The maiden chapter of India Retail Forum 2005 (IRF), the magnum opus of the Indian retail industry, was inaugurated by Krish Iyer, chairperson IRF 2005, at the Rennaissance, Mumbai.
The first day of the two-day conclave was attended by Hital Meswani, Executive Director, Reliance Industries Ltd; S Siva Kumar, Chief Executive, ITC International Business; Arun Nanda, Executive Director and President, Mahindra and Mahindra Ltd; and Ness Wadia, Deputy Managing Director, Bombay Dyeing, who made presentations and shared their perspective on the latest trends, opportunities and challenges in the Indian retail industry.
Speaking on the occasion, Dr A K Dua, Secretary, Industrial Policy and Promotion, Ministry of Commerce and Industries, said that FDI would not only expand the market but also bring in competition, and business was likely to get more innovative.
He added that the Government of India was yet to take a final view on the subject of FDI and felt that it would ultimately benefit the consumer.
Over 1,000 industry honchos, brands, retailers, mall and shopping centre developers, real estate firms, architects and designers, logistics and technology support vendors for retailing and shopping centre business have converged at the IRF 2005, which is the largest networking opportunity in India.
IRF also provides the international delegates a feel of the Indian retail scenario and offers an opportunity to interact with the stakeholders of the Indian retail industry.
Krish Iyer pointed out, “The organised retail industry in India is merely 3 per cent, which only highlights the huge opportunity, and is poised to grow to Rs 110,000 crore by 2010.”
He outlined the key challenges and opportunities for the retail sector to drive the growth, which include employment generation and demographic transition. With the services sector leading the robust GDP growth in the past decade, Iyer believed that the retail sector would be the next big thing for India.
Favourable factors such as a very high Global Retail Development Index (GRDI) and Foreign Direct Investment Confidence Index (FDICI), as specified in the AT Kearney report, highlights the fact that India is the world’s most attractive retail market ahead of China.
However, huge investments are required to realise this potential, and therefore, FDI in retail needs to be seriously looked into. This apart, availability and management of talent as well as speedy implementation of plans were the need of the hour.
Reliance Industries’ Hital Meswani highlighted the changing dynamics in several areas such as demand, supply, technology, supply chain management, and government viewpoint. He also outlined Reliance Industries’ plans in retailing.
Meswani further said that change in demand patterns had provided a huge opportunity to organised retail as India realigned itself with global trends in value oriented shopping experiences.
Change in supply trends provided the greatest challenge to retailers as price points grew competitive and new formats emerged on a large scale, he said, adding, the customer today demanded assured supply and quality.
Stressing on the need for technology in retail, Meswani informed the gathering that Reliance Industries would create India’s first hand-held computer terminals. This would help control and command the demand and supply requirements at its retail outlets.
Arun Nanda, ED & President, Mahindra & Mahindra discussed the emerging retail scenario and the scope to differentiate Indian retail.
According to him, “Retail cannot grow by developing only malls and that, too, caterinf to the needs of locals only. Unlike Singaporeans, who say ‘Shopping is our National Game’, we Indians are not so shop savvy. To grow retail we also have to promote India as a shopping destination for international shoppers, and to do that we need to give Indian retail an Indian face – the malls, the markets, the offerings.”
“Great designs succeed generations and so look at design as the tool to pursue and thrill the customer,” said James Damian, Senior VP, Best Buy, exhorting the Indian retailers to move away from product-centric designing. Engaging with the customer emotionally by understanding his feelings and latent demand added another dimension to customer experience, he added.
Mixing the experience with memorabilia by engaging all the five senses was an important part of Best Buy’s effort, which required imagination, persistence, commitment and most of all courage, explained Damian.
Adi Godrej, Chairman, Godrej Group, said, “Modern retail sector helps increase penetration, brings transparency, helps develop modern infrastructure and stimulates demand. Established manufacturers like P&G are known to enter into tie-ups with large retailers such as Walmart in order to reap the advantages to scale and in turn offer low prices to retailers, which can in turn be passed to the customers. FDI is required to make huge investments for modern retail projects to take shape.” Godrej places a special emphasis on agro-retail and the advantages of large retailers buying directly from the farmers.
On a final note, Noel Tata, Managing Director, Trent Ltd, said, “India is the only country in the world where women continue to wear traditional styles of clothes. This truly represents the story of Indian retail.”