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India’s Retail troubles

September 29, 2008

As a consumer you are now in an enviable position. The last few months have seen sales like never before. At last you can afford those designer shoes and dresses that you have been eying for a long time and as for the Buy One Get One free offers…they are a dime a dozen. At times creating a traffic jam at the supermarket!

But I’m trying to look at the brighter side. The truth is that times are tough. EMIs have gone up, inflation has hit, the stock markets are depressed, companies aren’t giving the promised raises and there is a global financial crises. People are cutting down on non-essential expenses. Footfalls at malls have reduced and sales are down. Organised retail is in trouble. If people go to malls, it’s to pick up stuff at discounts, hang out, catch a movie or a bite.

Whether it’s fast food joints like Bembo’s or a designer brands like W or your next door Tru Mart, they are all shutting down some outlets. Rents are far too high for them to make money at the malls.

A few examples of the retail shock: (Sources:[1], [2], [3], [4], [5])

  • Indiabulls Retail (Pyramid Retail) closed two stores in Ahmedabad
  • Koutons closed over 30 stores (out of over 1300) in 1QFY09
  • Nike has closed some stores
  • RPG Group company Spencer’s Retail has decided to close down at least 40 outlets
  • The consumer durables format of Videocon Industries, has also closed 10 stores
  • Pantaloon closed 2 Big Bazaar stores in Ahmedabad even though overall Big Bazaar is doing well
  • Mumbai-based Akruti City has shelved plans of seven of its planned mall projects
  • Reliance Retail has not opened all of its planned stores
  • Vikram Birla Group also not going through fully with its expansion plans with its ‘More’ outlets
  • Subhiksha also not doing well (Aziz Premji picked up a 10 percent stake in Subhiksha for Rs.230 crore, although the company is not up for sale
  • Wal-Mart and Tesco (UK) have postponed plans to start their chain of stores
  • Bharti Retail opening fewer stores than planned

Some facts:

  • Vacancy (space) rate in Mumbai malls – 30-50 percent in some suburban malls and 13.1 percent overall, the highest since 2005
  • Vacancy in Delhi’s prime and suburban markets – 16.2 percent and 10.8 percent today.
  • Vendors and companies refusing to supply stock to retailers because of payment delays.

If stores aren’t closing down, they are trying to control costs:

  • Pantaloon, Reliance Retail and Shopper’s Stop are looking to “right-size” their staff strength
  • Reliance Retail has downsized its hypermarket in Ahmedabad
  • Variable/Performance linked pay becoming more common
  • Shopper’s Stop cutting down on staff costs
  • Advertising and marketing costs coming down
  • Slowdown in recruitment, particularly at middle and senior levels.
  • Slower wage increases. Barely 15 percent as compared to 25 percent last year,
  • Consolidation on the anvil
  • All tenants of malls re-negotiating rents downwards as and when lease periods end

Is the retail honeymoon in India is over?
No, it’s not a doomsday scenario. In fact some companies like Landmark Group (Dubai based) is planning to invest Rs 550 crore in India and Max Retail and Max Hypermarkets are continuing to invest. The RPG Group may be closing down around 40 outlets, but it’s opening up another 300!

Organised retail has a future, but the problem is that consumer demand was overestimated…the industry didn’t grow at 38 percent as expected, but at 30 percent. This growth could slow down further…but these are not bad figures at all considering the financial environment today.

Another reason why retail players are downsizing is because of bad business decisions and the inability of small players to sustain themselves because of oversupply. Overstaffing has been a problem. Real estate property developers believe that the big developers will continue to do well as the right placement of a mall can bring big returns. Too many malls close together (bad placement) can mean the end of the less efficient players. Even though Inorbit mall in Malad is one of the success stories, insiders say that the opening of the Oberoi Mall close by has already eaten into Inorbit’s share. There simply isn’t that much business to go around!

The unprofitable, badly thought out and badly placed stores and malls are starting to die out. A period of consolidation and mergers is on the anvil.

The future
The India Retail Report 2009 (by New Delhi-based research group) says that the outlook is “bullish” despite the global market turmoil, partly because the Indian economy is expected to grow at 7-8 percent.

