INTRODUCTION:

The retail business in particular and the country India in general have, of late, captured the imaginations of the retail world. This sector has undergone significant changes and is fast emerging. India has become one of the most lucrative markets for international retailers.

The growth of Indian economy is now manifesting itself in the growing purchasing power of its citizens. A 10 per cent to 12 per cent increase in the economy's disposable income and a much higher one in urban areas is also reflecting itself in the way goods and services are bought and sold.

The year 2009 saw a marked beginning of an enormous ‘retail revolution’ in India through the resolved entries of many big players venturing to register their own shares within a huge US $ 450 billion retailing scenario. Today, retail is the fastest growing segment in the Indian economy a sunrise sector, appropriately referred. Its contribution to GDP accounts to about 12 per cent and generates employment of over 9 per cent.

Having weathered the storm, the organized retailers are now looking ahead, chalking out growth plans and eyeing profitability,

Retail is on a roll in India and that is definitely a rocking news for all the consumers. As of now, the listed biggies of Indian business are flocking for a pie of our coveted applecart.

India's Retail Scenario

The retail scene in India is vastly unorganized. There is hardly any supply-chain management perspective. According to a survey conducted in 2009 by AT Kearney, an overwhelming proportion of the country’s retail market is unorganized. In fact, only a $47 billion segment of the market is organized. Organized retailing was worth $ 39 billion in 2008 and is growing at a rate of over 20 per cent annually.

Organized retailing provides an ideal shopping experience based on the advantage of large scale purchases, consumer preference analysis, cordial ambience and choice of varied merchandise under one roof. Today, this sector, which had started with life style retailing, has moved dominantly to value retailing as well. The revolutionary changing life style, strong income growth and favorable demographic variables are expected to surpass even the rate of GDP growth by the next five years.

The share of organized retail in country’s total retail market is about 5.5 per cent (2008), which is expected to grow 12 per cent by 2012. Currently, India is the ninth largest retail market in the world.

A recent study of the retail segment in India reveals that fashion and food will dominate the future retailing, and it accounts for nearly 90 per cent of the total business turnover. The US $ 7 billion Indian foods industry, which forms about 45 per cent of the entire FMCG sales, is growing at 10 per cent ensuring a steady trade formats. Table 1 provides a view of commodities contribution through organized retailing in India.

Table 1: Commodity-wise contributions in Indian organized retailing

Commodity	Year 2008 (Value in Rs. Cr.)	Percentage	Year 2015(Expected) Value in Rs. Cr.	Percentage
Food, Grocery and General Merchandize	2950	10	102546	42
Cloths, Textiles and Fashion Accessories	10900	39	40604	16
Durables and Mobiles	3340	12	28891	12
Food services	2000	7	24351	10
Home improvement	2500	8	16346	7
Jewelry and Watches	1960	7	8770	3
Footwear	2500	9	6508	3
Books, Music, Toys and Gifts	800	3	3722	1
Others	1350	5	14692	6
TOTAL	28300	100	216431	100

Source: TSMG Analysis, 2008

One can easily visualize today that a determined bid of retail revolution is already set-in to sweep across this country in the next few years, as traditional good-olden-days markets are now surrendering ways for entirely a new breed of retailing formats eventually by way of setting up of huge malls, hyper-markets, supermarkets, multi-brand outlets (MBOs), discount stores, departmental stores, convenience stores, specialty stores, exclusive stores etc.

In the last one and a half years, beginning from early 2008, retailers consolidated their overall operating efficiency mainly by shutting down unviable stores, reassessing catchments and also by renegotiating rentals.

“In 2010, we are getting a good response from consumers to our offers and value propositions. This has resulted in enhancing positive same-store sales growths culminating our focus on productivity”, said Thomas Varghese, CEO, Aditya Birla Retail.

