Wednesday December 31, 09:20 AM

Source: Indian Express Finance

Hope floats

By RC Agarwal
Over the years, organised retail in India has witnessed a revolution with the change in the consumer buying behaviour and a change in the whole format of shopping besides observing recession, downsizing and growth in the private labels in the year 2008. Even though currently the Indian retail industry is facing a crisis due to the ongoing economic crunch, the retail industry will spring up again and definitely be one of the fastest growing sectors in 2009. New malls and shopping complexes coming up in various parts of the country will add up to the infrastructural development in addition to providing the consumers, convenience and a lot of shopping options. It is expected that by 2010, India may have 600 new shopping centres. The year 2009 will also prove to be a reality check for not only the retail sector but also the real estate developers fraternity with the correction of rentals and rationalisation of the landlord-tenant relationship. In 2009, the retail industry will also see a lot of private labels in the market. With recession predicted in the first half of the year, more and more consumers are looking at purchasing qualitative private labels to avoid burning a hole in their pockets. For example, Vishal Retail generates 45% of the total revenue from the apparel segment out of which 80% is contributed by the private labels while FMCG segment contributes 13%. We sell products 20 to 25% cheaper than the market. 2009 will also bring with it various opportunities in the organised retail sector. With many global retail giants entering the Indian market, the industry will definitely be turned around and would become one of the most viable options for many more global retail players to set up shop here resulting in healthy competition. For 2009, the retail sector will rework its business plans on the following lines: Increased focus on private labels, ability to transfer the manufacturing, procurement and distribution cost benefits to the end customer to the extent of 20%-50% lower MRPs. This ability to retail various brands under their private labels portfolio at significantly lower MRPs, offering truly competitively priced products in segments ranging from apparel, FMCG, consumer durables, to name a few while maintaining stringent international standards in quality of its products. Looking at innovative business alliances like the shop-in-shop format and providing in-store promotion opportunities to various brands will provide a complete shopping experience of various brands and products under one roof. It will help in generating revenues and also big brands associating with retailers under that proposal.