{"id":3114,"date":"2007-11-15T04:15:00","date_gmt":"2007-11-15T04:15:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=3114"},"modified":"2022-09-15T04:23:07","modified_gmt":"2022-09-15T04:23:07","slug":"executive-qa-retail-developments-in-india","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/executive-qa-retail-developments-in-india\/","title":{"rendered":"Executive Q&A – RETAIL DEVELOPMENTS IN INDIA"},"content":{"rendered":"\n

\n <\/i> <\/p>\n

Source: \n American \n Shipper – Namaste<\/A>, November 2007<\/i><\/p>\n

<\/i><\/p>\n

Few analysts speak with more clarity and insight about a subject \n than Devangshu Dutta does about Indian retail supply chain logistics. \n Third Eyesight is a Delhi-based company that helps textile, \n consumer durables and perishable shippers set up their Indian \n supply chain. Namaste<\/i> spoke with Dutta about a range \n of retail supply chain topics, including why retail can sometimes \n be a dirty word in India, and why India’s roads might \n not be as bad as you’ve heard.
\n
\n Namaste:<\/b> Retail is a word that evokes extreme reactions \n in India. Why is that so?<\/i>
\n
\n Dutta:<\/b> Developments in retailing are no more or no less \n divisive than any other change that is widespread in society. \n The fact is that the retail sector touches each individual as \n no other does. So whether you are a consumer, a retailer, a \n vendor, a service provider or a policymaker, it is difficult \n to adopt a distant approach.
\n <\/p>\n

The last 10 years have seen a tremendous amount of investment \n in modern retail and its supporting infrastructure in the form \n of shopping centers in India, and they are possibly the most \n visible dividing line amongst all development. This is due to \n several reasons.
\n <\/p>\n

While the environment within a shopping center may be world-class, \n no similar investment is seen in the high streets where the \n traditional retailer makes his living — whether in terms of \n commercial or civic infrastructure.
\n <\/p>\n

While the shopping center developer is increasingly planning \n his center impeccably, there is little regard still to the surrounding \n catchment, whether in terms of merchandise mix, or in terms \n of integrating with the urban infrastructure and landscape. \n In many of the centers, there is minimal traffic planning with \n regard to the surroundings, resulting in chaos over the weekends.
\n <\/p>\n

Simultaneously, large retailers are beginning to emerge in \n the country and are counted as legitimate targets for pressure \n and lobby groups of small traders, farmers, residents, non-governmental \n and trade organizations. In this, India is actually no different \n from other countries — witness the anti-Wal-Mart feeling in \n many communities around the U.S. or the talk of "Tesco-poly" \n in the U.K., or the strict planning norms regulating the growth \n of large format retailers on continental Europe.
\n
\n That may not be the case with other countries where similar \n debates may be suppressed or may have limited visibility.
\n
\n Namaste:<\/b> Would it be fair to say the emergence of \n the domestic retail sector in India seems to be pushing retail \n logistics as much as foreign logistics companies or retailers? \n If so, how will foreign companies benefit?<\/i>
\n
\n Dutta:<\/b> Logistics and supply chain developments are certainly \n being pushed along by Indian retailers and brands as much as \n international ones. The larger Indian companies, especially \n in the food and grocery sector, are aiming at adopting best \n practices and adequate infrastructure to be able to compete \n effectively against the operational skills of their foreign \n competitors. Most of them can skip generations when looking \n at supply chain standards, and do not necessarily need to go \n through the same decades-long adoption and discarding or legacy \n systems.
\n <\/p>\n

Foreign companies would also definitely benefit from this. \n Any development in one retailer’s supply chain typically spreads \n in ripples or waves through to other retailers as well, since \n most vendors are not dedicated to any single retailer. For instance, \n even if a specific physical link (such as a cold storage) may \n not be available to more than one retailer, the process excellence \n leaks across a vendor’s organization to benefit his other customers \n as well. Similarly, the standardization of UCC\/EAN bar codes \n will not just benefit the initial founding retailers, but also \n others along the way.
\n <\/p>\n

A foreign company stepping in after these developments have \n been initiated by Indian retailers would find the environment \n more conducive to its own processes and standards.
\n
\n Namaste:<\/b> What can Indian logistics services providers \n learn from the influx of foreign interest and expertise in India?<\/i>
\n
\n Dutta:<\/b> Foreign retailers expect to upgrade from the current \n fragmented state of the Indian industry to norms that they operate \n under in other markets. This provides an opportunity to Indian \n logistics service providers to grow and develop, but is also \n a threat to their existence in case they fail to change their \n businesses to adapt to the new needs.
\n <\/p>\n

Indian service providers need to look at rapidly upgrading \n their physical infrastructure, skill sets and systems. There \n is significant interest amongst international logistics firms \n to tap into the booming Indian market, and Indian service providers \n can be their partners, to mutual benefit. The Indian companies \n would stand to gain from the technical know-how, and possibly \n even from customer relationships, while the international companies \n can quickly gain the local base and ride on the local know-how \n of their Indian partner.
\n
\n Namaste:<\/b> Infrastructure is the first word out of people’s \n mouths — in India and abroad — when the potential barriers \n to India’s success are mentioned. Is the country’s infrastructure, \n as it relates to cargo movement, really as bad as it’s made \n out to be?<\/i>
\n
\n Dutta:<\/b> I would say that the infrastructure is a lot better \n than it is made out to be, and is getting better still. But \n this is one area where China stands in stark contrast to India, \n where China has an infrastructure surplus while India runs into \n severe deficit. Peak traffic, such as shipments of summer clothing \n at the end of the calendar year, make the bottlenecks painfully \n evident.
\n <\/p>\n

