Retail tells a New Tale
The Indian retail industry is the largest among all the industries, accounting for 22 per cent of the country's GDP. In India, it has emerged as one of the most dynamic and fast-paced industries with several players entering the market. The total concept of retailing and shopping has undergone a sea change in the recent past with the advent of modern retailing in the form of shopping malls. The changing consumer buying behaviour, the large young working population, growth in organized retailing and its consumption by Indian population are the key drivers for growth in this sector and are fetching more and more business in the market.
Retail Opportunities and Vendors perception:
Mapping with the growing trend of the Indian retail industry, Panasonic is looking at expanding and aiming to achieve 200-billion yen mark in sales in India by fiscal 2012. For further expanding its market share, Panasonic has launched a new lineup of products that reflect the needs of the local consumers such as VIERA Smart TVs, LUMIX Cameras, Direct Cool Refrigerators, Semi-Automatic Washing Machines, Cube ACs, Personal and Beauty Care products.
“Panasonic's core strength lies in innovativeness, quality and reliability of all products and services. The company's marketing strategy is to communicate the research and innovation advantage, energy-saving features which are integral to the products that not only reduce power bills, but also preserve our habitat, and the 'value-for-money' products that cater to the high volume segment,” remarks, Manish Sharma, Director - Marketing, Panasonic India. He further adds, “India has been one of the most important countries with high growth potential for Panasonic and the brand has launched an ambitious project to significantly increase sales in India.” The total retail sales in India will grow from US$395.96 billion in 2011 to US$785.12 billion by 2015, according to the BMI India Retail report. Looking at such a phenomenal growth in Indian retailing together with the company's commitment towards its consumers, Panasonic is targeting to close the 2011-12 fiscal with a turnover of Rs.5,500 crore and aims to increase its retail points from 2,200 to 6,000 by March 2011.
Kaspersky, a name known as least-priced anti-virus, has been in the Indian market for nearly five years now and has established a strong retailing chain. It, however, points out that the Indian retail industry, especially the IT software sector, is still germinating. In the case of software, retailing is still the forte of IT resellers in India as the LFRs have not yet been able to make a major breakthrough. This essentially hints at the Indian subscriber's mentality of still looking for trial or pirated software. Jagannath Patnaik, Channel Sales Director, Kaspersky Lab - South Asia, affirms, “In a recent study conducted by us, we have found that 42% of users still use non-paid AV software. We, however, see good potential in the retail segment to grow with proper distribution and marketing activities. We have been growing consistently over the past couple of years and currently have approximately 16% market share. We have established very effective and loyal distribution partners in the channel who are able to educate end-users to take up paid legal software and as a result the recall value, first sale and renewal of our products are on the rise.” Kaspersky is essentially a channel-friendly company and does all its sales through the reselling partners. “In India, the consumers are mature enough to download software, but they still depend on resellers for getting proper software for their computing needs. Thus, retailing is here to stay,” he further adds.
Understanding the underlying significance of retail, ViewSonic intends to enter the retail segment in a big way. It entered the Indian market in the year 2006. The company develops markets and supports a broad range of innovative products, including LCD monitors, LCD TVs, projectors, digital signage displays and other display products. It has recently entered the tablet market with its range of tablets - ViewPad. “One of ViewSonic's key strategies is to have 50 exclusive retail outlets. We will also have national distributors, followed by regional distributors and then dealers,” says, Ajay Sharma, Country Manager, ViewSonic Technologies India.
Win-Win Situation
Though modern retail is booming, Channel is still imperative. In India, the traditional channel trade has nothing to fear as long as they add value to the product by way of service and consulting. Here, the vendors have to see that the small reseller's interests are not compromised while propagating through LFRs. The vendors bank on resellers in tier-II & tier-III markets and at the same time glues the urban folk with Brand Shops or by placing the products in LFRs.
Asserting the demand of both Channel and Modern Retail, Patnaik fromKaspersky says, “We still see the customer looks for products at LFRs, but prefers to buy from traditional resellers. Kaspersky has adopted a two-pronged approach. One is through our traditional IT retail channel, i.e. major sub-distributors, master resellers and small resellers, and the other is through LFRs for placing and reaching urban customers. Having said so, we do this without sacrificing the interest of our traditional partners.” So, we can say that vendors see that parallel deployment of traditional and modern retail offers vendors a win-win situation, and pose no threat to the existence of traditional retailers or any conflict to business ideas.
Finally...
Modern retailing has enabled retailers to evolve to the next level. They have a positive influence on traditional retailers. In spite of the growing importance of organized retailing, traditional channel cannot be overlooked as the Indian traditional retailers continue to score high when it comes to customer trust. The future of retailing looks quite promising with the growing trend of the Indian market and will be dominated by the coexistence of both modern retailing and traditional retailing since both the channels have their target customer segment.
Moumita Deb Choudhury
moumita@varindia.com
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