The India Retail Forum (IRF) 2010, organised by IMAGES Group, was inaugurated at The Renaissance hotel in Mumbai on September 28. On the inaugural day of the two-day event, industry experts expressed optimism about the growth prospects of retail. They also maintained that Indian retail can’t reach its full potential until sufficient investments are made in the sector.
“India is expected to contribute 7.5 per cent of the world GDP (PPP) and 10 per cent of incremental income growth, which will be driven by factors such as rising incomes, growing working age population, increasing savings rate, increasing urbanisation, growing aspirations of consumers, nuclear families and working women, increasing consumption levels, etc,” said Kurien while talking about the Indian retail sector and the need of FDI.
He further said, “There is huge potential for Indian retail to grow, but without sufficient funds and market skills it won’t happen.”
Nagesh of Shopper’s Stop Ltd stressed upon the fact that retail can be improved by increasing the quality of products, rather than by offering discounts. He also spoke about controlling attrition rates by taking care of the associates.
Raj Jain, president, Wal-Mart India, and MD & CEO, Bharti Wal-Mart Pvt Ltd, said, “100 per cent FDI is allowed in cash & carry wholesale trading in India for the B2B segment, which consists of sale of merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers. Small retailers are getting benefited by the cash & carry format. The main factors of this format are transparency, availability, huge range of products, price, training, technology.”
He added, “The traditional retail market is highly fragmented. There are 12 million mom & pop stores, of which seven million are grocery (kirana) stores. At a CAGR of 27 per cent, modern retail will be at 20 per cent (of the total retail industry in India) in 2017, while traditional retail will continue to lead the Indian retail market.”
Ireena Vittal, principal, McKinsey & Co, said, “New formats, such as supermarkets and hypermarkets, within the industry have seen a positive response. Location is a vital factor in choosing retail space. The evolved consumer formats have received a positive response – food is being displayed on premium floors, speciality outlets receive huge turnovers. One needs to concentrate on how to saturate the clusters in India.”
She added, “It is very important to understand the consumer and their buying behaviour, their footfall into your retail space, their response to privileged offers and their thought process while making the purchase. When a customer is looking out for credit for value, it’s not necessary that price perception is equal to price value.”
Stressing that Indian retailers need to keep production, merchandising, price, expenses and convenience in mind, she said, “It is essential to maintain efficiency inside and buzz outside. Also, it is important to build a zero base organisation where in consumers’ requirements are met directly by the immediate sales associates.”
Over 1,500 delegates have gathered at the annual event to hear industry leaders from India and the world speak on a range of issues and trends on retailing.
India Retail Facts
- Total Retail: Rs.2,000,000 crore (Rs.20,000 billion)
- Modern retail size: Rs.1,64,000 crore (Rs.1,640 billion): 8.2 per cent of total retail
- Employment in modern retail: 10 direct employment in retail and 100 indirect employment per Rs.1 crore (Rs.10 million) sales
- Total employment in modern retail: 1.65 million
- Estimated indirect employment in modern retail: 16.5 million
- Dependence on modern retail: Over 18 million people
— IndiaRetailing Bureau