The Story of BIBA

“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.” The above holds apt for the story of BIBA. From being a wholesaler for salwar suits to today being one of the most well accepted brand in the category of women's chic ethnic wear, BIBA has an interesting history to share.

In the late 1980's when Meena Bindra got her first 'Punjabi Suit' (as it was commonly referred to then) ready for selling it to her customer from the confines of her house, little did she know that a few years down the line, her creation would meet a day when it would be present in the wardrobe of lakhs of women in India. Elaborates Meena who is also the chairperson of the brand, “I was always interested in designing in any form but lacked the technical or financial skills to set up a business and I did not have much funds either. Therefore I started with a bank loan of Rs 8000 from the house. It seemed the easier business as fabric was the only investment required, started almost 26 years back and the readymade garment industry was in its infancy thus the time was right to start this business.” Adding further, she says, “Luckily, soon after the launch, the brand gained popularity due it to its beautiful hand block prints and styles, and became the first choice for stylish cotton Salwar Kameez sets. Shortly thereafter, Benzer Mumbai became the first exclusive store to stock my designs and I started supplying to various stores.” The association with Benzer happened on reference of a customer who was obviously very much impressed with Meena's designs. Post then, the journey has been only that marked with 'growth'.

For a couple of years, post that Meena went ahead wholesaling her brand to the traditional retailers and it was only post in the early 1990s that an individual identity and exclusivity to her creation was given under the name 'BIBA'. But why the name 'BIBA'? Explains Meena, “BIBA, in Punjabi means a young, pretty girl or an endearment, normally used for young girls hence I decided to name my brand 'BIBA'.” This was also the time when Shoppers Stop came into being and Meena retailed successfully through them. Shares Siddharth Bindra, managing director, BIBA, “We take pride in being one of the first few brands to successfully expand using the shop-in-shop model. With Shoppers Stop we retailed using the shop-in-shop model and it worked extremely well for both of us.” But all this didn't happen as easily as it sounds right now. The challenge before the Bindra's to set up a brand was mammoth. Back then, women relied most on the local tailors and for a lucky few there were the designers. The concept of ready-to-wear salwar suits was not that prevalent. Also, majority of the traditional shops had their own labels to retail.

Citing the challenges encountered, Meena says, “I have no formal training in design and I faced some teething issues with garment production. I learnt along the way and devised my own methods to overcome those issues. But the biggest challenge for me was funds for expansion. I was naïve and had no knowledge of running a business or handling a brand. There were no competitors in my category - no benchmarks, no brands, no malls. That was a time when the fashion industry was not so evolved and customers used to rely on local garment shops for apparel shopping.

Moreover, my husband was in a transferable job and once, for eight years, we had to stay apart as I had to stay in Mumbai to be able to run my business when he was in Delhi.” A very confident Meena says, “Now, I have 23 years of industry experience. There is a separate category called ethnic wear. Biba is a well known and widely accepted brand and is big both in terms of scale and size. The company is profitable and we are fully equipped to handle any business challenges. We are opening almost 4-5 exclusive stores each month. Industry standards in general have gone up and so has the knowledge of fashion. People are well travelled and their tastes and design sensibilities have evolved. The only thing that remains constant is my interest in creating new designs. I am still actively involved in the creation of Biba designs and constantly interact with my design team.” Siddhart adds, “One of the challenge that we face today is that of the excise duty structure prevalent in the country. It definitely eats upon your profits to quite some bit. Also, because we are an ethnic wear brand, lot of our work is related to skilled labor. Getting trained  (skilled labourers) for our business is also a big challenge that we face besides the issue of streamlining the supply chain.”

The journey of expansion continued thereon with the opening of the first BIBA store at Inorbit Mall in Mumbai. An interesting personal experience led the brand to make the move to offer kidswear (read Indian ethnic wear for young girls). Elaborates Siddharth, “I have a daughter who is 7-year-old. We have always faced a challenge finding apt Indian ethnic wear for her. That is when we decided to expand our portfolio to include kidswear as well. My wife has been a designer and this helped us quite some bit.” It has been a year since the brand expanded its portfolio and till date they have managed to have about 85 touch-points to retail the brand. Says Siddharth, “We started retailing kidswear through some of our exclusive stores and through Lifestyle and Central. We shall partner with a few of the well established traditional retail formats too for this.”

Apart from being a pioneer and one of the most widely available brands for salwar kameez, what makes the brands stand apart from the rest. Sharing BIBA's USP, Meena says, “BIBA as a brand stands for variety and affordable designer wear. In simple words, BIBA clothes are simple, elegant and stylish.  Each month we launch new 'mix n match' collections and 30 new SKD designs so that our customers enjoy a wide range of products inspired from various different sources. I feel BIBA's style redefines the Indian woman's style. One feedback we always get from our patrons is that BIBA clothes make them look slimmer. The brand has evolved with the customers, making it so popular amongst women.” Elaborating further, she says, “BIBA specializes in ethnic garments with a modern and contemporary look. We keep changing our designs with the trends, retaining our roots which are steeped in Indian Traditional crafts like Hand Block printing with vegetable dyes, exquisite hand embroideries and many more. BIBA use pure fabrics like silks, chiffons, georgettes etc in vibrant-to-soothing shades to create its designs. The accent here is on fashionable yet affordable designer clothing ranging from medium-to-plus sizes which has won a large and loyal client base.”

A breakthrough for the brand came in during the late 1990's when Kishore Biyani approached the brand for a movie partnership with film – Na Tum Jano Na Hum. Post that came in a series of movies including the likes of Devdas, Bhagbhan etc. Sharing details of their marketing activities, Siddharth says, “Biba is building brand salience by strategically investing in premium media like top of line fashion magazines, national dailies, leading radio channels and out of home media. The intent is to not just advertise but engage with our consumers at all relevant touch-points. Hence digital and mobile media as well as onground activations are something we are taking very seriously. Recently we started our fanpage on Facebook and have built a loyal base of more than 1 lakh consumers in less than 1.5 months of launching! This just elucidates the popularity of the brand Biba. For the year 2011-2012, we have earmarked 4 per cent of total sales as the marketing budget. We will be launching our own online selling portal in the coming financial year.”

The brand is looking at strengthening its base in the country before embarking for an overseas journey. Says Siddharth, “Currently, we feel the Indian market is not saturated. We are already present in 40 cities but still we get a great response from our consumers each time we open a new store. Hence the focus is on home ground right now. We have already identified 100 cities in India where we would want to be present and the task at hand is to cover these cities in the next 2-3 years.

BIBA has successfully expanded its reach using the franchise route and according to Siddharth the returns have been good. To support the brand's expansion, capital infusion happened with the selling of 28 per cent of stake to Kishore Biyani's Future Venture Capital Ltd. Says Siddarth, “Post 2006 we went on an expansion spree and retail is a capital intensive business. We are happy to be associated with the Future Group. The majority of the stake anyways remains with us. There is absolute no interference and they are great partners (in terms of the 28 per cent stake that they have) to be associated with.”

