IndiaRetailBiz

Nirmalya Kumar, Professor of Marketing; Co-Director, Aditya V Birla India Centre; Director, Centre for Marketing; Faculty Director for Executive Education, London Business School and author of several books on marketing and retail management including, “Private label strategy: how to meet the store brand challenge” and “Value Merchants” was recently invited for an online chat with its readers by popular Indian internet portal “rediff.com” to answe querries of Indian professionals and those interested in the future of retail sector in India.

In a free wheeling chat Nirmalya Kumar answered a lot of quarries from interested readers. We hereunder present a sample of the same for our readers benefit. Those interested in full chat may kindly visit the portal.

Retail, according to Prof. Nirmalya Kumar, always has four winners-cheapest, biggest, best and nearest. He was replying to a reader’s question, who wanted to know if price alone was the only winning factor in retail.

When asked, as to why the likes of Wal-Mart are so keen to foray into India, while underlying the importance of large countries like India and China, he said, “These are the only two countries besides the USA where a retail chain can dream of having 5,000 stores. Retailing is about multiplication and large countries have the most potential.”

Replying to: Would it not be prudent for the traditional/ small retailers in India to form co-operatives and defend themselves against the might of established retail chains, Nirmalaya Kumar said: Forming retailer cooperatives or wholesale sponsored cooperatives is a way for small retailers to gain some leverage against large retail chains especially in terms of buying, credit cards, advertsing and promotion.

When asked about his vision about status of India’s retail sector, five years from now, Nirmalya Kumar said, “There will be many different formats but the kirana stores will continue to be around as they have a value propostion which is unique to them, however, besides being fewer in number, they will account for a smaller proportion of total retail sales. Given the fondness for shopping in Asian countries, Malls will be a very big factor, he added.

Asked to comment on success or otherwise of Cash and Carry retail formats for fresh products/grocery items, he said, “C & C serves small restaurants and shop keepers, so groceries will be needed but will not be as important as in the supermarket format.” In the later, a great grocery proposition will however be crucial for success, he added.

Commenting on high rate of employee attrition being witnessed in the retail sector in India, he said, “Attrition only matters at top management level. Most retail employees are serving customers and training new employees to do that is not that difficult. In retail we are quite used to working with attrition rates of 50% in most developed countries.”

Nirmalaya was also not unduly worried about the state of education in the field. “Marketing education in India is probably quite good. However retail education is relatively new and will take a few more years to mature. Having said that many good books on retail management exist so teaching retail skills is not that challenging and should be possible relatively easily in India.” he said.

Nirmalaya Kumar was quite certain of both the development and success of ‘private’ labels’ in India. According to him, “As retail chains develop, they will develop sophisticated private label portfolios and compete with international brands head-on. In ten years, private labels will be quite significant in India. And international manufacturers will have to compete with them in India just as they do overseas.”