What’s going on in India’s Retail Business?

In order to answer this interesting question, the India Retail Forum 2007 was held in Mumbai (Bombay) 4-6 September, and to look the Indians over the shoulder, ISO Secretary General Preben Bailey was there. One among more than 3000 professionals related to the retail industry, brand marketing, shopping malls and shopfitting.

We were told in 2007-2008 to expect 10 million M2 of new shopping center space. More than 15.000 new outlets, 100 hypermarkets, 500 department stores and 2000 supermarkets, as well as more than 10.000 small and big existing retail outlets that look forward to a complete facelift.

What a perspective for the shopfitting industry. If those figures are correct, India cannot, as it is, produce the necessary quantities of quality fixtures and equipment to supply their future retail space.

Are they real? Do we believe in these figures? The answer is both yes and no!

Yes, because the need is there, the plans, the will, energy and funds too.

No, because India is not like Europe, not like USA, not like China. India is India. A huge, seemingly chaotic subcontinent, society and market, and a system that exist on its’ own premises. And it’s a democracy for good or bad. With all the differences, delays and red tape that are so typical for a democracy, but also a freedom to the retail trade, that shows in the millions of little private shops everywhere, as well as in the rapidly emerging and fast growing new, organized retail chain stores.

So when the Conference participants where complaining about slow distribution (35 km/h average speed over long distances, 10 km/h in Mumbai), store projects that where delayed (not a week or a month, but a whole season), would they prefer a plan-economy like in former Soviet Union or similar systems with their law and order? I think not. With all the problems of a young democracy, it’s exposure to terrorism and subsequent need for high security measures, its’ slow decision making etc, it is after all impressive to see what they can achieve. They proved that to all of us there in Mumbai. The real estate developers and shopping mall builders where top professional, Global architects involved and consulted, and the design standard as good as anywhere. The retailers and brand marketers are competent, they work in a difficult market, but they improve, grow and profit.

Representing ISO, International Shopfitting Organisation with more than 2.800 fixture factories and shopfitters World wide, we have no members in India up till now! Typical for the globalization of our industry however is, that the only ISO member exhibiting at the event, was an Italian company with branches (and ISO Membership) in USA, UK, UAE, Taiwan, and of course now India! He did not give away much of his business secrets, but I kept seeing a very broad smile on his face, every time I bumped into him in the crowd, through 3 busy days and nights of the event. He was pretty alone, but one thing is sure: There will be many, many more in the years to come!

Of course the local shopfitting industry has to be developed. I saw a number of Indian exhibitors of absolutely acceptable standard in relation to the present market conditions, but also leaving a doubt, that they will be able to live up to demanding Western brands and retailers without further development. Partnerships are the obvious answer. Partnerships between local manufacturers and fitters, and Western manufacturers and designers, that will benefit from both exports and know-how supplies to India, and sourcing and import of low cost manufactured items to Western specifications from India. Again it is important to point out that India is not China, but they have an interesting, low cost level and an enormous potential, and it is a democracy with a huge, free and rapidly developing retail industry. ISO will support the shopfitting industry to meet with that challenge?