COMMENTARY
SPECIALS
CHAT
ARCHIVES

The Rediff Business Interview/Ajay Piramal

'At $ 180 bn, retailing is one of the fastest growing industries in India'

Part I: 'Bombay needs a world class mall'

What is the size of retail market in India?

India has nearly 5 million retail outlets for 950 million people, implying the highest number of outlets per capita in the world. Retailing, in India, is an approximately US $ 180 billion industry and contributes to 8 per cent of the employed workforce. So, it is one of the fastest growing industries in the country.

With focus on the service industry, what is the future of the manufacturing sector?

They will be there but in the backward areas. You can't have them in the heart of the city. It is very dangerous. You will see that the service industry will replace the manufacturing industry in cities.

Retail business is known for low margins of profits. So how come it is preferred to manufacturing?

Yes. But what counts in retailing is volumes. And unless we don't get volumes, we can't get high margins. We hope to generate enough volumes here. The customers will have a larger number of brands to choose from and hence will derive greater satisfaction. In retail business, the location of the business counts.

Crossroads is located in Central Bombay, in the heart of the city. And that's a big, big advantage.

Talking of brands, do you think the Indian consumer is brand- conscious? And what advantages does a shopper at Crossroads have over others?

Crossroads will offer a choice of a large number of brands. The Indian consumer is more exposed to brands now than earlier. And today, he wants to be part of the world. He doesn't want to be isolated from the world. Crossroads will offer lots of brands that are not expensive; these brands are selling in India today.

The Indian consumer is price-sensitive, isn't he? But you say you will offer brands that are not expensive. Sounds interesting….

The cost of all the products in this mall will be the same as elsewhere.

Your company is the not the first to foray into retailing. How will you square up against corporate retailers?

We don't fear competition. In fact, we welcome competition. It takes at least two to three years to conceive and develop a project. Hopefully, since we are the first to enter this field, we may gain an edge over others in future.

What will be your role after the mall opens?

We will ensure that the right tenants come in. We will ensure that service is good.

Is the project open to funding from venture capitalists?

I am not sure at this moment. I can't say anything more on this.

When is Crossroads expected to break even?

Three years down the line.

How different will Crossroads be from Bombay's premier shopping spot, Shopper's Stop?

Crossroads is a totally different concept compared to Shopper's Stop which is a 30,000 square feet departmental store. In Crossroads, there will be several different stores. There will be food, entertainment, games, etc. So, it's a totally different concept.

Will Crossroads target people of South Bombay?

We expect that people from all over Bombay and outside will visti and shop at Crossroads. At the moment, I can't say how many people will come in a day. You see, there is something for everybody here and nobody will be displeased. Be it parking cars, airconditioning, anything.

There is talk that Crossroads will employ specially trained staff.

We are going to have people who have experience in service industry. We will send some of our staff abroad to know more about the mall operations in other countries.

Interviews

Business news