Where do you stand in the retailing sector?
"India is still in the nascent stage of organized retailing and is constantly evolving. Pantaloon Retail (I) Limited is a front runner in India’s modern retail space and we represent fashion ,food, general merchandise and other lines of business, through multiple delivery formats, primarily catering to the lifestyle and value customers. The company has stores in nearly 30 cities across the country, constituting over 2.7 million square feet of retail space. The company has also signed close to 10 million sq. ft. of retail space to be operational by end 2008, which represents 20-30 % of all modern retail space coming up in the next three years. Over 200 million footfalls are expected in our stores by 2006-07. I believe that consumption will be the next big driver of India’s economic growth. Rising incomes and increased exposure to global products and global consumption patterns have changed the average Indian’s attitude towards consumption and savings. Consumption = Development. Increased and channelised consumption would lead to the development of the nation through improved and better infrastructure facilities, greater employment generation possibilities will emerge with increased consumption, leading to people wanting to spend more on themselves. This cycle is what will fuel the consumption boom in the country."
What are the other retailing/non-retailing areas you are looking at?
"We are in the process of constant evolution and firmly believe in creating the present, with the future in mind. We have only one vision-to capture the highest share of the consumers wallet. This is what has led us to believe that apart from our core strengths in fashion, food and general merchandise, we will operate through various formats in other lines of businesses; complete home solutions, leisure & entertainment, wellness, communications and financial products. We also have two AMC’s. One that specializes in Property and the other is a ‘Consumer India Fund’. The property fund aims at sourcing high quality property at the lowest possible rates, while the consumer fund will look at providing our retail pipeline and expertise to national and regional brands, thereby enabling them with a wider coverage. "
Who are your major competitors? What is your share in the market?
We operate in a competitive environment. For each line of business, we would face competition from established national and regional companies. In the fashion segment, we probably face competition from Shoppers Stop, Trent and Lifestyle. The hypermarket business is relatively new, being just about three to four years old in the country. We face competition from the likes of RPG (Spencer’s), Trent (Star India Bazaar) and with Shoppers Stop too indicating their entry into the hypermarket segment. In the Food business, we face competition from Subhiksha, Food World to name a few.
What is the market and mind share you are looking at in the next five years?
At Pantaloon we do not look at market shares. Though we have secured 30% of modern retail space coming up in the next three years, our endeavour is to keep evolving with the young Indian consumer. As regards mind share, we want all our store formats to capture the imagination of the target customer.
What are the major trends retailers should expect this year?
"In India, organized retail constitutes about 3% of total retail and is poised to reach 15-20% in the next few years, which translates into a 40% CAGR. This indicates tremendous potential for the sector for the next few years. The future will also see the pantaloon of several new concepts targeted at the Indian consumer. Further, retail development will not just occur in Tier 1 cities, but will have far more significance in Tier 2 & 3 cities as well. The consumption drive would be fueled in smaller towns and cities. There would be definite customer responsiveness towards Value Added products and services in the next few years. Since value retailing touches the mass of the population, and with organized retailing at about US $ 300 billion at present, value retailing has the scope to almost double. "
Can you do meaningful transactions on the Internet?
"I believe that inspite of online retailing being in its infancy in India, it could provide a completely new dimension to retail. There is a new and fast emerging population of customers called ‘Netizens’ who are spending more time in front of their PC’s. They are increasing by the day and are the ones who prefer to transact and communicate over the internet. We looked at this opportunity and hence our likely foray in the E-tailing space."
What do you include in your coverage area? What issues and trends bind them together?
"All our lines of business are consumer centric and I believe that if we are to be in the larger consumer space, we would need to keep changing, evolving and accordingly be flexible in our business plans. Consumers are the same everywhere; we are only bound by our social systems. Their desires, greeds and needs are similar. The value for money proposition is so ingrained in the Indian consumers mind that he needs to be shown true value all the time. Therefore, all our current and future businesses would necessarily have the common denominator as the consumer. All our alliances and relationships with many company’s have been built, keeping the synergies of business and consumer offerings in mind. "
How do you go about inspiring your employees to do their best?
"The entrepreneurial culture and spirit prevails in the company, whereby the appetite for taking risks is encouraged. We believe in learning while doing, and this what has helped us on our journey. We do not believe in any rigid organizational structure and instead prefer an organization design approach. Our employees are completely empowered individuals who are encouraged to think out of the box, use scenario planning as a tool for quick decision making, adopt design management as an approach which requires an individual to use both sides of the brain while evaluating business propositions, etc. We have been recognized as the most preferred employer in the retail sector. We employ close to 10,000 people and recruit nearly 500 additional people every month. We follow the Balanced Score card approach; a very critical strategic tool while evaluating an individual’s performance. "
What is it that you enjoy most about being in this line of business?
That in our business, customer decides your fate. To observe them shop and evolve excites me. I firmly believe that consumption= development and retail will play a role in accelerating India’s economic growth, and that I want to play a role here. Besides, providing employment opportunities to hundreds also gives me satisfaction.
What was your biggest break in the retail business?
"There have been pleasant and not so pleasant moments in my journey so far, but we have learnt from our mistakes and celebrated our successes. I consider two or three moments as memorable to me. Firstly, the company’s entry into organized retailing with the first Pantaloon store at Gariahat, Kolkata. Secondly, the acceptance of Big Bazaar as a fashion value format by the Indian consumer, across India. The third possible break for us a company, was when we ventured into cities and towns like Sangli, Durgapur, Nasik and were surprised to see the rising consumerism there, which made me believe that retail is not just an urban phenomenon. "
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.