India is at an early stage of evolution in organized retail, with its current penetration being 5 per cent, which indicates a huge potential for growth. This share of organized retail in total Indian retail trade in different formats is projected to grow at a very substantial rate per annum. We cannot deny the fact that organized retail formats including departmental stores, hypermarkets, supermarkets and specialty stores are fast replacing the traditional retail formats such as small mom and pop general stores due to rising consumer expectations.
India with its fast growing metros makes itself a preferred destination for the big retail giants to house themselves. India also has an interesting mix of maturing metros, metros in growth and metros in making.
Mature metros like Bangalore, Delhi and Mumbai have a population base that believes in Modern organized retail where in we are sure that Innovation in terms of Various formats will be appreciated and acceptable.
On the other hand there are metros in growth.
A considerable number of the middle class population with high disposable income lives here in these fast lane metros, making them an ideal destination to accommodate and sustain different retail formats.
Advantages like low rentals, easy availability of agricultural products due to closeness to agricultural farms, allows retailers to benefit with the first movers advantage, to gain foothold in these metros in the making of India.
These metros in the making too provide abundant opportunities for the modern retailers to operate in various formats.
Retailers need to adapt to the changing consumer, not to forget the generational shift from BOOMERS to GEN Y’ers. Young INDIA is even more diverse giving greater opportunities for format innovations in the country, for example - Wellness as a format has a huge opportunity with young India however it is important for the Retailer to understand the Target audience.
The mindset of the Indian Consumer is changing dramatically, with their focus from low prices to convenience, value and superior shopping experience. There is a high brand consciousness among the youth - as 60 percent of India’s population is below the age of 30.
With the Emergence of concepts like Easy and quick loans, EMI’s, Loans over the phone, credit cards, loans on credit cards, It has become convenient for the Indian Consumer to afford Luxury, so such things have become in REACH.
Real estate Development in the country in the form of Mega malls and shopping malls is augmenting the growth of organized retail business.
Now with the entry of the leading international retail giants in different domains and verticals of the organized retail game, we the Indian retailers need to consolidate and expand with vengeance. We need to start looking for innovative formats keeping in mind the needs and preferences of the target consumer that can make us unique and distinctive and is also necessary to be a step ahead in this rather crowded market.
As an Indian origin retailer, at Aditya Birla Retail, our advantage is that we know the Indian market and Indian consumer well, so customization and blending of ideas to come up with the innovative formats combining the best of retail trends with the local flavors is comparatively easier.
The size of Indian market would enable various formats viz, Supermarkets, Hypermarkets, Department Stores, Specialty Stores, Cash & carry and convenience stores to co-exist. However, retailers would need to innovate in both formats as well as operations to score over the others. Success in retail boils down to understanding the consumer. Our country has a young and aspiring population, understanding their unique psyche and dishing out merchandize and shopping experience to match their needs would be the key to success.
With such favoring factors, there are great opportunities for format innovations in India
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