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Why The Penetration Of Brand Value Stores Is Less In Two Tier Cities?

Why The Penetration Of Brand Value Stores Is Less In Two Tier Cities?

By Srinidhi R.

Edited by Anandita Malhotra, Senior Editor, The Indian Economist

The Indian retailing scene has never been more exciting both from consumers’ and marketers’ points of view. The Indian consumer is now spoilt for choice and has only one problem to deal with and that is the Problem of Plenty! From a marketer’s point of view, retail premise continues to be the battle ground, where brand destinies get decided based on the consumers’ preferences. Given the charm of the Indian consumer, the churn in the Indian retail scenario will continue. Indian youth particularly seem to get comfortable ordering online. Besides, their craving for anything foreign is legendary. Hence, Brick and Mortar apparel and fashion retailers will have to deal with competitive intrusion at two levels; one being continued entry of foreign labels to the Indian fashion landscape and secondly the evolving e-commerce space. Pricing for routine wear and exclusivity in case of event-wears will emerge as key differentiators in this sector. So, the coming year may witness most fashion and apparel retailers will join the

Multi – channel bandwagon (web and mobile spaces) to continue remain relevant to their target group. Retail chains will increasingly house licensed brands particularly in kids category chiefly inspired by cartoons, animated characters and Bollywood and star cricketers. This would include proprietary content from homegrown and international production houses. With online buying becoming increasingly popular among Indian consumers, brick n mortar retail chains are making sure they have online Consumer durables and kitchen appliances accessible at a click online. We will see more retail chains firming up their online presence. Furthermore, private brands will emerge in this sector, the success of which seems bleak at this point of time. We are a very price conscious nation, and online retailers continue raining promotional prices in the market, offering a significant boost to e-tailing in consumer durable sector. Options like cash on delivery and manufacturers’ warranty add fuel to this rage. Price wars will continue to exist in this turf. However for sustainability and growth, QSRs need to focus on providing palpable value to the customers, leading to loyalty equations. This is all the more relevant since most inputs of QSRs are inflationary in nature and an average Indian consumer is far from loyal as far as QSR. Speciality Retail will be most influenced by e-tailing. Retailers need to look for out of the box engagement ideas to ensure footfalls and conversions. Franchising will be the name of the game. Greater penetration in tier 2 and tier 3 cities. Indians find international foods cool, but desi khaana hot. Indianising international foods as well as standardising Indian street foods will both find takers. With Inflation prone inputs and price prone customers QSRs should focus on synergy and value.

“Mall Culture” is still catching up in tier 2 and tier 3 cities. Just going to shop in a mall has propped up as leisure weekend activity. Thus our first phase would focus on aggressive expansion to these cities which still don’t have a mall in place. This would provide is with the first mover’s advantage. This would be complemented with expansion into new sector of medical instruments specifically surgical instruments within the existing facilities.

The Retail Industry in India has come forth as one of the most dynamic and fast paced sector with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry.

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