Today organised retail in India only has a share of 5.9 percent (as compared to all retail in India) and this share could easily triple in the next three years.

The good news comes from the ICRIER report. It claims that organised retail and traditional Indian retailing will “co-exist”. 22 percent of organised retail consumers still want unorganised outlets and 34 percent of those who shop at the kirana outlets (similar to mom and pop stores) want more organised retail outlets.

All in all the future looks good. The present quite glum.

(All pictures are taken by me and are copyrighted.)

Related Reading: Advantages of supermarkets
Large format retailers are good for India
The high Mumbai real estate prices
Aggressive advertising by Subhiksha
Do you really need all those consumer durables?

48 Comments leave one →
  1. Vivek Khadpekar permalink
    September 29, 2008 8:41 am

    Nita,

    This is the most fabulous news I’ve got from your blog since I started visiting it more than a year ago. Anything that starts off as a fad must perish, so the malls are just following a well-established law of sociology and economics.

    As to the corporates who float them, the natural habitat of sharks is in deep waters, Shouldn’t they stay away from the shallows, which are meant for the small fry?

    Let the market take of the superfluous ones. That works in the best interest of the consumer in the long term. – Nita

  2. September 29, 2008 9:54 am

    Good compilation of stats and a good post. But future looks bleak in the near term. Will all IT companies trying to downsize and give lesser hikes, the most prominent customer these retail outlets had, are now spending much less than ever…

    That’s a good point. IT employees are big spenders and now their EMI’s have increased and also salaries are not that hot. – Nita.

  3. September 29, 2008 9:57 am

    Tell Amdavadis about too many malls at too short a distance… The whole road is jam packed with the malls and as you said we could see that the foot falls are decreasing… A good read!

    you have mentioned Big bazar of Ahmedabad twice.. just a point out!

    Thanks Sakhi. Will make the correction. – Nita.

  4. September 29, 2008 10:14 am

    Once a promising area is identified, entrepreneurs rush in. The crowd gets thick and breathing space reduces dramatically. One was expecting this but your post has just spilled the beans on these developments. Congrats to be the first to report the trend. Anything on the housing price front in view of shrinking portfolio values? May be in your next post?

    Thanks. Although this trend has been reported by the Economic Times, it’s been done in bits and pieces and I thought it wasn’t given enough importance. So all I have done is compile the data and highlight it. And how did you guess that I am compiling data on the real estate market?🙂 May not be my next post, but it’s in the drafts folder. – Nita.

  5. September 29, 2008 10:16 am

    I did see a lot of sporting brands cut their stores in Bangalore as well, Adidas and Nike closing some lesser profit outlets. Bangalore is still witnessing Mall boom, we see every other corner a big strutucture coming up with a prospective portfolio of shopping and cinema space. I think after the initial party, now is the time for retail to focus on their target audience, check whom they want to attract and price accordingly. I see that lifestyle has moved on and diversified showcasing designer brands in their store, what I liked about them was that they have tried to demark their selling space with floors seperate for this high priced goods, and more casual affordable ones on a different floor.

    I think the idea of providing a hangout place along with the shopping will catch on more, like a play area for the kid really helps, or for foodies like me food courts, cafes and book shops.

    Good to get a long comment from you Rambler!🙂 Thanks for that information, but we will wait and see whether these malls will be successful. Many such structures are coming up in Mumbai and the grapewine says that developers and builders are nervous about the future. The point of luxury brands that you brought is a very good one. It is believed that luxury brands will not suffer as much as they have another type of audience but that is as long as the supply does not outstrip demand!

  6. chirax permalink
    September 29, 2008 10:17 am

    Brilliant Nita, vicious circle. BTW something creepy happened I too have written on retail in India with a different POV.

    I have now linked your post to my post (first para) as it told of your experiences in Big Bazaar.

  7. September 29, 2008 10:46 am

    from: (http://www.financialexpress.com/news/global-meltdown-to-dent-financial-advertising-sector-in-india/364585/) and (http://www.thehindubusinessline.com/2006/08/12/stories/2006081202510500.htm)

    The most direct effect of the retail slowdown is on the advertising and marketing sector.. the huge cost involved now-a-days for print media, outdoor advertising and TV .. are making firms looking for alternate and cost effective ways… Internet has been regarded as a boom for one of the most cost-effective ways to let people know what u have to offer… lets see where does Internet and the traditional ways to advertise end up the customer with??

