Retail in Asia

In Markets

Inside India: Fine-tuning your offer for the market

India Insights is a retail consultancy in India offering clients insights into the Indian consumer as well as issues affecting their brands and businesses in the country. Retail in Asia talked to founder Dominic Twyford about opportunities for retailers in India and the challenge of adapting foreign offerings to the local market.

RIA: What is your previous experience in retailing and/or consulting?

DT: I have always worked agency side, starting with the advertising agency McCann Erickson in Hong Kong, where I worked on the Wellcome supermarket brand. I then worked at WPP [the world’s largest communications-services group in terms of revenue] for a design agency specialising in creating brand experiences through store design for many of the world’s leading retailers. More recently I have worked with niche agencies, specialising in the retail and property sectors.

RIA: What is the story behind India Insights?

DT: I first worked in India 10 years ago; the market – not just the retail sector – was clearly going to take off. Since then I have always kept my eye on the market and enjoyed analysing it and watching it develop. Three years ago I started looking at the market in greater detail and carried out some work for DLF and Reliance Retail. I concluded that there was space for a consultancy service that would help creative agencies and brand entrants, across multiple sectors, understand the Indian consumer and market. That’s how India Insights was born.

RIA: You have worked in several countries in Asia. What made you decide to focus your attention on India?

DT: Emerging markets fascinate me and India’s potential was obvious. While India still faces many challenges, all the necessary ingredients are in place to attract consumer brands: a young demographic, a growing consumer class, and a desire by consumers to define themselves through brands. But most of all, I like the attitude in India – there is a feeling that anything can happen and anything is possible.

RIA: Who are some of your main retail clients? Can you give us some details about the kinds of services you offer them?

DT: I am currently working with a UK company that has secured an exclusive export agreement with the Cuevas family, owners of the Riberebro Group in Spain, one of the most important food business groups in the country. We are looking at the feasibility of bringing a number of their labels to India.

RIA: What’s the biggest tip you can offer to foreign retailers looking to move into the India market?

DT: India is gaining plenty of positive media coverage, and rightly so, but entrants need to drill deep and avoid getting seduced by headlines – India is a complex country. Just consider the size of India’s middle class, the segment of Indian society that is fuelling domestic economic growth and gaining so much coverage. No one really knows the size of this group: Deutsche Bank recently concluded that it lies somewhere between 30 and 300 million people. In any case, the question that should concern retailers is how many in the middle class are part of the "consumer class" – how many are credible target customers.

RIA: There has been a lot of talk in recent years about the Indian retail sector being one of the most up-and-coming in the region. Do you think the country is living up to the hype? What are some of the main challenges currently being faced by the sector?

DT: The Indian retail sector is still in the process of learning – as are retailers entering the country. Considering the global financial situation and recent period of general uncertainty, progress is good. I feel that developers and landlords need to focus more on mall management – branding, marketing, leasing, zoning, pricing strategy, and so on – and creating brand experiences for their customers, which in turn will attract the best tenants. This will become more important as competition increases due to the proliferation of malls.

RIA: Who are the hottest retailers, homegrown and foreign, in the country at present? Which brands enjoy the most clout?

DT: The foreign retailers that get it right and bond with India’s consumers are the ones that have fine-tuned their brand and offer for the market. McDonalds is often cited as providing the best example of this, but I am also a great fan of the approach taken by Levi’s. Levi’s pricing would position their jeans as a premium brand in India, vastly reducing the accessibility of the brand. The company’s decision to trial monthly instalment payment terms solved this problem. The brand has been able to retain premium status over unbranded alternatives while providing the means for consumers to make purchases.

RIA: You have a stated interest in localising branding and design for India, as opposed to forcing Western formats into the country. Can you give us some examples of recent Indian branding successes and failures, in your view?

DT: I think there is a temptation for retailers entering the country to try to import Western formats into India. A walk around a Gurgaon [one of Delhi’s four major satellite cities] mall feels like a walk around any international mall. I would like to see retailers evolve to reflect the needs and preferences of the Indian consumer. Future Group’s theory of "organised chaos" is interesting: the retailer feels that by creating disorder in its Big Bazaar, it has put customers at ease.

From a purely design and branding perspective, I am a big fan of Bangalore airport, where the inspiration for the retail space is traditional rangoli patterns. The result is a contemporary scheme that is firmly rooted in India.

RIA: What are your expectations for retailing in India for the remainder of 2010?

DT: More expansion can be expected from both domestic and foreign retail brands. Reports suggest India’s economy will grow at around 9 percent this year, accelerating back to double-digit growth by 2013. In addition, a series of studies show that consumer confidence has returned. The signs point towards strong domestic sales, and with recovery coming quicker than in the West, I feel that plenty of international retailers will look to expand or boost their presence. In recent weeks Shopper’s Stop announced plans to boost its store network by 60 percent, and LG announced it would open 100 stores. We can expect to hear of more expansion plans.

RIA: How do you see your business developing over the next 18 months? How about the next five years?

DT: I am about to move to Delhi for a three- or four-month research trip. The trip will provide me with the opportunity to meet local business leaders and potential local partners. In addition I will be carrying out a range of research about the Indian consumer.
In the short term, as a new company, I want to raise India Insights’ profile and build more long-term relationships. Longer term, I want to position the company as a natural choice for organisations and brands that want to apply our knowledge to their business.

Visit India Insights for more on the company’s services.

Inside India is Retail in Asia’s regular column dedicated to showcasing opinions about the Indian retail industry.