India's Store Wars (ePub)

As India's middle class grows and disposable incomes rise, "modern"
retail is becoming the next hot sector of the Indian economy.
Hundreds of millions of new consumers will join this retail
revolution, venturing into supermarkets, department stores and
air-conditioned shopping malls for the first time. But instead of
just window shopping, many of them will be serious buyers with
money to spend. To cater for their needs, established players in
the modern retail sector such as Biyani, Raheja and Goenka are
being joined by the big names of Indian business - Reliance, Birla,
Bharti, Tata etc - who plan to spend billions over the next few
years rolling out supermarkets, big-box outlets and specialty
stores. At the same time, property developers are getting on with
the "malling" of India, and looking for high profile anchor tenants
to lure customers.

On the sidelines of this Indian retail revolution are big
overseas players such as Wal-Mart, which already has a tie-up with
Bharti to provide much-needed "back office" support.
But what Wal-Mart really wants is the right to set up its own
stores in India. The same goes for Tesco, Carrefour, Metro and
other international players.

While the macro outlook appears bright, the problems are
astronomical for India retail industry. There is no reliable cold
chain, transport logistics are appalling, there is a huge lack of
managerial talent, there is no consistency for quality and quantity
of supply, there is political opposition from groups such as market
middlemen, the mom and pop "kirana" corner stores have to be
catered for, as do the farmers who grow the produce that is
integral to a successful retail revolution. How well will these
disparate players cope with the various pressures of a dynamic and
fast-moving industry?