  8. September 29, 2008 10:55 am

    A shopper’s point of view: These guys will need to diversify, a bigger variety, more brands, catering to all budgets and they might add more eateries.

    I guess, one industry that can never stop bubbling in India is education. So if all else fails, they can start coaching classes in empty malls🙂

  9. September 29, 2008 11:54 am

    I’m from ahmedabad .. Since last few years, every corner of the A’bad city was flourishng with a new mall .. I hv always wondered how will they survive?? .. Real estate was booming, rents were high and still all the malls hv been spread in acres of land .. Today I can see so many of them closing down .. And it’s really very disappointing ..

    The pyramid one which u talked about, was a huge one 4-story mall .. It was one of its kind in A’bad .. I dont know why it was shut down .. It was doing very well and it was at very prime location ..

    The only business which looks promising is Restaurent and Multiplex but provided u hv acquired the prime location ..

  10. Vivek Khadpekar permalink
    September 29, 2008 11:58 am

    @ indianhomemaker,

    Confining my comment to first-hand observations in Ahmedabad, we have assorted Institutes of Management (some of them claiming affiliation to unknown foreign universities) running MBA programmes out of the equivalent of two adjacent shops (30-40 sq. metres), charging anything from Rs. 200,000 to 5,00,000 fees for a two-year programme. And believe me, there are thousands of takers for these. Why should they bother with space in malls which, even at the cheapest, would cost much more.

    And while waiting for Nita’s findings on the real estate market, my gut feeling is that it is plunging. So there’s going to be lots more space available lots cheaper. And it’s not only the cost of buying or renting space. The overheads, in huge, heat-absorbing glass-and-aluminium-clad buildings designed for round-the-clock air-conditioning, are simply too mind-boggling.

    The greatest service that municipal corporations can do to citizens is to compel the builders to modify the mall structures into multi-storeyed parking, smashing all the glass façades. We can then have streets with sidewalks for pedestrians, bicycle tracks and adequate rights-of-way for the smooth and orderly movement of buses, bullock- and camel-carts, motorised two-wheelers and other vehicular traffic.

  11. Vivek Khadpekar permalink
    September 29, 2008 12:30 pm

    Soham,

    If you are referring to the Piramyd [sic] mall near Parimal Garden, it deserves to shut down more than any other malls I have visited (admittedly very few) in Ahmedabad. The staff refuse to speak Gujarati, are abysmal in English, and totally ignorant of their inventory.

    The only time I went there I asked to see cotton shirts, size L. After 20 minutes of searching, they came up with shorts (that too in a size that even a moron could tell was too small for me). When I asked to see the floor manager I got a shifty-eyed, bowing-and-scraping joker with an oleaginous smile, who was no better than his underlings.

    I get much better attention and service at the small shops which the giant corporate retailers are determined to crush out of existence.

  12. September 29, 2008 12:51 pm

    Oh yeah the great property bubble cometh! I never understand why would anyone want to shop in these places though. There is no variety there, I could find more anyday in a flea market! Anyway coming back to the economy overall I think we are going to have some more pain in the future. The property prices in India are unreasonably high and thus a correction (to put it lightly) is due. When there are economic excesses there will always be a price to pay later.

    A small city like Chandigarh with a population of around 1.5 million people and a very small captive shopping gentry has 3 active shopping malls and 5 more coming up! What are these people thinking? Some of them are going to be torn down eventually and unfortunately.

  13. September 29, 2008 12:57 pm

    Though the retail spaces rents are going through the roof, the smaller Indian brands are nowhere in sight and these spaces are being taken by very large brands who are really not bothered about returns!I do a spot survey of all these big outlets in various malls and try to find out about their daily and monthly sales and believe me they stink! The only time they do a galla of 5 or 6 figures is during festival times and if it is a weekend. It is really a sorry state of affairs today. I hope the future holds some great news for the Indian retailer.

