Magazine 2013
International Peer-Reviewed Journal
RH, VOL. 3 JULY 2013
ECONOMICS
Mall vis-à-vis Pop and Mom Shop
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A Survey in Mumbai City
Harshada Rathod
A
ABSTRACT
The Indian retail industry, though predominantly fragmented into owner-run “Mom and Pop outlets,”
has been witnessing the emergence of a few medium sized Indian retail chains, namely Pantaloon
Retail, Reliance Fresh, RPG Retail, Shoppers Stop, Westside (Tata Group) and Lifestyle International.
During the last decade, Indian middle and upper classes have gone through a dramatic transformation
in lifestyle by moving from traditional frugal spending on food, groceries and clothing to lifestyle
categories that deliver International quality products and fashionable brands. Modern retailing satisfies
rising demand for such goods and services with many players entering the bandwagon in an attempt
to leverage greater opportunities. The Indian retail network is setting up organised and corporatised
chains spread across the country with new retail formats & emerging combinations. The attitudinal shift
of the Indian consumer in terms of “Choice Preference” and “Value for Money” has changed the face of
Retailing in India.
Keywords - Retail Industry, Shopping Mall, FDI, Organised Retail, Unorganised Retail
Introduction
In the beginning of 21st Century, India has witnessed an unprecedented consumption boom. The economy
has been growing at the rate of 7 to 9 percent and the resulting improvements in income dynamics along with
factors like favourable demographic and spending patterns are driving the consumption demand. Indian Retail
Industry is ranked among the ten largest retail markets in the world. The Indian retail industry is currently
estimated to be a US$ 200 billion industry and organised Retailing comprises 3 percent (or) US$ 6.4 Billion of
the retail industry. With a growth over 20 percent per annum over the last 5 years, organised retailing reached
the target of US $ 23 Billion in 2010.
According to the report of the American Management Consulting Firm A.T. Kearney’s 2006 Global Retail
Development Index (GRDI), India is in first position, continuing for two years (2005 and 2006), among 30
countries as the world’s most attractive market for mass merchant and food retailers seeking overseas growth.
On the other hand, China is losing its attractiveness and making room for India. GRDI helps retailers to
prioritise their global development strategies by ranking emerging countries based on a set of 25 variables
including economic and political risk, retail market alternatives, retail saturation level, and the differences
between gross domestic product growth and retail growth. According to the study : “The Indian retail market is
gradually but surely opening up, while China’s market becomes increasingly saturated.”
According to Tata Strategic Management Group, one of the largest management consulting firms in
South Asia, the overall retail market in India is likely to grow at a Compound Annual Growth Rate (CAGR) of 5.5
percent (at constant prices) to 16,77,000 crore before 2015. The organised retail market is expected to grow
much faster at a CAGR of 21.8 percent constant price to Rs.2,46,000 crore by 2015, thereby constituting 15
percent approximately of the overall retail sales. Based on the projections, the organised retail categories by
2015 would be general merchandise food, grocery, durables, apparel and food service, and home improvements.
Retailing is a revolution that is fast changing the way of life for millions of shopping crazy citizens in India.
From the days of mama-papa stores at the local marketplace, all metropolises and tier 2/tier 3 cities of India are
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now metamorphosing into the land of upscale shopping centers and malls, much on the lines of Singapore and
Dubai. Hundreds of shopping malls and arcades have sprung up on the national highways, state highways and
district places.
Scope of Study
In this country, people traditionally shopped from local markets. Now still some customers do visit
neighbourhood markets where vegetables are sold in one tiny shop and milk in another. Shoppers go from one
store to the next, buying flowers here, chicken there. They bargain for better deals and spend lot of time in
bargaining. The markets often are filthy, littered with garbage. But the malls offer everything under one roof,
even stores such as Big Bazaar, a smaller, more chaotic version of Wal-Mart. Young and working people who
are multitasking prefer visiting malls so that in one trip they get everything.
Based on the above introduction, the researcher wished to study why malls attract lots of people,
especially youngsters. What attracts the people to malls? How often and why do they visit them? Students of
Maniben Nanavati College did the data collection under supervision of teachers of the Economics Department.
Some factors congenial for mall-culture are
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Increasing literacy levels and impact of western materialistic life-style.
Changes in family structure and women’s role in the family.
Growing role of children as influence in buying process.
Growing influence of advertisements in Television and impact of urbanisation.
Fast penetration of organized retail chains, which from about 4.5 per cent at present will form 15 per cent
of total retailing by the end of this decade (2015).
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Growth of the organized sector. From 2006 to 2010, this sector grew at the rate of 50 per cent per annum.
Plural retail formats created by cultural and regional differences in India.
Emergence of hypermarket as the most favorable format to reap the benefits of large scale economies.
What is Mall?
