Is the Indian Retail Industry stabbed by Recession?

With the ongoing globalcrisis covering up the countries like a wet blanket, what is the position ofRetail industry in India?

Current meltdown is shaking theglobal markets today, hooking every single country. Rising inflation rates arecovering the economies of countries like a wet blanket. India obviously is not an exemption to the financial crisis. The slowdown and the resultingdisturbance in the economic status are affecting the retail industryadversely.

India is the fifth largest retaildestination; globally. Despite recession, India is still maintaining itself asan attractive destination for retail industry and foreign investments. Changein the buyer behavior and shopping trends have lured international giants, whoare at the wings seeking entry into the Indian market. Indian retail industryaccounts for 10% of the country's GDP, and is expected by industry analysts togrow by $427 billion by 2010.

While speaking about the currentscenario of Indian retail sector, in an exclusive interview with &sec=article&uinfo=<%=server.URLEncode(1761)%>" target="_blank">Fibre2fashion, Mr.Spencer Sheen, Head of Retail, M&S India, says, "India has a growing, vibrant population, and is a huge opportunity amongst emerging retail markets.The Indian consumer is well informed today and recognizes good value. As a midmarket retailer, we at M&S believe we will appeal to millions of Indianconsumers who, like UK consumers, both want good quality, good valueproducts."

Apparel Retailing:

India plays an integral role inthe global apparel market due to availability of abundant man power, rawmaterial, and infrastructural developments. Manufacturers and retailersentering into the industry are only using latest technologies and professionalmanagement procedures.

In an exclusive interview with &sec=article&uinfo=<%=server.URLEncode(1761)%>" target="_blank">Fibre2Fashion, Mr.M Prakash, Vice President, IIGM Pvt Ltd, views the slowdown from both themanufacturers and buyers view point. From the manufacturers purview he says "Asregards to today's scenario of the apparel industry, I totally look into adifferent way. Out of my 17 years of my career in this industry, this is thesecond time we are seeing the recession (especially for the Garment exporters).The younger generation who passed out from the universities since 1998 haveseen only the positives of the industry and economy. Therefore, I feel thiscorrection was required at this point. (Unnecessary values rose in stockmarket, prices quoted in real estate industry was steep; garment operators andtailors demand in salaries were also looking north)."

Viewing the other side of thecoin, Mr. Prakash also comments about the situation from the buyers view point.He says, "Any apparel buyers/ buying houses from all the over the worldare also looking for the cuts in expenditure. Therefore the first step is toconsolidate their operations in the region. For example, if a buying house hadoffices in Delhi, Bangalore, Dhaka, Colombo, Pakistan, Thailand, they are shutting down all the offices and consolidating with one office for theregion. Whereas this is forcing them to minimize their manufacturers fromvarious locations to one or two locations. Therefore, the Manufacturer who asthe USP on a particular product will sure get the business but others willloose out. For example Bangladesh may get all the denim jeans business becausethey are very strong on basic jeans. India may get lot of formals and designwear."

Alternatives:

The industry should adopt strategies to survive the crisis bites, or for an inoculation until things turn around.

• Low Marketing and Advertising Budgets:
  
  With the market getting slower, its current potential should be utilized to the optimum level. Innovative solutions like cutting down the marketing and advertising costs will reduce the financial encumber of the company. Marketing and advertising being the supreme power for the existence of the retail industry, utmost care must be taken while curtailing its expenditure, so that it does not infect the functioning of the business.
  
  
• Online Branding and Marketing:
  
  Fluctuations are not a new concept for global markets. It is the time to find right alternatives for the industry to minimize the expenses and put forth efforts to move up in the market. With online marketing prospects available, this trend is now creating enormous opportunities in the retail business. Online branding and marketing are the hottest retail trends. Mr. Spencer Sheen appreciates the growth of internet retailing by saying, "Internet retailing is important, and is definitely growing internationally and in India."
  
  
• More Customers at lower costs:
  
  Economic slump is forcing the consumers to curtail their expenses. Retailers should plan for attracting more customers with low cost products. Current trend is that discount retailers are doing much better than the mall owners.