Retail Chains in India – Current Scenarioby Udit Jain on June 20, 2007
· If we take out Bata, titan, Indian postal department most of the retail chains in India are in nascent stage they are even not present in all the states they are currently present in A class cities only and only a few are present in B class cities. Whereas in the west retail chains have national and international presence.
· India’s one of the largest organized retail chain – Batas – has a turnover of $140 million, while a single store of a retail chain like Wal Mart in the West turns in $180 million. This explains two things – we have miles to go and the unexploited potential of retail trade in the country which houses world’s second largest population.
· Future Group’s Pantaloon Retail India has just set up global sourcing offices in Hong Kong and Mainland China – the first overseas sourcing operation by any domestic retail chain. Global retail chains do it all the time. Subhiksha has also come up with a sourcing team which will look around the world for cheaper prices.
· Tatas, Birlas, Rahejas and ITC have initiated investment in retailing but also oil companies like HPCL (Speed Mart), IOCL (Convenio) and BPCL (In and Out) are diversifying from fuel retailing to grocery and convenience stores. What’s more, even venture capitalists like ICICI and IL&FS are increasingly investing in retail businesses.
· There are more successful retail chains in south India than in north India mainly because of low real estate prices and better infrastructure.
· With the entry of Wal mart in India the war has just began with merger and acquisition, all the small players have now realized that they will not sustain so either they are selling up or joining hands with others.