  14. September 29, 2008 2:12 pm

    @Vivek:

    Yeah, I’m refering to the same Pyramid Mall near parimal garden ..

    Actually, I visited it in 2005 and bought a nokia mobile, VIP luggage bag and bunch of clothes all worth around 40,000 bucks .. At tht time, the offers I got and and the courtsy/help which was shown by the staff were really admirable .. After that I went to US and when I came back recently, I found it closed down .. So I just wondered .. But after ur reading ur experience, I can see that it must hv deterorated at every level and that’s why they are paying the price .. For me, customer care and customer friendliness are the must thing .. Otherwise I wont put a foot in that mall/shop again if I am not entertained properly ..

    Anyways, thanks for the info Vivek … Now I wont feel disapoointed for Pyramid’s shut down !!

  15. September 29, 2008 2:45 pm

    hmm…i think the big super markets are good for us…but well if they open too many shops,they will have to close them at some point…

  16. Vivek Khadpekar permalink
    September 29, 2008 4:29 pm

    Click the following link to an article from TIME magazine, September 2004 — dated but prophetic. And this was well before the emerging global financial crisis which threatens to take us from “India Shining” into “India Whining”.

    http://www.time.com/time/magazine/article/0,9171,501040920-695915,00.html

  17. Vipul permalink
    September 29, 2008 4:41 pm

    Nita,

    Another timely article. I think the trends you mention are only going to get worse. Somehow, there is an ingrained belief that the Indian economy can continue to churn out 7-8% growth yoy. I feel the growth will be severely suppressed over the next few years as the effects of the global slowdown are felt.
    Wrt consumer spending, the negative effects will be amplified for 2 reasons:
    – The main sectors fueling spending power – financial services and IT – would be worst hit and shall see a contraction of sorts.
    – Unlike in the west, reduction in spending ‘power’ in India would be met by an even greater reduction in ‘actual’ spending. I say this because (I feel) Indians are more credit averse and more prudent with their finances during non-boom times. Declines in the value of investments (stocks as well as real-estate) isnt helping either.

    Lets see how it all pans out.

  18. September 29, 2008 4:52 pm

    @ Vivek

    Would this be the same Aravind Adiga who is on the Booker shortlist?

  19. Vivek Khadpekar permalink
    September 29, 2008 5:59 pm

    @ Shefaly,

    I am not knowing pliss, but the statistical probability is high.

    1. Adiga is not all that common a surname.

    2. Still less common would be that particular combination of first name and surname.

    3. That particular spelling, “Aravind” (especially without a third, terminal ‘a’ would be very rare indeed.

    4. Finallhy, how many individuals fulfilling all those three criteria could also be writers who are published?

    Ergo, it is safe to assume same-to-same person.

    You are understanding, no?🙂

  20. September 29, 2008 6:21 pm

    @ Vivek:

    I am tho fully understanding, baba. Thank you. You are welcome.🙂

  21. hoku permalink
    September 29, 2008 7:02 pm

    Its good for the consumer, no doubt about that. But, should we think about the road corner pop-and-mom shops. Should we try to know how many such small shops have been closed since these big shops have come up. We the consumers are after all heartless.

  22. September 29, 2008 7:20 pm

    I m a mall person and I can spend entire day there! And I have more reason to visit a mall if there are many discounts and offers! But looking from the workers POV, I hope the glum present ends fast and the bright future begins soon.

  23. September 29, 2008 7:58 pm

    @ Hoku @ Nita

    Many big supermarkets’ business models are quite creative and include involving rehri-wallas and corner shops in a way that they do not resent the malls and big chains, and also make greater margins than their business allows. They reach and serve a very different target audience from that served by malls where these supermarkets may be located. Some schemes are being trialled – with great success – in different parts of India. So it is not as bleak as it may seem.

    You have to remember that these mom-and-pop stores make good tear-jerking stories but are not the favourites of wholesalers when it comes to ‘dhandha’ (business). So somewhere a more fundamental shift is required and some of it is already happening.

    Laws in India are regulating the entry of foreign operators enabling several innovations in process and business models.

