News: One retail solution does not fit entire India

(BL 02/06/2007) Bangalore: - Do not mistake the South for a single market. While the South is no doubt different from the North, retailers must also not make the folly of generalising South as one market - as the customer from Hyderabad is different from the shopper in Chennai or Bangalore.

Drawing from their own experiences, retailers from diverse product spaces and categories, participating at the two-day conference, The Shop, on retail in South India, unanimously agreed that one retail solution does not fit the whole of India.

While putting together their retail strategy, retailers must not only recognise the cultural differences but also go down to the micro-level and dissect each region with its various components, said the speakers, discussing the Rs 2.5-lakh crore retail landscape in South India.

South, North divide

Some of the differences brought out between the South and the North: The value of trust is greater in the South compared to the North; while at the top end, the differences between the South and North are narrow, lower down the differences are more pronounced. While customers down South go in for future value of products, in the North customers prefer current value.

C.K. Venkataramani, COO, Tanishq, said the South is more brand and quality-conscious, which explains why the highest grade of diamonds are sold in Tamil Nadu, and the lowest in Punjab.

Some of the differences can be attributed to historical events as well. Shumone Chatterjee, Managing Director, Levi Strauss, said: "The customer in the South is more stable and more resistant to change than the customer from the North - perhaps, because the North has always been susceptible to invasion and attacks than the South."

Bhaskar Bhat, Managing Director, Titan Industries, said the South market was more mature and organised, which paved the way for several experiments by Titan, such as its foray into jewellery retailing with Tanishq and mass jewellery business through Gold Plus.

The franchisee model especially has worked well in the South, said Bhat, who addressed the inaugural session of The Shop.

While all may seem rosy down South, it's not so, warned Bhat. The growth of retail in malls could be hindered by the lack of adequate infrastructure support. "Unlike in Delhi and Mumbai, malls in the South do not have proper infrastructure. While high-street locations are developing in the South, malls are not. This is a problem in the South where the number of Tier 2 and 3 cities is also large."

Day one saw retailers addressing the issue of ensuring good footfalls in the face of competition. Commenting on the number of reasons created by retailers to attract crowds, like Valentine's Day discount or New Year sale, Bhat said: "For a retailer, everyday walk-in is important. Thus, retailers resort to creating days out of non-days, hours out of non-hours." But the key character in all this is still the customer, he said. A point echoed by Kodandarama Setty, Chairman and Managing Director, Vivek's (Chennai-based retailer of consumer durables): "For the retail business to be successful, the retailer must not lose focus of the customer. Consumers, especially in the South, are knowledgeable and demanding."