‘India can develop its own retail sector’

Mr Paul Etgart, former Director of TESCO and currently managing director of Retail Planning Innovations, UK, warned Indian retail businesses at IMAGES Fashion Forum 2005 (IFF 2005) “not to be fooled by partnership offers by global retail giants because they want 100 per cent control and, eventually, ownership”.

Speaking on “World Retail Development from Great Britain to the Middle East”, he said that global retail giants see massive opportunities in India. It is only the strict Foreign Direct Investment (FDI) of the government of India that is preventing them from moving in. TESCO and Walmart see China as their opportunity at the moment. TESCO took 50 per cent investment in a Chinese company and are ready to open stores in several cities”.

With just two per cent of retail in the organised sector with 12 million outlets, and set to go to six per cent of the organised retail market in the next five years, Mr Etgart said India could develop its own retail sector. “Urge your government to retain your strict FDI regulations. Global retail giants are very smart and clever to tackle local cultural and political obstacles. India must beware”, he warned.

Mr Etgart cited the example of Hungary which, with a population of just ten million, had become a battleground for all global players. TESCO alone had 42 hypermarkets there, with more space there than in the UK. Global players are now focusing on smaller stores in smaller towns. Many retail businesses will be squeezed out. In Western Europe, it was now difficult to open a new hypermarket and that was why the giants had to go global to grow, he said.

In the Middle East, with a population of 237 million plus tourists, the retail market landscape was changing. Dubai Mall, also known as Mall Arabia, was set to be biggest in the world with 500,000 sq feet of retail space. On the future of retail in India, he said that much would depend on government policy. If it opened its doors to FDI, the sector would see rapid change and more formats with hypermarkets and new breeds of stores. The pattern of store expansion would follow international trends. Another important format will be discount stores leading the way into rural areas for the poorer population. E-shopping would also be a crucial part of every retail business. India would also see growth of Own Label brands and more loyalty programs.

Mr Bob Pritchard, CEO, Marketingforce, One, Inc, USA, shared his experiences in brand positioning and equity, the key drives for business success. In “Trend Talk”, Mr Krish Iyer, executive director and CEO of Piramyd Retail and Mechandising Ltd, presented a retailer’s take on creativity in fashion. Mr Iyer said convergence of the traditional and modern, not one versus the other was happening and was evident at weddings, where the sari is no more the norm. He said that pret was gaining ground, and this shift from couture to pret demanded fundamental changes for designers. Mr Poya Tsai of Invista, Taiwan, and Mr Hans Leitner, Business Development Director (Asia) at Lenzing, discussed the relevance of fashion forecasting for constant product development right from the fibre stage.

The morning session also saw an animated discussion on creating the ideal brand. The participants said that the challenge on creating the ideal brand in India was not as difficult as in other parts of the world because there had to be “Indianness” in the brand.