Growing Demands in Smaller Towns

Despite economic downturn during the last couple of years, India’s retailing scenario is venturing on high speed growth and taking a new image with malls and MBOs mushrooming allover. The total mall space till 2002, which was merely hovering around one million square feet mark, expected to be crossing the 60 million mark by the end 0f 2010. The exponential growth in organized retailing hitherto has been fueled by the retail boom in the few selected tier-I cities which accounted for close to 75 per cent of the total mall space that has come up in the country since 2002. However, the share of tier-I cities in the total retail sales is about 15 per cent, compared to about 28 per cent for the tier-II and tier-III cities.

Even as the retail majors gear up to enhance their stake of organized retail in the $ 450 billion retail ventures from the current six per cent to around 28 per cent by 2012, experts opine that the tier-II and tier-III cities will, in the next phase, contribute as major growth-centre in organized retailing in India.

As the Indian modern retail spreading its tentacles wider in urban areas, companies are increasingly testing considerable growth options in smaller towns, where demand is expected to gain substantial momentums in the coming years.

Elaborating on the Future Group’s experience in smaller towns and cities with its Adhar chain of outlets, Damodar Mall, customer director, said, “These consumers appreciate the width and depth of merchandise and are highly value conscious. Our learning experience is that the customers across tier II, III, and IV towns are as aspiration as their counterparts in the metros”.

These smaller towns are now already witnessing brand activation. The young today represent a very large growing consumer base in these smaller towns and help drive growth due to significant level of media exposures.

In the same vein, The Loot, a multi-brand retailing store, pointed out that the current slowdown in economic growth is, in fact, helping the companies focus on expanding their value formats into the tier-II and tier-III cities. A recent research report conducted by Angel Broking suggested that demand for organized retail has tremendously picked up in those tier-II and tier-III cities like Ludhiana, Lucknow, Chandigarh, Jaipur, Kochi, Agra, Nashik, Indore, Mysore, Amritsar, Guwahati and Varanasi and the consumers there are now started opting for the shopping experience at malls.

Today, the mall mania has given Indians a new and unique shopping experience which has everything from food, entertainment and apparel to electronics and home appliances. On the other hand, luxury brands too are flooding the Indian markets with their goods and stylish stores. While the customer profile for these hi-end goods may be limited; they at times attract the upper middle class, which wants to move up the consumer and social ladder.

Here is a new fad catching up especially in the city. These are recessionary times and how desperate the shop owners are to get customers is evident from the schemes they are offering. If ‘buy one and get two free’, ’flat 50 per cent off’ and the like are of any indications of their desperation, some retailing bigwigs such as Levi’s jeans, Arrows, etc. have come with the much talked about interest-free EMI options to attract their customers amidst competition.

Attractiveness of Indian Retail Markets

As per the Global Retail Development Index (GRDI) 2009 report as could be viewed from Table 2, India was the second most attractive destination among top ten emerging markets in the world. It had even overtaken China, a country that had literally been liberalized cent per cent entry cap on FDI.

Table 2: Emerging global markets in retail industry

Sl. No.	Country	Rank(2008)	Rank(2007)	Change
1.	Russia	1	1	0
2.	India	2	5	3
3.	China	3	3	0
4.	Slovenia	4	14	10
5.	Croatia	5	N/A	N/A
6.	Latvia	6	19	13
7.	Vietnam	7	9	2
8.	Turkey	8	6	-2
9.	Slovakia	9	2	-7
10.	Thailand	10	18	8

Source: GRDI Report, 2009

Increasing purchasing power, new formats, time of entry and pace of expansion, retail expertise and information technology infrastructure etc. are the guiding factors for retailers entering a particular market.

Entry of Corporate Biggies:

India’s retail scenario took a great leap forward through the entry of big names such as Reliance with huge investments. But what really grabbed the attention of the biggies was Sunil Mittal’s telecom-to-retail group Bharti enterprise’s foray to join the league by announcing its tie-up with world’s largest retail chain, Wal-Mart, the $ 450 billion (equal to India’s total retail market size) American gorilla to India.

