Retail in India – A Quick Flashback

Stepping back to yesteryears, it shall be of interest to you to learn about the handful of brands present in the country till the close of the fourth decade of the 20th Century.

Flashback
We Indians love our chai but you may be surprised to learn that when it came to branded tea – it was just Brooke Bond and Lipton that found place on the shelves of the kirana stores. Lux and Lifebuoy minus any of their existing SKUs where the only two bathing soap brands that the country had and for clothes it was Sunlight. Cooling  / fairness talcum powders were not even thought of then as the only brand available was Himalaya Bouquet. Afghan Snow was used as an all purpose cream as obviously the concept of age defying and fairness cream was absent then.

Colgate was the only toothpaste that consumers bought – be it to fight tooth decay / sensitivity or have a refreshing breath. 7’o clock blade was the only male grooming accessory which was used till its bluntness could no longer be sharpened and there was a need to replace it with a new fresh 7’ o clock blade! It was only the hair-oil category which had about 3-4 brands but then these brands were put to use only on special occasions.  After reading about all this it should not come as any surprise to you when I say that the country got its first brand for slice bread in 1964! And yes, to share more – this brand originated from Orissa just in case you thought it was Mumbai, Delhi or Bangalore which took the lead for setting up the industry for slice breads in the country.

Till about 1950s the only major FMCG Companies in India were that of Colgate and HUL. No wonder then that till late 1950s the monthly consumption of an average Indian middle class household was just about Rs. 70. Till then, the level of aspiration he had was restricted to owning a fountain pen, a cycle and a watch! I missed mentioning here that India got its very own branded fountain pen only in 1955 and there are stories of how the body had to be usually masked with a sticking tape to avoid leakage of ink. 1969 saw the entry of Nestle in India.

Coca Cola came in by 1957. The Indian FMCG companies till then who were fast filling the shelves of retailers with their brands were – Dabur (till a long time it was just into Ayurvedic products), Godrej and TOMCO which was later taken over by Hindustan Lever.

Means of communications were visibly absent. Radio wasn’t in the reach of a common man forget having a television at home. Till late 1970s Illustrated Weekly  was the only magazine hence where and how would brands advertise then? Had it not been for Lal Bahadur Shastri’s intervention, perhaps we still would have just been tuning to Radio Cylon. It was he who under his reign launched Vividh Bharti. In 1972 Mumbai saw the launch of the television! The trend of owning a television set then mushroomed during the 1980s. That is when information explosion and information bombardment started happening and advertisers were there plenty many!

The advent of branded garments swept the wardrobes in the early 1980s and post that there has been no looking back in this category which witnesses the launch of a new clothing apparel brand almost on a daily basis. The MRP concept in the country came in  mid 1980s. Till then it was just the concept of a 5 per cent mark-up. To mention about the concept of super markets, the country truly speaking didn’t have one as till mid 1960s, 99 per cent of the stores were less than 500 sq.ft. But it is of importance to mention that department stores as a concept existed in the country since the time of the British regime. 1962 saw the setting of a super market with Delhi Super Bazaar and it was in the 1970s that super-markets were to be seen but thanks to the Co-operatives who in all sense need to be credited to have launched and set the ball rolling for the concept of ‘modern retailing’ in India.

The Transformation
Now, after learning about all this, isn’t it an obvious question to ask that how and why would multi-nationals enter the country then and why then we didn’t have the concept of modern retail in India?

1970s saw the aspirational levels of an average Indian middle class graduating to owning a two wheeler and a refrigerator. It was a transition in 1990s with the same target audience now wanting a flat, a car and a foreign tour. Gradually we then saw the mindset being comfortable with spending rather than always wanting to save.  Things changed largely with the then Finance Minister – Manmohan Singh opening the doors of India to Liberalization, Globalization and Industrialization. A lot of consumer goods importing began in the country and this was also with more and more Indians going abroad for work and study. Top industrial houses of the country jumped into retail – Tata’s, Birla’s. Goenka’s, Marico etc.

Contribution from Down South
The contribution from South India in setting the ball rolling for organized retail in the country has been significant with industry players there taking a lead to establish the first organized retail chains in the food and grocery segment in India with stores such as Nilgiri’s, FoodWorld, Margin Free etc. The Consumer Durables segment too has its root from down South with regional players like Vivek’s, Giria’s, Pai International etc. Additionally, India saw its first mall in Chennai in 1997 – The Spencer Plaza. Mumbai saw the opening of Crossroads but eventually it had to shut shop as it went wrong on many aspects – the major being not adhering to following the basics of mall management which includes have 5 anchor tenants – each from the category of a hyper or a bigger super market, a successful / well established departmental store, a food court, a multiplex / entertainment zone and a well known food chain. But this failure was well taken note of the future malls setting themselves in the country and those which followed the basic principles succeeded whereas the rest had to change their strategy and have the property used for commercial office space.

 Foreign Direct Investment in India in Cash and Carry Wholesale was allowed in 1997 but soon it faced a roadblock on its way to success when it required Government permission. Though, in 2006 the approval requirement was relaxed and automatic permission was granted. Between 2000 to 2010, Indian retail attracted about $1.8 billion in foreign direct investment but this was representing a very small 1.5 per cent of total investment flow into India.

India as a country is an amalgamation of various communities and cultures. The potential of retail in the country is immense with the possibility of customizing retail options based on the area of operation and its catchment. Success in retail is no rocket science as long as the basics are adhered to.

  • Zainab S Kazi –
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