Services ride high on retail boom

India’s booming economy, growing middle class and increasing disposable income is fuelling a retail boom in the country. And, following close on the heels of this boom are cold chain suppliers, software providers and educational institutes that are expected to benefit from it.

The rapid growth of modern retailing, especially in food and groceries, calls for an organised cold chain infrastructure. India is one of the largest producers of fruits and vegetables in the world. Moreover, India’s food market is valued at $70 billion, which is doubling every three years.According to a recent report published by Technopak and Sun Microsystems (India), organised players are expected to make huge investments in supply chain infrastructure with a view to have better control over price, consistency in product supply as well as quality.
Air conditioning and refrigeration major Carrier is already providing refrigeration equipment for long-distance trucks and trailers for delivery of perishable products. “Organised retail is a major focus area for Carrier India,’’ says Zubin Irani, managing director, Carrier Airconditioning & Refrigeration. The company plans to introduce new products as the market matures.
Similarly, Ingersoll Rand’s solutions include pre-cooling, cold storage and land transport refrigeration. It’s already supplying refrigerator systems to large retail chains in India. Ingersoll Rand is also partnering with agricultural universities to develop basic protocols (enhancing shelf-life of fresh produce) and training on post-harvest management. “We see a multi-fold increase in the refrigeration business in the coming years. Right now, less than 10% of the fresh produce goes through a cold chain,’’ says Daljit Mirchandani, president, Ingersoll Rand (I) Ltd.
Retail players in education are hiring by the dozen and soon this number is expected to surpass the IT and BPO sectors. MeritTrac, a company specialising in assessments, recently released a survey on skill requisites of retail sales personnel. The study noted that an executive rated half as good as his colleague on creative presentation skills, loses out on 25% of all sales opportunities his colleague is certain to succeed in. The survey also said that sales personnel lack the key skill to explain creatively and demonstrate the product.
Based on this report, the company has introduced a new suite of tests. “A lot of emphasis has to be laid on grammar fluency during training,’’ points out Madan Padaki, co-founder and director, MeritTrac. He adds, “The requirements for this sector are getting competitive. Unfortunately, most people still look at retail as a low-end job where anybody with two hands and feet can man the counter. It’s important to enhance customer interaction skills, especially of the frontend sales personnel,’’ he adds.
India is currently facing a shortage of 3,00,000 skilled retail (both frontline and experienced) professionals. Keeping this in mind, NIIT Imperia has launched a set of programmes targeted at executives. The IT major, in association with IIM-Calcutta, is planning programmes in the arena of retail management. While the course and faculty will be from IIM-C, NIIT will deliver the programme in six metros. Already, 1,000 have enrolled for the programme.
With organised retail requiring substantial investment in technology, IT providers and software players are developing solutions specific to the sector. Sun Microsystems’ Java CAPS is an integrated platform that enables real-time application connectivity and data synchronisation. Globally, Sun’s turnover from the retail sector is over $1 billion. “Most retailers in India are looking at inventory management solutions,’’ says Priyadarshi Mohapatra, general manager, retail practice, Sun Microsystems India.