The second bugbear is documentation and regulatory process, \n which again has gotten simpler, but needs to be simpler still. \n VAT does not yet uniformly apply across the country, several \n check points exist between and within states that hold up cross-country \n cargo traffic. This not only adds time but also cost.
\n
\n Namaste: <\/b>Do you think the major retail chains who \n have been itching to get into India will find the success they’ll \n be looking for, and do you think they’ll have the patience it \n takes to learn the Indian market?<\/i>
\n
\n Dutta:<\/b> In my recent experience, most major retail chains \n looking to enter the Indian market realize that it is a different \n world from what they are accustomed to. They are prepared to \n develop business plans cautiously, and with a long-term perspective. \n The chief executive at one of our client organizations said \n to me, while we were discussing its potential branding strategy \n in India: "I see India as a market that will pay off in \n the next 20 to 25 years, not just give us a quick buck in the \n next five years."
\n <\/p>\n

Some have also learnt from their bitter experiences in China, \n which also attracted companies with its billion-plus population, \n but proved to be a burial ground for many reckless projections \n and strategies imported from the West.
\n
\n Namaste:<\/b> Are Indian consumers — particularly those \n outside of the cosmopolitan urban areas — ready to embrace \n retail, and if so, what product categories are they most likely \n to embrace?<\/i>
\n
\n Dutta:<\/b> The Indian consumer is more sophisticated than \n most people believe, and adapts new offerings at a very rapid \n pace. This is true across product categories. The growth of \n mobile phones amply demonstrates this. Not only have basic mobile \n services grown rapidly, but also value-added services.
\n <\/p>\n

However, the price\/value equation has to be right. Just because \n a retailer has a swanky, air-conditioned store does not mean \n that he can automatically charge a hefty premium over traditional \n retailers. Again, mobile phone companies are a great example \n — with the correct pricing, their penetration of even premium \n services such as caller tunes, song-catcher, messages and calls \n to premium numbers, etc. are prevalent not just in the metros \n but in semi-urban and even rural areas.
\n <\/p>\n

Retail is similar, the only major difference being that due \n to the need to put down physical stores, the growth is more \n organic and looks staged rather than explosive. However, the \n growth of shopping centers anchored by the Future Group in smaller \n towns, or the aggressive launch of Reliance stores demonstrate \n the willingness of the Indian consumer to also constantly evolve, \n regardless of where they are based.
\n
\n Namaste:<\/b> What sections of the retail supply chain, \n specifically, need to be improved to make them as efficient \n as they’ll need to be to meet the expectations of foreign retailers \n and transportation and logistics companies?<\/i>
\n
\n Dutta:<\/b> Roads, truck fleets, distribution centers all \n need to be upgraded, and are being. Some Indian companies — \n Reliance is a notable example — are even pushing this along \n and act as a domestic benchmark. Reliance has not only set up \n a logistics company, but is also looking to manufacture trucks \n in a joint venture with Volvo, to fulfill Reliance’s own requirements.
\n <\/p>\n

However, I believe foreign retailers will themselves evolve \n a different mix for India, rather than sticking to their home-base \n business models. I believe India, and possibly China, actually \n changes companies as well. We might well find that these companies \n will also carry back innovative practices to their home base \n from India, as much as they bring in.
\n
\n Namaste:<\/b> Could you give a particular case you’re aware \n of where improved supply chain efficiency from a retailer influenced \n that retailer’s competitors to become more sound logistically?<\/i>
\n
\n Dutta:<\/b> ITC’s rural initiatives — contract farming, e-Choupal \n — have created copycat initiatives from other companies.
\n <\/p>\n

In the mid-1990s Spencer’s began pressing its FMCG suppliers \n to bypass the distributor channel but were only somewhat successful \n at that time. As they and other retailers have gained size and \n weight, the tables have turned, and FMCG (fast moving consumer \n goods) companies have even begun creating separate key account \n business divisions to service large retailers.
\n <\/p>\n

McDonald’s had to create its supply chain from scratch before \n launching in India in 1996, and it did so with its supply chain \n partners from other markets which it paired up with Indian companies. \n These companies have then gone on to service other customers \n such as Domino’s and Pizza Hut, and some have also created their \n own brand of products (e.g. sauces, baked goods) to distribute \n in the wider market.<\/p><\/td>\n <\/td>\n <\/tr>\n","protected":false},"excerpt":{"rendered":"

Source: American Shipper – Namaste, November 2007 Few analysts speak with more clarity and insight about a subject than Devangshu Dutta does about Indian retail supply chain logistics. Third Eyesight is a Delhi-based company that helps textile, consumer durables and perishable shippers set up their Indian supply chain. Namaste spoke with Dutta about a range […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3114","post","type-post","status-publish","format-standard","hentry","category-press-quotes"],"yoast_head":"\nExecutive Q&A - RETAIL DEVELOPMENTS IN INDIA - Third Eyesight<\/title>\n<meta name=\"robots\" content=\"index,follow\" \/>\n<link rel=\"canonical\" href=\"https:\/\/myechoproject.com\/TES\/executive-qa-retail-developments-in-india\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Executive Q&A - RETAIL DEVELOPMENTS IN INDIA - Third Eyesight\" \/>\n<meta property=\"og:description\" content=\"Source: American Shipper – Namaste, November 2007 Few analysts speak with more clarity and insight about a subject than Devangshu Dutta does about Indian retail supply chain logistics. 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