“A couple of things have gone wrong with respect to modern retailing in India. We have gone wrong in estimating the market size, we have gone wrong in understanding the consumer mindset and preferences, and specially the curve on which consumer will grow,” commented Rajneesh Mahajan, executive director, retail services, Cushman & Wakefield. Mahajan shared his views when IndiaRetailing asked him to comment on the current scenario of modern retailing in India.
Taking the discussion further, he adds “It resulted in creating infrastructure which is not right. It resulted in creating stores which are not right. This has ultimately affected the expansion and development strategy.”
When asked whether there was any other way to do it right, Mahajan said, “Might not be. Unless you do a store, open it for consumers and they come in, you can never say where you are going wrong or what is it that is going wrong. So, yes, all we know today is that we have gone wrong. But was there any other way to get it right, is a million dollar question for almost all of us.”
“Retail is not going wrong. Retail is going on its own right path. But its more a problem of speed. I do believe that we were on an overdrive. The speed did not give us flexibility to do things in a right manner. Had we retarded the speed at the right time, we could have easily escaped surgical correction which is happening today,” he further said.
“Retailing has two parts – buying and selling. Retailing in an organised way is a channel of selling. Retailers will have to understand the preference of a consumer for five years, because their buying behaviour changes in every 2-3 years. The journey itself will teach many things to developers and retailers. Indian retail and modern retail is going to grow only. But the channels will have to improvise themselves” disclosed Mahajan.
Commenting further on the retailers and developers blaming consultancy firms for (wrong) advices. Mahajan said, “What matters is not the advice, but the execution that makes the real difference.”
Replying on a question about the possibilities of repeating the same mistake in terms of speed and formats in tier II and III cities by developers and retailers, Mahajan appeared optimistic enough in his words. “Retailing in tier II and III cities is much simpler and complex altogether. They are going to get more disposable income, thanks to 6th pay commission. And despite being considerable amount of development in terms of inflow of foreign banks, educational institutes, restaurants, flats and all, you will not see their ethnic values and shopping habits changed drastically in last decade. And as a retailer and developer, you must thank to FMCG companies who have been present there from decades to support you in terms of brand recognition and availability.”
“A consultant’s job is to consult based on certain data. When you open a store, you analyse what consumers are buying. But when you don’t open a store, you don’t know what consumers are not buying. So I can’t say that retailers went wrong or developers went wrong or consultants went wrong. I think, we all went wrong in analysing the data which we had. Our role is restricted. We are a real estate consultancy firm and our experience has been till recently that we are required for very specific data on a specific area. We have never been involved in overall emergence of a shopping centre,” concluded Mahajan.
(Full interview text in April issue of Images Retail, Hindi edition)