Flattening of the Retail Market


[Note 1: Suck it, I don't mean flattening as Thomas Friedman meant.. I mean Flattening as in 'Flat Anna' as in 'Thassal Gone' as in 'Slept Of' or in extreme cases .. 'Died']

[Note 2: I'm sure many would disagree with this post :) ]

One thing I cannot fully understand is why 'Retail' is becoming such buzz word in India. I feel it'll only undergo one or two boom and bust cycles. Why? .. The Internet...

Internet penetration in India is on the rise. Yes, in the villages too largely thanks to mobile phones, open source software and companies such as FINO and ITC's E-Choupal which are largely bringing the informal and 'undefined' market into the organized sector. Conventional models of internet connectivity and growth based on developed countries won't prove efficient here as the growth in these areas is largely due to the stupendous growth of new technology.

Even in the urban areas not many of us would want to visit the groceries or the Kirana stores for our daily needs when one can simply place an order from work using an online portal and the goods are being delivered right to your doorstep. This might even be possible in the villages due to mobile phone penetration where companies can deliver goods to villages on a bi-weekly basis with almost zero inventory cost thanks to pre orders made by the village dwellers.

Of course it will be a while before companies can achieve economies of scale and this practice becomes widespread, but personally these options are going to become available way before Wall - Mart conquers every street corner. But then again there will always be shops who provide further value to the customer by enhancing the shopping 'experience' making shopping a leisure activity rather than a necessity. Probably a trend that Malls should pay more attention to before they start construction!

So, lets consider that this does happen. Internet enabled services does destroy the retail sector (even the unorganized ones!) . The amount of prime real estate that gets freed up due to this would be major change everywhere!! With shops closing all that area can be put to more productive use.

Ah, well .. but I guess I am but idealizing. I'm sure there will always be unions, communists and probably even local goondas who might stop all this from happening....

Image Courtsey www.indiaretailbiz.com