Sharing expert view on the brand, Harish Bijoor, brand-expert and ceo, Harish Bijoor Consults Inc., “The best thing the brand has is its name. A 4 letter word with two syllables that fall easy on the tongue. its focus on ethnic wear helped the brand occupy a vacuum in the space of high end branded ethnic wear. It made for itself a space all its own.  A space which later attracted clones, but the brand remains a step ahead of consumer desire and aspiration in terms of fashion and flaunt value. And that's its true merit. The brand is alive. Alive  to change and alive to the chameleon consumer at large.”

The brand did receive a set back a couple of years ago when the elder kin of the family – Sanjay Bindra decided to part ways and begin with the retailing of his own brand – 7 East but this has not deterred the mother- son duo – Meena and Siddharth to expand their wings to reach to new territories. Says Siddharth, “On an average, Biba is looking to open 4-5 stores each month to take our exclusive store number to 200 in the next 2-3 years. 80 per cent of the stores will be company owned. We are also planning to launch 4-6 flagship stores across the country in the next 12 months with an approximate investment of 1 core per store. In terms of product line we have recently launched 'Biba Girls' – an ethnic wear collection for 2-12 year old girls. We have got a tremendous response for this and we believe this will become a big category for us. There are also plans to launch 'Unstitched Fabrics' in a big way.”

As penned for STOrai Jan – Feb 2012 issue

The Story of Amit Jatia and McDonald's in India

You will hardly see him at retail conferences or read about him in print. He works silently and prefers it that way. But meet him in person and you just cannot help yourself being in awe of the magnificent persona he carries. Amit Jatia, vice-chairman, Hardcastle Restaurants Private Limited, the man behind bringing McDonald’s to India can leave you at loss of words when he gets talking. Strictly no nonsense and no going around the bush. He talks straight highlighting the finer nuances of business and life that makes him an achiever in whatever he undertakes. His biggest claim to fame is being the youngest McDonald’s partner across the globe but not to forget the various international degrees and fellowships he holds! Excerpts from the story I had penned for STOrai 7^th Ann special.

practically wasn’t really born with a silver spoon in his mouth but Jatia has no qualms in accepting that there were no financial struggles he had to face during his early childhood, “Basically I had a good childhood. Essentially we are a business family so I always aspired to get into business since early childhood. It was perhaps in my blood and imbibed in my mind that ‘industrialist’ was the way to go. Our area of expertise then was into manufacturing.” Jatia flew across to the West to complete his higher education but was sure to return to India. He was given an option of taking care of their international business but since he was keen to be a part of the manufacturing business, he opted to return to India. Jatia elaborates, “I had just got through with my graduation abroad. The time I returned was also the time when we had just got into a Joint Venture with an industrial lubricant business and it was a very high technology mechanism that goes into steel mills / mining etc.”

Adding further, he says, “This line was suggested to me by grand-uncle. At that time we weren’t event sure what we wanted to exactly do with the business. But I took it on me to make it a success. I must have been 21 (age) then. The product we were talking about was water based. Till then, oil based products were usually used. The idea was to replace oil to water and it was obviously a high safety and environmentally friendly product. Now in 1988, who cared about environment and besides my product was pegged expensive. I was too skeptical if it would meet with success and if I would really be able to sell. I dug deeper into its study and the market study as well and spent about three months with our collaborator. Based on all the studies I developed a line of products. A lot of raw material was not available in India then. I remember my R&D head always telling me that so and so is not working out and its not available in the country. My only response would be – business is not built by saying it cannot be done. You have to find a way to do things. We wrote to every international supplier, got samples and gave the samples to Indian companies saying – match the target. This is how we built the first line of products.” Jatia personally would go to every steel mill in the country showing his new product line and convincing them to try what he had to offer. Elaborating further, he says, “My main theme was – just tell me your problem. Our job is to solve your problem.”

As Jatia was getting himself comfortable with the business, the Jatia family went in for a structural re-organization though fortunately for them the lubricant business remained as part of their portfolio. This was in 1992. During one of the meetings that Jatia had with Walter Saldana for one of his businesses, Saldana casually informed him that McDonald’s was looking at setting base in India hence looking at a partner. Shares Jatia, “What happened was that for one of my marketing activities, I had a meeting with Saldana who was the chairman at Leo Burnett and McDonald’s uses Leo Burnett internationally. Now, they had written to him asking him to suggest potential Indian partners. Saldana asked me if I was interested. I snapped back saying – You know I am a vegetarian!” On second thoughts post the meeting, Jatia did feel it was a good business proposition, specially when they were looking at diversifying into new businesses apart from the lubricant business of theirs. Says Jatia, “McDonalds was looking for a young partner with a capital to invest and was willing to take the business as their primary business and drive it. We met, had a series of meetings and finally inked the agreement in 1995 and opened the first restaurant in 1996. I went and worked at one of the international McDonald’s restaurant for three days. We took our initial batch for training to Indonesia.”

Considering he had zero experience in the restaurant industry, wasn’t he scared of failure? Jatia is quick to say, “No! Infact being from another industry was an advantage because sometimes when you come from the same industry, you bring with you a lot of baggage. So for me actually not being from the industry in my view has helped the business. Like for e.g. in real estate – I had zero real estate knowledge. Now, the way McDonald’s does business – it is all long term. We do a 20-year lease. That time remember there were no malls and development for commercial spaces was very limited and it was restrictive too. Now when you go to Linking Road and you tell the owner of the building – that I cannot pay you heavy rent and I want a 20-year lease and you cannot enter the building when the renovation is on as we follow very strict terms and conditions. With all this, you can probably imagine that they would throw us out but since I wasn’t from this industry, I didn’t have any reservations in putting forth my terms and conditions. You may be surprised that we got the deal in our favor and we paid zero rent during the construction phase.” Jatia is a man full of patience when it comes to business and he completely accepts the fact that if you have to build something solid – it takes time. As he beautifully reminds us, “Rome was not built in a day. It takes time to set the foundation right. Normally all businesses are marathons and it starts at the bottom and then goes high…so the crux is to build the foundation. For me, my strength is in my people. I have always worked with people right from day one. We have built a very strong team. They are at the forefront to take care of things. My focus is strategy but ofcourse it has evolved over a period of time. In 1996, it was not just strategy that formed my core competence. In 1996, I got my hands dirty too… we went to Indonesia and were there for training for a period of nine months to understand the intricacies of the business.”

The challenge for the group began with the launch of their first restaurant. Says Jatia, “We were bringing in a new concept, people didn’t know about it well. Quick service restaurants were not famous…infact unknown. There was just one somewhere in Bandra which eventually lost public trust due to poor customer service. So when we came in, people weren’t too sure if we in true sense would be a quick service restaurant serving quality food. Another major challenge for us was to build the supply chain and maintain food safety standards as followed by McDonald’s internationally. These all obviously led to heavy investment and our customers then were ready to shell only a certain amount of money on our products. Also, over a period of time we realized that we needed to have more of a vegetarian menu. We had to quickly make changes but McDonald’s was very much responsive to our needs but it still took some time to convince them.”

