Virtuous Retail Boosting Growth

According to the Indian Council for Research on International Economic Relations (ICRIER), India is the seventh-largest retail market in the world. No doubt that luxury retail is not just here to stay, but is the future of modern Indian economy.

The organized Indian retail sector has developed exponentially due to globalisation, high economic growth, changing consumer preferences. Even Tier II towns have witnessed have thus emerged as attractive markets for premium retail shopping outlets and superb retail spaces.
Virtuous Retail, an offshoot of global investment firm Xander Group, specializes in Retail Management and Leasing, Tenant Relationship Management, and neighbourhood shopping centres. The company currently has around 8 luxury shopping malls in various stages of construction in Pune, Mumbai, Bengaluru, Kolkata and Udaipur, which will be given to luxury brands as retail space on lease.

The company’s flagship mall is in Surat; a total of 6,00,000 square feet of luxury retail spaces. VR Surat celebrated its first anniversary last year, and is drawing customers in large throngs. It is the largest shopping centre in Surat – 3 storeys high and 45,000 square feet of open area. 90 per cent of the total retail space for lease has been booked by 11 renowned anchor stores, 2 mid-sized units and 78 inline stores. This contemporary, premium lifestyle retail centre has already won an award for the ‘Most Admired Shopping Center Launch’ award at the Indian Shopping Centre Awards 2014.

In Pune, another fast-growing tier II city, Virtuous Retail is currently developing “My Mall.” The Pune mall is spread over 17 levels including 3 basements. A mixed-use format, My Mall also houses the upmarket Marriott Hotel within its premises. The Epicentre at Kolkata too, is a mixed-format project where the mall houses Grade A residential premises as well as a star hotel. Both the malls are expected to launch in 2016. The opulent retail shopping outlet in Bengaluru, VR Bengaluru promises to be an ‘it’ destination with luxury and premium retail brands and even a microbrewery. What sets it apart is that this 1-million square feet mall, which will be operational in 2015, will have a dedicated 50,000 square feet plug-and-play workspace for bootstrapped entrepreneurs. The Boulevard in Mumbai is spread over 16 floors and houses a high-end sports club, hotel and banquets, top-class luxurious residential units.

It is not just enough to built swanky malls and rent out commercial space on lease; the success also depends largely on the brand mix and primary market. Virtuous Retail is also a specialist in the niche field of Tenant Relationship Management, which plays a crucial role in anchoring the mall’s success.

Today, mall management and marketing is not just retail space for rent, but all about Consumer experience design- where the overall experience of the consumer plays an important part in the buying process. Virtual Retail has not just mastered the art, but has perfected it.

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Virtuous Retail mapping the future

The demand for quality retail shopping outlets is increasing at a steady pace. This phenomenon is already evident in the metropolitan cities; Tier II and Tier III towns are also witnessing a demand for superior shopping experience and retail spaces. Swanky lifestyle malls and luxury retail brands replace traditional mom and pop stores. Experts are of the opinion that Indian lifestyle retail is set to grow faster than the growth of India’s GDP (Gross Domestic Product).

Rentals are one of the major cost overheads for retail companies. A major shift from the property-selling model to a leasing-and revenue-sharing model has been perceived in recent years. Virtuous Retail Services Pvt. Ltd. is a company that specializes is the development of retail space for lease. Its portfolio includes lifestyle centers, neighborhood shopping centres, and luxury retail centres. Virtuous Retail owns premium retail space for rent in India’s top cities – Bengaluru, Chennai, Mumbai, Pune, Surat and Kolkata. Virtuous Retail works in a developer-operator role. It develops urban social and commercial hubs (mall and shopping centres) and then manages the day-to-day operations of the mall. Global expertise is smartly fused with local data to create high performance prime commercial hubs, attractive to national and international retail players. This has made Virtuous one of the leading institutions in retail management and leasing.

Nowadays, apart from leasing space, promotion and marketing has also become crucial. According to Govind Shirkhande, CEO, Shoppers Stop’s, “With the revenue-sharing model, it has become important that tenant and owner both have a transparent business relation. This is the reason that specialized contracts are becoming popular.” Thus Virtuous Retail, in addition to its developer and operator role, also offers specialized services like consumer experience design and tenant relationship management. Consumer experience design is nothing but experiential marketing – the practice designing promotions and services with a focus on the quality of the customer’s experience. In today’s challenging scenario, it is not enough to make ensure 100% retail space on lease. The right mix of tenants adds stability; tenant relations and retention is a key component in mall management. Tenant relationship management today has evolved into a specialized field where dedicated managers are focused on developing mutual trust and smooth operational flows between the mall tenant and mall owner.

