Retail and Marketing - The BIG Picture

Organised retailing in India is poised for a paradigm shift as the sector witnesses meteoric growth. An eminent panel of industry stalwarts discussed the coming of age of the Indian retail industry at the discussion organised by the Retail and Marketing Clubs at the ISB. The discussion was moderated by ISB student Arun Singh.

“India is the most attractive retail market today. Given the diversity of Indian consumers, we need different models of retailing to tap the entire gamut of opportunity that exists, “said Kaushika Madhavan, Manager Retail Practice – AT Kearney as he explained how India ranks number 1 in the company’s Global Retail Development Index. Slowing growth and decreasing profits in their domestic markets is pushing foreign retailers to international markets. India, with its immense market potential, is primed as the most attractive retail market globally. Globalisation of retail is fraught with challenges for western retailers – 2 out of 3 retailers fail in international markets.

“Rushing to the gold mine, with a lack of market understanding is the prime reason for failure,” Madhavan pointed out. This provides a window of opportunity to local retailers, who are at an advantage due to knowledge of the domestic market. The Indian retail market is poised for rapid growth of about 25-30%. Retailers need different retailing models depending on the customer segment being targeted. The One-size-fits-all model is not suitable to a market characterised by vast differences in purchase frequency, footfalls, and income levels.

Sanjay Mishra, VP – RPG Retail talked about seizing business in the rapidly evolving Indian environment through focussed and unique strategies such as e-tailing. Multiple retail formats will thrive in the Indian context depending on the consumer need satisfied: Top up needs via Mom/pop stores, Express counters, 7/11 formats; Convenience via formats such as Spencer’s Daily and Food World; and Destinations for a variety of products through specialty stores and hypermarkets. The focus area, according to him, should be customer demand planning and fulfillment in such a rapidly changing market.


Sivakumar, CEO – ITC IBD focussed on creating access at the bottom of the pyramid. In the euphoria of hyper retail growth, certain segments in our society are getting neglected. These include lower income groups, rural markets, low population density areas, certain vendor communities such as small farmers and street vendors. This immense problem calls for innovative solutions. Giving an example of e-Choupal for solving the Last Mile access problem, Sivakumar emphasized the need to use agriculture as an anchor business for enhancing incomes. This will push value added to farmers and lead to inclusive and efficient ways of doing business. Microfinance, logistics management support, training in customer service, and effective use of IT can all lead to inclusive growth through efficient supply chains. He ended on a poignant note stating that retail in India is a double edged sword – we can choose to widen the existing income divide by remaining indifferent to the neglected segments or can decide to bridge the gap by focusing on growth that encompasses society.

Existing supply chains to source products are clearly complex” said Vidhya Srinivasan, Strategy Head – Aditya Birla Retail. The challenge for Indian retailers lies in offering value for money to price conscious Indian consumers. The need of the hour is to demonstrate a robust economic model, such as Contract Farming, for encouraging participation from farmers. The country is geared for higher growth in non-food categories such as Staples, Apparel, Electronics, and Personal Care.

Suhas Tuljapurkar, CEO – Legasis offered a fresh perspective on the retail industry by focussing on the policy aspects of retail in India. According to him, areas of retailer concern such as product liability, regulatory measures, foreign direct investment caps and dealing with local partners need to be addressed for making the segment more attractive. Investments in brand management, supply chain management, policy changes and moving to an organised retail sector will add value to all stakeholders.

Bijay Sahoo, Human Resources Head – Reliance Retail added that the so called talent gap in the industry does not actually exist. The shortage of talent in the retail sector is a temporary aberration that can be fixed by incorporating the large numbers of unemployed graduates into the industry and by training and deploying the right people effectively. Recruitment of subject matter experts from developed retail markets can contribute to the proliferation of knowledge and talent in the Indian retail sector.

The panel was unanimous in highlighting the challenges that faced the sector. Infrastructure, inefficient supply chains, regulatory and policy issues were the key areas that need to be focussed on for ensuring rapid and sustainable growth in the retail industry. The session ended with the panel being bullish on the sector’s prospects and in the part that it can play in promoting inclusive and all encompassing growth.