Jatia explains the four phases the business went through. The first for him was Glocalization where they took all the international norms of McDonald’s and married those with the Indian knowledge and got the model out. This was in  1995-96. There on till 2002, it was the Built Phase. He says, “This was the time when the market also saw the opening of other brands. I remember getting a lot of flak from peers and media as to why our expansion plans were slow but for me, I wasn’t going slow. I was setting my foundation right. For me it has never been a number game. For me, it was always getting the unit economics right, which meant, that every McDonald’s we opened, I had to make money. It was about getting the customers value proposition right and the third thing was getting the right people on board. When we had all this in place, we moved to the third phase which was between 2003- 2010. This was our Growth Phase. This was the phase when what we were doing was building the foundation for ‘eating out’. All this while we were building our own foundation to survive and now we moved on to the next level.”

The model as Jatia very well says was very simple. Explaining it further, he shares, “It is all about value to customers, it is about accessibility and it is about the brand – which is menu, ambiance, look and feel and customer service. We believe if we get these three things right, then it is hitting the target bang on. We launched our Happy Price Menu  - the Rs. 20 burger in 2004 which was game changing for us. Customers found McDonald’s valuable, affordable and they also liked the product. So it was not about discounting a product that people did not like; it was about giving them value in what they liked. In 2009, we launched the Extra Value Meals once we realized that the customer understood our individual products. Recently we have launched our Extra Value Lunch. In our growth phase, we decided that from x number of restaurants, we now had to move to newer cities. I often had to hear why wasn’t I moving to places like Bangalore, Chennai etc. Our philosophy has always been – step by step. India is not going anywhere. It takes time. Whatever you do, do it solid and we did that. We made a lot of change in our ambiance and made the brand relevant to the Indian market. The name of the game is to keep evolving and being relevant to the market at that particular point of time. What worked for me 10 years ago, will not hold true today and similarly what is working for me now, shall be redundant in another couple of years.”

Adding on further, he says, “In 2011, we said that now is the time to accelerate. Now we have got the foundation right and we shall continue to innovate and innovate in every area. So now is the time to expand very aggressively. So what we have done in 15 years, we shall do in the next three years and what we do in the next 3 years; thereon we shall do that in the next one year. For me now, since I have a phenomenal team in this aggressive / accelerate phase, my role has changed; our challenges have changed. No more it is about dealing with things as they were before. Now it is about dealing with growth. Dealing with how can we see the business tomorrow…having a strong leadership in the pipeline. These are my challenges for the day. So I am just trying to make sure that I change fast enough or I will have to be changed. Basically, as long as you recognize that change is the only constant, you are good.”

Mentoring young entrepreneurs or brands which aspire to make themselves successful in the Indian market, Jatia shares, “Today people who are trying to get themselves in the Indian retail market are going too fast. I believe you cannot conquer the market no matter how deep is your pocket. The consumers are only going to evolve at their space. For e.g. if it took us 20 years to evolve customers in the US, India will take may be 5-7 years but it shall definitely not happen overnight. So all I want to share is that it is brick by brick. Be aggressive but at the same time don’t be in a rush to own the market, Get your unit economics right. There are different stages of development and in different stages, you use different strategies. My message is, see where your category is in terms of its evolution at that point of time. Get that right and trust me you will win. Don’t worry how fast others are going.”

Adding on to the business philosophy he follows, “My philosophy is that you have to face reality. Whatever the constraints, you have to develop your business around it. If you only keep crying and cribbing then you cannot move ahead. That is why to my mind there are no villains. You got to adjust to the environment around you and just move on.”

Sharing his views on the retail industry as on today (in India), Jatia minces no words, “I just feel we do not have enough talent and depth in retail today. It is not to do with the people. It is got to do with the age of the industry. So if your industry is just 5-7 years old, the maximum experience someone will have is only that much then. Bringing international talents is no solution as they do not understand the Indian market and by the time they do, the team gets restless and starts moving out. FDI is going to benefit Indian retail to quite an extent. It is going to structure the Indian supply chain. I do not see any reason for us to feat or stop FDI. Why do we need to be scared of them taking our market share? Instead, we need to compete with them and match their standards.”

 An avid reader, Jatia’s current favorite is – Great by Choice by Jim Collins. A firm believer of whatever Paul Coelho writes in his book Alchemist, Jatia strongly feels that you just have to take the step and doors shall automatically open for you.  As for this favorite author, its Jack Welch for him. As he says, “He is the man for me. His thoughts and mine resonate and I like the straight, no-nonsense approach that he has in all his writings. Welch says - Face reality as it is, not as it was or as you wish to be.” In my company, I encourage people to tell me how things really are because if you don’t see the real issues, it can impact the business. I also follow Ram Charan’s writing as well. Charan discusses eight important skills for a CEO. He says self confidence is critical; those with self confidence are the ones who succeed eventually. You should have courage in your own ability. But you should not be arrogant. He also talks about traits that can interfere with success. For a CEO, ambition is important but if you use it to win at all costs, it derails you.”

Chai time with Basilur

When Japanese scholar Okakura Kakuzo said - Tea…is a religion of the art of life he really wouldn’t have envisioned that decades down the line, someone would go ahead to position tea and its packaging in the category of luxury and premium products. A Sri Lankan based tea company by the name Basilur went ahead to not only redefine the most unassuming and  mostly taken for granted beverage but also managed to position it at par with any other premium product.

Not so long ago when a proposal came knocking at the girl’s door for a prospective groom, the meeting would culminate over a cup of chai at the girl’s house where members from the boy’s family would more or less judge the culinary skills of their to-be-daughter-in-law from the taste of the tea served. Tea-time breaks are a must for us – whether at home or at work. This simple yet powerful beverage remains indispensible as part of our lifestyle and it has had its share of adulation but more often than not, it is a beverage we have been taking for granted. Though with changing lifestyle dynamics, tea is now catching the fancy of people as a ‘lifestyle’ beverage with the introduction of flavored tea / green tea / iced tea / tea as part of cocktails etc. Tea began as a medicine and grew into a beverage. In China, in the eighth century, it entered the realm of poetry as one of the polite amusements. The fifteenth century saw Japan ennoble it into a religion of aestheticism—Teaism. The popularity of tea is evident from the fact that today there are kiosks for iced tea and on the menu of any restaurant or fast food joint, there are various options available for iced tea too! Cola major Coca Cola recently went ahead to even launch bottled green tea in Taiwan targeting the large tea drinking population residing there. So much so about tea to set the context of what is to follow.

