|The Bangalore Think-tank: (From left)
Ravi V. Melwani of Kemp's Fort, Prakash Nedungadi of Madura
Garments, Irfan Razack of Prestige Estates and Projects, Suhel
Seth (moderator), Bijou Kurien of Titan, and Nakul Anand of
has it? Who better to ask than some of India's top retail strategists.
So Business Today invited Ravi V. Melwani, Managing Partner, Kemp's
Fort, Bijou Kurien, coo, Watches Division, Titan, Irfan Razack,
MD, Prestige Estates and Projects, Nakul Anand, Executive Director,
ITC Hotels, and Prakash Nedungadi, President, Madura Garments, to
thrash it out-moderated by Suhel Seth. Excerpts:
Seth: The sole task this evening is to
draw blood. Go for these gentlemen. Challenge them. Make them feel
miserable, but most importantly, enjoy yourself. Now, the topic.
'Has India missed the retail bus?' The south is often touted as
the area where it all began-the Foodworlds and the Nilgiris. Is
it a phenomenon restricted only to this region? And what kind of
retail are we talking about? May I invite Nakul Anand to kick it
Anand: Statistics tell us that retail
in India is fairly large. It's about 58 per cent of our Gross National
Income. Going by that, there's no reason to believe that we have
missed the retail bus. But only 2 per cent is 'organised retail'.
If you look at per capita retail sales, we're about $200, compared
to the $1,150 international average. The space per supermarket for
every 100 persons in Delhi is 0.3 sq ft, compared to about 200 sq
ft in Hong Kong. The reasons? We've grown up in a paternalistic
regime of control, the Licence Raj. Yes, there are visible signs
of change. There are 6-8 million sq ft of supermarket or hypermarket
space coming up. While retailing has a long way to go, in the modern
sense of the word, India hasn't missed the retail bus.
Seth: Ravi, what do you feel?
Melwani: The retail bus? The fact is
that India is still on the retail bicycle, which means that India
has a long way to go for the bus to arrive. I remember when we wanted
to open a 20,000 sq. ft store on M.G. Road, there was no big store
in India. People thought we'd fail. But I thought that if there
could be large departmental stores around the world, why not here?
Now we have Kemp's Fort, a 300,000 sq. ft store.
India will succeed in retail when our policies
go in the right direction. On travel, people ask me, "You've
come to import toys? What's the duty?" I say, "45 per
cent." They go "Whoa!" So we've got to be patient,
but we'll get that retail bus when it comes.
"Are We Bargainers?"
Some questions that the audience of 200 threw at the panel.
|Retail-talk: Retail gurus bat some
Where is Indian retailing vis-à-vis store brands?
Nedungadi: I think it's just a matter of time. Look
at some of the sari stores. These are store labels, and they
advertise with five-page ads in national magazines. In consumer
goods, manufacturing capacity is concentrated with only a
Isn't the Indian shopper a bargainer at heart?
Melwani: Well, these women will never go to a Bata
showroom and say "thoda kum kar do". There will
be a consumer who will always want to bargain, but I don't
believe she enjoys bargaining.
Razack: Bargaining reflects consumer insecurity.
The consumer doesn't know what the right price is. If she's
sure that this store gives the best bargain, it's fine.
Will virtual shops kill retailing?
Kurien: There will be various forms of retailing,
and e-tailing is another format of retailing.
Seth: I'm confused. Will the bus ever
come? Reminds me of 'Waiting for Godot'. Bijou, has India missed
the retail bus, bicycle, any 'vahan' you choose?
Kurien: Autorickshaw, maybe. I don't
think we're as slow as a bicycle and I don't think we're going as
fast as a bus. Archaic real estate laws, multiple taxation systems-all
these inhibit retail. We have fragmented retailing. Organised retailing
is emerging very slowly, and only in a few cities. But it's poised
to grow. In the it revolution, we missed the mainframe to get straight
to PCs. In retail, we'll probably leapfrog weaker formats.
Seth: Perhaps the retail revolution
should've started bottom-up, in smaller places. Prakash, what's
Nedungadi: We have to be careful we're
not taken for a ride. We have to find our own solutions to things.
What do we mean by retail bus? We mean a total change in the shopping
experience-unorganised to organised. We're talking about a big concentration
of trade. That's why, a bus and not an autorickshaw or speedboat
I met this person in Germany, who spoke of
the German retail revolution. He said: "Look, when it happens,
it will happen not at a progression that is arithmetic, but exponential."
When it happens, it's going to be a rocket. It will create a climate
of creative destruction, which could happen in the next 10-15 years.
My parents live in a suburb of a small town in Kerala called Mavilikar,
which has an under-50,000 population. Fifteen years ago, there was
no gas, no kerosene-nothing out there. Today, it has two supermarkets.
Latur has one of our best-selling Peter England stores.
Seth: Bus, cycle, auto, rocket... I'm
marvelling at the transition. There's one person on this panel who's
responsible for the red ink on most retail balance sheets. That's
because these guys artificially prop up real estate prices-that's
what they are accused of. Has retail in India ever considered partnership
as a plank of growth? Irfan.
Razack: Actually, the retail bus will
wait-for all of us. Now, the issue is what real estate can do for
retail. At first, we put up a few malls, which failed. Still, we
said, "No, it doesn't mean that malls are bad." We didn't
know how to do it. Now, we're putting up our first well-designed
mall, and we're partnering with some retailers. The concept is changing
to family entertainment centres. We call it shoppertainment. I see
huge scope. But supply chain sophistication has to rise.
Seth: What about manpower training,
logistical management, processes and the delivery systems... have
we got these right? And what about regulation problems?
