Kiranas Kicked by Malls

KIRANAS KICKED BY MALLS

 Sakshi Bhatnagar  Tanvi Valia  Hiral Donda  Smith Sanghvi  Sana Parmar

First Year B.Com Honours N.M. College Contents

1.Introduction

2.Literature Review

 Indian Retail story from Myths to Malls  Mall culture & its Implications  Small town and suburban shopping  Shoppers prefer Kirana shops to Malls  Organized Retailers still insignificant Players  Consumers favourites: Small packs, discounts

3.Methodology

4.Questionnaire

5.Description of Field and Participants

6.Analysis of Data

7.Conclusion

8.References Introduction

The dawn of Liberalization, Privatization and Globalization led to the evolution of the mall culture. In India mall culture came in during the start of the 21st century. But the unorganized retail sector prevailed in India from centuries. There were small stores located in every nook and corner. May the street be small or big, each one had its own kirana store. People bought their day to day requirements and hoarded monthly stock from the kirana stores. Everything they needed, they got from the kiranas which were located near their residences. The kirana business was a family business, run from generation to generation. The kiranawalla had personal relation with all his customers and catered to their needs effectively. Everyone could easily avail the services of the kiranas.

BUT the coming up of organized retailing i.e. malls, scared the unorganized ones i.e. small kirana stores. Although the unorganized retail sector comprises 93-94% of the total retail pie, they are still sacred of the minority of the organized retail sector, which is only about 6-7%. The kiranawallas could not offer the sophisticated services like the organized sector and thus their self confidence was getting lower and lower. Due to their lack of confidence, kirana stores were losing on their customers. They felt that the schemes and facilities offered by the malls were too much and nothing could be done about it. This underestimation on the part of the kirana stores made us take up the study to know the actual reasons behind the lowering demand of the kirana stores. Literature Review

 Indian Retail story from Myths to Mall Traditional markets are transforming themselves in new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and near metro cities, introducing the Indian consumer to a new shopping experience.

The Indian retail market is of enormous size about US$ 350 billion. But organized retail is not so huge and it is at only US$ 8 billion. Indian Retail Industry is ranked among the ten largest retail markets in the world. The attitudinal shift of the Indian consumer in terms of "Choice Preference", "Value for Money" and the emergence of organized retail formats have transformed the face of Retailing in India. Modern retailing satisfies rising demand for goods and services with many players entering the bandwagon in an attempt to tap greater opportunities.

One stop shop cater to varied/ consumer needs. They work in convenient locations and have extended operating hours. Organized retailers in India are trying a variety of formats, ranging from discount stores to supermarkets to hypermarkets to specialty chains.

From a handful of malls in the mid '90s, India today has nearly more than 200 malls spread across large and small cities. And 700 new malls are coming up all over India-40% of them concentrated in the smaller cities. Typically, small cities offer a 15% to 30% cost advantage over larger cities.

A major portion of the organized retail will be developed in small cities and towns, this opportunity has not been encased by kirana stores and they are unable to meet the requirements of the customers. Therefore both the malls and kirana stores can play simultaneously in India so no need get afraid due to the malls.  Mall culture and its implications GONE ARE the days when people had to buy different things at different places. Those were the days when there were separate markets for various things.

Now, the things have been changed completely and almost everything is available for all of us under just one roof. Thanks to the beautiful malls opened across the country in last five years.

You just name anything and the mall has it. Each of the malls has its own attractions that make it a great crowd puller. Even in the remotest areas of any big city, you can find a mall.

Most of the outlet owners are happy to be a part of any mall. Because, according to them, malls are always being constructed at prime locations and in high profile areas. The changing trend, convenience of shopping, getting variety of items under one roof attracts and induces people of all age group to frequently visit malls. The changing lifestyle and increasing standard of living also plays a vital role. According to them, due to the growing BPO industry in India, youngsters are financially more sound and capable to spend more of their own and hence this is also of a great support to them.