The Basilur Story in India
The story of Basilur in India makes an interesting read. Perhaps the association of tea with marriage is so strong in India that the entry of Basilur in the country too happened based on an event related to a marriage. When Raghav Gupta  and his family were busy preparing for his marriage to take place in December 2011, the thought of gifting ‘tea’ to all the guests being invited for the marriage crossed their minds considering the Gupta family had business in Sri Lanka and they wished to gift something of the Sri Lankan origin. Now this thought further laid the seeds of exploring the options available and Raghav’s mother who was in total awe of Basilur and their marvelous packaging declared there couldn’t be any better option. The idea finally bloomed into the possibility of being the Indian distributors for the brand! Quite a story, isn’t it!

Adding further, he states, “When we approached Basilur for an order of 2000 packs, out of the blue they suggested a business proposal of us representing them in India. Now, we were looking at a new business vertical under SVA considering my younger brother – Abhinav Gupta had recently then finished with his graduation. Looking at the product and the potential, we said…why not??? Well, there has been no looking back since then. We returned to India, did a bit of our own research. We checked the market potential for a brand like Basilur in India which sold tea in the range of Rs. 6000 a kilo and more. Based on the feedback we received and also out of passion of food and beverage that we both brothers have, we decided to go ahead with it. Two months before my wedding date, the first shipment arrived and we were rolling all out then!” According to the Gupta brothers, the USP of Basilur is evident from their business philosophy where they have no intentions of being a part of the mass market. Add Raghav, “Fancy packaging, flavors and unmatchable quality remains our niche and since the beginning Basilur never aimed at being a part of the mass market.”

The brands has presence in about  The very fact that they joined hands with SVA in India to be their partners based just on a relationship building meeting shows that for them the business of tea is much more than just a ‘business’. Passion rules the brand and also connects them to their various partners across the globe. In Russia, they went ahead to create an exclusive label for a chain of supermarkets and they assured them of exclusivity of that particular brand thus refraining from supplying the same brand to other Russian stores and super / hypermarkets. With the Gupta family, the association was based on the meetings they had where all they took into consideration was the dynamism of Raghav and Abhinav and their lifestyle which was exactly what Basilur catered to.  Says Raghav, “From day one, all that we were told was to just keep the brand image in mind and not allow it to get diluted in quest for bigger volumes. Volumes were never thrust on us and they extend all possible support to us to set ourselves in the Indian market. Inspite of us not even featuring in their list of top 10 countries that they export to, they agreed to introduce ginger flavored tea for our Indian patrons.”

Brewing Further
Available at niche food and gourmet stores, Basilur in India was initially welcomed at Foodhall from where their journey began. Says Abhinav, “Future Group’s Foodhall helped us to gain an insight into the world of retail. With them, we initially began our journey and simultaneously we were also listing down the stores we would have liked to see ourselves in.” Initially, the idea behind introducing Basilur in India was to tap the gifting market specially keeping in mind the packaging of the product. They went ahead to suggest Foodhall to keep Basilur as part of the gift hampers for the festive season. The idea worked but simultaneously they also saw a considerable movement of the packets being picked off the shelves and that is when they thought of paying more attention to retail sale. Explains Raghav, “The strategy we adopted was similar to what a luxury apparel brand would adopt. Would they go about to stores asking for a shelf space or would they wait for retail stores having similar brand image to approach them.”

Pitching Basilur tea as a perfect gift for occasions ranging from weddings to festive to just about  anything, the Gupta brothers personally paid attention to the minutest of details  - be it in terms of maintaining relationships to ensuring that the customization of gift hampers was well executed. Reminiscing the arrival of the first shipment in 2011, Raghav shares, “Our experience related to our first shipment is imbibed in our memory. We were confused as to what would really sell hence we ordered a little of everything from the 200 SKUs. As against what we thought would sell well, we were in for a surprise when flavors we really didn’t think would sell actually generated a lot of interested. Till date, each shipment that arrives gives us some new thing to learn!”

Reaching the Boiling Point
The group went ahead to experiment with designing niche programmes to reach to their target audience. Apart from taking part in various trade shows, they would also go ahead and undertake special orders for setting up of tea counters at various high profile weddings / events. With an in-house tea sommelier in place, they take due care to ensure that the brand leaves an impression wherever it travels. Recently, they also got into a tie up with the Mumbai and Delhi Airports where they served 24 variants of our teas as part of a tea festival. Specially designed tea boxes with different flavors were kept before the audience to choose from the variety of flavors. The event generated a lot of interest specially because so far the only flavors that one can usually pick and choose from include masala chai, ginger / green tea and / or regular tea.

With the brand gaining popularity amongst its target audience, today they have huge corporate orders for gifting purposes which are then directly taken care of by the Gupta brothers. Shares Abhinav, “Today, people do not shy away when it comes to experimenting with various gifting options instead of sticking to mithais, chocolates and dry-fruits. Our product scores very well because of the exquisite packaging and not to forget the various flavors that we have to offer.” The idea of gifting Basilur tea as part of Raghav’s wedding helped them to tap the curious minds of their guests who are not a part of their regular clientele.

Adding Flavors
Across the years, the innovations to tap the market includes setting up of tea tasting counters at the high end retail stores that they are present in, keeping a tab of the regular customers and informing them of any new flavors / offers being launched, having a one on one communication with their customers to have a first-hand feedback and incorporate changes in their approach to reach out to them if necessary. Sharing details on the ‘Tea Tastings’ that they carry forth, Abhinav adds, “We do these in various ways. There is a fixed setup at locations such as Foodhall wherein guests can sample the teas and understand the differences in tastes/ flavors from the sommelier on site before buying. We do a range of private functions also where we offer tea tasting sessions for families and guests to learn about tea and the different flavors of tea.”

The group has also gone a step ahead to have a fully comprehensive and delightfully engaging website which not only tutors its patrons on how they can prepare their cup of Basilur tea but also provide options of enrolling for a membership which entitles them to receive a pack of Basilur tea every month. Commenting on this, Raghav says, “Online retailing - Only place where all our flavors are available. We offer free shipping across India and that really opened our eyes to the Indian market because we would receive orders right from Metro cities to Tier 3 cities. We have also partnered with Teach for India wherein we donate a portion of all our online sales.”

Explaining the concept, Abhinav shares, “We offer a different tea every month for an entire year wherein the flavor of each month is dependent on the season and every flavor will be unique. Each box will be sufficient to last the entire month. This concept is growing in India and have a small base but is increasing. People are enjoying the idea for themselves and also gifting it to their loved ones. The selection of teas is done based on a few criteria’s such as weather, client preferences and feedbacks, previous month selection, new arrivals as well as what we feel would be interesting for our clients.”

The Sri Lankan brand seems to be in safe hands of the Gupta brothers who are not leaving any stone unturned to create a niche for it in the Indian market place. Future plans include setting up of exclusive tea lounges in metros and tier 1 cities and the task looks do-able considering they not only have the required passion and enthusiasm to carry it forth but also hundreds of flavors to offer!

as penned down for  STOrai May - June 2013

Where is my Mobile?? I need to Shop!!