Close on the heels, another big-league retailer plans to kick-start its operations in the country this year(2010) by setting up its shop in India. This time it was the French giant and world’s second largest retailer – Carrefour, which like many foreign retailers, has been looking forward to enter the restrictive Indian market for over seven years by now. Europe’s leading retailer – the $ 150 billion company operates more than 12000 hypermarkets, supermarkets, hard discount and convenience stores in over 30 countries around the globe. The company already has a sourcing office in New Delhi which coordinates procurements of food and non-food items worth $ 2 billion from India alone.

It has, meanwhile, set up two entities in India ---- Carrefour WC and C India Pvt. Ltd. To run cash-and-carry business and Carrefour Master Franchise Company Pvt. Ltd. For its retail business, but none has any outlets.

Global retail chains have long been frustrated in their efforts to set up shops in the world’s second fasted growing major economy, only behind China, where organized retail accounts for a meager 6 per cent of industry sales while income are rising quickly.

Carrefour will join mega retailers such as top-notched Wal-Mart and Germany’s Metro AG in operating cash-and-carry ventures in India.

Indian regulations allow foreign multi-brand retailers only through franchise agreements with local players. Foreign retailers may own up to 51 per cent in single-brand retail and 100 per cent in cash-and-carry ventures. However, these restrictions are intended to virtually protect the small petty shop operators that still dominate majority of retail business in India. Carrefour is on a hunting spree to formalize its entry.

Future group, India’s largest retailer, with over 500-plus outlets comprising 125 Big Bazars, 160 Food Bazars, Central and Pantaloon shops along with 120 KB Fair Price units, has long been in the media speculation as a possible partner for Carrefour.

Wadia group’s flagship company Bombay Dyeing and Manufacturing Company already has a presence in home furnishing and apparel retail. It’s food area Britannia Industries recently took over Café Coffee day’s 50 pr cent stake in Daily Bread, a Bangalore based high-end food retailer.

Before Reliance opened its first supermarket in Hyderabad in November 2006, with an investment of around $ 5.5 billion, the other players already joined the band-wagon were Future Group with its retailing arm, Pantaloon Retail India Ltd., Subhiksha, RPG, Magna and Spencer’s. Of late, Heritage Foods Ltd., too jumped into the fray.

The Rs.4000-crore Pantaloon Retail also announced an investment plan of $ 1billion to open 1000 outlets in the near future, an answer to the aggressive growth strategy of Reliance. Meanwhile, Reliance announced a pan-India network of outlets in multiple formats in the coming years.

Celebrity Fashions, owners of premium menswear brand ‘Indian Terrain’, is creating ‘Spirit’ an economy range exclusively for Reliance Retail outlets which have apparel domain.

The Tatas have been there for a while with Westside. Later, joined with Woolworths and entered into a technical collaboration and launched household appliances and home electronic stores, Croma. The Raheja Group opened Hypercity, a hypermarket, in Mumbai. Chennai based Subhiksha closed the year with nearly 500 outlets across India, making it the largest in the discount format. As far as formats are concerned, hypermarkets, supermarkets and discount stores gained prominence in recent years.

Amongst the biggies, it is now the turn of Kumar Mangalam Birla, who along with Ambanis and Tatas sits at the high table of India Inc., has taken over the 172-store Trinethra from private equity firm of Indian Value Fund. This marks Birla’s first foray into retail space (outside of clothes brands such as Allen Solly, Van Hunsen and Louis Phillipe, which are by-product of his group’s interest in textile via Grasim and Madura Garments).

For Aditya Birla Retail, the foremost plan is to expand in locations that meet its catchments criteria and have the right rent-to-revenue ratio as per its business model. Today, it has more than 600 Supermarkets and eight hypermarkets under the brand name More. It had also planned to open one each in Delhi and Hyderabad and have a network of almost 1.9 million square feet space currently.

Birla has acquired 90 per cent in Trinethra through Aditya Birla Retail, the unlisted retail arm of the group; the remaining 10 per cent continued to be with the parent company India Value. The Rs.40000-crore group’s interest in entering retail has been known for a while. Under the corporate umbrella of Hyderabad-headquartered Trinethra Super retail Ltd., there are two main brands, Trinehra and Fabmall, selling personal care, home products, food and grocery in the convenience format. Recently, the group has also announced the launch of ‘more’ brand of stores to sell fresh fruits, vegetables and groceries through a chain of retail outlets across the country. Birla plans to invest around Rs.9000 cr. over a period of three years to set up its 1000 ‘more’ outlets across the metros and in the tier one cities of India.