At one hand, where customers have got so many benefits of the malls, they say that they have lost a personal touch with the shop owners and a special relationship that they have with their local ‘kirana’ stores since last so many years. In malls, they definitely get good services but they lack ‘after-sales services’. In malls, they feel they are being treated as just another customer whereas in the local ‘kirana’ store they are known by their names, their tastes, etc. Several times, even personal problems are being discussed at the local stores. If any item is found to be of undesired quality then they can easily get it exchanged for a better one. And of course, at a local store, they enjoy their bargaining right for every single product.

Of course the number of customers daily visiting the malls cannot be overlooked and hence it looks almost impossible to know customers by their names, etc. However, there are many customers who regularly visit their favorite mall and some selected shops in the mall. And this is when they expect some ‘more than usual’ treatments as a regular customer.

But still people enjoy air-conditioned comfort, availability of a range of merchandise just under one roof, and a one-stop family entertainment arena.

Regardless of all the pros and cons of these ever-increasing malls in the country, the moral of the story is that people love this trend and whole- heartedly welcome this culture. So I can only say one thing that, “Yeh mall nahin ‘ka-mall’ hai!”  Small-town and suburban shopping

At first, shopping in country towns was dominated by general stores, which offered goods on credit to local farmers. Travel was difficult, so rural people needed to buy their goods locally. Stock and station agents expanded their ranges and many goods were offered through mail-order catalogues.

The city centre was the place to go for more variety – it had specialized small shops and large emporiums, chain stores and department stores.

From the 1960s, car ownership grew steeply. Cities spread as suburbs grew outwards. From the late 1960s shopping malls were built, especially in the more spread-out cities. Increasingly people drove to do their shopping. Malls offered ample free parking and often had an adjacent supermarket. They drew customers away from city centers.

Malls reduced the need for a trip to the city centre. Small general shops and department stores suffered the most. Some chain stores opened new shops in malls, and some small specialty stores survived by selling luxury fashion items.

To lure the suburban shopper a city-centre store needed a point of difference, such as niche products, or extra services like repairs. Small shops could also be nimble and change their stock quickly to capitalize on changing fashions – one advantage over chain and department stores.  SHOPPERS PREFER KIRANA SHOPS TO MALLS

Kirana stores and local retailers remain the most preferred destinations for majority of the shoppers across the country as compared to sprawling shopping malls as they provide for cheaper purchases to an extent of 25% and also offer options for avoidance of payment of duties such as VAT and other local levies on articles sold by them.

According to a country-wide survey done under the aegis of ASSOCHAM Social Development Foundation, it was discovered that goods disposed of by the malls are devoid of these twin benefits and thus attract only the up market buyers.

According to ASSOCHAM, malls only entertain the shoppers and make a big hole in the shoppers’ pocket; while in case of retail shops consumers have the satisfaction of scanning through major brands and products for which prices are generally found to be negotiable

The survey of the apex chambers suggests that the mall culture has not been able to shift the focus entirely away from local traditional markets as the shoppers prefer to hangout and shop there, more so because of the familiarity with ambiance, ease of access, variety of goods, early opening and late closing times etc. which suits to the local residents.

A compulsion to take the cash memo for every purchase made in malls is another aspect that puts off the shoppers. It is generally perceived that malls only provide different range and variety in branded stuff, it is nothing but a paradoxical mindset as in reality it is observed that well- established retail outlets not only provide affordable brands but also have abundant variety of products with significant reduction in margin.  Organized Retailers Still Insignificant Players The organized sector, identified as malls/multiplexes/supermarkets is still at a nascent stage, and is unlikely to prove a threat to the unorganized sector for many, many years to come. The retail segment itself is growing so fast that it will absorb any fresh additions to the supermarkets very easily, and the unorganized sector will still continue to grow.

There are a number of reasons which clearly vouch for the fact that India will continue to be dominated by small retailers for a long time to come. Such as - Even the biggest of domestic players in organized retail lack the muscle and resources to cater to significant proportion of Indian population. It takes a lot of time and money for an organized retailer to show decent profits in Indian situations, and the weaker ones will continue to fall by the wayside.