Hmmmmm….gone are the days when all that your mobile phone did was to connect you with someone you wanted to speak to. Phones today remain a remote medium to talk. They do much much more! So much more that retail is in threat because of them! For those who arent acquainted with term – Mobile Showrooming, here you go...

As pointed out by a TNS Study, ‘Showrooming’, implies a behavior by shoppers where they visit stores only to test products but buy them later elsewhere and this has emerged as a significant threat to the high street in recent years, with one third of mobile users globally admitting to ‘showrooming’ behaviour.’

But let’s not panic. As per TNS’s annual Mobile Life study, based on responses from 38,000 people in 43 countries, shows that whilst showrooming is a very real threat, mobile can offer a solution to brands in minimizing this risk. Among those who showroom, two thirds use their phone whilst doing so, providing a major opportunity for brands to interact with consumers via mobile and turn browsers into buyers.

Matthew Froggatt, Chief Development Officer at TNS, said, “The impact of digital development, mobile Internet and online shopping are coming together in a way that is posing a very real threat to traditional bricks and mortar retailers. However, there is also opportunity to mitigate that risk for brands that get their customer engagement right.”

Some behaviours - such as using a mobile to conduct independent research in-store - do present risks to retailers, as external influences may increase a shopper’s likelihood of leaving without making a purchase. However, the study shows that people are open to engaging with brands whilst in-store, with more than one tenth (11 percent) of smartphone owners in India keen to receive mobile coupons whilst shopping and 14 percent interested in apps that help them navigate the store they are in compared to one fifth of people globally.

Meanwhile 10 percent of consumers in India are interested in a ‘virtual sales assistant’, compared to 13 percent consumers globally, who will help answer their questions in-store about a particular product. This openness to interacting does present a real opportunity for brands that get their mobile strategy right, to engage meaningfully with people at the point when they are considering a purchase.

Parijat Chakraborty, Executive Director, at TNS India adds, “People in India still want the reassurance of seeing a product before they buy it. Rather than seeing mobile as a threat to in-store sales, brands and retailers must embrace it as the most immediate and personalised way to engage with shoppers while they are in-store to ensure they don’t leave empty-handed.”

Showrooming is a global phenomenon, but the role played by mobile varies significantly across the world. In markets where people’s first introduction to the Internet has been via a handset, shoppers are highly likely to use their mobile when showrooming – 75 percent in emerging Asia, 87 percent in the Middle East and North Africa and 67 percent in Sub-Saharan Africa. People in developed markets, where online shopping is well established, are less likely to do so, with 55 percent of showroomers in North America and 56 percent in Europe using their phones in this way

“In developed markets, mobile presents an opportunity to break established showrooming behaviours and make purchasing in retail more appealing. However in emerging markets, where there is a greater tendency to embrace disruptive behaviours, there is an imminent threat of new showrooming behaviour driven by mobile,” commented Froggatt.

The biggest drivers for showrooming consumers are twofold: reassurance on price and reassurance on suitability. Reading reviews or checking social media whilst in-store to inform their decision-making stands at 2.4 percent in India compared to 16 percent globally. 42 percent Indian consumes prefer asking friends and family what they would recommend buying. This is in line with 49 percent in emerging Asian markets and much higher when compared to such consumers globally (25 percent).

Having knowledgeable sales staff on hand is no guarantee of success, with two-fifth (39.7 percent) consumers in India preferring to access information on their phone than speak to a sales assistant in store, compared to almost a third of people globally and two-fifths of 16-30 year olds. While people continue to choose diverse ways of seeking the reassurance they require, an integrated approach meeting customer needs at all touchpoints is essential.

Parijat concludes, “The increased popularity of m-commerce is not the death-knell for conventional retailers. Both online and offline retailers need to understand the complex mix of decision making elements in-store and online, and sharpen their strategies accordingly. Consumers want both the formats to exist; however, they wish to see the benefit of both in each. The success for marketers will depend on how the best of both the worlds can be offered by bringing in synergies across online and offline”.

TNS shows the way in which retailers can get involved –

• 38 % of people are interested in redeeming mobile coupons

• 36 % would like to scan a barcode for more information

• 34 % would like to check social media and buzz about the product

• 31 % would like a mobile app to help navigate a store

• 30 % are interested in completing the purchase on their phone

• 30 % would like to receive mobile coupons when they pass the product

• 16 % are interested in an app to check to availability elsewhere

Bharti Wal-Mart Easyday cannot Afford to Take it So Easy!

A couple of months ago, I happened to visit one of the oldest surviving cities of the Punjab region in India – Jalandhar. The place is far away from any of the metros that you would come across. The city is known for its lineage associated with the manufacturing of sports goods and a drive down the city highway shall also bring to your notice innumerous resorts and banquet halls that will give you a peek into a lavish Punjabi wedding! Retail in Jalandhar is still at its infancy but it is a good sight to see majority of the supermarket and hypermarket chains having set themselves early on.

My trip to Jalandhar was a leisure trip where I tagged along with my hubby for one of his business meetings. Our toddler accompanied us and because the city is otherwise a bit dead, the option before me and my daughter was to just go and spend time at the nearby malls (if I can call them so!!). One of the malls that I happened to visit had Bharti Wal-Mart’s Easyday as its anchor. The store entrance would literally confuse you of the store being under renovation but then since I had nothing better to do and I wanted to pick some cup noodles for my little one, I thought of just taking a stroll within. The product display is at par with what you would find in any other super / hyper market. The cooling within the store is decent as well. The product assortment has a good mix too but what really amused me was the training extended to the store staff specially considering the brand name – Wal-Mart is associated with this place! The staff seemed to be in a kitty party mood with all of them standing in clusters and exchanging jokes thus filing the air with their laughter. Well, laughter is the best medicine but then I am sure this exercise can be practiced outside the store when they aren’t spoting the uniform that they were in!

As I strolled down the aisles hunting for cup noodles, I just could locate them and finally I had to go and disturb a gang of girls on duty to help me out. None of them were rude but yes, ignorant to the core of what the supermarket housed! Firstly, one of them just couldn’t comprehend what I was looking for and because she had more jokes to share with her colleagues hence could really waste more time to solve the mystery that I had just presented her with, she requested me to go to the enquiry counter / helpdesk and just get my query resolved. Wow!! I thought to myself – Now that is indeed a solution!! How couldn’t I have thought of this before! As I was standing there with my little one thinking how could I be so daft as to disturb the girls’ with my silly question, the gang just decided to leave me alone with my thoughts and guess what!! Just as they moved, I found my cup noodles that were hidden behind their backs!!

Now, Bharti Wal-Mart EasyDay really really cannot afford to take it this easy when it comes to customer service and staff training!

Customer Loyalty ain't no Child's Play!

