Skip to main content

Retailers go to small towns for big growth

Image
By
Retailers go to small towns for big growth
In the September quarter, Kishore Biyaniled Future Retail opened its hypermarket Big Bazaar at Hajipur in Bihar, Puri in Odisha, and Raigarh in Chhattisgarh, taking the presence of its flagship stores to 130 cities across 26 states.Big Bazaar has also signed up properties for new stores in the remaining three states —Meghalaya, Mizoram and Nagaland.
A clear sign organised retailers are not only reaching tierII and tierIII towns but beyond is that Biyani has announced plans to have 10,000 smallformat neighbourhood stores across the nation in the next five years, up from 700 now. In FY18 itself, he plans to take the number of small format Easyday stores to 1,100.
“We will open stores within 2 km of every consuming Indian,” Biyani said, unleashing his Retail 3.0 plans that aims to make the Future Group Asia´s largest integrated consumer business, with Rs 1 trillion in revenues, by 2047.The retail giant also has a consumer and logistics business, which not only supports its retail empire, but also caters to outside businesses.
Biyani isn´t the only one who is penetrating deeper into India.According to real estate consultant JLL India, Mukesh Ambaniled Reliance Digital has established its presence in more than 100 cities and plans to expand further.
Swedish fashion retailer H&Mis planning to expand its presence in cities, including Coimbatore, Indore and Amritsar.Tata group owned Trent´s value fashion brand Zudio has launched stores in tierII and -III cities.Walmart is planning a fulfilment centre (cash and carry with focus on fast moving consumer goods and staples) in Lucknow.
Online eye wear retailer Lenskart raised capital to enhance its supply and expand the reach of its products across tierII and -III cities.And, Amazon India has opened fulfilment centres cities, including Coimbatore and “Retailers are looking actively beyond these metro cities to explore the offered byalarge consumer hungry for experiential retail,” said in its report with CII on emerging destinations.
“What adds to the of these smaller cities, which future centres of retail growth country, is availability of land at cheaper prices, lower rentals, new high street and a younger generation of now willing to experiment with leasing formats,” said the report.
The expansion into smaller towns coming atatime when the online space has not only seen consolidation but is actually looking to collaborate physical stores.
Amazon India has with the KRaheja Group owned Shoppers Stop, and Flipkart, is exploring such an opportunity.Future Retail´s expansion plans also dependent on leveraging technology with Google and Facebook, besides online retailing plans.
“As the dust for ecommerce physical retailers are getting aggressive on their expansion plan to convert unorganised into organised in tierII and -III cities,” said Nitin Gupta, transactions partner at EY. “For these towns, large format stores are not that is why there is rapid expansion for mid and small format stores.These stores are also coming up in tierI towns as retailers optimise formats for each cluster considering high rentals,” he said.
The Business Standard, New Delhi, 2nd December 2017

Comments

Post a Comment

Popular posts from this blog

Shrinking footprints of foreign banks in India

By
Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…
Post a Comment
Read more

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

By
GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…
2 comments
Read more

RBI rushes in to prop up falling rupee

By
RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…
Post a Comment
Read more