In­tro­duc­tion

VMRD - - Contents - Suren­der Gnanao­livu

The In­dian Re­tail Mar­ket is grow­ing at a CAGR of 12% in In­dia with or­ga­nized re­tail surg­ing ahead at a CAGR of 32% (PwC re­port “Build­ing re­tail busi­nesses for tomorrow to­day”). This data also shows that 92% of In­di­ans still pre­fer shop­ping off­line owing to re­tail’s four “T”s: touch, trial, take­away and trust. This has com­pelled re­tail­ers to strive to bet­ter the ex­pe­ri­ence de­liv­ered in their store en­vi­ron­ments. The im­pact of this has been that many or­ga­nized and tra­di­tional re­tail­ers are reimag­in­ing their ex­ist­ing store con­cepts to new ones. One of the key el­e­ments ad­dressed in th­ese projects have been the store presentation which has in­creased the de­mand for cus­tom­ized fix­tures.

VM&RD took a close look at the cur­rent trends, by con­nect­ing with 26 of the top re­tail fix­ture sup­pli­ers in In­dia. We find that they are ready to cater to the es­ti­mated ad­di­tion of about 15+ Mil­lion Sft of re­tail space an­nu­ally.

THE TOP 5 TRENDS IN THE FIX­TURE IN­DUS­TRY FROM THE CON­VER­SA­TIONS ARE AS FOL­LOWS:

En­try of many new play­ers, start-ups and those di­ver­si­fy­ing from other re­lated ser­vices in the arena is cre­at­ing fierce com­pe­ti­tion De­moc­ra­ti­za­tion of cus­tom­ized fix­tures and the like-to-like price drop of 10-15% in the cost of sup­ply.

Fo­cus on im­prove­ment in R&D and man­u­fac­tur­ing pro­cesses to match global fin­ish and form needs

In­crease in ex­ports and in­ter­na­tional part­ner­ships for tech­nol­ogy im­ports

In­te­gra­tion of re­tail ex­pe­ri­ence el­e­ments like light­ing, dig­i­tal sig­nage and tech­nol­ogy into store fix­tures

SOME OF IN­TER­EST­ING QUAN­TI­TA­TIVE HIGH­LIGHTS OF THE FIND­INGS ARE AS FOL­LOWS:

31% of the 26 com­pa­nies are less than 10 years old and 35% are over 20 years old.

The av­er­age size of fa­cil­ity has re­duced from 66,000 sq ft to about 63,000 sft in the last 2 years. How­ever, the num­ber of play­ers with over 100,000 sft has in­creased con­sid­er­ably. Also, the num­ber of smaller play­ers has also in­creased sub­stan­tially.

The av­er­age turnover, in the last 2 years, has de­creased by about 19% from INR 23 Cr to INR 19 Cr owing to fall in prices and spread of the pie over more play­ers.

The av­er­age man­ning strength of the in­dus­try has re­duced from 140 per fac­tory to 103, a re­duc­tion of 23%! This is a prob­a­bly a reflection of the adop­tion of more ef­fi­cient man­u­fac­tur­ing.

Though the per­cent­age of ex­ports has not in­creased in the last 2 years, the num­ber of com­pa­nies that ex­port has in­creased from 39% to al­most 50%.

The av­er­age area fit­ted out by each com­pany has dou­bled in the last 2 years, from 3.25 Lac sft to about 5.9 Lac Sq Ft per sup­plier.

Over­all, from the sup­pli­ers’ per­spec­tive it’s faster growth with more op­por­tu­ni­ties, higher rev­enues and higher ef­fi­cien­cies of oper­a­tions (in terms of hu­man, ma­chine and space re­source). From the cus­tomers’ per­spec­tive its bet­ter bench­marks of qual­ity, bet­ter price, more choices for cus­tomiza­tion and more pro­fes­sional ser­vice. So we can con­fi­dently con­clude that, amidst the very chal­leng­ing com­pe­ti­tion, it’s a sure win-win for both the Buyer and the Seller.

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