Let's admit it...we all like gifts! Better than that we all like stretching our money to get the best from what we spend. Offers and discounts have a magnetic effect and they just manage to pull more and more money out of our wallets. Better still, the very mention of the word - Loyalty Scheme  unintentionally binds us to that retailer and invariably our next shopping happens at his store. Encapsulating the inception of loyalty programmes, Brian Pearson from LoyaltyOne shares, “I think the original loyalty programs were airline programs going back to American Airlines and The British Airways. They were the pioneers. This was back in the 1980s wherein the frequent flyers could collect points and redeem it for something free. Post the airlines, it was the hospitality industry and it was only towards the early 1990s that the retail industry started having strong loyalty programs for their customers. So to speak, we are sitting on something that is just about two decades old.”

Adding more to the history bit he says, “Originally it was just value add to the customers. Only later was it seen as a means of promotion and get people to consolidate more of their spending then they might have done in a more fragmented environment.”

That much for setting the context for what is to follow. Just as modern and organized retail is gaining momentum in India, each retailer is up against the other in offering his customer alluring loyalty schemes. Shoppers Stop set the ball rolling for them. Other's followed. Swanky cards, email reminders of the point accumulated and how you could win more, SMS reminders etc etc.  There was bombardment of reminders and offers from across! For me personally, it caused immense irritation. So much so that today I just refrain from going to these MBOs and department stores which offer you reward points which are petty to say the least! I dont recollect using any of my reward points so far!

A couple of days ago, I was casually walking down an extremely local market in Mumbai in the area of Dadar. there are hordes of local retailers based there since donkeys years and yes, they have an extremely loyal set of customers. I was due to gift an everyday causal tee to my maid's son and one of the shop had a good offer put up on its hardly visible facade. I went in and picked two tees, each for Rs. 300. Went ahead to the billing counter to pay and the person there just asked me if I had ever shopped at his store before. When i replied - No, he pro-actively just removed a folded card (the picture that i have put with this blog) which had a few rows and columns in it, attached my bill, wrote something in one of the columns and told me that if till November I shopped for another R. 1400 more then I would be entitled to a free gift of Rs. 200. Simple! No show off and pompousness about any loyalty scheme and information booklet or filling of a form with all my personal details including my birthday, anniversary, hubby's birthday, pet's birthday etc etc  and ofcourse  - no swanky card!

I walked a few steps ahead and there was this store of one of the brands I stock for my Indian ethnic wear. The brand is called Cotton Cottage. I visit the place one in approximately 2-3 months and pick up a kurti (top). I did the same this time and went to pay my bill and redeem my accumulated points on the loyalty card that I had. Guess what I get to hear... M'am, our system is down hence you cannot redeem. I tell them, I have it on message the points that I have but the lady is curt enough to cut me off with a - SORRY!! According to her, I could redeem the points on my next purchase. Well, if only she knew that I might not visit her store again!

To conclude, loyalty programe and loyalty schemes are good but then do brands really care to look at them the way they should be looked at? From my experience, in India, the only reason the modern retailers want to offer a loyalty scheme is to collect data and use it for promotional and marketing activities.

For all you big guys of modern retail in India who witohut a wink just ape the West.... local players like the one I visited at Dadar have much more to teach you!

Much more than just a Fantasie!

As I would pass through the corner of New Marine Lines, no amount of self-discipline would ever let me hold myself back from not only looking but also getting tempted to the huge outdoor display advertising covering the façade of the store Fantasie Fine Chocolates. The foundation of the store was laid much before I was born…infact much before my mom was born!! It was 65 years ago when a man by the name A. Fazelbhoy decided to do something no one would have even imagined of at that time. He decided to start off with a store for hand-crafted, artisanal chocolates in India. These were certainly not the days and not the time when Indians were matured to indulge in delicacies such as this but nonetheless he took the first step. And today, when modern retail is the buzzword, not much has changed! If you look around, except for a handful (number that you can count on your fingertips), not many exclusive chocolate brands can be seen around. Salute to Fazelbhoy for being the visionary that he was!

Ask his stunning and absolutely gorgeous grand-daughter – Zeba Kohli  (she heads the mantle for Fantasie Fine Chocolates and the other businesses that Fazelbhoy gave birth to and also is in-charge of the trust he initiated) on the philosophy behind the name and she explains, “It was my grand-father’s fantasy to have world-class chocolates in India and hence the name - Fantasie Fine Chocolates!” True to its name, the artisanal chocolates are class apart! A bite into any of them and you shall literally forget the Patchi’s and Leonida’s of the world!

As a teenager, Zeba used to hang around at the store helping the staff (usually they employed the physically challenged and the under-privileged). She would be introduced to the customers who would walk-in to the store and gradually she became the face people associated with Fantasie Fine Chocolates. She leaves no stone un-turned to praise her grand-father for setting a trend for many to follow  - be it in the business of artisanal chocolates or in the industry of refrigeration. “Cold storage in the country was literally not there! Nana did his every bit to pioneer things and set a trend”, says Zeba.

Today, the range that Zeba offers will leave you amazed. From chocolate Taj Mahals to Cindrella Shoe, from chocolate jewelry to chocolate puzzles for children – she has it all!! Way back in 2006, she had a chocolate fashion show! For Zeba, as she puts it so well – the business she is into is not that of chocolates but she is into something she loves doing and this just happens to be the business of chocolates. The purity of her thoughts is well evident from initiative she undertook to inculcate the values of ‘peace and non-violence’ in children from the film she made. Sharing a bit on this, she says, “I wanted children to understand the preaching of Mahatma and children love chocolates. I used the medium of chocolates to have a short film for them.” Amazing, isn’t it!

Across the world, Zeba has carved a niche for herself as the Chocolate Lady of India. Her confidence in what she does is evident from the fact that she bares it all before you. Check her website www.fantasiechocolate.com and you will be able to jot down all the recipes. She shares, “For me, I am my biggest competitor. I don’t need to feel insecure about having my recipes being replicated by anyone else.”

Ask her about the dynamics of artisanal chocolates in India, and she explains, “If I have to share the dynamics of the chocolate industry in India then I have to say that we have a long way to go! We are blessed with the most delicious of mithais hence for us chocolates actually account for just 0.01 per cent of total consumption when we talk of ‘sweets’. The mushrooming of exclusive chocolate stores is a good thing but the players need to think through all the challenges that are before us in terms of the back-end and our climate and culture. Climate because maintaining the shelf life for exquisite handmade chocolates  isn’t an easy task considering our tropical weather and culture because of the constant thrust on vegetarian products and also we have a lot of shraads and following of amavasyaas where chocolate consumption is restricted.”

Currently, with 6 stores spread across Mumbai and Pune, Zeba is in no rush to expand. She firmly believes that expansion has to be gradual and sure-shot. “With discrepancies in having a strong back-end, there is no point in expanding and compromising on the brand values and brand promise,” she shares.

