Smoothly riding the crest of Eastern India’s aspiration wave and changing shopping trends in the metros, Tier II and III cities of the region have driven the conventional trader-run stores to morph into more organized, large-format retail outlets. And, to facilitate this growth of retail, many retail realty projects have sprung up in all major markets of East India.
As we move further into 2017, most of the Eastern states of India display a glorious upward trend, one which is rapidly reaching skyward. Luxury buying has transmogrified from an occasional indulgence into necessity and increasing consumer spending power is aiding this metamorphosis. The end result – the Great Indian Middle Class has been elevated to a higher level. What was unthinkable in the Eastern region till a few years ago is becoming a reality, thanks to premium retail destinations like Quest Mall, which has opened the luxury retail gateway in Eastern region. It’s because of such premium destinations that customers belonging to a diverse milieu are making a beeline for malls to look at, touch, feel, buy, and then revel in the experience of possessing highend international and national products.
Eastern India is in the cusp of being transformed from a traditional customer base into a fashion conscious, brand-savvy market. Its young generation is shopping and demanding both fashion and quality along with value for money spent from retailers. To meet these impossible demands retailers – big and small, branded and unbranded, regional, national and even international – are gearing up hugely, and very successfully. To cater to these consumers, retailers need to wake up to the importance of managing retailing efficiently and effectively. Retail management saves time and ensures the customers easily locate their desired merchandise and return home feeling satisfied that they have received what they have paid for. The consumers’ ambitions to reach global standards in lifestyle, coupled with high disposable incomes, are aggressively scripting a radical change in the business viability of organised retailing East India.
“East is called the retail market of tomorrow with all its potential. The east Indian economy has grown by about nine per cent annually over the last three years and even higher growth rates are being projected for the future. Malls and large size department stores have become a fixture in the urban landscape across the East Indian countries” says, Regional Marketing Manager, East and Central India, Max Retail Division, Anirban Kundu.
India’s retail market value will reach an estimated Rs 6,156,333 crore (US $1026.06 billion) in 2017. And if this number has to be pushed further then the focus needs to shift from traditional
North and West zones to states like West Bengal, Bihar, Orissa, Jharkhand, Chhattisgarh and the North-eastern states. Retail stalwarts are of the opinion that the true demographic dividend of India would remain untapped if the eastern region is not explored. As the retailers are now looking for scale, sustainability and growth, Eastern India – with format retail players who are present across multiple categories – is the next obvious bet. Be it Pantaloons or Big Bazaar, or regional fashion and lifestyle brands such as Turtle, GKB Lens, Spencer’s or Manyavar, the East has been a major market contributing significantly to overall growth for all these brands.
In this special feature, we speak to the stakeholders of modern retail in the region. We gain their perspective and analyse ‘what the future holds for East India’s retail market’.
11 Shashwat Goenka, Sector Head, Spencer’s Retail Ltd
Are you satisfied with the way the organized retail industry has grown in East India until now? How do you see its progress over the last ten years?
India’s retail market is currently valued at US $700 billion and is expected to nearly double by 2020. 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. The industry and Government’s increased focus on West Bengal, Bihar, Orissa, Jharkhand, Chhattisgarh and the North-eastern states will further push these growth figures. From an infrastructure perspective, East India has been well-integrated through improved communication systems, real estate development, urbanization, a well-traveled population and the growing service
sector. There has been a palpable shift in the customer buying pattern and expectations in the East, owing to the increasing middleclass segment, rising disposable incomes and growing aspirations for improved living standard. Th ese factors are further influenced by media exposure, globalization of cultures, lifestyles and better technology. Overall, the East has done a good job in growing the retail industry, and continues to foster retailers – big and small.
How according to you will the modern retail industry evolve in the next 10 years?
The next decade will see further consolidation in the industry and maturity of the Omnichannel model to build a sustainable retail practice. Consumer expectations are high. They want on-demand access to products and services on multiple platforms. It’s not about online and offline, it’s about being seamless across channels. Retail will become more consumer-pull driven and less retailer-push oriented. This approach will bring about a shift in how consumers plan their shopping, consumer journey and purchasing decisions. Retailers will be focusing on making this multi-channel shopping experience seamless and building an engaged customer base. Physical and digital retail will merge into a new avatar, with growth coming from more from Tier II and Tier III cities and towns. Looking ahead to 2026, curated shopping and digital assistants will be widely used. Consumers will soon let a trusted digital assistant like a Chatbot wade through incoming information to identify relevant deals. Consumers will expect convenience and personalization in their interactions with retailers, and brands will accept that this is enabled by sharing personal data. Technology will further merge into the retail space, with retailers already starting to experiment with augmented reality, wearable devices, virtual reality and artifi cial intelligence.
What do you think are the biggest problems and challenges facing the modern retail industry in Eastern India? What bottlenecks must be overcome to allow the industry to grow to its maximum potential?
There are no challenges that are specific to the East only – all of the challenges are applicable across the country. The retail industry as a whole has a few challenges – be it the lack of adequate skilled retail manpower, high attrition, insufficient infrastructure (eg: cold storage facilities) – but they have started to become less concerning due to focus given by the Government. Overall, it is much easier to work in the Eastern part of the country.
What do you think should be done by the industry and the Government to boost the growth of the modern retail sector in East India?
As retailers are looking for scale, Eastern India with its huge population base and market potential provides a plethora of opportunities. Until a few years ago, many retail brands seemed hesitant to step in this market, today they are vying to build presence here. This has been made possible by the joint working of the industry and the Government, facilitating the building of marketing channels and a quality supplier base.