Peculiarities of the Indian customers, which make it a very ‘unpredictable’ lot. Even for a large section of able and affluent buyers, malls are mostly for ‘hanging out’ and family outings – purchasing is still done at the friendly neighborhood kirana store. And however much marketing gurus like to tout the “changing mindset” and the “increased purchasing power” of the Indian customer – the truth is – she still feels that supermarkets/malls are expensive.

Despite of what the media and business leaders want us to believe, the average Indian customer has very limited purchasing capacity. Even the affluent buyers are not profligate spenders – we Indians love to extract maximum ‘value for money’. Purchasing at the local kiranawalla gives us valuable opportunity to bargain!

Most important of all, the smaller retailers, shopkeepers and kiranawallas are learning very fast, and are willing to provide exceptional customer service at no extra cost.

Ahh, the virtues of competition – customer is truly the king!  Consumer favourites: Small packs, discounts

Consumers have reduced their purchase basket and are clamoring for discounts. It's not a seller's market, finds out an IMRB retail trade confidence survey.

Companies as well as retailers have observed down-trading amongst consumers because of the rise in prices. Inflation, especially the rampant rise in food prices, has worked like a tax on the poor families because food comprises a large chunk of their expenditure.

Kirana stores -- and there are over six million of these in the country -- are not happy with the current situation and do not see a bright future.

One reason could be the advent of modern retail, which has affected them badly, especially in large cities. And among towns, the confidence index is positive in metros and large towns, but negative in small towns. The survey says that retailers in small towns have been hit hard by inflation and the lack of an upward movement in demand.

Retail Barometer says that as many as 54 per cent retailers in the country are in despair (the present situation has deteriorated, the future situation will deteriorate further), 23 per cent are positive about the present as well as the future (the Sunshine Group), 18 per cent feel the present situation has remained the same or deteriorated but are optimistic about the future, and 5 per cent say the present situation has improved and the future will remain the same -- it will neither pick up nor worsen.

The study has also covered how consumers are rationalizing the increasing cost of products across categories. The results indicate that due to the impact of inflation, purchases have gone down across categories.

Moreover, customers are looking for discounts in the form of package deals and monetary discounts, with the personal care category leading the way. As many as 65 per cent buyers of personal care products ask for a discount. Fifty-seven per cent demand a discount on staples & pulses, 55 per cent on processed food, and 52 per cent on home care products. Methodology

For our survey, we decided to plan a questionnaire with some qualitative and quantitative questions. We planned the whole process to go about surveying and took in all aspects important for our research. We went step by step. Firstly we planned how many shops we will survey and the areas. We divided ourselves into groups to survey shops in different areas. For preparing the questionnaire- we made various possible questions, arranged them in a sequence and then edited it, i.e., deleting the unnecessary questions because they would only waste time. We kept our questionnaire short, so that it takes less time and the shopkeepers do not feel that a lot of their time is wasted. After all, we had to be sensitive to their feelings too. We gave options in the questions wherever possible and the other questions (qualitative), we made it too simple, so that the kiranawalas understand better. We made questions like the tenure of their shop, type of customers, no. of customers, no. of employees, effect on demand, why do customers go to malls- their opinion, their plans and strategies to attract more customers etc. As the important part of our data was qualitative, we took notes while surveying and later on we arranged the data for each kirana store systematically on different sheets, so that it becomes easy to compare. Below is an attached copy of our questionnaire. Questionnaire

1. Area of the shop:

2. Tenure of shop:10yrs or more 5 to 10yrs less than 5 yrs

3. Type of customers daily: Household Servants Office Children

4. Daily customers: less than 25 25 to 100 more than 100

5. Number of employees?

6. Effect on demand? Yes No Why?

7. Why do you think customers are opting for malls?

8. Is location affecting demand?

9. Any changes in infrastructure due to malls?

10. What schemes offering now?

11. What plans, schemes, strategies to attract more customers? Description of Field and Participants

The location of study: Our topic of survey was “THE IMPACT OF MALLLS ON SMALLL SHOPS AND KIRANA STORES” we wet surveying small and big kirana stores near the malls of Santacruz, Malad, Borivili, Parle, Andheri and Goregaon. Some kirana stores were just next to the malls and some at a distance. And we went into small lanes and streets near the malls to survey kirana stores. But the impact of malls on kirana stores was more or less the same, may it be just next to mall or at a distance. It was our first time experience, so we felt a little fear, some hesitation but lots of excitement. And this worked out due to the support and co-operation of the kiranawallas.

