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Mass appeal John Abraham with his award

The largely untapped Indian consumer base has become the latest target of foreign retailers. “We believe in the country and the potential it has to grow,” said Troels Holch Povlsen, Chairman, Best Seller. The group’s men’s apparel brand Jack & Jones will hit the Indian market this year.

But the pertinent question as asked by B. Nagesh, Managing Director, Shopper’s Stop, at the CEO’s Conclave was that if people’s spending power has indeed increased, and the market too is growing, why are many retail organisations not registering profits — why haven’t sales increased proportionately?

Plenty of reasons were offered. Firstly, for a country that’s as diverse as India, it is difficult for a marketer to have one common strategy. And concepts that click with people abroad are not necessarily applicable to Indians as well. Said Aaron Boey, Managing Director, Levi’s (Asia Pacific), hitting the bull’s eye, “Indians don’t like fashion to be thrust upon them, as the country has a long cultural heritage, which has to be taken into consideration while creating a product.”

Kishore Biyani, CEO, Future Group, seconded this thought. “Designers look westwards for inspiration but the need is to look inwards. We have to take into account the aspiration of the small town. A place like Benares, for example, is one place where you will see the real India,” he explained.

Numbers only substantiated the contention. Ireena Vittal, Head, Retail Practice, Mc Kinsey & Co, pointed out how when it comes to women’s wear, 60 per cent of the market share was still with the sari, 38 per cent women still bought churidar or salwar-kameez, while western clothes held only two per cent of the share.

B. Nagesh addressing the gathering and Sanjay Dutt with sister Priya

This pointed to the issue of lack of innovation in blending Indian tradition with clothes. An example was the concept of Indo-fusion clothes that took the country by storm a couple of years back. But the idea never took flight beyond it and died a slow death. “India could have created a niche in that category,” felt Chetan Shah, Managing Director, Pepe India.

“People don’t buy brands, they buy an identity. Brands have to change themselves before people do if they want to survive,” D. Shivkumar, Managing Director, Nokia India, reminded the assembly.

Experts said sale seasons are another spoiler when it comes to customer behaviour. “It’s we who give shoppers the chance to turn bargain hunters. This will harm the industry over a period of time,” warned Ireena. The rise in real estate prices and high entry taxes for foreign brands were other reasons mentioned for the retail industry not flourishing the way it could have.

But beyond these, felt the delegates, there were bigger factors retailers needed to look into. While most retailers are looking to sell their products to tier I of the Indian population, it comprises only 11 per cent of the people. The big chunk of 55 per cent falling under the second tier — the middle class, who too aspire to be fashionable — remains untapped. Is the real reason the lack of a mass spectrum apparel brand that cuts across backgrounds? The speech by EVKS Elangovan, Minister of State, Ministry of Textiles, echoed a similar feeling. “Can fashion be in reach of everyone? Can a ‘Nano’ happen in the fashion business?” he asked.

But it was not all grim talk. There were success stories like Koutons, which have tapped the right market and recorded a growth rate of 142 per cent over five years. “There is a market of 400 million waiting to be tapped. With a good quality product at the right price, our aim is to reach out to India like the Indian post office system,” said DPS Kohli, Chairman, Koutons.

The industry representatives were confident the inconsistencies could be dealt with over a period of time, as Indian retail is still at a nascent stage. “Just give us a little time,” said Sanjeev Agrawal, CEO, Pantaloons.

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