Retail is exploding

Retailer: How do you see the retail scenario in respect to real estate and retailers?  How do you anticipate the growth of retail in India?

Hemchandra Javeri (HJ): Retail is certainly one of the most exciting businesses and employment opportunities in India. This opportunity will continue to grow in scale and importance over the next 10-15 years. With only 5 per cent of retail falling under the ‘organised’ platform with an existing landscape of 14 million retail outlets, I see significant growth and profit opportunities in various formats, segments, and locations in different parts of India catering to different consumer groups.  I see the retail industry exploding over the next 5 years, and the momentum will accelerate further as the infrastructure improves.  

 

In my view, various stakeholders can profit from this opportunity.  Mall developers, brand owners with small and medium formats, big box retailers, back-end vendors, partners in all facets of supply chain and sourcing, recruitment partners, etc have an opportunity of a lifetime in retail.

 

Retail also has the potential to create and offer significant employment opportunities for young people as they enter the workforce. 

 

Retailer:  India is a country of diversity and culture changes after every 50 miles. How retailers will meet challenges posed by such variant tastes and preferences?

HJ: India is certainly a diverse country but there are enough similarities among consumers across India. In my view, there are some product categories where there are local differences, but there are more categories where there are similarities. Besides, there are similarities between consumers across cities and regions depending on their SECs and profiles.

Retailers can influence and change consumer habits; retail offtake in India is supply-created as consumers try new products and services. But the retailer has to offer appropriate products and services that are relevant to consumers in each store.

 

Retailer: When do you think India will attain the maturity of producing globally acclaimed brands like Armani and Chanel?

HJ: Brands like Armani and Chanel are inconic world brands that have been been built with great passion and investment over decades. I am confident India will eventually build such brands over the next 10 to 15 years, but its early days yet.

 

Retailer: It is seen, the local brands are doing brisk business in their respective region despite having tight competition from national and international brands?  Who will be the winner in this? Will the national brands bring changes in the behaviour of consumers?

HJ: I believe, the Indian consumer doesn’t care too much if the brand is international or Indian provided it gives the relevant benefits they seek. International brands that have given the right product and service have won, but those that haven’t have failed. The same applies to the Indian companies and retailers. 

Younger consumers are attracted to international brands because they are more international in their outlook and aspirations, but these consumers are as willing to use Indian brands if they offer world class product and brand equity.

 

Retailer: What are the present challenges and opportunities before retailers as well as developers across India and what is your suggestion to overcome these hurdles?

HJ: From a developers’ perspective, the opportunities are immense and exist across the country. They must evaluate different and relevant formats of retailing and mall creation. Every mall doesn’t have to be the same and offer the same products and brands, but must think for the community they are entering if they are to succeed. A mall developer needs to build a mall brand that offers a unique product service experience. Exclusive food malls, kids’ malls, jewellery malls, electronics malls, etc will emerge as trend-setting concepts over the years. The challenges are mainly around the need to do consumer research on the project and make more investments in enriching the consumer experience.

From a retailer’s perspective, India is a massive opportunity over the next 10 to 15 years. The consumer is willing to increase her spending and wants to increase her time for each shopping effort. The challenges are mainly related to poor quality of mall maintenance, inadequate footfalls, supply chain and sourcing, and inadequacy of trained people. But they are addressable and should be rectified by retailers with appropriate planning and resources.

 

 

 

 

 

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