The participants of study: Our participants were the kiranawallas and small grocery shop owners. At the starting, the shopkeepers were hesitant to give interviews. They asked us various types of questions like – why we were doing this survey – the reason, our identities etc. We showed the\m our College ID card and promised them that we won’t reveal their identities. Some of them were reluctant and refused to answer any of our questions. Some said that they did not have time and told us to come later. But the majority of the shopkeepers were very co-operative. We convinced them of secrecy and made them comfortable. Some of them easily gave interviews and were very anxious to criticize malls. Of those, who did not give interviews, we did not force them to do so, as we had to be sensitive towards their feelings too. From the others we were able to extract the information we wanted. We could see their feelings about malls on their faces. Their expressions were conveying everything. Analysis of Data

On analyzing the data we found out that majority of the kirana stores were affected due to the various schemes, discounts, varieties, and facilities offered by the malls.

Effect on Demand YES 80% NO 20%

While surveying too, we could see the anger and agitation on the faces of the kiranawalas. They were so frustrated by their increasing losses, that we could see that clearly through their gestures and body language.

But we noticed one thing that the older shops, which existed even before the coming up of the malls were not much affected. Their demand went down but not to much extent. They still were able to earn reasonable profits due to their loyal customers.

Location Affecting 46% Not Affecting 54% We arrived at the conclusion that 46% of the kirana stores’ demand is affected due to their nearness to the malls.

Although majority of the stores we surveyed did no major changes in infrastructure of their shops but have come up with display strategies to attract more customers. Some of the kirana store owners have changed the look of their shop to make it look like malls. Some have come up with the self service ideas too.

Any strategies for Future

Can't say 9% Can't say Yes No No 50% Yes 41%

50% of the kiranawalas are planning strategies for future to increase their sales. Their strategies could be improving infrastructure, advertising locally, schemes in festive season, free gifts etc. But their main strategy would be giving DISCOUNTS – the main reason for customers opting for malls. Reasons for customers opting for Malls

Schemes, 17% Discount, Discount 32% Varieties Window Facilities shopping, Can't say 17% Window shopping Can't say, Varieties, Schemes 3% 11% Facilities, 20%

Finally we concluded that most of the Kirana stores are affected by the opening up of the malls but are trying their best to minimize the impact of these malls. After all Kiranas are the oldest and represent ethnic culture of India. Conclusion

The coming of malls has affected the kirana stores but not to the extent to their shut down point. The coming generation is influenced by the mall culture, but still the old generation prefers Kirana Stores. After all, Kiranas are the oldest form of retailing. The kiranawala has better knowledge of the customer’s tastes and preferences. They know the customers better and personally too, which the mall owner does not know. But can’t the MALLS & KIRANA STORES exist together? Can’t there be healthy competition between the two?

TO improve their share, the kirana stores can be developed. They can go for computerization, a little more improvement in infrastructure and hygiene and also better display of the products. Also they should follow the ETHICS in retailing. If this happens, kirana stores will be able to compete with the malls in a healthy way and both can stay in the market together. References

 Byravee Iyer (2010) ‘Consumers favourites: Small packs, Discounts’ – Business Standard

 Carl Walrond (2010) ‘Small town and Suburban shopping’ - Te Ara-The encyclopedia of New Zealand

 Hiten Trivedi (2007) ‘Mall culture and its Implications’ – Meri News-Power to People

 Siddharth Singh (2010) ‘Organized Retailers still insignificant Players’ – Business General

 (2007) ‘Indian retail story from Myths to Malls’ – India FMCG Image

 (2010) ‘Shoppers prefer Kirana shops to Malls’ – Current Affairs