Four Surprising Insights about Indian Retail

After the recent launch of SPAR International's 8000m² flagship hypermarket in Bangalore, India on 13 March, I had the chance to interview David Moore, International Retail Development - Country Manager India, Portugal, Global Retail Store Operations SPAR International, and the man who oversaw SPAR's strategy and development in India. While the launch in and of itself was impressive enough, David revealed some surprising insights into retailing in India, many of which cut against the "conventional wisdom" on that emerging retail powerhouse nation.

1. Unorganized retail... is pretty well organized. Over 90% of the retail market in India is labeled as "unorganized" because it isn't in conducted in Western chains or large store formats, but rather in 10m² "kirana" stores. But the moniker "unorganized" doesn't really apply. In one city alone, Delhi, every Monday 120,000 vehicles arrive delivering products to the kirana stores, and are unloaded in only three hours. While kirana stores don't have the cache of Western retail formats, the supply chain is incredibly sophisticated.
2. India is a very young market. 70% of the population in India is under 30 years old... putting this in perspective of the world population, this means that one in every six "Millennials" is in India, representing a massive proportion of next generation of shoppers. The formats in India reflect this youth-oriented market: over 50% of the shopping space in hypermarkets is non-food, including large areas focused on children's toys, books, and video games; electronics, and fashion brands. SPAR has been successful leveraging the demographics of this youth market to help its store launches, using SMS messages, Facebook, and Twitter to connect with young shoppers.
3. But demographics don't tell the whole story. Social dynamics in India mean that many times, the "head of household" isn't the actual shopper. In cities like Bangalore and Mumbai, the affluent men and women counted in surveys send their maids and drivers to do the household's shopping, meaning that retailers who rely solely on demographics to determine their offer will end up missing the mark with the actual shopper in their stores.
4. All retailers in India have to be world class. India is the proving ground for new ideas, offering both a fertile green field for new formats, technology systems, supply chains, and service offerings... set against the backdrop of an amazingly diverse shopper base, a challenging supply chain infrastructure, and a complex regulatory environment. To succeed in India, whether a global retailer like SPAR or an emerging native powerhouse like Reliance, requires best in class strategy and execution combined.