Organised retailing in India: Trend of the 21st Century

16 May 2008

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From mandi's to mall's, Indian retailing has come a long way. The transformation of Indian retailing is but to be noticed especially with Indian economy playing a crucial role globally.

With food and oil prices rising internationally, the global retail sector worldwide has suffered an impact.  To develop a better understanding of the key challenges in retailing sector and to discuss and debate on the strategies for combating challenges faced by the Indian retail sector, Confederation of Indian Industry (CII) with Deloitte as the knowledge partner organised a retail conference "Transforming Retailing in India" in Mumbai today. 

"Differentiation, branding, compelling customer experience, exploring commoditisation, share of purchasing power, and continuous innovation would be the key retail strategies to be focused on in the 21st century", said Dr Ira Kalish, director, Deloitte Research, who was speaking on global trends, strategies and outlook in the retail segment in the 21st century. He further spoke on the growing impact of internet on global retailing being gradual decline in store visits, slower growth of same store sales, increase in internet shopping from 0 per cent - 5 per cent in last 10 years in US and bigger increase in internet research.

"Incremental spending on innovative products, focus on health, wellness and focus on social responsibility are the main challenges in global retail", stressed the Speaker. 

Present at the CII Conference was Shyamak Tata, partner, Deloitte Haskins & Sells who in his address dealt with the challenges and opportunities faced by the Indian retail industry. "Out of the Indian GDP of about $1,036 billion in 2007, retail is about $295 billion. Organised retail penetration has increased from 3 per cent in 2004 to 8 per cent in 2007", said Tata. He further elaborated on some key trends in the Indian retail industry as real estate, innovation, retail formats and consolidation and collaboration.

Mr Tata spoke on the major challenges faced by the Indian retail sector as decisions on diversification, environment, location, operations, innovations, talent, technology and competition from new entrants. "Would organised retail penetration in 2011 be 25 per cent?" was the key question raised by Mr Tata.

Sumant Sinha, chairman, CII National Committee on Retail & Chief Executive Officer , Aditya Birla Retail Ltd. spoke about the benefits that organized retailing present to the society as improvements in supply chain management, benefits to farmers in terms of faster payments and increased productivity and yields; employment generation and benefits to consumers in terms of variety and quality. "With Indian retailing becoming more mature, there will be retailing outlets to satisfy all types of customer requirements", emphasised Sinha. 

He also spelt out the challenges faced by the Indian retail segment as fragmented supply chain which causes difficulties in physical movement of goods interstate; variety of tax and regulatory structures; training of people; exposure of individual consumers to various retail formats and scaling up by the retail segment to keep pace with the growing advancement in needs and requirements of the consumers.

Thus another important initiative was taken by CII in building a platform for the retail segment which saw participants across the globe sharing experiences and studies on the crucial subject of retailing. 

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