The deal between Bharti Enterprise, the parent of top telecom firm Bharti Airtel, and Wal-Mart is now clear and open. It is a cash-and-carry JV under the brand Best Price Modern Wholesale and with 50:50 partnerships it had already initiated its operations since early 2009 by opening first 5 major stores in the country to start with. It has also planned to open another 10 to 15 huge stores over the next seven years while employing about 8000 people during the period. However, as per confirmed information from the JV partners, they might get into full-fledged retail only when the rules were relaxed for investment in the segment.

Wal-Mart through its joint venture partner will also supply products to domestic mom-and-pop stores, kirana stores (corner shops) and even any other retail chains who should be willing to be served, at almost the same price as what it shall offer to Bharti retail. Wal-Mart’s global enterprise in supply chain and logistics is expected to bring enhanced efficiencies across the retail ecosystem. The venture promises to bring great value to millions of farmers, artisans, small manufacturers and retailers across India. Mike Duke, vice-chairman, Wal-Mart Stores, Inc said that they would like to leverage their global scale to transform some of the Indian suppliers into exporters with access to their global markets over time. This US-based juggernaut, however, for the moment has no plans to come to India’s multi-brand retail sector due to prevailing Indian law.

Wal-Mart’s ‘customized’ strategy for India to supply to all business customers may have been stemmed to please the lobby working against them in particular and in general, against foreign investment in retail. The company has been facing opposition from government, its allies, mainly the left and also local store-owners, who feel that it is a back-door entry of the retail shark to enter the Indian retail space.

As per the joint-venture agreements, the wholesale cash-and-carry stores will cater the back-end supply chain operations for all kinds of merchandise such as grocery, apparel, home products including consumer electronics. Product sourcing for Indian operations will be met from domestic suppliers and barely about 10 per cent from outside the country on specific requirements.

This strategy is likely to reinforce confidence levels and will be viewed as a positive move by foreign retailers. International retailers know that they cannot afford not to have operations in India. With Wal-Mart already fired-up its way here and others such as French Carrefour and English Tesco waiting in the wings expecting a possible structural change within the regulatory framework of the government’s policy, India’s retail industry is apt to make a big leap forward in the coming years.

Germany’s Metro AG now operates five cash-and-carry stores in India under its own brand.

Under the high intensity retail war, the guillotine is now turning towards the market leader in the sector, Pantaloon Retail India Ltd. (PRIL). As per its Managing Director, Kishore Biyani, in a span of 5-6 years, PRIL shall introduce a totally different retail format that would change the consumer’s perception of shopping. While Pantaloon may focus on mall mania, others like Reliance, Subhiksha etc. are opting for much lesser flamboyant space in numerous neighborhood locations that are far more convenient ones.

However, the most important question – whether PRIL be able to save its numero uno crown from the incoming heavy weights like Reliance, Bharti and so on? PRIL is mainly relying on the front-end and not so much on the supply chain efficiency while rest of the club is giving equal importance to both. Neglect of back-end operations may prove to be a silent assassin threatening its very existence.

A recent press report revealed that the National Textile Corporation (NTC) had approached PRIL for partnering its vast nationwide retail space in a joint venture agreement in near future. NTC had offered a lucrative share of 49 per cent to finalize the deal.

Meanwhile, Gautam Singhania-controlled Raymond is beefing up its retail business by planning further to add about 300 stores to its existing 500-plus outlets over the next two years. However, this time, the entire focus is shifting largely on smaller cities. In a determined bid to ultimately boost its growth plans, the group is roping in Marico’s CEO Rakesh Panday to head its retail business in order to explore especially the growth potential of brands like ColorPlus.

