Monday, November 15, 2004

Organised Retail Market

The traffic in bannerghatta main road(near my office) has considerably increased in past few weeks inspite of a fly over construction. This is because a shopping mall " Shoppers Stop" has been opened. The Indian economy is in a state of rapid transition & market is evolving . As a result you can witness shopping malls & supercenter popping up in and across Bangalore. The following summary is my views on organized retail market & there challenges.The major players in Bangalore are Food world, Fab Mall, Shoppers Stop,Globus, Forum (Multi Specialty complex consisting of most of the above said Malls), Family Mart, Mega Mart, METRO. Though Forum is biggest in terms of size and goods sold, I prefer metro as it is more sophisticated & transparent. However choices are less there and the end users cant directly purchase from Metro. Organized retail market, unlike traditional retail market is highly structured & seeks to provide economy to the consumers.Over the last five years a no of large business groups such as Tata's, RPG, Raheja's have set up stores and malls. However the consumer market is unpredictable & due to competition I believe organized retail has to work on the following issues to cash in the opportunities.

1. Organized retailing has to be stepped in strong conceptual clarity, rather then adapting business models grown in west. It is important to take into consideration Indian Context, which is Unique in itself.
2. The extensive development of subbrands make it more complicated for the non food retailers. The solution lies in the developing the concept of store branding & Metro is leading the way in this regard.
3. Increase in cost of floor space in turn results in cost of products sold. This is important to note that there is an emerging paradox in this regard.
4.They have to understandt the turbulence of external environment. It is important that Indian organized retail braces itself for inevitable.
5. The common issue for any business is availability of trained personnel & retain Human resource. It is important to note that specialty chains compete on service, a segment called "category killers" offers price as an advantage. Toys R us is good example of category killer. Any way more the players, It is better. The consumers will benefit the advantage of competition.

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