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FDI in Retail Helps Growth + Operational Benchmarks for Success – Biyani & Vineet Kapila

October 12, 2012


ICICI recently hosted an interactive session with hosted Mr Rakesh Biyani (Joint Managing Director, Future Group) and Mr Vineet Kapila (Managing Director and CEO, Spencers Retail) to discuss their experience on the evolution of Indian retail industry and share their insights on the way ahead. Here is an excerpt of the proceedings of the session.

Retail Growth from product assortment and supply efficiency
Indian Retail industry is bound to grow if supply keeps pace with growing demand. Therefore the strategy that would define success in the industry would be to sell more and sell more efficiently. Flight of Foreign Capital into the sector will definitely help in building strong back-end infrastructure, improving even the current supply chain and sourcing process.

FDI Global Partner will help jump the learning curve
Global / MNC retailers will bring with them rich experience of various competitive markets and best practices followed by them in markets similar to India. This will help Indian retailers jump the learning curve. Further, the strong consumer analystics skill sets of foreign retailers and specialised ancillary services would go a long way in taking the growth in the Indian retail industry into the next orbit.

Operational benchmarks for Success
While there is no one particular format (convenience store, super market, etc) or category (food, apparel, electronics, etc) which can guarantee success in retail industry, Mr Rakesh Biyani felt a balanced combination of food and apparel has been a relatively successful model globally. Retailers must strive for an optimal operational parameter of atleast sales of Rs 12,000-15,000 per sq ft for apparels and Rs 20,000-25,000 per sq ft for food to make decent profit.

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