Backed by extensive research, Virtuous Retail is currently developing 8 large-format retail shopping centers in Surat, Bangalore, Pune, Chennai, Mumbai and Kolkata and Jaipur and Udaipur are on the anvil. The company is looking at outright purchase or commercial space on lease for these projects. With the backing of The Xander Group Inc., a leading emerging markets investment firm, Virtuous Retail is on the path to map India’s retail future.

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A Makeover for Retail Stores

The Indian retail market is the only industry that keeps the consumer sentiment up even when the economy sees a downturn. The retailer in India never faces a drought in terms of buying. The only thing that stops the growth is rising realty cost and shrinking spaces which curbs the retailers to open larger and more retail stores at a fast pace. The brands are feeling the pinch but a strategized movement in various markets will help them grow better.

The problem area: Growing number of brands, coming up of malls, realty laws becoming stringent and space becoming costly, all these contribute into calling for a problem for retailers in India. The retailers, who looking at the growing spending power and aspirations among Indian consumers, want to grow their presence in the Indian market rapidly, but with rising realty costs they are unable to reach their target consumers. The store sizes have shrunk. Recently we saw all the big names in the retail sector who run large size stores have sought to shrink the size of the stores due to high operational costs and rentals.
The brands who want to penetrate further in markets have now curbed their plans and are planning to grow in a slower manner, which also puts down their target sales and further growth.

What needs to be done: The retailers in India will now have to work towards creating stores which offer value for space. Incorporating more workable equipments which also help in creating a clutter free store, will help them get more value from each square feet they rent, buy or lease. The visual merchandising will play a critical role along with limited inventories so that there are no stock ups at the store. Also a better understanding of markets the retailers want to move into will help them design the stores accordingly.

E-retail: a better prospect: What can also be the next big thing is the growth of e-retail. With space becoming constraint and the operational costs becoming high in terms of maintaining retail stores, e-retail has come across as a better alternative which not only eases the shopping experience for consumers but also lets retailers to sell better with lower operational costs. Today almost all big retailers in the country have their e-retail segment as well. This helps them reach consumers which they still have not touched upon. The internet penetration in India is growing and for people who have less access to brands through physical stores, e-retail proves to be a boon for them.

Virtuous Retail: Ideal partner for retail players

Studies validate, that India’s retail sector accounts for about 14 to 15 per cent of the country’s GDP; and employs about 40 million people. With the opening up of the economy, India features high on the list of priority markets for several international luxury retail brands. There is also a hot debate regarding the issue of FDI. However, it goes without saying that lifestyle retail is the next big thing, and retail spaces are much in demand.

With retail shopping outlets sprouting across cities, retail management and design is now a specialized field altogether. Virtuous Retail, a unit of The Xander Group Inc., a global leading emerging markets investment firm, is a pioneer in retail management and leasing. With a focus on developing prime zones as commercial hubs and neighbourhood shopping centres, Virtuous Retail also offers services like research, finance, planning, marketing and mall operations, retail space for rent, consumer experience design, and tenant relationship management.

In today’s competitive scenario, it is not enough to provide build retail shopping outlets or give out commercial space on lease. The success of neighbourhood shopping centres depends on crucial factors like right tenant mix to address market gaps, extensive market knowledge, and cost-effective operations for a mutually beneficial and successful relationship between the tenant and the owner. This is where companies like Virtuous Retail bring in their expertise. For example, if a shop is under-performing, then Virtuous Retail would provide in-depth recommendations based on exhaustive market intelligence. Based on these recommendations, the mall can increase lease savings; and the under-performing store can negate losses to a certain extent. This is an example of tenant relationship management that is a forte of Virtuous Retail.

With increased competition, it is imperative that the neighbourhood shopping centre offers a unique engagement proposition to attract footfalls. Whether it is restaurants, entertainment options for weekend crowds, or a quality mix of daily requirements, the mall has to offer a solid consumer experience to make it a popular destination. This is where consumer experience design comes in.

So, what makes Virtuous Retail an ideal partner?
* In-depth local market knowledge
* Strong marketing strategies
* Cost-effective and sustainable mall operation services
* International design benchmarks
* Global experience

In addition to Virtuous Retail’s specialized services, the company’s pan-India portfolio of premium retail space for lease comprises impressive locations in key cities like Surat, Bengaluru, Kolkata, Pune, Mumbai and Udaipur.

So for lifestyle retail and luxury retail players looking for retail space on lease, Virtuous Retail is a perfect partner.

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Virtuous Retail commercial retail sector

Virtuous Retail is a visionary group and has brought in global expertise and trends in building world class retail shopping outlets. It provides retail spaces for rent in prime cities like Bengaluru, Mumbai, Pune, Surat and Kolkata.

