- Weekend Business
- Goa’s retail undergoing sea change
Goa’s retail undergoing sea change
Retail as we know it is changing by leaps and bounds with national players entering the battle field. How this market will look a few years down the line makes for an interesting proposition. AJIT JOHN spoke to a few of the local players to understand what was going on
Buying an apple or a laptop may be possible without much hassle at the local mall anywhere in the country but the rate of change in the retail landscape will make that experience very different in the years ahead. The retail industry is experiencing a robust transformation. Be it employing new technologies or exploring new store formats, revamping business strategies or creating personal experiences; retailers are indeed getting ready for the future by looking beyond conventional retail and evolving along with their modern consumers.
The numbers are quite humbling and it must be noted the Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. According to data available in the public space, it accounts for over 10% of the country’s Gross Domestic Product (GDP) and around 8% of employment. The country’s retail market is expected to increase by 60% to reach USD 1.1 trillion by 2020. This will be fuelled by rising incomes and lifestyle changes by the middle class and increased digital connectivity. While the overall retail market is expected to grow at 12% , modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10%. The country’s retail market is divided into the organised retail market which contributes 93% and the unorganised which contributes the rest.
Where does Goa fit in all this? For a State that has a population of a mere 15 odd lakh it is attracting national brands to set up base in the State. Kirit Maganlal Founder and CEO Magsons Group recently tied up with Godrej Natures Basket marking the entry of that retail major in the State. It would mean the entire system followed by Godrej Nature’s Basket would be replicated in this business tie-up.
Speaking to the Herald Maganlal said “Retail is already changing. You can see what the local companies are doing. Borkar for example is expanding right left and centre, I am very happy for them. They are gobbling up smaller stores. In our case we are giving up smaller stores because we believe the effort to run a 400 sqft store or a 4000 sqft store is the same. Our way of thinking is different. You can also see the entry of big players in the state. Future Group is putting up a huge place in Margao, just next to Westside and DMart is coming in. The promoters of Mall de Goa are coming up with a premium mall concept at Benaulim. What is happening is truly inspiring.”
Like many industries today, IT is playing a lead role in transformation of this game. Who is buying what, how much are they spending etc is now being closely tracked. All this is being done with the help of IT, data mining is now a very big part of the strategy of any retail outlet.
Speaking about data mining Maganlal said “We do a lot of data mining in terms of data preferences, buying habits and now with Godrej coming in it is going to take centre stage for us. We are not dominated by the tourist business. We sell for daily requirements and we keep upgrading the quality and service levels for the locals. Earlier it was one kind of butter now it is 5 kinds of butter. In a couple of weeks the variety of eggs that will come into our store will surprise everyone. There is a brand of chicken called Kadaknath it retails at Rs 1000 a kilo and it will be available in Goa. It is called black chicken everything about it is black. The eggs sell at Rs 50 per piece. Retail now is experimenting a lot and giving options.”
Like everything it is about increasing your share of what the individual is buying ie the greater share of the money leaving the wallet. The Magsons Group will be migrating to the cloud server next month, this will mean easier access of data especially by the partners in Mumbai. It will also help the group to track who is shopping where and accordingly plan the merchandise. All this happens through IT which is the biggest driver.
Nihaal Borkar, director of Borkar was quite exuberant saying that national and international brands were now looking at smaller cities. Borkar said “We are looking at such a perspective and our growth plans are certainly aligned. We will be looking at the smaller cities and towns and our growth plans are aligned. These cities and towns will be the growth markets for us.”
Echoing Maganlal he said technology and more specifically IT would be critical as they spread their wings. Borkar said “With the number of stores increasing technology will help us track the sales, the movement of stock etc and help us make our decisions. We have to think along these lines now as the market gets more complicated and nuanced. The consumer will make us raise the bar.”
He believed the next couple of years would also witness a dramatic increase in the level of knowledge of retail amongst those interested in taking it up as a profession. He said “With national and International brands entering the State, the market will get more competitive, there will be an increase in salaries, local players will have to pull up their socks to stay in the game and the knowledge base of young professionals in the state will have to improve. This will be very good for the industry.”
One has to consider the fact that India’s direct selling industry is expected to reach Rs 159.3 billion (US$ 2.5 billion) by 2021, if provided with a conducive environment through reforms and regulation.
Like in the rest of the country, customer engagement will increase in importance. Customer satisfaction will gain more importance and most of brands will keep pace with changing trends to ensure they effectively communicate with their customers. With the future set to be more tech-based, virtual assistants like - Siri, Google Voice, Alexa and Echo will have more roles to play. In a state with a very young population, this will hold true too. The times ahead look interesting but also quite daunting. Nerves of steel along with huge war chests will be the norm. Time will tell who will survive to tell the tale.