Indian retail market matures

21 March 2013

NEW DELHI: The Indian retail market is currently in the early-to-mid-stages of maturation, but will develop rapidly over the next decade, a leading expert has claimed.

Anand J. Mehta, director of retail, Asia Pacific, at Motorola Solutions Singapore, was speaking to The Economic Times at the World Retail Congress Asia Pacific. He expected to see "explosive growth" in the retail market, thanks to the new spending habits of 400m Indians with higher purchasing power.

"The Indian market's consumer and cultural diversity is huge. But it is already well into its journey [to maturity]," observed Mehta.

Breaking down the structure of the retail sector, he said that around 6% was organised, with the rest being independent, but he anticipated this situation would alter markedly in next 10-15 years. Mehta also compared that time span with the 60-70 years the US retail sector had taken to reach maturity.

The industry will also be given a boost by the Indian government's decision last year to allow foreign direct investment in multi-brand retailers such as supermarkets. Mass grocery and apparel are the two categories that are expected to benefit most.

Mehta also revealed that Motorola is currently working on tailor-made solutions for the Indian market and its retailers.

"It is a good time the way the retail industry is maturing, and actually for India, to leap-frog the whole technology solutions," he said.

Pointing out that shopping and retail management technology was developing rapidly, and that more consumers were using mobile phones, he suggested tech-savvy retailers would seek to use the latest tools to gain a competitive advantage.

The importance of mobile was also stressed by one of the speakers at the congress. Tesco's Philip Clarke noted how mobile commerce was growing at an astronomic rate. "Asia is at the epicentre of this transformation," he said, adding that the company employed more than 5,000 technologists at its development centre in Bangalore.

The scale of the change taking place became apparent when he stated: "I believe that Tesco has to be more than a retail company. We have to become a technology company too."

Speaking at the launch of an initiative on catalysing start-ups in India, Google's Eric Schmidt also emphasised mobile, saying "mobile apps are going to be a big thing and no company can ignore that".

Data sourced from The Economic Times, International Supermarket News; additional content by Warc staff