IRF 2008: Day 3

Day 3: India Retail Forum
The next urban Frontier: Twenty Cities to watch By: Roopa Purushothaman, Chief economist, Future capital holdings and R Shukla, Directo, NCAER
Detail discussion about the report….real good report….could not write it up due to huge data bombardment!!

Creating excitement in retail By: Bob Pritchard, International Marketer of the year & Tony Coombs, Market Force One
· The following three should always be present in interactive entertainment that should be provided to children to relieve parents for shopping:
o Education
o Health
o Fitness
· ‘e’ ball
· Track ‘n’ Find

Investments in Retail
- Anchor: Prashant Desai, Future Fund
- Vikram Rao, Business Director (textiles & apparels), ABG
- Srinath Sridharan, Sr. VP &Head, Strategic Alliances, Wadhawan Holdings
- Anjan Chatterjee, CMD, Speciality Restaurants (Mainland China)
- Ashish Kapur, MD, Yo!China
- Pradeep Hirani, Chairman, Kimaya Fashions
- Atul Jain, country head, Jumbo Electronics
- Sanjay Sahni, MD, Rituwears
- Ho Jung Lee, Senior Analyst, KPMG Korea

· Business of Business is to create value / Business of Business is to satisfy customers
· Business value is determined by its market capitalization which depends on
o Performance – (in your control)
o Perception – of the market (can only be affected by business)
· Capital will only come when the market sees growth in business.
· Market loves the following about retail:
o Growth
o Pure India play (not affected directly by global happenings)
o Can be the next big structural story in making
o The benchmarks are available world over to compare the growth
· Market hates the following about retail:
o Few size players – largest player is at $1 bn
o The promise on growth / revenue / profit is not being delivered – poor execution
o Confusing growth – largest player is growing @ 75% while smallest @ 25%
o Continuous need for capital
· Challenges:
o Tough macro environment
o High real estate prices
o Delays in development of mall
o Every store is a new challenge – customers are different in different region
o Evolving market – continuous change
o Cost is increasing
· Opportunities:
o Huge Customer base and rising income
o Rentals are way down
o Increasing entry barriers
o Competitive activities are at its weakest

Real estate and Retail
· Need for both realtors and retailers to understand each other business and then work out the deal.
· Currently both work in isolation
· Mall design should be as per need of location and all mall should not be designed in standard way.
· We can look at the option of taking rent as per the business of retailers. Also need to work out how revenue share model works.
· Developers should size there stores as per requirement of retailers and not just by sizing it in std way
· The high property tax is also a big concern
· The huge cost of finance and rising cost of land is forcing realtors to charge high prices from retailers. How to decide as to how much of total mall revenue should come by revenue sharing mechanism.
· Look at providing entertainment in malls like children theme park, water-park, and aquarium so that foot fall can be increased.
· Is it possible that consumers are ready to pay more for better shopping experience?