But, retail spaces are not only about huge shopping malls, they have a lot more in store. Neighborhood shopping centers for instance have increased more than double in the past four years. These hypermarkets or shopping centers offer a viable and easy alternative to people for everyday needs and entertainment. Similarly, the extreme of neighborhood shopping centers, luxury retail, is another major segment as far as retail spaces go. Reports indicate that the spurring growth of the Indian luxury market, will result in a three times increase in demand for luxury products by 2015. Lifestyle retail is another segment of commercial retail spaces and is gaining immense popularity as well.

Another concept that has gained a lot of prominence in retail construction is that of consumer experience design. This is a process where the quality of user experience is kept at the forefront. It is used to design products, processes, services, events, environments and many more things. Consumer experience design is a new and emerging discipline, and draws inspiration from various fields like cognitive psychology and perceptual psychology.

The retail sector though, is a complex and intriguing one, and has various forces at play. While, putting up retail or commercial space up for lease, the concept of tenant relationship management becomes extremely important. The lease may be negotiated by the developer, but to make this arrangement work smoothly, the tenant and the owner of the retail space, i.e., the developer need to come to agreement with the terms and work in a harmonious environment for the duration of the lease.

Retail Management and leasing also play a crucial role in the commercial retail sector. While, the art of Retail Management revolves around promoting greater sales and customer satisfaction, and can only be achieved by getting a better understanding of the consumers and their psyche. On the other hand, leasing is organized by developers of the commercial property.

With growing disposable incomes and the love to spend increasing, the retail sector in India is only expected to flourish. And, with retail developers doing extensive background and trend research, the properties coming up are easily comparable to international standards. The retail sector has opportuniies galore for everyone involved!

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Organised Retail In India

Retailing-An Introduction

The word “Retail” originates from a French-Italian word “retailler” meaning someone who cuts off or shreds a small piece from something. Retailing includes activities of marketing and selling products or services to end consumers for their own household or personal use. Retailer is a Person or Agent or Company or Organization who is instrumental in reaching the Goods or Merchandise or Services to the End User or Ultimate Consumer.

Kinds of Retailing


Traditional or Unorganized retail outlets are normally street markets, counter stores, kiosks and vendors, where the ownership and management rest with one person only. This sector accounts for two thirds of the market and requires low skilled labor. These are highly competitive outlets, with negligible rental costs (unregistered kiosks or traditional property), cheap workers (work is shared by members of family) and low taxes and overheads.

Organized Retailing

Organized retailing comprises mainly of modern retailing with busy shopping malls, multi storied malls and huge complexes that offer a large variety of products in terms of quality, value for money and makes shopping a memorable experience.

Retailing Scenario in India

Most of the retail sector in India is unorganized, which were known as mom-pop stores. The biggest advantage in this sector is the consumer familiarity that passes on from one generation to the next. The transformation stage of the retail sector started in late 1990’s. The emergence of pure retailer has started at this stage as it is been perceived as a beginner and the organized retailing is getting more attractive. In India, the retail business contributes around 11 percent of GDP in 2005. Of this, the organized retail sector accounts only for about 3 percent share, and the remaining share is contributed by the unorganized sector. The main challenge facing the organized sector is the competition from unorganized sector.

Transformation of the Retail Scenario in India

As Indian retailing is witnessing rapid transformation in different areas of business by using ascendable and gainful retail models across different categories, consumers started accepting the modern retail irresistibly. The unorganized market is making its way for modern retail formats such as malls, provision stores, hypermarkets, discount stores etc. Most of the malls started expanding from metros to tier 2 cities as part of the expansion plans. Consumers are more attracted to these because of the shopping experience they provide and extra facilities like food court, entertainment which is set under one roof.

Demand and Supply Factors

Economic growth: Economic growth is one of the major demand factors of Retail sector in India. Rapid economic growth has resulted in greater disposable incomes for the booming Indian middle class. Disposable incomes are expected to rise at an average of 8.5% p.a. till 2015. Higher numbers of working women have also increased both consumption and purchasing power. Real GDP grew at an annual rate of 9.4% in the fiscal year 2006 (ending March 2007), the fastest expansion for 18 years.

Demographics: A tidal wave of young adults are entering India’s consumer society with rising aspirations, new lifestyle requirements and an insatiable demand for consumer brands. A large number of young working populations between the age of 24 and 35 are also a major factor.

Urbanization: Urban areas are the engines of productivity and growth in the country. Urbanization is associated with higher incomes, improved health, higher literacy, improved quality of life and other benefits. The Indian urban population is projected to increase from 28% to 40% of the total population by 2020 and incomes are simultaneously expected to grow in these segment.

Media Explosion: TV, Internet, radio & Press have the power to influence the population when it comes to promotion. Compared to previous years the presence of media has become more important. Our televisions have over 200 channels: international, national, regional and local. And the print media is still strong in this area. The radio is opening up and growing by the day.

