RETAIL SPECIAL Retail cos set to mushroom

All formats — conventional, modernrn and e-commerce — are set to grow over the next decadee as Indians look for more choice and variety

MUMBAI: The online Grand Diwali Mela in October by GroupM in association with Google, Amazon. in, LINE, Games2Win and Hungama.com, drew over 55 lakh visitors. Over 1,50,000 skincare and household product brands were sampled and shipped – 70% to tiers II and III towns.

Many say that e-commerce will lead the retail evolution over the next decade. Flash back to similar discussions in the late 90s of the then emerging modern retail surely overwhelming conventional retail in the future. The numbers speak for themselves. All retail formats will grow, predict experts.

A Technopak report says that traditional, unorganised brick and mortar retail may increase by 80% and modern, organised brick and mortar retail by 240% by 2020. E-commerce will account for 3-5% of retail by 2020 and 10-12% by 2025.

Arvind Singhal, chairman, Technopak, said, “Traditional retail will continue to thrive, but e-tail will drive organised retail’s growth in big cities. India spends 68-69% of its money — 50% of it rural — on grocery and foods. E-tail will not significantly impact food consumption in tiers II and III towns. SEC A and B consumers are 15% of the metro population. SEC C, D and E consumers won’t to shift to e-commerce in a hurry.”

BS Nagesh, ex-vice chairman of Shoppers Stop and founder of retail association TRRAIN, concurred: “E-commerce will remain a big city phenomenon because of the wealth in big cities and the number of people who can afford to buy, living in the big cities, and not because the smaller cities will not get connected. Even after 20 years of modern retail, the top five cities still contribute 35-50% for most businesses.”

Gaurav Gupta, senior director, Deloitte in India, doesn’t agree. “Why should e-commerce not work beyond metros? Awareness, wealth distribution and connectivity will all be there.”

Technopak predicts that by 2020, the incremental retail market will be 30.9 lakh crore, 62% of which will come from urban retail.

A sure development, said Nagesh, will be omni (multi-channel) retail. “As customers look for 24x7 convenience, the future will be for those companies who can sell online, offline, deliver anywhere, click and collect, buy and return anywhere. That’s why John Lewis, Macy, Nordstorm and Saks have become very successful and profitable.”

“Over the next decade,” added Kumar Rajagopalan, CEO, Retail Association of India, “consumers will create their own buying preferences. Retailers who help with information, trials and samples may be able to lure them back to their omni channel offerings.”

Some other developments the experts predict include: a more balanced portfolio of channels; higher focus on profitability; more entrepreneurs launching e-supermarkets (food & grocery); online furniture sales in big cities; localisation of conventional retail; and a remarkable growth of micro-websites offering one kind of product, such as Zivame. com offering women’s lingerie.

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