The Hindu Business Line : Retail growth will rely on evolving consumer needs

Mr Indrajit Basu, Deputy General Manager (Retail Sales), Indian Oil Corporation Ltd. delivering his speech at a seminar under the aegis of Business Line Club, Kolkata Chapter, in Kolkata on Tuesday. - A. Roy Chowdhury

Kolkata, March 13

The key trends in modernday retailing will be urbanisation, changing family structures and demographic changes, and the real growth will take place in small and medium towns.

Speaking at a seminar on "Managing the changing Indian retail scenario" at the Indian Institute of Foreign Trade here on Tuesday under the aegis of the Business Line Club, Kolkata Chapter, Mr Indrajit Basu, Deputy GM, Retail Sales, Indian Oil Corporation Ltd, said it was important for the Indian retailer in the current scenario to appeal to the senses rather than the intellect as in the past.

Stressing on the need for tracking demographic and socio- economic changes, as the purchasing power of the middle- class had grown substantially, Mr Bose said the key drivers for growth in retail would be market research on consumer needs and a totally redesigned retail space.

NO GUIDELINES

Pointing out that there were no set guidelines in retail, he said one has to simply feel and decide on experience, of course backed by a complete understanding of evolving consumer needs. Stressing on the continuing relevance of brick-and-mortar structures of retailing in the Indian context, he said backend retailing and an effective supply-distribution network were of equal importance.

Suggesting that a rapid transformation was taking place in the country's retailing space, essentially clued on the global competition which was imminent, he felt organised retail in India may leapfrog to a staggering $11 billion by 2011 from the current $6 billion. He said there would also be huge employment opportunities (around 2.5 million additional jobs).

In the context of the sweeping changes taking place in India in organised retail today, he said growth was not the issue. "It is how you manage the growth." Calling for India-specific retail models, he said we were at a stage where we had to bypass many intermediate stages, posing bigger challenges for us. He, however, felt that the ubiquitous Indian kiranawallah, big or small, would remain till at least 2015, after which he too would need to change his business model.

KEY CONCERNS

The key concerns for potential entrepreneurs in retail management, according to him, were location, infrastructure, product sourcing, marketing, logistics for perishable products and distribution network.

Commenting on the likely impact on smaller retailers around the country because of the emerging hypermarkets, Mr Bose said some 5 lakh small retailers could be hit. "But I am confident that because of growing disposable incomes among the burgeoning Indian middle class, there would be no serious threat as such till at least 2015".

Earlier, welcoming the 50- odd postgraduate students of IIFT to the seminar, Dr K. Rangarajan, Prof and Head, Kolkata Centre of IIFT, said such meaningful seminars by institutions like The Hindu and Business Line helped improve industry-institution linkages in a big way.

Welcoming the students, Mr Subhas Chakraborty, Regional Manager of The Hindu, Kolkata, said Business Line was privileged to associate itself with great institutions like the IIFT in conducting such seminars, which enrich the students' learning experience.

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