New Retail Formats
Will Emerge and Grow
India will see the emergence and wide-spread growth of new retailing formats such
as:
- Cash & Carry Wholesale Format
- Forecourt Retailing
- Super-Specialty formats
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| 1. Cash & Carry Format |
With the introduction of Cash and Carry format in India by the Metro group of Germany the wholesale format is here to stay. With 97% of the estimated 12 million retailers in India being very small and unable to afford their own back-end infrastructure, the Cash & Carry business has a huge potential in India. This format is ideal for meeting the needs of the small mom and pop retailers in India as well as the restaurant and hotel industry. The format also offers a lucrative entry mode for international retailers as 100% FDI is allowed in this format. Currently, Germany’s Metro Cash & Carry is the only player who have set shop in this format. However, competition is likely to hot up with the entry of Bharti Wal-Mart, Reliance Retail and Future Group. According to technopak estimates 6% of total investments planned in retail over the coming five years are expected to happen in this space. |
| 2. Forecourt Retailing |
With convenience becoming increasingly important for urban consumers and oil majors facing increased pressure on margins due to competition, oil marketing majors in India have big plans of entering into non-fuel retailing utilizing their existing fuel station space. India has a long way to go in forecourt retailing with less than 4% penetration of non-fuel formats on fuel stations as compared to 65% in US and 92% in UK. The share of non fuel revenues of oil marketing companies in India is about to witness a big increase because of surge in investments planned – Indian Oil Corporation ready with a nation-wide rollout plan and Reliance having planned 144 stores by the end of 2007. BPCL is ahead in the race currently having clocked an annual turnover of Rs. 140 Crore from 410 In&Out stores across its petrol stations and plans to further increase it aggressively. |
3. Super-Specialty Formats |
As customer segmentation increases and the span of needs of consumer is wider than ever before retailers have an opportunity to target specific customer segments for different needs through super-specialty formats. In the Indian context currently, formats catering to kids such as Giny&Jony, expectant mothers such as Mothercare and apparels for plus-sized women such as Mustard have emerged. The future formats would be based on different platforms of demographics, time starvation of consumers and customization on the lines of Western counterparts such as Club Libby Lu for ‘tween’ girls, Hot Topic for teen/youth, Chico’s for middle-aged women etc. |
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- Easy availability of
low-credit has
encouraged a kind of purchase boom
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