As paraphrased from Wikipedia – “A Shopping Mall’ (or simple Mall) or Shopping Centre or shopping
arcade is a building or set of buildings that contains stores and has inter-connecting walkways enabling visitors
to easily walk from store to store.”
Objectives of the study
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To study the reasons for different age groups who visit malls.
To know effect of mall-culture on housewife.
To find out whether mall-culture has changed the lifestyle.
Sample Size
The students of Maniben Nanavati College for Women administered an interview schedule to 130 married
housewives. Primary data was collected from Northern suburban part of Mumbai, i.e. from Vile Parle to Virar, in
the end of November, 2012.
Methodology
Primary data was collected through face-to-face interviews, and the secondary data was collected from
reviews of related literature, articles, and news paper clippings.
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Findings
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Data analysis of the findings revealed that 56 percent of the respondents belonged to the age group
between 21- 32. Three fourth of the respondents were had literacy levels from SSC to Undergraduate level.
More than 50 per cent of respondents were living in Joint families. More than 70 per cent respondents had a
maximum of five members in the family. About 50 per cent of the respondents lived in flats and 43 per cent lived
in Chawls (small tenements attached to each other in a row). More than 50 percent respondents belonged to
income group of monthly Rs.5000 - 10,000 and 10,001 – 15,000 respectively; the remaining 50 percent belonged
to the higher income group with monthly Income above Rs.15, 001. Monthly savings of 43 percent of the
respondents was between Rs. 501-1000.
About 55 percent of the respondents did shopping from the malls and they visited the local malls every
fortnight due to proximity. It was found from more than 70 percent respondents that malls are centrally located
and on their way to home. The interviewees reported that in the malls they preferred to buy branded items and
also were able to choose from more varieties. Three- fourths of the respondents reported that they were going
for shopping with their family members and friends. Only one fourth of respondents were going for shopping
with their neighbours.
More than 50 percent respondents reported that they found malls cheaper than local markets. When
asked to what extent they found malls cheaper than local markets, housewives in the sample reported that
commodities in malls were 15 percent cheaper than local markets.
The field survey revealed that about 40 percent respondents visited the malls for shopping purposes,
whereas 18 percent visited malls to watch movies and 14 percent visited malls to spend quality time in a nice
ambiance and for window shopping. It was found that 40 percent respondents spent Rs. 500- 1000 per visit to
mall, whereas 23 percent spent between Rs. 1000-2500. In the survey, 20 percent of respondents said that
main advantage in going to the mall, was that the mall made it possible that all the shopping could be done
at one place. More than 50 percent said that there were multiple advantages; i.e., if they went to the shopping
malls they could have wider choices, they got branded products, they got discounts on total bills and they
also saved shopping time. Out of the total women in our sample, 40 percent of the respondents felt that
products / services offered in the malls had reasonable prices. Around 40 percent respondents said that malls
were a threat to small shops. However 37 percent of the respondents felt that more shopping malls must to be
built in and around where they stayed. About 50 percent of respondents said that government should liberalize
retail policy by allowing more FDI, because multinational giants could bring in huge capital investments and
technology to set up infrastructure and warehousing facilities, which would take years for our government to
build up.
Prospects for Malls
About the prospects of the malls, respondents’ viewpoints were encouraging. Most of them preferred to
buy things from the retail stores like Reliance Fresh, Food World, Subhiksha, Big Bazaar, etc., rather than from
the local kiranawala, because of convenience, higher standard of hygiene and the attractive ambience. The
respondents said that if we look at the retailing scene in clothes and footwear, we will find the presence of a
large number of unorganised players. They generally display a limited range of inexpensive and popular items.
In contrast modern clothing and footwear stores are spacious, with sample products displayed in windows.
With growth in income Indians have been spending more on health, beauty products, entertainment and food.
Therefore, big retailers are aiming to provide all these amenities under one roof through the mall culture. There
people can shop, and have fun, food, entertainment and leisure time activities. Malls presently account for a
tiny share of the retail sector, but in the future the business is bound to grow as more and more malls open day
by day. Thus there is immense potential in the growth of malls in India.
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Problems with Malls and Advantages with Neighbourhood Shops
The Respondents in our study reported some problems in response to the boom in retail or mall sector.
According to them the ambience of these mega stores is no doubt world class but they fail to establish a
personal touch. In local kirana shops the owner keeps personal contact with customers, remembers all the
customers of the locality in which he/she is operating and can builda rapport with them, whereas in retail stores
the buyers have to walk and select the item. The owner of a shop has a different way of managing business than
employed workers in the mall. The employees of the mall just do what they are told to do and they don’t try to
build a bond with the customers. The local kiranawala (corner shop owner) knows people in the locality to
whom he/she supplies goods, and the customer may pay cash later as there is rapport between shop-keeper
and customer. At the mall, in contrast, the customer has to make payment for purchased commodities immediately.