Retail in India... the Story so Far...

As you key in the words – History of Retail in India; google quickly reflects a link to Wikipedia highlighting the historical milestones on retail in the country. The intro states – Retailing in India is one of the pillars of its economy and accounts for 14 to 15 percent of its Gross Domestic Product (GDP) GDP. The Indian Retail Market is estimated to be US$450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail markets in the world, with 1.2 billion.

Now that is the picture before us. But can you imagine that just four decades ago the total retail trade in the country was only Rs. 10,000 crores! In 1947, before the partition of India, the total branded FMCG items in India were in numbers that could be counted on our fingertips! In 1953, the total food grain production was in tune of just 53 million tons and now it accounts to 257 million tons! Well, the reason for this spurt in retail and food production / consumption has to do with the changing market dynamics which has its root in the consumer evolution and various reforms in policies undertaken by the Government at various levels.

Stepping back to yesteryears, it shall be of interest to you to learn about the handful of brands present in the country till the close of the 4^th decade of the 20^th Century. We Indians love our chai but you may be surprised to learn that when it came to branded tea – it was just Brooke Bond and Lipton that found place on the shelves of the kirana stores. Lux and Lifebuoy minus any of their existing SKUs where the only two bathing soap brands that the country had and for clothes it was Sunlight. Cooling  / fairness talcum powders were not even thought of then as the only brand available was Himalaya Bouquet. Afghan Snow was used as an all purpose cream as obviously the concept of age defying and fairness cream was absent then. Colgate was the only toothpaste that consumers bought – be it to fight tooth decay / sensitivity or have a refreshing breath. 7’o clock blade was the only male grooming accessory which was used till its bluntness could no longer be sharpened and there was a need to replace it with a new fresh 7’ o clock blade! It was only the hair-oil category which had about 3-4 brands but then these brands were put to use only on special occasions.  After reading about all this it should not come as any surprise to you when I say that the country got its first brand for slice bread in 1964! And yes, to share more – this brand originated from Orissa just in case you thought it was Mumbai, Delhi or Bangalore which took the lead for setting up the industry for slice breads in the country.

Till about 1950s the only major FMCG Companies in India were that of Colgate and HUL. No wonder then that till late 1950s the monthly consumption of an average Indian middle class household was just about Rs. 70. Till then, the level of aspiration he had was restricted to owning a fountain pen, a cycle and a watch! I missed mentioning here that India got its very own branded fountain pen only in 1955 and there are stories of how the body had to be usually masked with a sticking tape to avoid leakage of ink. 1969 saw the entry of Nestle in India. Coca Cola came in by 1957. The Indian FMCG companies till then who were fast filling the shelves of retailers with their brands were – Dabur (till a long time it was just into Ayurvedic products), Godrej and TOMCO which was later taken over by Hindustan Lever.

Means of communications were visibly absent. Radio wasn’t in the reach of a common man forget having a television at home. Till late 1970s Illustrated Weekly  was the only magazine hence where and how would brands advertise then? Had it not been for Lal Bahadur Shastri’s intervention, perhaps we still would have just been tuning to Radio Cylon. It was he who under his reign launched Vividh Bharti. In 1972 Mumbai saw the launch of the television! The trend of owning a television set then mushroomed during the 1980s. That is when information explosion and information bombardment started happening and advertisers were there plenty many!

The advent of branded garments swept the wardrobes in the early 1980s and post that there has been no looking back in this category which witnesses the launch of a new clothing apparel brand almost on a daily basis. The MRP concept in the country came in  mid 1980s. Till then it was just the concept of a 5 per cent mark-up. To mention about the concept of super markets, the country truly speaking didn’t have one as till mid 1960s, 99 per cent of the stores were less than 500 sq.ft. But it is of importance to mention that department stores as a concept existed in the country since the time of the British regime. 1962 saw the setting of a super market with Delhi Super Bazaar and it was in the 1970s that super-markets were to be seen but thanks to the Co-operatives who in all sense need to be credited to have launched and set the ball rolling for the concept of ‘modern retailing’ in India.

Now, after learning about all this, isn’t it an obvious question to ask that how and why would multi-nationals enter the country then and why then we didn’t have the concept of modern retail in India?

1970s saw the aspirational levels of an average Indian middle class graduating to owning a two wheeler and a refrigerator. It was a transition in 1990s with the same target audience now wanting a flat, a car and a foreign tour. Gradually we then saw the mindset being comfortable with spending rather than always wanting to save.  Things changed largely with the then Finance Minister – Manmohan Singh opening the doors of India to Liberalization, Globalization and Industrialization. A lot of consumer goods importing began in the country and this was also with more and more Indians going abroad for work and study. Top industrial houses of the country jumped into retail – Tata’s, Birla’s. Goenka’s, Marico etc.

The contribution from South India in setting the ball rolling for organized retail in the country has been significant with industry players there taking a lead to establish the first organized retail chains in the food and grocery segment in India with stores such as Nilgiri’s, FoodWorld, Margin Free etc. The Consumer Durables segment too has its root from down South with regional players like Vivek’s, Giria’s, Pai International etc. Additionaly, India saw its first mall in Chennai in 1997 – The Spencer Plaza. Mumbai saw the opening of Crossroads but eventually it had to shut shop as it went wrong on many aspects – the major being not adhering to following the basics of mall management which includes have 5 anchor tenants – each from the category of a hyper or a bigger super market, a successful / well established departmental store, a food court, a multiplex / entertainment zone and a well known food chain. But this failure was well taken note of the future malls setting themselves in the country and those which followed the basic principles succeeded whereas the rest had to change their strategy and have the property used for commercial office space.

 Foreign Direct Investment in India in Cash and Carry Wholesale was allowed in 1997 but soon it faced a roadblock on its way to success when it required Government permission. Though, in 2006 the approval requirement was relaxed and automatic permission was granted. Between 2000 to 2010, Indian retail attracted about $1.8 billion in foreign direct investment but this was representing a very small 1.5 per cent of total investment flow into India.

Till date, India’s retailing industry is essentially owner manned small shops – the mom and pop stores that is. Considering the entire concept of modern retail in the country is relatively new, we shouldn’t feel ashamed to accept that larger format convenience stores and supermarkets account to just about 5 – 6 per cent of the industry today and majority of this are to be found in the urban centres. As for employment generation, with the industry maturing with each passing day, we shall see the figures rising high from the current  figure of about 4 per cent of the Indian population. The Indian Central Government denied FDI in Multi-Brand Retail till 2011 forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single brand retail was limited to 52 per cent ownership and it involved a lengthy bureaucratic process. But as soon as the Government announced retail reforms in November 2011 for both multi-brand stores and single-brand stores, the entire industry saw high pitched activities taking place in various genres – from IT to Innovation to Customer Service Initiatives etc. This was primarily undertaken to prepare for competition that would arise from the entire of players like Walmart, Carrefour, Tesco, IKEA etc. But this excitement was short lived as the announcement met with strong opposition but the speculations continued hence the momentum as such was not lost. January 2012, we had the Government approving for reforms in Single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100 per cent ownership provided that they should source 30 percent of its goods from India.

