Why regional retailers thrive in South India

Comfort of the native language along with familiarity with local culture and purchase preferences have been the driving forces for the growth of these retailers.
Why regional retailers thrive in South India

Retail in South India is purely dominated by local players. No matter how the region has evolved by adapting to the global retail trends, yet, a homely retail experience, comfort of the native language along with familiarity with local culture and purchase preferences have been the driving forces for the growth of these retailers.

South India Retail Hotspots at a glance

Tamil Nadu

Retail market in Tamil Nadu is one of the most evolved one when compared to its neighbouring states. The retail brands in Tamil Nadu have been able to grow in a way that customers from every district and every city within Tamil Nadu come to these retailers to shop.

Additionally, the emerging cities of the region like Coimbatore, Kochi, Vizag, Vijayawada, Trivandrum, and Madurai are less saturated than the metros, but have greater spending power. The middle class and the lower middle class form majority of the households, with more than half the population falling in this category.

And here, names like Sangeetha Mobiles, UniverCell, Kalyan Jewellers and silk saree retailer Nalli are retailing in these cities and earning trust other than revenue. Similarly, Kalyan Jewellers’ revenue touched Rs 1000 crore this year, its MD & Chairman, Kalyanraman, attributes his biggest achievement as trust of the people of South India.


The city saw the advent of organised retail in the 1970s when Nilgiris (food), Viveks (consumer durables) and others started their operations while corporates like the Tatas (Star Bazar), the Birlas (More), Ambani (Reliance Retail), RPG Enterprises (Food World), and mega retailers like the Crosswords, Shopper’s Stop, and Pantaloons raced to revolutionise the retailing sector and hoping to turn the retail sector as an industry in the city.

It was only in late 2008 that the supermarket and mall culture caught up pace and now it has grown to a sizeable number, but in no way comparable either to Gurgaon or Ludhiana.

Bengaluru’s Brigade Road, MG Road or Commercial streets are famous for offering a mix of regional and branded showrooms. Retailers of the regions consider conducive Government regulations as a reason behind the entry of many global players in the city and progressive venturing of the new brands into the city’s retail market.


According to C&W data, Chanda Nagar in Hyderabad witnesses 90 per cent penetration of domestic brands, whereas, foreign brands constitute only 10 per cent.

If demographic profile is taken into consideration, foreign brands have great opportunity to boost their presence in this area. Kothapet, another town of Hyderabad has 99 per cent penetration of domestic brands, whereas, foreign brands constitute only 1 per cent.

The data reveals that keeping apparel and footwear section apart, departmental stores have mushroomed in Kothapet. And in Chanda Nagar, house improvement shops and supermarkets have the lion’s share.

Malls Vs. high-streets

There will always be locations such as Bengaluru’s Brigade Road and Delhi’s Connaught Place, which provide a certain kind of shopping experience that shopping malls cannot match.

They will continue to remain in favour and are unlikely to sink under the pressure.

Nitesh Giria, Director, Girias, shared, “We are more comfortable with high street retailing as all our stores are landmark stores. We cannot suit ourselves in malls as opening a 10,000 sq ft store in a mall is not a viable choice to make because of the high rental charges of a mall.”

D Sathish Babu, Founder, UniverCell Telecommunications India Pvt Ltd, shared, “We are present in Phoenix Mall in many markets and all the malls are doing very well for us. Some of our best high street stores are in Annanagar- Chennai, Ameerpet-Hyderabad and Indiranagar – Bengaluru.”

For Kalyan Jewellers, malls are not a doable choice for their nature of business as malls cater to ‘popcorn crowd’.

Sharing thoughts on the same, Kalyanraman said, “Jewellery is not an instant decision product. Although, in Dubai, 50 per cent of our stores are in malls, because people in Dubai visit malls to purchase jewellery and they will not go to a Kalyan Jewellers showroom for the same.”

Consumption pattern across segments

It is true that the consumption pattern of a particular state varies from other states due to India’s diversified cultural heritage. Retail is no different, what Tamil Nadu people prefer to eat with a cup of coffee is not the same for people in Bengaluru and vice versa.

