India is developing a big appetite for western grocery lines. Clive Beddall flew to New Delhi to find out more about the dawn of the modern supermarket revolution
When it comes to convenience retailing Asian-style, Mahendar Kumar is a pioneer with a difference. His store in a modern, air-conditioned New Delhi shopping plaza contrasts sharply with the bustling, open-fronted momma and poppa units that characterise the metropolis. But what really makes the entrepreneurial 30-year-old unusual is his distinctive international product profile. For, apart from a few locally produced confectionery items, Kumar's store majors on imported groceries from the west and the UK in particular. And it is proving a big attraction for the increasingly prosperous middle class segment of New Delhi's 14 million populace.
New Delhi's food shopping facilities have for centuries been provided by scores of traditional, bazaar-style shops that have served up sacks of staple items stacked alongside shelves boasting just the occasional multinational brand.For many locals, home deliveries of bulk supplies of basic items remains the order of the day.
Add the local markets that provide essential supplies of fresh fruit and vegetables, so prominent in the average Indian's diet as are the all-day milk stalls and you have the colourful local retailing picture.
Although India has in excess of six million retail outlets of all shapes and sizes,until recently it had nothing that came anywhere near to being a modern retailing sector. Even now, what are considered to be ultra-modern food outlets are believed to account for only about 2% of the $180bn spent annually on food. But times are changing. Two years ago, one consultancy predicted that, as government restrictions on outside investment and imports were eased, a new revolution was about to start. More western influences are obvious across the nation's shopping scene and, despite the continuing high cost of real estate, the supermarket revolution that blossomed in the west three decades ago is beginning to show the first shoots in Delhi, Chennai and Mumbai.
The drive is being spurred partly as, in the hope of importing improved technology, more proactive Indian firms are looking for joint ventures with foreign partners. Names like Benetton, Levis, Marks and Spencer and Dairy Farm of Hong Kong, with its own supermarket formula, have moved in with new ideas and systems.
The country's first true shopping mall, complete with food courts, opened in Mumbai (Bombay) in 1999, and Indians soon began to get an appetite for western labels from Burberry to McVitie's. And while India may not yet have seen a Wal-Mart style invasion although Tesco is said to have "looked hard" at the opportunities in a couple of major cities the buzz in Delhi suggests Metro of Germany may soon set up shop, and Carrefour teams have been seen in the city.
Price is not a problem'
Meanwhile, home grown entrepreneurs like Kumar are showing the way forward. The genial father of two owns four c-stores, trading in Delhi, Agra and Jaipur. He starts with an advantage, because, to use his own words, for most of his customers, "price is not a problem".
We spotted several locals eagerly picking up packs of McVitie's Digestive biscuits for the rupee equivalent of £1 or a bottle of HP sauce (a big seller) for over £2. Most of his customers combine a trip to his Candy Land unit with a tour of a nearby M&S franchise for their clothes. In stark contrast to the poorer districts just a mile or so away, where motorised rickshaws chug around and emaciated children beg on street corners, Kumar's New Delhi unit is on one of the avenues that make up the three-year-old US-style 250,000 sq ft Ansal Plaza shopping precinct. Here, well-pressed designer jeans and logo encrusted sweatshirts complement the colourful saris as families arrive in smart cars. They are there to trawl the 48 stores and to pay homage with their wallets at temples of glitzy western fashion icons such as Jennifer Lopez, Kylie Minogue and St Michael.
When he moved in alongside M&S and the gleaming fashion emporiums, Kumar's trading formula was based around sweets and confectionery. He has broadened his inventory to take in several hundred ambient lines ranging from Belgian chocolates to Scottish shortbread, American mayonnaise, canned peaches (considered a delicacy by the locals), toiletries and snackfoods. Add the usual c-store essentials such as phonecards and books and magazines, and you have a range that keeps the store busy especially at weekends. The 400sq ft store, although small by UK c-store standards, takes upwards of 35,000 rupees per day (nearly £500).
Kumar buys his stock from specialist importers, constantly watching for new trends which will help boost his inventory. A new free-standing unit selling books by big name western authors is proving especially popular with late night shoppers.
Currently, Kumar's inventory majors on ambient goods, but he's well aware that, despite logistics and delivery challenges, processed and even more value added products from abroad are finally finding their way into India.Despite the arrival of chicken frankfurters from France and chicken bologne from the US, Kumar has not been tempted too far down that route. But he nods meaningfully at the suggestion that a move in that direction may be his next step.
But while modernising on many fronts, India as a nation still remains desperately poor, with massive problems further up the food chain. The economics and politics of food remain high on the Delhi government's agenda as one startling statistic illustrates. For, 20 years after a green revolution made India the world's second most populous country, self-sufficient in grain production, half of its children are malnourished. Experts agree one of the solutions lies in a better organised food processing sector, thus preventing so many under-used crops from being destroyed.
Encouragingly, the worldwide trend towards organic is being picked up across the nation. One of India's largest basmati rice exporters recently revealed plans for launching branded organic wheat, rice and vegetables, and there is talk of a concerted overseas selling effort by specialist producers.
Optimists on the burgeoning local retailing scene, not to mention in certain astute Delhi government circles, predict that the pace of retailing investment across the sub continent will accelerate in the years ahead, bringing a more modern slant to the whole food chain.
As one official puts it: "We want the world-class players here. Tesco may have by-passed us and gone to the Far East, but we hope they'll open here one day. We have some smart pioneerial brains of our own who can put our shopping facilities on a par with any in Asia."
