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Retail sector-Back end supply chain | AvantGarde

Retail sector-Back end supply chain

Wed, Sep 4, 2013

Biz Arena

Long since I have known business, it was of the form when a vendor used to give free candies and a smile along with
the grocery provided I am staring at the candies, now who says that consumer calling back then was not incentive
driven.
Well, that is not the topic of my comments; my take is on Retail Sector back then and now. I take you to the era after
1991, when McDonald was unknown to most of the Indians but it existed for half a century in the outside world, when
telephone, TV were the commodities

of rich, when 1 rupee on the palms of children was meant for 16 orange candies,

when Mahabharata and Ramayana had the highest TRP and when Shahrukh was spreading the magic of romance. This
was the time when organized retail was in the design phase of its existence in India and unorganized retail was the way
of living.Then something hit India which is considered as the best reflection of Indian political fraternity till now, and it was
Liberalization, Privatization and Globalization (LPG).
Though the idea struck in 1991, the slow process of opening up the retail sector to FDI started in 1995 when a free trade
policy passed by WTO directed India to allow FDI in cash and carry (wholesale) which ultimately got materialized in 1997
and Indian government allowed 100% rights subjected to governments approval. If we talk about the situation of retail at
ground level that time, there was not much change except the expansion of Indian middle class and their purchasing
power and a demand for more organized market

. Kirana or mom-and-pop stores with limited goods on the shelves

and its owners with their family business values were leading the Retail market. Occasional fairs open Kiosks and stalls
also known as Mandis were the sources for food and grocery during that time. The flavour of western culture was
also tasted by some traditional retail chains like Nilgiri and Akbarallyswho made supermarkets on similar lines, which
indeed led the foundation of organized retail in India.During the same time, high streets like Linking Road and Fashion
Street emerged as the busiest markets of Mumbai.
The choices for a customer were limited which gave birth to a concept called Everything under one roof. As time
passed, joint families started changing into nuclear families. There too both members started earning which resulted
into a new way of lifestyle. Since then growth of mom-and-pop type of stores started diminishing, and organized retail
stores came into existence. . Big veterans of the global retail industry in the likes of McDonalds and Dominos stepped in
the Indianmarket

with support from the domestic conglomerates. Same period witnessed a revolution of new retail

formats like departmental stores, hypermarkets and supermarkets whose popularity grew several folds nationally.
Flourishing with an exponential rate, Indian Retail Sector transformed itself continuously to become the most desirable
retail destinations in the world. The start of twenty first century brought the retail sector as one of the quickest growing
sectors in India. Some of the companies who started their operations that time are renowned names today Liberty
Retail Revolutions, Welspun Retail Ltd, Hypercity Retail (India) Ltd and METRO Cash and Carry India Pvt Ltd.
The rejuvenation of the sector can be attributed to foreign players who publicized the cash and carry format.
The rapidly evolving shopping centres, multi-storey lifestyle malls, giant complexes that offer shopping, food and
entertainment concepts in tier I, II and III cities are overwhelming and they are attracting companies to invest

in the

rapidly growing Indian organized retail space. These companies have too much inclination towards new retail formats
like departmental stores, hypermarkets, convenience stores, supermarkets, and they are contributing substantially in the
Indian organized retail. Many big business houses like Reliance, Aditya Birla, Tataetchave aligned themselves in this
retail market during the last two decades by investing heavily keeping in mind the long term benefits.Some companies
have expanded their presence in the booming market through the inorganic route by acquiring existing retail players; for
instance, the Aditya Birla Group took over Trinethra supermarkets and Indiabulls acquired Piramyd Retail Ltd.
Now a large chunk of middle class prefer to buy grocery monthly from big bazaar like marts rather than a Mom n Pop
store, they prefer to browse the variety of fashion in Lifestyle, Pantaloons etc rather than going to a local garment shop,
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Retail sector-Back end supply chain | AvantGarde

they prefer to do the whole shopping in a big Mall rather than going to a specific product market

. Well, what is so

promising about organized retail stores? My opinion, its their stress on providing the best customer experience which
comprises of an air conditioned building with good maintenance, trained workforce, technologically advanced electronic
machines, parking facilities and organized display of products so that customers can browse easily, be satisfied with his
selection and save time on top of it. This is nothing but a new way of making shopping a luxurious experience along with
the joy and entertainment it brings along for the customer. Fix cost removes the threat of misleading and bargaining is
not an option which is a relief for someone who is really bad at it. Certainly times have changed and it goes without
saying that we are living in a constantly evolving India with its prevailing retail revolution which might surpass the
achievements of IT industry in the near future. Because,
High expectations are the key to everything
Sam Walton, Founder of Wal-Mart.

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