A Kalyan Jewellers spokesperson said, “Consumption pattern varies from state to state and month to month. For example, we have our stores in 77 locations in India and we have presence in three countries including UAE, Kuwait and India. Accordingly, consumption trend is different in all three countries and Indian states.”

Explaining further, he said, “In terms of changing buying patterns, people now prefer to buy from branded stores and want to have excellent shopping experience. Also, people startedbuying diamond jewellery and there is an increase of 10-30 per cent increase in buying diamond jewellery. It is not that people have shifted their preference from gold to diamond but they have started buying diamond jewellery.”

He also informed that people from across social segments are still maintaining their preferences for traditional jewellery.

Jagdish Krishnan, CEO-Retail & Bakery Div, Heritage Foods, shared, “There are regional brands which dominate certain markets and sometimes have a higher market share than national brands.”

D Satish Babu, shared, “Today, every individual, young or old, male or female wants a big screen smartphone. Many of our customers change their phone more than once a year. We have seen the price points of 5-10k grow very aggressively in recent times. Consumers also want cool gadgets like good music headsets, smart watches etc.”

Sailing through the eCommerce wave

As against the general perception, it is the Tier II and Tier III cities that have augmented the growth of eCommerce retail in India. As per a recent eBay study titled ‘Census 2014’, against the 10 metro cities where eCommerce has seen traction, there are as many as 3,133 Tier-II and III cities, and 1,233 rural hubs that are getting onto the online retail bandwagon.

The top 10 rural hubs for eCommerce include Guntur and Tada in Andhra Pradesh, Karthikappally in Kerala, Ghattia in Madhya Pradesh and Chorayasi in Gujarat. Budgam in Jammu & Kashmir and Cachar in Assam are also among these, according to this report, which was based on actual transactions.

Delhi was also first among the cities, followed by Mumbai, Jaipur, Bengaluru and Chennai. “Bengaluru gained a position due to higher sales on electronic items like laptops, tablets and cameras,” the report said.

Witnessing the huge demand for online retail, Subhash Chandra L, Managing Director at Sangeetha Mobiles Pvt Ltd, said, “The last one year has been very challenging and disrupting because of the predatory pricing by the eCommerce players. However, this phase too will pass away and, eventually, the eCommerce players will have to correct their pricing strategy.”

Recently, Sangeetha Mobiles has ventured into an online platform, shopno47.com, and the name takes inspiration from the first shop number of Sangeetha Mobiles that opened its door in 1974. Now, the brand owns 315 showrooms across India, with South India being home to most of its outlets.

Narendra Malhotra, CEO, Oriental Cuisines Private Limited, shared, “In recent times, the industry has witnessed a gradual shift to the digital spectrum. The eCommerce space is booming and sales have picked up on the online platforms, in fact, doubling over the weekends starting Friday onwards.”

Expanding to national level

Not only venturing into eCommerce, these players have their plans set to expand to national level too, and some of them also have plans to expand product portfolios.

As revealed by D Satish Babu of UniverCell, “We will expand into new markets. Our immediate focus is west, but we are exploring other regions as well. We are in the business of mobility retailing and our focus will be to offer the universe of products for our customers. We are also considering to launch our brand of devices and gadgets.”

Jagdish Krishnan, CEO-Retail & Bakery Div, Heritage Foods, shared, “We have a current footprint of 89 stores across the three cities of Hyderabad, Bengaluru and Chennai, with a present trading area of 3.3 lakh sq ft. We propose to expand to 6 lakh sq ft within these three cities by 2020.”

Nitesh Giria from Girias, shared, “We intend to foray into the branded furniture business to extend our product portfolio as we have the space to accommodate big furniture in all our stores, and also, because furniture retailing is a high ticket business. We might start five stores at the end of 2015 and all our stores would have an area ranging from 10, 000 sq ft to 25, 000 sq ft.”

Clearly, the Zaras and Armanis will have their takers too in due course of time, but as of now, the regional organised players top the consumer preference chart of South India.

Publish Date
Not Sponsored
Live: People Reading Now