From the pages of Images Retail (May 2009)

Line of Control
By Piasi Sinha

India’s retail history is also replete with examples of regional players who have started their journey as humble regional players and have become a national player. Even as some regional players have remained content with their leading slot in the region and have not spread its presence elsewhere.

Be it Vivek’s in South India or Sumangal in Kolkata, Beach Fashion or Sohum Shoppe in Guwahati, or Jade Blue in Ahmedabad — regional retailers have conquered their respective regional markets, have established themselves as a brand but yet to go beyond the regional catchments whereas players like Nalli’s, Sreeleathers or Khadim’s have outgrown their parochial images to adopt a national retail face. There is no doubt that Indian retail market is now entering a phase that will see increasing consolidation in an environment where retailers are still trying to arrive at a magic formula. Can established regional retailers now replicate their successful models in other parts of the country?

To start with a few examples, Jamshedpur-based footwear retailer Sreeleathers kicked off its retail operations in Kolkata and spread its presence gradually to states such as Bihar, Orissa, UP, Assam, Tripura, Chattisgarh, Madhya Pradesh, Tamil Nadu and Delhi. Over a span of more than 50 years, the retailer has shed off its regional identity to become a leading footwear retailer across India. Today Sreeleathers claims to be one of the leading retail brands operating in a single product category. "We have never actively devised a strategy for a pan-India presence. The expansion has happened over a long period of consistent growth. In fact, we never had to push too hard; we have been fortunate enough to have a demand for our products in other states. Basically demand has been the driving force behind our expansion," says S B Dey, partner, Sreeleathers.

While Sreelathers had taken a slow and steady approach to create a national identity, retailers like womenswear chain FI have always been keen to expand across India quite aggressively. “We opened our first retail outlet in Kolkata in 2004 and now we have 20 stores across cities such as Delhi, Mumbai, Hyderabad etc,” says Sharad Nawalgaria, managing director, SNG Fashions, the parent company of FI.

Despite such success stories the current trend in the market shows that regional retailers in India are by and large not too keen on expanding across the country. A closer look at the unique characteristics of a local retailer reveals why transporting a successful local model to non-native markets may be easier said than done...

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