The Retail Conclave 2018 organized by Confederation of Indian Industry (CII) recently in the Indian Habitat Centre, witnessed interesting deliberation on the future of retail in India. The conference titled, “Steering for retail growth for Tomorrow”, had Krish Iyer, President and CEO Walmart India as the conclave Chairman and Atul Chaturvedi, Additional Secretary, Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India as the Chief Guest.
Online or offline or both: where is the future of retail in India heading?
Backed by the second largest population, rapid urbanization, growth of ecommerce, rising middle class and rapidly growing consumer spending capacity, the Indian retail industry has emerged as the world’s fifth-largest global destination in the retail space and has been ranked first in the global Retail Development Index 2017 ahead of the booming Chinese market. According to reports, it accounts for over 10% of the country’s Gross Domestic Product (GDP) and around 8 % of the employment.
Rajesh Jain, MD & CEO at Lacoste India (Sports And Leisure Apparel Ltd.) mentioned that the Government of India’s various initiatives to enhance the retail industry in India is seen as a positive step forward. The demonetization affect slowed down business as the chain of stores across the country had taken hit but with the Indian customer’s growing interest for global brands and quality shopping experience, brands commitment to the Indian market remains high and overall market continues to be positive.
India’s retail market is said to be the world’s third largest consumer economy reaching US$ 400 billion in consumption by 2025.
Online-Offline is the new business strategy
According to Dr. Jitendra K Das, Director at FORE School of Management, New Delhi, “Brick-and-mortar vs. online is not a debate anymore. The ‘Kirana’ store has survived alongside the growth of Big Basket and Grofers as the typical Indian consumer used both online and offline touch-points. Brands should find the right mix of channels and offer the strategic blend of online–offline options to its customers. Likewise, neighborhood stores like Safal which has a huge loyalty base can lure younger customers by going online”.
The marketing manager of IT MNC turned academician, Dr. Das, also cited the recent development of the US retail giant Walmart picking up a 77% stake in India’s largest e-commerce firm Flipkart and its rival Amazon scouting for partners in India’s offline space, explained why both “offline and online will co-exist and thrive in the future”.
Malls Vs High Streets
The retail real estate trends continued to be on a growth path with malls in tier 2 & 3 cities catching up fast. Compared to high streets, malls witnessed increase in lease rentals and higher land prices.
Malls are definitely seen as the preferred shopping destination of the consumer as the customer can hang out with entertainment and food chains available around. However, rentals for key high streets in major cities such as Connaught Place, Khan Market, and South Extension in Delhi and Park Street or Elgin Road in Kolkata witnessed a rental appreciation. Brands have to balance their presence between malls and high streets but “high rentals and low footfalls during week days in malls, can be a deterrent for a brand’s growth and expansion”, said Shriti Malhotra, CEO The Body Shop – South Asia. Sharing similar sentiments, Gautam Saraogi, Founder & CEO of Go Colors, cited why Go Colors do not have a store in any malls till date.
Among others also present were Pankaj Renjhen, Managing Director- Retail Services, JLL - Jones Lang LaSalle; Yogeshwar Sharma, Executive Director, Select CITYWALK, Vikram Bakshi, Chairman, Ascot Hotels & Resorts Ltd.; Valentin Blanchard, Design Head, Ultra confidential, Gaurav Kushwaha, Founder Bluestone; Ms Benu Sehgal, Business Head, Mall Management Select City Saket.
By Nirmalya Pal