    The entire economics of malls is linked with that of the real estate sector. Bad decisions are also made but since we Indians are a culture, where we do not say ‘no’ easily, it is a relief to see that some have the nerve to exit bad business decisions rather than keep defending them.

    Thanks.

  24. Vivek Khadpekar permalink
    September 29, 2008 8:36 pm

    @ Shefaly,

    Mention not🙂

  25. hoku permalink
    September 29, 2008 9:36 pm

    Shefaly@ we should remeber the ultimate aim of budiness is profit maximization. The model of involving local groceries is a stopgap arrangement. Once that Retailer understands that market is mature enough, they would start busienss directly. This model is followed by most of the foreign companies in India. Local partner first and then start your own setup.
    I can quote some reports which show how Walmart has completely wiped out small stores in some localities.
    Another issue is given the financial strength they can and are exploiting the suppliers and workers all over the world (walmart record of labor wage is not very good http://www.ufcw.org/press_room/fact_sheets_and_backgrounder/walmart/wages.cfm)

    ‘Laws in India are regulating the entry of foreign operators enabling several innovations in process and business models. ‘
    You dont have to worry for long. Given the economic agenda of the main rulling parties in India and the fact that general population has no say in the process of decision making, I am sure this restriction is going to be thrown out of the window within next couple of years.

  26. September 29, 2008 10:40 pm

    those were some startling revelations!
    things are burning in the fire of inflation!
    and the signals of a global financial crunch comes directly from the tumbling US economy ….i hope that the situation at least doesnt gets worst off as the market will still take time to revive

  27. September 29, 2008 11:11 pm

    The overheads, in huge, heat-absorbing glass-and-aluminium-clad buildings designed for round-the-clock air-conditioning, are simply too mind-boggling.

    Vivek, spot on!! It seems to me that the business folks are quite divorced from ecological issues and simply copy-and-paste from “developed” countries. I’ve seen this kind of thinking among a friend and his fellow-colleagues – all Harvard MBAs and quite smart people. As long as it’s air-conditioned, it’s a sign of “progress.”

  28. September 29, 2008 11:37 pm

    I am not surprised at this, but I am surprised I am not seeing much news about this in the mainstream media. May be I am not looking in the right place. I am curious to know what effects all of these is going to have on the Residential real estate market throughout the country. I always felt that real estate was booming too much in India and had a feeling it was bound to slow down and correct.

  29. September 30, 2008 12:00 am

    High Inflation, prices going up, higher oil price, expensive loans….this is the time for Retail & Malls, bcoz they offer the consumer ‘Discounts’ and thus help her save money.
    It may happen that in the short run ‘Clothing Retail’ would slow down BUT ‘Food Retail’ would surely prosper.

    I may postpone buying the next pair of jeans BUT would surely love to save Rs.50/- on my weekly grocery bill 🙂

  30. September 30, 2008 12:51 am

    We all knew this was coming.
    The only way out would be cutting the flab and churning out more in-house brands(read higher margins)
    -Nikhil

  31. September 30, 2008 1:13 am

    [..] bcoz they offer the consumer ‘Discounts’ and thus help her save money.

    Rahul, I bought this new car yesterday for $60,000 and I’m willing to sell it for $20, 000 $19,999, thus saving the buyer $40,001. That’s a pretty huge discount with considerable savings – $40K. Want to buy it and save some money??😀
    Give me some time and I can probably come up with a “buy one, get one free” deal – resulting in even more savings for the consumer!! The more you buy, the more you save.😉

  32. Vivek Khadpekar permalink
    September 30, 2008 7:23 am

    @ Dinesh Babu:

    //I am curious to know what effects all of these is going to have on the Residential real estate market throughout the country//

    To fulfil your curiosity, come to Ahmedabad. Locust swarms of “developers” are buying out entire residential localities to be converted into commercial premises. Generally a resident happily vacates, because he’s made “an offer he cannot refuse”. And although no one is talking, I would not be surprised if the occasional freak with notions such as “neighbourhood”, “emotional attachment to the place” etc. is “persuaded” to vacate by other means. Land use controls exist only on paper. “Free market forces” are God.