Alongside, the highly attractive urban scenario where shopping, of late, has replaced outing as most favored option among the increasing IT related BPO tribes of DINK (Double Income No Kids) couples with inflated pay packets, regarded amongst the highest salaried people within the Asia Pacific countries; rural retailing too gained momentum with Godrej growing stronger through its Adhere initiative. Clearly with 70 per cent of 1.2 billion-strong population in rural India, predominately consisting of farmers, retailers have realized that this is the fastest way forward to strike fortunes --- be it ITC’s e-Choupal or DCM Consolidate’s Hariyali stores. Sooner or later, Mukesh Ambani’s Reliance Retail too is targeting this segment with all seriousness.

As the competition war hot up, more and more discounts, freebies, better service and improved quality are being assured. While Reliance Fresh is said to be offering 10-12 per cent price undercut along with an additional incentive of 1 per cent against purchases through membership cards in a bid to keep its loyal customers visiting regularly, Food Bazaar is offering freebies on purchases made above Rs.499. Subhiksha, on the other hand, provide 8-10 per cent discount by managing a cost-cut on real estate space and overhead expenditure.

In an attempt to reduce operational costs, retailers are embracing technology more often than not. Oracle is providing not only an easy solution for weighing and billing processes but also making storage a better proposition by avoiding in-house theft and fraud, which amounts to nearly $ 1.4 billion every year according to a Pricewaterhouse Coppers estimate.

Players like Trinethra believe that retailers who have been in the market for a long period, definitely will have an edge over new entrants. Because they are aware of the customer’s pulse --- after all the needs of the customers in Malkajgiri and A.S.Rao Nagar are very different from those of people in Banjara Hills and Jubili Hills in Hyderabad.

Biggies in the business do not feel that their presence is harming the interests of small retail players. For, the market is growing by 10 per cent at about $ 24 to $ 25 billion (nearly Rs.1045 billion) every year. The share of organized retailing in another 10 years could achieve 10-12 per cent in an estimated boom of over $ 600 billion market, which is very meager.

Interestingly, in the midst of hue and cry, the neighbourhood kirana store might just exist despite the big fish’s threat. Their plus points are a laid-back ambience that the middle class and the lower middle class feel comfortable. The happy pass-time of little Chinna, who run across to the neighborhood Venkaiah’s store for 25P chocolates is not about to change anytime soon. The retail boom is, however, definitely poised for a podium finish.

Industry Status and FDI:

Foreign Direct Investment (FDI) in retail has become a subject of hot debate once again, thanks to the government’s recent announcement to allow 51 per cent FDI in single brand retailing. The UPA-II government, headed by Dr. Manmohan Singh who incidentally authored India’s first liberalization process during early nineties, and its oppositions, mainly the left-combine, are in sharp disagreement; the issue is all about whether in the larger interest of the country, the passage should be allowed.

The debate has evoked unprecedented reactions from different quarters --- government, farmers, middlemen and also consumers. A developing country like ours, where problem of unemployment is of highest concern and where millions at the bottom of the pyramid merely survive on small-time retailing, the entry of multinational giants of the likes of Wal-Mart and Careefour is expected to pose a huge challenge. It can be argued though, that the entry of these MNCs could possibly chance enhancement of the scope for higher exports of goods and at the same vain boost job prospects for millions of Indians.

In a recent interactions with the students of Wharton School of the University of Pennsylvania in the US that it was only a matter of time before India opened up its $450 billion retail market to foreign investors. The statement came as a great relief to foreign investors, who were perturbed by the remark of the then commerce and industry minister Anand Sharma, who, in the Incredible India @60 function in New York had expressed the government’s reservation on opening up the sector to foreign investors.

“Industry status has been a long standing demand of the retail sector. Besides, we aqlso want a relaxation in the budget on FDI norms, “Kumar Rajagopalan, chief executive, Reatilers Association of India, said. Ecoing the similar views, Koutons Retail India chairman DPS kohli said, “No industry in India has grown without FDI participation and retail to emerge as a big player, FDI should be allowed. Only then retailers be able to fully enjoy the recurring benefits of the organized financing, insurance and fiscal incentives”.