Infrastructure Development: Real Estate development, ownership of private transport, banking/credit are other factors which comes in the demand side. The real estate story in India is growing bigger by the day. Industry experts believe that Indian real estate has huge demand potential in almost every sector — especially commercial, residential and retail. Organized retail is expected to create a demand for around 220 million square feet of retail space by 2010. Ownership of private transport gives accessibility. Credit facility is also playing a major role as the availability of it is more liberalized and the rates of interest are in an affordable position.

Competition: As the market is a mix of organized and unorganized players, it is obvious that there will be a competition from the unorganized and the future stores.

Pricing: Pricing will be a crucial variable due to its direct relationship with a firm’s goal and its interaction with other retailing elements. The importance of pricing decisions is growing because today’s customers are looking for good value when they buy merchandise and services. Price is the easiest and quickest variable to change.

Scale of Operations: Scale of operations includes all the supply chain activities, which are carried out in the business. It is one of the challenges that the Indian retailers are facing. The cost of business operations is very high in India.

The Human resource factor: As this sector has only recently emerged from its nascent phase, sourcing right talented people and training them will be a major factor.

Organized Retail in India

Organized retail business in India is very small but has tremendous scope and is expected to grow faster than GDP growth in next few years. Research done by the Tata Strategic Management Group (TSMG ) indicates that over the next 10 years, the total retail market in India is likely to grow at a compounded annual growth rate (CAGR) of 5.5 per cent (at constant prices) to USD374 billion (Rs 16,77,000 crore) in 2015. The organized retail market is expected to grow much faster, at a CAGR of 21.8 per cent to USD55 billion (Rs 246,000 crores) in the same time frame, garnering around 15 per cent of overall retail sales. Based on their projections, the top five organized retail categories by 2015 would be food, grocery and general merchandise; apparel; durables; food service; and home improvement.

Last few years witnessed the growth of retail sector in India. Growth of this sector led to the entry of foreign players, expansion plans, use of new technologies and processes. Supply chain plays a major factor in new era retailing because of their complex structure which includes different suppliers, retailers and other third party suppliers. Supply chain includes activities like proper relation and communication with suppliers, stock management, cost cutting and reducing wastage, which is one of the major factors.


Finally, it is important to note that value is function of not just price, quality and service but can also be enhanced by personalization and offering a memorable experience. In fact, building relationships with customers can by itself increase the quality of overall customer experience and thus the perceived value. But most importantly for winning in this intensely competitive marketplace, it is critical to understand the target customer’s definition of value and make an offer, which not only delights the customers but also is also difficult for competitors to replicate.

Retail Job Recruitment agencies – a hit or a miss?

Last decade has seen a boom in retail industry, especially outside the Americas and Europe. Major retail brands in the western countries looked into the potential of the third world countries in Africa and Asia and decided to set up their shops in this region. The opening up of new retail shops across the globe has increased the demand of larger workforce due to which the recruitment agencies are having busy days short listing millions of profiles and sending to the retailers for approval.

Recruitment through retail job agencies in Africa has their own pros and cons. Most of these recruitment agencies have their own website and therefore, provide a common platform to both the employer and the prospective job seekers. Whereas, the employer may look for a candidate with the desired skill sets, the job seekers may land with a job in reputed organizations with better pay and growth prospects. The recruitment agencies maintain a huge database of employers and job seekers irrespective of the location. These data can be accessed online with advanced search technique. These companies have the specialization in recruiting for specific industries. Hence, the recruitment agencies specially designed to cater to the needs of retail and fashion industries have the skilled staff to look to hire the best talent to run their business. The fees charged by these agencies vary from one requirement to another and prices are also region specific. The data is also maintained confidential.

Although there are multiple advantages of hiring an external retail recruitment agency, on many occasions, it was found that retail recruitment agency is highly uncompetitive. They lack manpower or resources, who do not even understand the needs/requirements of retail industry. On many occasions, the staff of the retail recruitment agencies is not able to differentiate among the highly skilled or high paid jobs and low skilled jobs or low paid jobs. The agencies are required to understand this gap and work accordingly. Sadly, the reverse happens. It was also found in many occasions that these agencies lack ethics and poach candidates from one recruiter to another. Poaching is a common problem and is ideally a common problem in the recruitment agency. This is not a healthy practice and may result in many companies to loose their talented staff.

Each of the functions has their own advantages and disadvantages and so is the retail industry. Today, retail businesses need people across different functional groups. Although, people believe that most of the retailers employ salespersons and shelf organizers, there is a wide group of recruitment that takes place in the retail sector. They are no longer famous for job ghettos or skills gap. There are many management graduates, IT specialists, etc at different job levels. Although the entry level jobs do not require much experience, for the jobs of other sectors, one compulsorily require the expertise of recruitment agencies. Depending on the rapport and the cost efficiency, an employer may also go to a reputed recruitment agency rather than the ones who are specialized in retail recruitment.