    We are headed towards an urban form in which the whole of downtown is multiplexes, malls, supermarkets, hypermarkets, hotels, upmarket nursing homes and hospitals etc. The people are steadily moving to live far out, with not much mass public transport to ferry them, so they clog the roads with personalised private or semi-public transport (i.e. taxis, autos etc.). The fancy new “developments” on the urban periphery consume rich agricultural land. They don’t have piped water supply so people buy bottled drinking water at Rs. 10 a litre. There is no sewerage, so it all goes into soak pits that are not too scientifically designed. All these are minor inconveniences when you consider that in your new habitat you get clubhouses, swimming pools, mini-golf courses, glamorous people as neighbours and if you want exclusively NRI company that too is catered to. For those with very upmarket ambitions there are vast farmhouses schemes (consuming hundreds of hectares of agricultural land).

    Let’s wait and see where it all ends.

  33. September 30, 2008 9:56 am

    @Vivek and @Dinesh Babu

    Yeah Vivek .. I completely Agree ..

    I stay near Ashram road in Ahmedabad and some builders did offer 50 Lakh per flat to buy out our entire residential locality to convert it into mall/multiplex.. But we are waiting for other good offers because this offer is not so mouth-watering that we can’t refuse it .. We r waiting for around 65 LAkh offer .. but now as real-estae might go down, I think we’ll hv to stick to our old home only ..

  34. September 30, 2008 10:11 am

    @Vivek Khadpekar – Parking is not at all a bad idea🙂 And the Coaching Classes suggestion was tongue in cheek🙂

  35. September 30, 2008 10:41 am

    Rashmi, Indian Homemaker, Odzer, krsnaknows, Vishesh, Hoku, Arpit, Amit, Nikhil, thanks for your responses!

    Soham, well, it’s a case of demand vs supply I guess.

    Vivek, that was an interesting link. Thanks.

    Vipul, I have also started getting doubts about the growth rate…

    Dineshbabu, it’s being downplayed in the news, that is what I feel. Now is the time for real estate to correct. It’s started!

    Rahul, same here. I find grocery rates cheaper. It’s just that too many of these supermarkets are coming up to sustain themselves.

    Reema, I like the supermarkets in malls for grocery shopping but to buy other goods I find they are cheaper in the city. And I like going to malls for the movies and at times I love hanging out there too. So now you know what we will do if you come to Mumbai!

    Shefaly, absolutely, it’s all intricately linked to real estate. The high prices are driving retailers up the wall.

  36. Vivek Khadpekar permalink
    September 30, 2008 11:19 am

    @ Nita:

    //Shefaly, absolutely, it’s all intricately linked to real estate. The high prices are driving retailers up the wall.//

    The real estate sharks are driving the entire city up the wall — land use, infrastructure, environment, urban cultural fabric can all go hang.

  37. September 30, 2008 12:48 pm

    @ AMIT:

    ‘Rahul, I bought this new car yesterday for $60,000 and I’m willing to sell it for $20, 000 $19,999, thus saving the buyer $40,001. [..] ‘

    Sorry.. can’t take the offer even though the discount seems Good…..I hv got a new car just a few weeks ago 😦 🙂

  38. September 30, 2008 10:23 pm

    Nita:
    I have nothing to add except “Good post!”
    I was going to suggest a post on realty downturn in India, and so I am looking forward to it.

  39. September 30, 2008 10:55 pm

    Rahul, I was pulling your leg as well as taking a potshot at the discount tactics used, and the consumers influenced by such tactics. It’s quite easy to put a sticker on a stuff with a high number crossed out, and a lower number as the current selling price, thus giving the illusion (delusion?) of a “discount” and more savings.

  40. September 30, 2008 11:03 pm

    @ Amit: Yah man I got the Joke but ur offer was great so I had to reply ….HahahaHa🙂

  41. Vivek Khadpekar permalink
    October 1, 2008 6:52 am

    @ Amit:

    //…put a sticker on a stuff with a high number crossed out…//

    The sticker also helps to conveniently conceal a lapsed expiry date.