“In case if the FDI norms are not relaxed in the budget, the government must clear the prevailing ambiguity on FII and foreign PE funding route”, said Kohli.

A clarity in the issue will help Indian retailers raise funds from abroad as the global liquidity situation is now improving. Easing of FDI norms will bring much needed funding and also bring competition.

Franchise India chairman Gaurav Marya urged the government to make special budgetary allocation to franchising businesses in its small and medium enterprises(SMEs) from the finance allocated to financial institutions. Today, there are about 3.5 Cr. SMEs of which nearly 2.3 Cr. Units constitute retail sector. Credit availability is a major hurdle in the growth of franchising.

However, Budget 2010-11 just disappointed the retail sector once again and did not provide the expected relief, instead maintained the status quo.

As of now, India allows 100% FDI in cash-and-carry and wholesale operations, besides 51% FDI in single-brand retail. It is expected that the government is now seriously considering in allowing 51 per cent cap on FDI in multi-brand retail too in sectors like electronic goods, stationary, sports goods, office and building equipments. India has been ranked World’s No.1 in the AT Kearney Global Retail Index 2008 and according to the latest industry estimates, the organized and unorganized retail market will grow to $580 billion by 2011 and $793 billion by 2015.

Given their higher per capita income, meager rate of unemployment, extreme quality consciousness etc., the industrialized countries are usually best positioned to get the advantages of FDI in retail. The people concerned generally face time constraints in their daily lives, and hence , look forward to a ‘single window facility’ that can be conveniently experienced at any Wal-Mart chain or the like shopping options.

Outsourcing is a specific business need and an economic decision especially in retail sector. The success of Wal-Mart, the US based world’s largest retailer, can be assigned on its unambiguous outsourcing techniques being practiced for virtually everything under the sun that come from few low-wage but quality producing South Asian countries, mainly China. As a result, China’s exports have shot up in geometric progressions and have become one of the world’s choicest manufacturing destinations, generating suitable employment for millions.

Today, global retailers of different hues buy about $ 65 billion of manufactured goods from China as compared to mere $ 1 billion from India. Proponents for FDI in India would argue that gains for higher exports and mass employment are possible here also in the event of a liberal policy on the MNCs entry are ensured.

However, many of us who think otherwise may find it acceptable that let those multinational giants source their products from India without setting up shops here. Could it be practical proposition? Any global retailing entity would prefer to source their needs on a sustained basis only when they establish a close linkage with local producers and suppliers. And that could be possible only when they are allowed to open their stores within their operational territory.

Once in, they would be in a position to necessarily develop and control the supply chain, which includes quality of input, manufacturing process, product designing, standardization, and transportation as well as making changes in product mix to suit varied requirements of their global consumers. Supply chain and the infrastructure thus developed locally would provide surplus funds for sales promotions achieved through the economies-of-scale. That is how China managed to export goods worth about $ 20-22 billion to Wal-Mart alone, after the retail giant was accommodated to open 100 per cent foreign-owned retail stores since 2004.

The Challenges and Opportunities Ahead:

The rising scale of prevailing organized retailing and increasing competitions in India will force new entrants in the sector to focus on structuring the whole logistics and supply chain managements in improving productivity and provide a better deal at lower prices and better quality to customers.

Some of the challenges which need urgent attention in order to streamline the retail markets are:

·Cultural and regional differences in India are the biggest challenges confronting retailers. The economic, social and cultural diversities of Indian consumers force marketers and retailers to view this mass of consumers not as one single market but as a 'mass of niches'. The language people speak, the religions they follow, the diversities of foods they consume, the fabrics they wear and the festivals they usually celebrate change every hundred kilometers. Logic and emotion, poverty and affluence, and the past and the future simultaneously coexist in India. And all these paradoxes converge to make India a unique retailing destination in the world.

·The entry of multinationals will push the growth of hypermarket format as it is the best way the organized retailing giants are able to compete with the unorganized retailers and dislodge them from the stake.