On 14 September 2012, the Government of India announced the opening of FDI in multi-brand retail, subject to approvals by individual states. This decision has been welcomed by economists and the markets, however has caused protests and an upheaval in India's central government's political coalition structure. On 20 September 2012, the Government of India formally notified the FDI reforms for single and multi brand retail, thereby making it effective under Indian law. On 7 December 2012, the Federal Government of India allowed 51 per cent FDI in multi-brand retail in India. They managed to get the approval of multi-brand retail in the Parliament despite heavy uproar from the opposition. Some states will allow foreign supermarkets like Walmart, Tesco and Carrefour to open while other states will not.

The Governments of some states, particularly Congress-ruled states have said they will allow Foreign supermarkets to open in their state. Andhra Pradesh, Assam, Delhi, Haryana, Maharashtra, Manipur, Rajasthan, Uttarakhand, Daman and Diu and Nagar Haveli would welcome the foreign retailers in their states. The states that have refused to open themselves for any international players are – West Bengal, Gujarat, Bihar, Karnataka, Kerala, Madhya Pradesh, Tripura and Orissa.

Supporters of retail reform who have voiced the need to promote organized retail include Chief Ministers of several states of India, several belonging to political parties that have no affiliation with Congress-led central government of India. The list includes the Chief Ministers of Maharashtra, Andhra Pradesh, Tamil Nadu and Gujarat. In a report submitted earlier in 2011, these Chief Ministers urged the Prime Minister to prioritize reforms to help promote organized retail, shorten the retail path from farm to consumer, allow organized retail to buy direct from farmers at remunerative produce prices, and reduce farm to retail costs. Similarly, the Chief Minister of Delhi has come out in support of the retail reform,] as have the Chief Ministers of the two farming states of Haryana and Punjab in North India. The Chief Ministers of Haryana and Punjab claim that the announced retail reforms will immensely benefit farmers in their states. The Chief Minister of the state of Maharashtra - the state with the biggest GDP in India and home to its financial capital Mumbai - has also welcomed the retail reform..

Tarun Gogoi, the Chief Minister of Assam, an eastern state in India, announcing his support to the retail reform, claimed "this will go a long way in bringing about a sea change in rural economy. The decision will boost agriculture and allied sectors, manufacturing, logistics, integrated cold chains, refrigerated transportation and food processing facilities in a big way."

Today, the organized retail market is growing at almost 35 per cent annually while growth of unorganized retail sector is pegged at 6 per cent. This shows the potential of the industry at large.

India as a country is an amalgamation of various communities and cultures. The potential of retail in the country is immense with the possibility of customizing retail options based on the area of operation and its catchment. Success in retail is no rocket science as long as the basics are adhered to.

Empty Malls? use them as Jogging Tracks!

Yeah! What else will you do with them? Massive structures built by Indian developers being too optimistic of the growing consumerism in the country all remain deserted and empty today and accentuating this is the most recent article appeared to today's ET which states that the boom has burst, though, currently it is restricted to small towns and cities. But then, if I recollect from my experience in the industry since last 7 years, many of the upcoming malls in metros too changed plans mid-way (somewhere 2009 onwards) and converted their malls and shopping centers into commercial buildings.

Quoting excerpts from the Economic Times article: "The bubble has burst," says economist Bibek Debroy. "There has been excess capacity in smaller towns and not so much demand. These boomtowns haven't seen a huge consumption story yet and salary levels too haven't increased the way they were expected to," he says. Vacancy levels in malls across the country are growing at an alarming rate, says property consultancy Jones Lang LaSalle. In smaller towns, over a third of the space is unoccupied, as against just 7% in 2007. Supply of retail space has increased dramatically, but demand from retailers and overall consumption have dropped."Many developers overestimated the appetite for retail in these small towns. They did not realise that the consumption threshold here was low," says Ashutosh Limaye, head of research at Jones Lang LaSalle.

The entire mall culture in India started off on a wrong note. Crossroads in Mumbai failed to understand its target audience when they pioneered this concept way back in the early 2000. What were they thinking when they made it mandatory for visitors to flash wither their car keys or credit cards before entering the mall? Did they even care to do a simple research to find put that majority of the Indian population does not fall in the category of SEC A and B? Was that massive structure built only for the rich and super rich? But then it managed to create enough curiosity and generate interest amidst its peers to follow the bandwagon and open malls  after malls with little USPs to differentiate one from the other. When the space in the city was satiated, the bunch started exploring the tier 2 and tier 3 cities and towns convincing themselves that India was truly Shinning and these places were the future of the country. Really? Be realistic guys! If these places were indeed the future of the country then the youngsters from there wouldn't be aspiring to come to the Metros for their work! Mumbai really wouldn't be house-full all the time! Providing Shopping Cetners and a good F&B and Entertainment option is not what will bind people to stick to their hometowns. Creating employment opportunities for them through your malls will not do the trick either. You pay them but then who pays the people to come and shop at your malls and if people don't shop then how would you make money and if you don't make money, how on earth will you create a sustainable model of employment?

India is Shinning and yes, India is Shopping but the majority of it is still happening in city roads and local markets. Glamorous and glittering malls and shopping centers are good for recreation and to beat away the heat during vacations but otherwise, we still have a long way to go!

During the 6th Edition of The India International Shopping Forum, Anuj Puri from Jones LangLaSalle clearly stated, "Only people who are committed and are hands –on involved and have perseverance will survive. It is a product that will require a lot of financial stability. Those on the real estate side who believe you come out with a box that you develop and sell, than that is not the way ahead." He spoke on how the 6 malls that he sold in the last six month; 90 per cent out of those were sold purely on the land value where no cost of construction was taken into consideration. The structures were slated for demolition to make way for residential complexes to come up. Puri attributed the failure of malls meeting with success in tier 2 and 3 to the herd mentality we have in India of following the West and having a common formula for everything. Here being, these malls blindly copied the deisgn that they saw being accepted in metros and tier 1 cities. The retailers started feeling a pinch to pay the rent and the CAM. Today, developers across the country are not being able to pay even the interest on the debt component with the rentals they charge and hence this is de-motivating the developers to opt for malls and shopping centers. Instead, developers see residential as more lucrative. Puri strongly advocated that for developers to make money they will have to increase their rentals. Otherwise there is no way that the math will have to stack up but then retailers are not in a position to pay more rentals coz their margins are limited. Many of them will have to re-capitalize their companies as their profitability is so low. They will have to find a way out of the interest they paying on their debts to better their profitability. If this simple math does not happen, we shall see more and more developers shrinking their malls and diverting it to having a residential or a mixed use of their land. There is a fundamental challenge today we facing as an industry.