Unorganized retail will have to get organized in India

In my last essay on retail we looked at how organized retail is gearing for a big bang entry in India. Now let’s have a look at what the unorganized sector has to do to counter the attack.

With the onslaught of organized retail in India, the Indian press and the Left front are devoting endless articles and speeches about how to safeguard the local ‘kirana’ store owner.

The usual points are:

1. Give personalized services
2. Home delivery
3. Short term credit to customers
4. Providing added services like P.C.O. and Bill payment.

In my opinion, all these things they already did. As far as I can remember whenever I asked my grocer to give me bathing soap, without fail, he always gave me ‘Pears’ (which happens to be our ‘family bathing soap’) and after I have left, dutifully enters it’s cost under our family credit account. Of course whenever we purchased bulk items like sugar, ghee etc. he would deliver it to our doorstep.

No doubt that with the kind of money currently being put in organized retail in India, the share of organized retail is bound to increase from the current pittance of 3-4%.  It’s  increasing share  can be delayed  but  cannot be  averted. Though with a CAGR of 50% or so, still the share of organized retail will reach only to 10 – 15% by 2010. That leaves the unorganized players with ample time to get their act together or perish.

Where the organized players score against local retailers is in bulk purchase of goods. To counter that the local retailers will have to form certain organization at city level so that they can pressurize the FMCG majors into giving them better prices.

Or maybe some of the local retailers can transform themselves into supermarkets with some loan. It is a necessity in urban areas where organized retailers are fast setting shops and with changing shopping habits more and more urban Indian’s are going for shopping in Hypermarkets.

The threat of organized sector to local retailers is definitely there in the long run, but in short run they won’t feel much of a difference. And those who won’t change on this slight difference will have a hard time, not now, but may be in next 8-10 years.

Trivia: Pears is the only product which is exported from India by HUL.

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No computers for first 3 semesters @ IITK!!

In a unique first, IIT Kanpur has barred student’s from buying laptops/computers for their first three semesters. LAN will be disabled from rooms of these students. Though for these students computer center will remain open 24 hrs.

The same step taken a few years back might have had helped in slowly exposing the students to use/misuse of computers when most of them had not seen one till they joined IIT. In today’s scenario, when most student’s are spending a few lacs for JEE coaching alone, most of them would already own a computer or have used/misused it.

If these are the steps IIT Kanpur is taking to prevent the rising number of suicides in campus then it is too little too late.

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Indian professional networking space heats up

After lot of me too social networks being launched in India now it’s the turn of professional social networks. With alexa data showing traffic rank of orkut in India to be no. 2 the fate of all those networking sites seems to be sealed. I am afraid the same is going to happen to these professional networking sites unless the make strong corporate connections and offer direct opportunities as well as people-people networking . In that respect naukri.com can come up with some interesting ideas in their newly launched brijj. While on the other hand techtribe is a little old and has been slowly and steadily building user base and also recently got funded by Canaan partners. Unless these sites offer something which is focused only on India, it doesn’t give me reason not to join Linkedin onto which lately many Indian professionals are joining.

Regarding brijj I think they have a strong partner in form of naukri which can help them drive traffic to the new site as the target audience is same. Ideally I would like to see interoperability between both sites. Right now both brijj and techtribe have more or less same features. Also with techtribe there’s a problem of a ‘tech’ in it’s name with can shun potential users in careers other than technology which are fast growing in India such as finance.

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