The Indian modern retail scene : rapidly changing & much more to come

For many UK brand owners wanting to grow internationally, media commentary on the BRICs tends to be weighted away from India or focuses on a few stereotypes that risk missing the sheer pace of change in the market.

Here are a few indicators that might prompt a rethink

The rise of the malls

Indians love large scale shopping malls as both lifestyle and entertainment venues driven by urbanisation, digitisation and the evolving tastes of the growing middle class. At the end of 2017, there were 600 operational malls with 30 new openings across the top 8 cities by 2020. Lulu International Mall in Kochi (touted as the largest) is now being surpassed by new openings in both Tier 1 and Tier 2 cities.

For the modern trade, the only way is up

Large scale modern retail outlets, such as those opening in the malls, represent only around 6% of total retail spend currently due to the massive fragmentation of the Indian retail channel. Historically this has been a big problem for brands wishing to enter the market but that is changing with the ability to distribute CPG brands through the retail network of operators like Future Group into every state. 

Big Bazaar beauty retailing

Big Bazaar, owned by Future Group, is one of the most established hypermarket chains with 250+ stores and covering home, food and fashion categories. Interestingly, a JV with Mibelle to develop personal care products for own label should ensure ‘fashion forward’ ranges.

Big Bazaar Puducherry

Cultural nuances for beauty brands

In terms of brands and category space, obvious differences relate to the proportions of space dedicated to categories like bar soaps (a historical throwback and still sold in big multipacks) and hair oils with brands like Pears and Dabur.

Hair Oil Category

NewU as a new kid on the block

Launched in 2012 as an omni channel business; by 2015 NewU reached 70 stores and with +20 openings planned yearly. As part of Dabur, but carrying western make up brands like Maybelline and Revlon plus Olay and Neutrogena in skincare alongside Indian brands, the jury is still out on the full potential of cosmetics/drugstore style chains.

The retail price vs pack size challenge

As a rapidly developing market, the convergence of pack sizing and shelf pricing of benchmark beauty brands in India compared to international markets is evident and will continue driven by the number, wealth and aspirations of the urban Indian middle class.

The importance of local partnerships

As with any international market, the detailed understanding of local regulations is obligatory and the value of a strong, properly recruited and trusted local partner cannot be underestimated.

For example, local knowledge of appropriate packaging copy may lead to a need for some ‘eclectic’ packaging amendments to ensure a brand can fulfil local formula, weight or pricing regulations.

So to recap, there are challenges for brands for sure, but in such a fast changing and high growth market, maybe it’s time for a rethink to push India up the agenda.

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