India Inc wants retail sector to be unshackled

India is in for a retail revolution in the coming years, but only if the right steps are taken now. Industry representatives today made a strong pitch for "unshackling" India's organised retail sector at an event held in the city to discuss issues facing the industry in Mumbai.

The two-day event, with representatives from a wide range of industries from real estate to petroleum retailers, saw industry captains come out strongly in favour of allowing foreign and large-scale investment in setting up retail chains.

"Till now, the retail sector has been considered a luxury and, therefore, not given priority," said Adi Godrej, chairman, Godrej Industries, reflecting the mood at the first India Retail Forum. "The question is not whether we should allow organised retailing. but why we haven't changed our mindset and let this sector play its role in the development of the country," he added.

The participants pointed out the huge employment and economic potential of the retail industry "" the largest employment generator in the world.

"In India, organised retailing has the potential to grow into a Rs 110,000 crore industry in the next five years,'' said Krish Iyer, chairman of the forum and CEO of Piramyd Retail Ltd. And it can give jobs to an estimated two million people "" roughly two per cent of the entire country's population.

The Indian retail industry is still in its infancy with the organised sector accounting for just around 2 to 3 per cent of the goods sold. "We are woefully behind the rest of the world,'' said Rajendra Aneja from his experience with Unilever East Africa, "In fact, on a scale of 10, we are just around 1 to 1.5 whereas even Africa would get a 3 to 4."

Industry representatives were of the opinion that fears of small shopkeeper being wiped out by big chains were misplaced and were responsible for denying customers a decent shopping experience.

"The fragmented supply chains is responsible for the productivity of this sector remaining at just 6 per cent of the efficiency levels in the US," Godrej said.

Giving the example of Walmart, Deepak Seth, head of Pearl Academy of Fashion, pointed out how retail chains can provide not just cheaper, but better quality goods. "These firms exercise quality check right from the from cutting and sourcing. and even provide individual quality manuals giving details of the raw material used, washing instructions etc.,'' he said.

Delegates also shared their experiences with dealing with the Indian customer, especially those in rural and semi-urban markets. Urging the companies to think beyond the "glass and marble floor set up," Arun Nanda, executive director of Mahindra and Mahindra said: "We have to stop replicating foreign models and cater to what is required. We need to give the Indian customer an ambience where he is comfortable. If we can provide a cheaper alternative like the Dilli Haat or a cluster of shops instead of the malls, then we should do that."

All speakers were emphatic about the need to remove regulatory roadblocks to the fledgling industry.