
stores, corner shops and village markets alike. Just five years ago, there were shopping arcades
but no malls. Today there are nearly 100 big shopping malls in the country, more than half of
them in Delhi and Mumbai alone. And in two years there will be 360 malls across the country.
More than 20 are in various stages of development in Delhi and Mumbai. Among them is India's
biggest shopping mall, Ambi, which is being built in Gurgaon, near Delhi. Spread over 3.2
million square feet, it is set to become a virtual town, where multi-screen cinemas, recreational
facilities for adults and children, food courts and branded outlets will fill the space. It will have
exclusive showrooms of international brands, where, according to the developers, customers will
have to shop by prior appointment. Analysts comment that this is just the beginning and this is
going to experience a ‘sea change’ once the platform is opened up for the FDI.
doc_180259817.docx