  42. October 3, 2008 3:44 am

    Nita,

    As a retail expert (in the UK) I have been looking at the Indian retail/mall sector, here are a few observations based on a recent visit:

    – Many malls look similar; fine when competition is limited but in time, as it increases consumers will have more choice and will need more reasons to choose one mall instead of another.

    – Compared to worldwide best practice the current experience from arrival in an underground car park through to departure leaves many areas for improvement.

    – Brands appear to be ‘badges’ on walls, they lack depth and meaning, consequently there was no sense of a customer service ethic in the malls. A strong brand is more than 2-dimensional.

    – Brand identities are weak and often difficult to spot on cluttered fascias, way-finding signage is inconsistent and retail delivery and mall design is disappointing.

    – Many centres are located in close proximity which results in increased competition between the schemes with no apparent distinction between positioning, offer and service except “this mall is bigger”

    In conclusion, strong brands have the ability to create differentiation and attract customers – in difficult times strong brands will be more resilient, in the long term, after the inevitable shake down the strongest brands will survive.

    Some more observations can be found on my site.

    Best wishes

    Dominic

  43. Anil permalink
    October 5, 2008 8:06 am

    India is different and we will not become like the West with organised retail taking up a huge chunk of business. The local kirana in the metros (Indian version of mom & pop stores and why do we ape the west and call them mom & pop when we have such an appropriate home grown easily understandable name!!) is upgrading his service so as not too lose business. And unlike the west the malls here are not easily accessible to the common man in India.
    Finally India is in the villages. Most of the business is not in the metros which have seen the growth of the malls. If modern retail has to really get its act together and wants to succeed it has to go to the small towns. But I wonder if it has the business model to succeed there?

  44. Vivek Khadpekar permalink
    October 5, 2008 9:47 am

    @ Dominic:

    //Brands appear to be ‘badges’ on walls, they lack depth and meaning//

    Not being in the business of business, I may be pardoned for my ignorance, but are you saying that brands actually have any deeper meaning than being badges on walls? To me, as a customer spending heard-earned money on something I need (repeat, “something I need”, not something which the marketing scum want me to aspire to just because they feel I must), the main thing I am looking for is assured quality and value for money in the particular item I am buying. To suggest that brands ipso facto deliver these desiderata is…well…naive.

  45. October 7, 2008 1:18 am

    @ Vivek

    “are you saying that brands actually have any deeper meaning than being badges on walls?”

    Hi Vivek. Yes I am saying ‘strong’ brands are more than just a logo, they trigger positive associations that help consumers chose that brand over another. There is a multi billion dollar global advertising/branding industry – and a growing industry in India – to prove it.

    Brands help people chose one manufacturers product over another, eg. If you were to find a number of value for money necessity items of similar price what would be the factor that would help you chose, possibly brand reputation and which one you trust – a vital brand attribute, that not all brands have earned from consumers.

  46. Vivek Khadpekar permalink
    October 7, 2008 8:22 am

    @Dominic,

    Having already issued the necessary disclaimer regarding my ignorance about business in general, may I humbly submit my disagreement with you?

    I am a consumer who believes that quality is an inherent property of the product effected by good design, craftsmanship or engineering, not by whose label adorns it.

    And in deciding on what constitutes quality, I prefer to use my own sense and judgement. I refuse to be guided by the paid-for-and-scripted opinion of some least-common-denominator-of-intelligence-and-civilisation shitbag of a “star” (usually — speaking in the context of India — of some “popular” medium such as Hindi film or cricket), who rudely and loudly intrudes into the privacy of my home via the TV screen when I am watching a thought-provoking or mind-enriching programme, on which scum such as “stars” have no place.

    And to me the high-decibel trumpeting of a brand does not translate into it’s “strength, I’m sorry.

    I need hardly point out that, in the world of finance, Lehman Brothers was also a “brand”.

  47. Thenmozhi permalink
    October 20, 2008 5:23 pm

    Thanks for the information about Indian retailing .
    I am a research scholar doing my research in the area of retailing.My topic is related to study the impact of shopping malls on small retail traders(unorganised retailers) in Tamilnadu.
    If i could get some information/websites/research articles retaled to my area of study it would be of much use.

    Yours
    SPT

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