We looked at the applicability of the concept of the life cycle with reference to the retail sector and also examined the applicability of the concept to various markets. It is interesting to note that retail formats can also be mapped in the concept of the lifecycle. This mapping is with reference to the time when they evolved and the current status with reference to the overall sales and customer acceptance.
To consider a few of the retail models automated shopping, digital downloads of music, books, etc and the concept of personalization and customization of shopping is at the emerging stage in the retail lifecycle. On the other hand, e-commerce, dollar teen specialty stores are at various stages of growth in the lifecycle. Lifecycle retailers and home improvement retail models are at a stage which is close to maturity. Hypermarkets, supermarkets and fast foods retailers are in the maturity stage of the lifecycle. Variety stress, department stores, furniture stores and general merchandiser retail models are among those models which are in the decline stage of the life cycle.
Thus the concept of the lifecycle for a retail model needs to be looked at from the point of view of the specific markets and also from that of the stage that the model is in the context of its own evolution.
Traditional Business models in Indian Retail:
India has a rich traditional history of retail trade. Many of the business models have been in existence since time immemorial, and at the same time, they have had a presence across the country. It is for this reason that they are taken into consideration at this stage of research. However most of these models focus on food grains, cereals and other related food stuff.
At the top of the market hierarchy are mandis which owe their development partly to government polices in agricultural marketing.
Mandis are agricultural markets set up by state governments to procure agricultural produce directly from farmers. Located in high production centers of different crops, these markets can be categorized as grain mandis, cotton mandis, soya mandis, vegetable mandis etc.
There are 7,161 regulated markets, or mandis in India which are mostly primary wholesale markets, and are usually governed by the Agricultural Produce Marketing Committee (APMC) Act. Typically agricultural areas with population of more than 10,000 have mandis. Buyers may visit the mandis for procurement of the produce many a times, on a weekly basis. These mandis are primarily wholesale markets, located near important towns or centers of production. The mandis that are secondary wholesale markets are also located in district headquarters or major trade centers. It is true every district has a mandi and it is also true that mandis are spread throughout the length and breadth of the country.
The important point is that small farmers have limited access to these mandis. Transactions take place between commission gents and wholesalers. Market intermediaries (adhaatis or dalals or with other names) purchase the farm produce from farmers often in advance it to mandis for sale to wholesalers.
Unlike the regulated markets, there are also unregulated markets known as haats, peta, angadi, hatwari, sgahndies, chindies or painths. A haat is a periodic market exists typically at a village level. A haat can be said to be a public gathering of buyers and sellers of commodities, fruits, vegetables, household goods, clothes, a accessories like bangles etc Most of the haats (75%) are held once a week while others (20%) are held twice a week and the rest are held daily.
It is believed that there are around 47,000 permanent haats. In haats, disintermediation is greater and there is an opportunity for producers to directly sell to consumers or small rural retailers although the APMC act sometimes prohibits such sales that bypass mandis. Unlike mandis small farmers have access to hands. Local bodies usually control auctions of space an issue licenses and permits to vendors to use these haats.
In most villages, haats are the nerve center of the economic, social and cultural life. Producers and farmers depend on them not only for the disposal of their produced in exchange for cash, but also for procurement of items needed in daily life. It is estimated that a haat on an average, covers between 20–50 villages; the number of sales outlets per haat in excess of 300 and the number of visitors per hat are 4,500. The average sale per outlet is estimated at Rs 900 and the average sale per day at a haat is around Rs 2.25 lakh.