Wednesday, December 10, 2008

The Unstoppable Retail Revolution in India

Will retail be the next wave, very much like IT was in the past decade? Read on.

What is it about retail these days? We hear and read about retail in the newspapers and on the TV - that a supermarket chain has plans to add 500 stores; that a department store is investing several crores for expansion; that another hypermarket is being launched and more will follow.etc. Why is there so much brouhaha in the world of retail? And is it for real? Is it going to impact the lives of you and me? How?

Let's try to put this euphoria into some perspective. The one billion plus Indians last year spent $322 billion or Rs.14,50,000 crores on their consumption needs. It is estimated that given the growth that Indian economy is on (never mind the current hiccups due to International Economic conditions) the Indian population (I wouldn't hazard a guess on how much that will be) will spend $593 billion or Rs.26,70,000 crores in the year 2012, just to meet its consumption needs - that would include all purchases that you and I make from a sewing needle to buying a vehicle and everything in between! And all that we buy for our personal consumption happens in a retail setting - whether you are buying your weekly groceries or buying the latest car in the market. By retail setting, I mean a shop of some kind - be it in a mall or next door to your home or office.

Having established the premise, it is easier to see why there is so much excitement. Firstly, for you and I to be spending our money on purchases, we need more and more shops to buy them from - shops closer to our homes and offices and at all the places we frequent. You may argue that you are actually spoilt for choice in your neighbourhood, because you have Foodworld, Spencer's; Nilgiris; More; Reliance Fresh etc. etc. Believe me, what you see today is just the tip of the iceberg. You and I may be the lucky few; think of our fellow country men and women in smaller cities, towns and villages. They too need what we need and therefore deserve to be served the way we in metros are. So, it is no surprise that every retailer in the country wants to expand their chains of network. The metros are nearing saturation and sooner rather than later, these retailers will move to mini-metros; smaller towns and villages(Tier 2 and Tier 3 cities in demographic parlance).

I dare not mention what the international retailers would do when they eventually are allowed to set shop.

Therefore, it is fairly commonsensical to assume that if every retailer opens more stores in every nook and corner of the country, where you and I and all our fellow countrymen can spend their money (hard-earned or otherwise!), they will need people to manage their stores and keep it filled with what we want and serve us when we visit them. Simply put; they will need people - it is estimated that about 15 lakh fresh jobs will be created in retail by 2012. That's just direct retail jobs. More jobs in associated areas will also be created simultaneously - If a teenager in your neighbourhood gets the job of a saleswomen in a swanky department store; her father may get employed in the transport company that supplies goods to her stores or in the security company that safeguards the store or the housekeeping company that maintains it!

Organised retailing - which is what we hear about nowadays - is very new in our country and finding people experienced in professional retailing companies, is difficult. Nevertheless, the need for 1.5 million people has to be met. Which means that practically everyone with an attitude to serve and willing to work on their two feet for 10-12 hours a day (irrespective of their gender, religion, caste and political beliefs) is in demand? A popular large retailer is known to be hiring housewives for part-time jobs (both, for their in-store as well as for back-end jobs). They will be trained; paid for and looked after well for their services. Those who come with relevant experience can expect to find supervisory and managerial level jobs in retail, of course with handsome rewards.

For those aspiring to make a career in retail, there are also many education institutions offering training programs - from certificate and diploma courses to professional degree courses - in retail.

If Information Technology (IT) was a wave a decade ago, retailing in India is a tsunami - a tsunami that has just been triggered. One with a positive effect - that will provide more jobs and meet many an aspiration for the average Indian.

Whenever I've introduced myself as a Bangalorean, I've been faced with one inevitable question - ''What IT company do you work for?'' But that's likely to change soon. In the years to come, no matter what city or town or village you hail from; you shouldn't be surprised if you are asked ''What Retail company do you work for?''