North India: Retail dreamland of India

North India is home to huge retail growth opportunity for regional brands as the region witnesses hefty spending spree from its dwellers who are driving the retail growth of the country.
North India: Retail Dreamland of India

By Sharmila Das & Nitin Abbey

North India probably is the most sought after region for global brands to launch their maiden store, and Delhi, particularly, tops among the NCR regions, as it falls in the preference list of such retailers.

Be it global F&B brands or designer label, these retailers; time and again have showed their preference for the city over others. Delhi NCR has been rightly termed as the ‘launch pad’ for these brands.

Yet, in the cluttered lanes of Old Delhi - you will still be fascinated by the dominance of decade-old regional retailers selling sarees, lehengas, mithai or rabri. Delhi has been accommodating both the regional and global players since long, and to be more precise, both of these retail segments happily co-exist.

Chandigarh too, has a penchant for global brands. However, the retailing scenario for rest of the states of North India including Haryana, Punjab, UP, J&K, Rajasthan and Himachal depicts a liking for regional brands.

Consumption preferences

Due to its high-spending capability of the dwellers of the region, North India has a good variety of consumer preferences too. Reflecting a trend in his segment, Bipan Jain, MD, Madame, said, “The consumption patterns are quite optimum and being in the fashion trade; all region/ zones embrace fashion in equally exciting terms.”

Sandeep Kohli, Owner, Kohli Brothers, shared, “Being there ‘locally’, I would say it gives you an advantage of customer’s loyalty on a personal front. Being one to one is something that gives you an upper hand of understanding the customer better, if you know what he wears, or what anybody wants because you know the trade.”

Bhuvan Ahuja, Retail Head, Ahujasons, said, “It’s a rather wise gamut, fashion style stoles in silk and wool and Cashmere are as popular as the evergreen Pashmina shawls. It is difficult to point one out.”

Nitin Arora, CEO, Creambell Ice Cream said, “Ice cream still remains a largely impulse purchase though in-home consumption is growing at a very healthy pace.”

Malls Vs High Streets

Malls are generally very popular as retail destinations and have been preferred by the UP consumers as well. The industry people observed that the malls of UP are so beautifully designed that one can get from a little safety pin to a Rolce Royce car, and for that matter, these malls are doing very well in the region.

Sharing thoughts on the same, Kohli, said, “If the product is premium, then I would definitely prefer a high street at any point of time. I am talking especially about UP, everything is available in every mall; whether it is Big Bazaar, or a Tommy product. If I have to do a mass product which is not very premium then malls are better places.”

Darpan Kapoor, Managing Director, Kapsons, said, “Brickand-mortar and malls go side by side. For a city like Shimla, only high street will work. In Jalandhar, since they don’t have any good malls right now, high street again is a better option. In Ludhiana, both high street and malls are doing great. Chandigarh too, is a place where both the options are doing well. As for my preference, high street comes in at a huge cost, although you will get the comfort of many things. You also have to compete with a number of people who are probably as efficient as you are. The mall rentals can be killing for any brand, big or small. For high streets, rents are now reasonable and one saves a lot of money in a high street location. We zero in on the business model of the brand itself whether it is fit for a mall location or a high-street location.”

Nakul Yadav, Executive Director, Le Marche, shared, “I prefer high streets as compared to malls. Malls do generate higher revenue, but malls are not a sustainable model for a grocery store. Grocery stores have to be accessible.”

Riding the eCommerce wave

eCommerce undoubtedly has been the show-stopper of the retailing industry off late, with predatory pricing and great marketing strategies. And the impact of eCommerce in regional retailing landscape is even more significant, voice retailers.

Kapoor explained the situation by saying, “With so much of retail coming in through so many online companies these days, growth for another two seasons would be stagnant. Because online is giving too many discounts. Also, places like Pantaloons and Shopper’s Stop have extended from being in just metro cities to now being in Tier-II and Tier-III cities. It will take some time for all of it to settle down. One or two seasons will be difficult for the regional players. The cost to get the customers back has gone pretty high. With so many discounts being given online, the brick-andmortar also has to offer discounts somewhere. So, the cost of that has gone very high. We have to work hard, we have to take our sales staff to the next level, have to work towards the ambience of the store, and then only customers will come back.”

Kohli said, “We are also looking at that business and how we can get into that sector. Currently, we are not into eCommerce. But at the same time, I feel that fashion business or the ‘premium’ fashion business that I am primarily into, where a customer is spending a higher value for a product, he would definitely want to touch and feel the product before he is spending that kind of money.”

Expanding to national level

With a good combination of well read and well travelled consumers in the region, brands see optimum opportunity to expand to national level. As per Kohli, they started “Made to Measure” last year. He said, “It is a very strong area and one would have a lot of retention in terms of clientele. And, we are looking at a couple of stores to start within this year in Lucknow itself.”

Kapoor shared, “We may expand to Rajasthan. The focus is more to improvise and to increase per sq ft area. Right now, the market is very unstable. North is my comfort zone and I am not willing to go South or East or West, because there is no explaining the huge discounts offered in the online space. Before expanding, we are trying to talk to the brands saying that we also want to give the kind of discounts the online space is giving, so it is a level field. Even the brands are unable to ignore the online space right now. There is no fun in it. So, I want to keep low, and wait and watch until the market gets stable.”

As the market indicates, there will be no surprise if these regional retailers capture the total retail market of North India and give the global brands a tough fight in the years to come.

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