This flexibility and social capital make neighborhood shopkeepers popular and socially viable. There is a lot of
ease in buying goods from local shops rather than in retail stores. For example, if you need to buy toothpaste
then you have to just telephone to the shopkeeper and he will send it immediately. But in retail stores you have
to go to the counter for billing which itself is a very time consuming process. Moreover, it makes people uneasy
to go to a big retail store just to buy a small item.
One more problem for the retail sector is uncertainty about the government policies. Though we know
that the government is opening up the retail sector in India, even then there is a fear that the government may
make rules that can disrupt the retail growth in case it feels that it is against the welfare of the people. So there
stays a constant fear of legal change among the companies.
Measures to Strengthen Retailing
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The respondents in the study were asked what measures should be taken to strengthen the retailing
sector, and they suggested the following measures:
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The retail sector in India is constrained by limited availability of bank finance. The Government and RBI
need to evolve suitable policies to lenders that will enable retailers in the organised and unorganised
sectors to expand and improve efficiencies. Policies that encourage unorganised sector retailers to migrate
to the organised sector by investing in space and equipment should be encouraged.
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Cultural and regional differences in India are the biggest challenges in front of retailers. This factor defers
the retailers in India from adopting a single retail format. Hypermarket is emerging as the most favourable
format for the time-being in India. The arrival of multinationals has further pushed the growth of the
hypermarket format, as it is the best way to compete with unorganised retailing in India.
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A National Commission must be established to study the problems of the retail industry and to evolve
policies that will enable it to cope with FDI.
Entry of foreign players must be gradual and with social safeguards so that the effects of the labour
dislocation can be analysed and the policy fine-tuned. Initially allowing these players to set up supermarkets
only in metros will make the costs of entry high and keep business operating within specific norms and
regulations. In order to address the dislocation issue, it becomes imperative to improve and further
develop the manufacturing sector in India. There has been a substantial full employment in the
manufacturing sector, to the extent of 4.06 lakh over the period 1998 to 2001. But its contribution to
GDP has grown at an average rate of only 30 per cent. Respondents averred that if the retail sector is
given due attention it could be a great source of employment generation and compensation.
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The government should actively encourage setting up of cooperative stores to procure and stock their
consumer goods and commodities from small producers. The government can also facilitate setting up
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warehousing units, thereby lowering the cost of capital for the small retailers. Prices for perishable goods
like vegetables, fruits, etc., are not fixed and therefore, this is where economies of scale are likely to
provide a benefit to the consumer in the form of lower prices.
Conclusion
The Indian retail network is getting organised and corporatised and is spreading across the country with
new retail formats & combinations emerging. The attitudinal shift of the Indian consumers in terms of “Choice
Preference” and “Value for Money” and the preference for “branded goods” has changed the face of Retailing
in India.
The buying behavior of Housewives in Indian context assumes significance due to the reason that they
are the cynosure of the family. Present middleclass home-maker is well-informed and capable of weighing pros
and cons. Modern housewives meticulously plan and execute the purchase requirements of the family. Now,
educated middle class housewives gather information from print media, electronic media, friends and other
available sources. Generally grocery items, fruits and vegetables are purchased by housewives.
In buying consumer durables the head of family takes final decisions. For purchase of expensive goods,
the housewives can’t take major decisions without consulting spouses over a period of time. Circumstances
are such that unless both are earning it is not possible to meet both ends, but these types of working families
are growing. Multi-tasking has become a mantra for both men and women, and even more so for women
whether home-makers or working women. In order to satisfy this segment, companies are coming forward to
produce ready- to- eat recipes and products. Instant items are sold in the retail outlets and are exported to
other countries to cater to the needs of Indian migrants. In accordance with the changing times the traditional
stores have to understand these challenging changes.
References
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Bajaj, Chetan, R. Tuli, N. V. Srivastava, (2005); Retail Management, Oxford University Press; p.201-250.
Devendra, Mohan (2002), “Mr. Big Bazaar”, Mumbai: Business India, September.
Indian Retail Sector Analysis (2006-07) - Market Research Report, www.researchandmarket.com
Nair Sreekari, Economic Times Bureau, Dec 17, 2009, 01.56 am IST.
Singh, Harjit (2009); Retail Management: A Global Perspective: Text & Cases; S. Chand and Company
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80- New Delhi, pg. 843.
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Singh S.D. (2011): Encyclopedia of Marketing Research, Vol. 9, Retail Management :Annual Publications
Pvt. Ltd, New Delhi, pp. 20-21.
Srivastava, Kandai (2013), Consumer Behavior in Indian Context, Galgotia Publishing Company, New
Delhi, 113-157.
Sudarshan R and et. al. (2007): Retail Management: Principles and practices; New Century Publications,
New Delhi pp. 83-85 & 255-256.
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www.indiansinFrance.com/Forum/Topic 844/.html
www.scribid.com/doc/13853238/Mall-Culture-in- Bangalore
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