Tuesday, October 9, 2007
Back to the Indian Retail Scenario, one aspect in which our organized retail differs from those in the advanced economies is the physical size of their set-ups. The Malls in UK and US are much larger in size and the area that they end up covering is many times more than the average mall in the country. One of the major constraints that we have is the availability of space in urban centers and if we were to locate the malls at some distance from the main heart land of the city we would find it difficult for consumers to come because of the lack of personal transport.
The other trend one can observe in the market place is the slow shift from the commitment to large formats to much smaller formats. Initially most of the players were bullish of the larger hyper mart formats but now most of them have started talking about operating much smaller formats. Though reliance with the opening of reliancemart a 1,65,000 sq ft hyper mart in Ahmedabad is bullish and plans to open over 30 such marts by the year and expand it to 500 by 2010 across the country. But with its retail plan coming unstuck in many states it is to be seen if it would be able to stick to it's expansion plans.
The largest player in the organized retail Pantaloon Retail is also planning to come-up with 1500 200sq ft no-frills KB fair Price shops in the next two years across the country.They propose to provide branded products at 10% less than the mrp and 20% off on the local brands, which is similar to what has been Subhiskha's proposition for a long time. Subhishaka the predominaltly south based chain has always followed the low-frills small shop size format. Spencer's Retail has it Spencer's daily which is small format and the bigger Spencer's hyper mart.
My feeling is that as with most new initiatives be it retail or telecom, we cannot copy what had worked in other countries and try to plant it in into India, we have go through the tough trial-and-error process to understand what would work for India and suitably adapt and change. And whoever is able to master the art sooner would lead ............
There is a good article written by Sunil Jain in Business standard on the 'Big Retail's Blunders'