Running its fourth year, the country’s largest retail event – India Retail Forum (IRF) – took off in the commercial capital Mumbai. The opening session started with a welcome note and an informative speech by C Vaidyanthan, MD, Retail Division, ICICI, who is also chairing the fourth edition of the global event.
In his address, Vaidyanathan commented: “India is the new blue ocean of opportunities for many global players. As far as the country’s retail is concerned, only 3 per cent is organised and the rest 97 per cent stands unorganised. That’s the blue ocean the retail world is eagerly looking at.
“The story of India is full of opportunities, but the big opportunities lie in alternatives, not substitutes. There are paradoxes that retailers everywhere have to grapple with – the ‘old becoming new,’ ‘mass customisation’, and so on.”
Confirming that the current organised retail boom will help all, Vinod Sawhney, Bharti, said: “The time is now and there is no place for any worries. We assure that oganised retail will only help each section of the society to flourish. It will bring a 360 degree benefit to farmers, masses, mass economy, manufacturers, logistics and supply chains, and markets. Modern retail has taken a paradigm shift that is reclaiming the golden era of our ancient civilisation.
“Today, consumerism has become easier in India. All of a sudden, we see a queue of international brands from the global fashion high streets. The country has a bunch of active media houses that tell consumers about the arrival of a new brand. Even shopping has turned out to be a new experience. It has become inundated with the M word – as in the booming malls, marketplaces, multiplexes, megamarts, and hyper and super markets. As per data, the Indian retail industry is worth Rs 1,200,000 crore, and is witnessing a 30 per cent increase.
“India is a vibrant young economy. About 65 per cent of the population comprises youngsters, who are driving the economic bandwagon. By 2025 India will become the fifth largest market in the world, moving from the current 12th rank.”
At the Retail Theatre, the Jayne Rafter talk show took off with Cliff Crosbie, global director, retail marketing, Nokia, as the first star guest.
A flagship store of Nokia is a brand driver for the global mobile phone major, and Crosbie said that India is very much on the radar for opening a flagship store. In an interview to Indiaretailing, on the sidelines of IRF, Crosbie said, “A flagship store is surely on the cards for India. It will be in Mumbai or New Delhi, and we are already in talks with real estate companies.” In fact, Crosbie did not rule out the possibility of opening two flagship stores of Nokia in India. However, he did not disclose what kind of investment is being planned for the flagship store.
Nokia already has a concept store in Chennai. Crosbie said that a concept store is one step below the flagship store for Nokia in its retail scheme of things, but an important format nevertheless.
Asked to define a flagship store, Crosbie said, “Globally, Nokia has only six flagship stores. These are in Moscow, Hong Kong, Helsinki, Chicago, New York and Mexico City.” Crosbie added, “A flagship store will essentially have to be about 300-400 square metres in size. It stores all the products that we offer in a particular region and is very interactive in nature.”
Crosbie also said that the scope of rural marketing for Nokia in India is very strong and will grow faster in the times to come. He said that the ‘priority dealers’ of Nokia continue to be extremely important. Crosbie said that both at the flagship stores as also the concept stores, the effort is to de-mystify technology for consumers and help them make informed choices about mobile telephony.
Globally, Nokia operates 350,000 retail outlets.
India Retail Forum saw the launch of the country’s first Food Forum, which discussed the size and business potential of the market while bringing forth solutions to the various issues currently being faced.
Speaking at the session, Krishan Kalra, SG, PHD Chamber, commented: “The food and grocery market is currently estimated at US$180 billion and expected to touch $300 billion in the next 4-5 years.” He said that the largest number of units approved by the US-based Food and Drug Administration (FDA) outside the United States is in India.
“Two-third of overall retail in India is accounted for by food and grocery. We must now facilitate the transition from agricultural to agri-business,” was the message from Sanjay Bhatia, president, PHD Chamber. In his opinion, India needs an organised and commercial supply chain management. While retail itself is gearing to get organised, the backend is still archaic in many aspects.
Louise Spillard, director of International, IGD, UK, discussed the ways in which the global retail landscape is evolving and the implications thereof.
Globally, the dominant tends can be summed up in terms of selected retrenchment, format diversification, growth of private label, and expansion into emerging markets. Spillard said, “The period of flag-planting is over. It is more critical to develop scale in key regions and deliver shareholder return.” As Spillard quoted, “It’s better to be strong in a few countries, rather than be weak in many.”
Spillard further said, “Multi-format expertise is essential. Although hypermarket is typically considered to be the perfect entry model, it is convenience that is the ‘format to watch’. Retailers are now looking to go deeper into core markets.” Tesco provides a good instance in this regard – for example, it has a convenience store in Thailand, a discount in Czech Republic, and a general merchandise in the United Kingdom.
What does it take to win the game? According to Spillard, “The important differentiator is building strength at home, in terms of both scale and skills. The other aspect is to build up concentrated market presence.”
Ravi Naware, CEO, ITC Foods Division, focused on the current status of the food processing industry in India. He explained the “slow” status in terms of the country’s historical background and unique climate regions, which ensure that availability of “fresh” food is year-round. The imperative of processed food was, hence, almost non-existent. In the current evolving scenario, Naware said that the industry must move ahead on the strength of market-driven linkages across the chain through partnerships, as well as consumer-driven insights. He also informed that eating out has become a $5 billion industry in the last 5 years, and is expected to double in as much time.
The India Food Forum was officially announced open by Subodh Kant Sahai, minister of food processing industries, government of India. Sahai said, “More than 70 per cent of our economy is agriculture-oriented, unlike in the United States or the United Kingdom, where it is a negligible part. For us, organising the sector is not a luxury, but a challenge.
“Only 6 per cent of processing is done in India at the moment. We are the largest milk producer in the world, but hardly 18-20 per cent processing takes place here.”
Announcing the government’s decision to sanction a Rs 50 crore grant towards supply chain development, Sahai exhorted the country’s major retailers to involve small shopkeepers in the supply chain and help engender a collective movement.