TiE-ISB Connect 2006 - Retail Track Summary

Participants

Jacob Kurian (ICG Fund)

Anirudh Dutta (Credit Lyonnes)

Sambasiva Rao ( Heritage Foods)

V P Harris (WITCO)

Subba Rao N (Actis Partners)

Ashutosh Garg (Guardian Life)

Raman Mangalorkar (AT Kearney)

The Retail track was one of the highlights of the Tie-ISB connect, and it garnered a packed house which only became bigger as the track progressed. One of the Unique features of the event was the diversity and distinctiveness of the panel. While, Mr. Jacob Kurian (ICG Fund) headed the track and brought the High Level venture capitalist ad investment perspective about Retail opportunities, Mr. Raman Mangalorkar (AT Kearney) gave a comprehensive overview of how the retail sector is expected to grow in the near future. The presence of some budding entrepreneurs like Mr. Ashutosh Garg (Guardian Life) and other eminent speakers brought in some distinctive and extremely relevant perspectives to the audience. The underline theme of the track was an insight into the Retail sector into India and the various opportunities and challenges it would bring in.

Mr, Jacob Kurian set the pace at the very onset by bringing in a beautiful analogy.  In his words “Retail in the 2000’s is what Imformation technology  is to 90’s”  Mr. Raman Mangalorkar started by mentioning that the time is right for the students and entrepreneurs to enter into the retail sector as there are a lot of opportunities which are getting created in different stages of the value Chain, especially Infrastructure & supply chain. 

Organized Retail is only 3% and is expected to grow by 30% in the next 3-5 years. The key factor that is propelling the growth is that India’s population with < 40 years is approximately 70% (<25 Years is approx 50%) and with the overall growth in economy the trend is towards increasing disposable income, which signals towards increasing demand for products and services.  While Reliance  has already announced an investment to the tune of Rs 25,000 crores and Pantaloon expanding its network at a rapid pace, other key Players like Bharti  and many others are expected to jump in a big way in the next 2 -3 years.

While we would see lots of mergers / joint ventures getting formed as time progresses, debates are still on as to which formats would work better in the Indian context.  As an estimated guess, Convenient and specialty stores are expected to do well, whereas the development stores may not work very well in the Indian context.

Whilst there are a lot of opportunities opening up, the challenge is to develop the physical and IT Infrastructure in a big and fast way. Retail has still not got a Industry recognition and with 97% of the retail currently unorganized, Players need to work out their cards strategically and work out a differentiated offer, which attracts consumers, to have a long term success.

In nutshell, it won’t be incorrect to say that Retail is the sector to be in the coming years and it is here that we can envision all the action in the near future.