{{ANALYSIS }}
When it comes to convenience retailing Asian-style, Mahendar Kumar is a pioneer with a difference. His store in a modern, air-conditioned New Delhi shopping plaza contrasts sharply with the bustling, open-fronted momma and poppa units that characterise the metropolis. But what really makes the entrepreneurial 30-year-old unusual is his distinctive international product profile. For, apart from a few locally produced confectionery items, Kumar's store majors on imported groceries from the west and the UK in particular. And it is proving a big attraction for the increasingly prosperous middle class segment of New Delhi's 14 million populace.
New Delhi's food shopping facilities have for centuries been provided by scores of traditional, bazaar-style shops that have served up sacks of staple items stacked alongside shelves boasting just the occasional multinational brand.For many locals, home deliveries of bulk supplies of basic items remains the order of the day.
Add the local markets that provide essential supplies of fresh fruit and vegetables, so prominent in the average Indian's diet as are the all-day milk stalls and you have the colourful local retailing picture.
Although India has in excess of six million retail outlets of all shapes and sizes,until recently it had nothing that came anywhere near to being a modern retailing sector. Even now, what are considered to be ultra-modern food outlets are believed to account for only about 2% of the $180bn spent annually on food. But times are changing. Two years ago, one consultancy predicted that, as government restrictions on outside investment and imports were eased, a new revolution was about to start. More western influences are obvious across the nation's shopping scene and, despite the continuing high cost of real estate, the supermarket revolution that blossomed in the west three decades ago is beginning to show the first shoots in Delhi, Chennai and Mumbai.
The drive is being spurred partly as, in the hope of importing improved technology, more proactive Indian firms are looking for joint ventures with foreign partners. Names like Benetton, Levis, Marks and Spencer and Dairy Farm of Hong Kong, with its own supermarket formula, have moved in with new ideas and systems.
The country's first true shopping mall, complete with food courts, opened in Mumbai (Bombay) in 1999, and Indians soon began to get an appetite for western labels from Burberry to McVitie's. And while India may not yet have seen a Wal-Mart style invasion although Tesco is said to have "looked hard" at the opportunities in a couple of major cities the buzz in Delhi suggests Metro of Germany may soon set up shop, and Carrefour teams have been seen in the city.
Price is not a problem'
Meanwhile, home grown entrepreneurs like Kumar are showing the way forward. The genial father of two owns four c-stores, trading in Delhi, Agra and Jaipur. He starts with an advantage, because, to use his own words, for most of his customers, "price is not a problem".
We spotted several locals eagerly picking up packs of McVitie's Digestive biscuits for the rupee equivalent of £1 or a bottle of HP sauce (a big seller) for over £2. Most of his customers combine a trip to his Candy Land unit with a tour of a nearby M&S franchise for their clothes. In stark contrast to the poorer districts just a mile or so away, where motorised rickshaws chug around and emaciated children beg on street corners, Kumar's New Delhi unit is on one of the avenues that make up the three-year-old US-style 250,000 sq ft Ansal Plaza shopping precinct. Here, well-pressed designer jeans and logo encrusted sweatshirts complement the colourful saris as families arrive in smart cars. They are there to trawl the 48 stores and to pay homage with their wallets at temples of glitzy western fashion icons such as Jennifer Lopez, Kylie Minogue and St Michael.
When he moved in alongside M&S and the gleaming fashion emporiums, Kumar's trading formula was based around sweets and confectionery. He has broadened his inventory to take in several hundred ambient lines ranging from Belgian chocolates to Scottish shortbread, American mayonnaise, canned peaches (considered a delicacy by the locals), toiletries and snackfoods. Add the usual c-store essentials such as phonecards and books and magazines, and you have a range that keeps the store busy especially at weekends. The 400sq ft store, although small by UK c-store standards, takes upwards of 35,000 rupees per day (nearly £500).
Kumar buys his stock from specialist importers, constantly watching for new trends which will help boost his inventory. A new free-standing unit selling books by big name western authors is proving especially popular with late night shoppers.
Currently, Kumar's inventory majors on ambient goods, but he's well aware that, despite logistics and delivery challenges, processed and even more value added products from abroad are finally finding their way into India.Despite the arrival of chicken frankfurters from France and chicken bologne from the US, Kumar has not been tempted too far down that route. But he nods meaningfully at the suggestion that a move in that direction may be his next step.
But while modernising on many fronts, India as a nation still remains desperately poor, with massive problems further up the food chain. The economics and politics of food remain high on the Delhi government's agenda as one startling statistic illustrates. For, 20 years after a green revolution made India the world's second most populous country, self-sufficient in grain production, half of its children are malnourished. Experts agree one of the solutions lies in a better organised food processing sector, thus preventing so many under-used crops from being destroyed.
Encouragingly, the worldwide trend towards organic is being picked up across the nation. One of India's largest basmati rice exporters recently revealed plans for launching branded organic wheat, rice and vegetables, and there is talk of a concerted overseas selling effort by specialist producers.
Optimists on the burgeoning local retailing scene, not to mention in certain astute Delhi government circles, predict that the pace of retailing investment across the sub continent will accelerate in the years ahead, bringing a more modern slant to the whole food chain.
As one official puts it: "We want the world-class players here. Tesco may have by-passed us and gone to the Far East, but we hope they'll open here one day. We have some smart pioneerial brains of our own who can put our shopping facilities on a par with any in Asia."
{{ANALYSIS }}
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