Melwani: Not having good enough manpower
is a problem. People choose to work in retailing only as a last
resort. Now, finally, we're getting professionals.
Nedungadi: On training, there's a lot
of science to be learnt, but there's a feel to it too. Read Jeffrey
Archer's As the Crow Flies, and you'll see what I mean.
Razack: We have managed to remove this
Urban Land Ceiling Act, which brings down land prices. But we still
have a lot of antiquated legislation, concerning multiplexes, for
Seth: To sum up, there's an obvious
belief that we are on the path to retail nirvana-a retail boom.
''Has Chennai Fallen Off Indian
|The Chennai Panelists: (From left) David
E. Friedman of Ford India, Srinivasan K. Swamy of R.K. Swamy/BBDO,
Ravi Santhanam of Mahindra Holidays and Resorts, Suhel Seth
(moderator), Vijay Ramachandran of Citibank, and Ajay Vidyasagar
of Vijay TV
perhaps, to put it so bluntly. The panelists? David E. Friedman,
Managing Director and President, Ford India; Srinivasan K. Swamy,
CEO, R.K. Swamy/bbdo Advertising; Ravi Santhanam, President &
CEO, Mahindra Holidays & Resorts, Ajay Vidyasagar, General Manager
(Regional Channels), Vijay Television Ltd; and Vijay Ramachandran,
Vice President & Head (Marketing Services), Citibank, N.A. Relevant
soundbites from a heated session:
Seth: The general perception across
India-and it may be perception, and management of perception is
the business of advertising and marketing-is that Chennai is no
longer the active brain-cell that it used to be in the Indian advertising
Friedman: I wonder how you can look
at an increasing prosperous city of six million, and wonder if it's
fallen off the map. I don't think it has, and I don't think it will.
If you look on the creative front, look at
our 'Josh Machine'. It's invented here. Our Ford Ikon marketshare
here is more than any other place in India. So it's the Josh Mecca,
maybe. Conservative? I'm not sure.
Seth: Can one Josh make Chennai rock?
Vidyasagar: I think it's wrong to even
ask. Fifteen years back, the top agency of Mumbai used to bill around
Rs 100 crore. In Delhi, it was around Rs 75 crore, Bangalore around
Rs 35 crore and Madras Rs 25 crore. Today, Mumbai would be clocking
Rs 1,250 crore-plus, Delhi Rs 500 crore-plus, Bangalore Rs 200 crore-plus
and Madras Rs 70 crore-plus. This is what you see. But if you dig
deeper, you'll find a retail-advertising boom. Chennai also drives
regional TV, and C&S brands here get Rs 200 crore of revenue.
Some rather perturbed questions from Chennai's ad crowd.
|Ad-libbing: The audience grills
Who's asking this question (the topic)? In Chennai, we've
never even thought about it. And what are the benefits of
being on the advertising map?
Seth: The point was to debate whether being on the
map is at all relevant to the creative contributions that
a city makes to the advertising and marketing processes.
I'm the woman, by the way, who did Josh Machine-in Chennai.
Vijay, do you want us to release some scam ads to get on to
Ramachandran: No. It's important to be focussed on
communication, more than the advertising alone-on what is
relevant for a brand and for a client. It goes several stages
beyond scam ads.
Seth: Srinivasan, is Chennai hemmed in
Swamy: There are enough agencies here
handling national accounts. Ford is an example. We also have small
Chennai clients that have grown large, CavinKare being an example.
It's many Joshs that drive Chennai.
Seth: But why have this topic at all,
then? Has Chennai not marketed itself well? Honest answer, Vijay.
Ramachandran: Three things constitute
presence. One, what is the peer acceptance in other cities of Chennai
as an ad city? Two, do professionals want to come and work here
for reasons other than personal? Three, is there a record of work
that builds brands, generates sales and wins awards? Probably not.
Next, consider the three Cs. First is the Consumer. Do we have articulate,
educated consumers? Of course, yes. The second C-Companies that
advertise nationally, like Ford and Citibank. You can probably count
them on the fingers of one hand. The third C is the controversial
C, which is the quality of creative talent here.
Seth: So, what are you saying about
creative people here?
Ramachandran: Could be better.
Seth: Oh, don't behave like George Bush.
Santhanam: Let me be honest. On the
two occasions that my marketing team was based in Chennai, I chose
to source ad services from outside Chennai. And if a third occasion
comes, I would do it without hesitation. Was Josh really done in
Chennai? I'm not too sure. I'm a Chennaiite, I love Chennai. It
does not matter if this city is not an ad Mecca. Also, in today's
world, location is not a source of competitive advantage. How does
it matter? But it certainly matters whether you're on the marketing
map. Brilliant Tutorials was the first to advertise education services
across India in a big way.
Seth: So, has Chennai fallen off or
Santhanam: You can't fall off something
that you're not on.
Seth: So, where does Chennai stack up?
Srinivasan: I don't buy their perspective
on Chennai. The commercial capital of India is Mumbai. Consequently,
the advertising capital is Mumbai. But we have clients from other
parts of India, even MNCs, seeking support from us here in Chennai.
Seth: David, do you think we've not
been able to manage the perceptions of the people outside Chennai?
Friedman: Possibly, possibly not. Yes,
Ravi, we really did Josh Machine here.
The Chennai Crossfire brings to a close this
year's round of BT debates. The round was kicked off on July 26
in Delhi, and this was followed by Mumbai. Bangalore and, of course,
Chennai. Other than the irrepressible Suhel Seth as moderator, constant
presence was maintained by the four Crossfire partners, Taj Holiday
Resorts and Palaces, Indian Airlines, Alliance Air and McDowell's
Signature (with BPL Mobile joining up for the Mumbai round). BT
thanks them all.