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Value retail emerges a high profit business across India

Value retail emerges a high profit business across India 002While premium brands maintain their exclusive tag by being present only in select stores and places, value retail stores offer high street designs at affordable prices for the multitude. These stores generate profits through their large scale reach and unique target audience segmentation.

Latest trends and styles at affordable rates

A big format store concept, value retailing involves selling branded products and accessories under best deals. Unlike premium brands which use 3x multipliers to recover their cost, value retailing use only 1.5x multipliers to provide the customers with maximum cost benefit. This concept is planned mainly for Tier II and III cities wherein retail stores offer products with an inexpensive price tag.

Consumers, today, expect good quality products at inexpensiveValue retail emerges a high profit business across India 001 pricing. There is a noticeable shift in their shopping preferences with more importance given to product pricing. The products on display in any value retail store generally are on par with the ongoing fashion for that season in any premium brand. Value retailers bring the latest trends and styles from across the globe and make it accessible to the tier-II & III segment. The market for the tier-II & III segment in India has been penetrated by a few players in the retail sector.

Products catering to specific demands of the region

The key to the operational success of value retail stores is the consistent product outreach alongwith managing demand and supply chain. Since these stores cater to the Tier-II, III segment, their products cater to specific demands of the region. They serve the choicest goods that are the need of the hour.

The retail sector in India contributes 10 per cent of the GDP. India’s retail market is expected to increase 60 per cent to reach $1.1 trillion by 2020, on the back of factors like rising incomes and lifestyle changes by middle class and increased digital connectivity. While the overall retail market is expected to grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent. Indian retail market is divided into organised retail market which is valued at $60 billion which is only 9 per cent of the total sector and unorganised retail market constitutes the rest which is 91 per cent of the sector.

Value retail does not expect consumers to compromise on their shopping experience, ambience and customer service. On the contrary it attempts to offer the same experience to shoppers who walk into departmental stores in Tier I cities.

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