The Hindu Business Line : Growing economy to transform organised retail in India

Positive impact: Mr K. Radhakrishnan (from left), CEO, Reliance Retail Ltd; Mr M. Balasubramanian, President, SICCI; Mr Bhaskar Bhat, Managing Director, Titan Industries Ltd; and Mr A. Satish Kumar, Convenor, Retail Summit, at a meet organised by SICCI, in Chennai on Friday.

Our Bureau

Chennai, Sept. 5 In India, though modern retail is in its initial stages, the progressively transforming economy stands clearly as evidence of the evolution of organised retail. Although there are some disruptions along the way, the overall impact will certainly be positive, observed experts on the first day of the two-day retail summit — Emerging Retail Paradigm, organised here by the Southern India Chamber of Commerce and Industry.

In his inaugural address, Mr Bhaskar Bhat, Managing Director, Titan Industries Ltd, said organised retail will take years to touch all the households in the country. Currently, he said, only 14 million households embrace modern retail outlets as they are geographically concentrated.

“Even after seven to eight years from now, it would not go beyond a few hundred towns in India,” he said. However, noting that proximity to consumers will not be a long-term competitive advantage for many retailers, Mr Bhat said, “Over a period, price, location and merchandising will diminish in importance. Only professionalism, process and people will make the winning difference.”

According to him, profitability, scalability, sustainability and respectability are the four key ‘abilities’ required to emerge as a successful retail brand.

Although modern retailers clearly have the advantage of size and power, local companies can survive by adapting. As the newcomers introduce new branding strategies, improved merchandising and management techniques, local retailers can emulate them to co-exist, he said.

Mr K. Radhakrishnan, CEO, Hypermarkets, Reliance Retail, said while with 80 per cent of the total expenses/investments is on real estate, utility charges and manpower, which are not in the hands of the retailer, the supply chain efficiency is the only area which can be effectively leveraged for better profitability in the retail business.

Earlier, announcing the theme of the summit, Mr A. Satish Kumar, Convenor of the summit, and Managing Director, Henkel India Ltd, said the country will witness a lot of mergers and acquisitions happening in the industry, and finally only a small number of big players will be there in the organised sector. “However, there will be traditional stores which will co-exist with them in the market place,” he said.

This session was followed by a technical session on visual merchandising. Delivering his presentation on this, Mr Ranju Mohan, Vice-President (Marketing), Henkel India, pointed out how even small changes in visual image of a store’s exteriors and interiors can impact consumer perception. As a retail store is an effective communication medium, retailers and manufacturers must work closely bring in ‘the difference’ in visual merchandising, he said.

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