As I said in July, I spent 4 weeks in India. It was a great trip, mainly a personal one however I did take out some time to do some official work as well. I had the pleasure to visit Hyderabad, Bangalore, Chennai and Mumbai. Across all the metros, two things are common,

  • All the cities are booming with construction, new malls and retail outlets.
  • Traffic is really bad, in fact these cities compete with each other to be the worst in traffic

 Organized retailing is slowly gaining momentum in India. Most of the major industrial conglomerates (Tata, Reliance, Birla, etc.) of India are entering this market to capture the ninth-largest retail market in the world, with an estimated annual retail sales of around USD215 billion in 2005 (Rs 960,000 crore).

I visited most of the new organized retail outlets and they seem to be well organized and modeled after US and European layouts. However the check out process is a bit different compared to the western world. Check out process has three main steps,

  1. Step 1: Check out clerk scans the items and places them on the belt for bagging
  2. Step 2: Items are placed in the bag by a bagger and the bags are sealed either by stapling them or using the warm pressure to melt the plastic and seal the mouths of the bags.
  3. Step 3: A security guard at the gate checks the bags and receipts carefully before letting the customer leave.

Step 2 is very unique to Indian market and does take quite sometime as each and every bag has to be sealed. However considering the new concept of organized retailing this may be necessary to reduce shrinkage.

Another interesting observation was, if you have any bags from another store or any personal items they are not allowed into the store. There is actually a "bag check" counter at the entrance like a "Coat check" where the customer must check in all their bags except the purse/wallet. This is again is in place to reduce shrinkage in the stores.

Stores themselves have lots of items and isle space is pretty tight, which means there is lot of bumping of carts into each other or into other people. Since this whole organized retailing is a new concept, shopping in these places is considered as hip. So the whole family comes out to shop as they all want to experience this new trend and want to enjoy it. This increases the number of folks in the stores.

So in summary,

Pros:

  • Great to see finally organized retailing in India which is providing superior experience to consumers
  • Consumers consider it to be hip to shop there and love it
  • Consumers have same choices of products as the western world
  • Opportunities for retailers

Cons:

  • Isle space is too tight
  • Stores are too crowded irrespective of name or city
  • Check out process can be better

Next time I'll share my observation of technology in retail.

Love to hear your experience and comments.