·Displacement of labor and small shopkeepers in unorganized sector is undoubtedly another area of serious concern. While the ingress of foreign retailers may boost exports and also they may buy their requirements directly from local farmers, invest in food processing and raise the quality standards of agricultural outputs, it would simultaneously affect the very livelihood of approximately 15 million small retailers spread across the country. These unorganized ‘father and son’ stores constitute about 95 per cent of the country’s retail trade and contribute about 12 per cent of the gross domestic products. With the MNCs entry, many small retailers shall be forced to go out of orbit and add to the ranks of the teeming millions of unemployed and create further social tensions.

·Though the share of retailing in India's GDP stands at 12 per cent, its share in employment is substantially very low i.e., only 6 per cent. Table 3 shows contributions of GDP and employment in India's retailing industry in comparison with few important countries in the world. While creating employment, these global retail giants would love to recruit people who are educated, skilled and amenable to training. Small retailers may not fit the bill. Besides they may be inclined to use more of technology over manpower.

Table3: Contributions of Retail Industry to GDP and Employment

Sr. No	Country	% Share in GDP	% Share in Employment
1.	USA	9.4	16.8
2.	Poland	11.0	14.7
3.	China	8.0	12.0
4.	India	10.0	6..0
5	Brazil	6.4	6.0

Source: CII-McKinsey Report, 2008

·There is no guarantee even that these MNCs ultimately access products from

India, thus boosting country’s exports potentials. They may take fancy to source it from equally low-wage countries like Nepal, Thailand, Bangladesh or China. One can not be even dead sure that they will invest in food processing, create an inventory management system and help our farmers sell their produce directly to them and earn a better return. What happens when the farmers are unable to meet their required standardization norms and fail to get their produce passed? These questions must be addressed in clear terms before taking a firm decision on the entire issue.

A summery of opportunities in support of for and against opening up of retail trade are appended as under:

Opportunities	Threats
- Availability of quality products at a compete- tive price.	- Offshore brands occupy both markets and mind share of Indian consumers.
- Priority development of agriculture and processed food industry.	- India supplies cheap labors while top echelon is held by foreigners.
- Enhanced employment avenues.	- Profits are taken away by foreign nationals.
- Inland tax revenue swells.	- Small and medium industries take the burn in long run.
- Logistics and supply chain management gets boost.	- Manufacturing activities gets affected due to outsourcing.
- Improved competitions and greater exports.	- With large economies of scale, local brands can not compete with low price offered by foreign companies.

CONCLUSION:

Indian retailing is clearly at a tipping point. Unlike the experiences in most other countries, the growth of Indian retail is not going to be a staggered and time consuming process. This nation has already shown the world how quickly and efficiently it can adapt to hi-tech products and services and will again set a record of sorts in setting up world class retail formats across the country in no time. In the next five years or so, India will have retail entities strong enough to compete with the best in the world.

Companies need to develop ideas and solutions that are uniquely Indian. To be successful in India, retailers have to blend the best practices, expertise and technology that the world has to offer and synergies these with the demands and expectations of the Indian consumers.

As the indications are surfacing the government may further liberalize the entry norms in retail industry by bringing down the cap in FDI from the existing 51 per cent so as to enable more and more MNCs to venture into Indian retail industry. This would invariably facilitate the availability of products of international standards with competitive rates to the Indian customers. It creates further a healthy revelry among local and international retailers to offer superior quality products at reasonable rates. In the same vein, the government should also encourage exports in the retail industry to provide a global and wider platform for our Indian manufacturers and retailers.

Interestingly, in the midst of hue and cry, the neighborhood kirana store might just exist despite the big fish's threat. Their plus points are a laid-back ambience that the middle class and the lower middle class feel comfortable. The happy pass-time of little Chinna, who run across to the neighborhood Venkaiah's store for a 25 paise chocolate is not about to change anytime soon. The retail boom is, however, is definitely poised for a podium finish.

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Received on 02.05.2010 Accepted on 20.05.2010

Asian J. Management 1(1): Jan. – Mar. 2010 page 14-21