As it opens up to global competition, the organised retail segment in India is projected to be around 9 per cent of the total retail market by 2015 and 20 per cent by 2020.
Virtuous Retail (VR) is a leading retail real estate asset platform, sponsored by Xander Group Inc – a major emerging markets investment firm. As India’s first “master retailer”, the company specialises in providing a holistic approach to the retail experience for the country’s booming consumer class. It announced the launch of its flagship retail centre – VR Surat, based in the commercial capital of Gujarat – in London recently.
Anupam Yog, Director – Marketing for Virtuous Retail Services (pictured), speaks to India Inc about the growth prospects in the sector and the vision for VR centres in the future.
What are the most attractive elements of Indian retail for foreign investors at the moment?
India is one of the largest consumer markets with the lowest penetration of organised retail. Despite a sophisticated and aspiring consumer class, and the potential for scale, the quality of retail real estate at present is below international standard, leaving a major gap in the market for an institutional player.
How has the Indian retail space developed over the years?
There have been some important developments in the Indian retail sector in recent years: the entry of several international brands despite a challenging business environment reflects the strong interest in the market. Our research shows that international brands outperform their domestic peers, thus redefining the competitive landscape.
Interestingly, in the last one-two years, the luxury segment is showing signs of sustained growth, and is a strong indicator of market potential. The retail sector is not perceived as attractive as the IT sector in terms of being an employer of choice, but this is expected to change as consumers demand better service standards, which still lag global benchmarks, forcing retailers and operators to invest in the softer aspects of retail management.
What are the key Indian cities in terms of global interest?
Bangalore, Surat, Pune, Mumbai, Chennai, Kolkata, Delhi, Hyderabad and Ahmedabad.
What are some of the upcoming regions in terms of Virtuous Retail’s expanding property portfolio?
Focused on the top nine urban markets in India, Virtuous Retail's (VR) portfolio strategy is to develop location-specific retail formats. Each VR centre has been designed and leased keeping in mind the catchment, competition and gaps in the micro-market. Key metropolitan regions in our expanding portfolio include Surat, Bangalore, Pune, Mumbai and Kolkata.
What sets the new Surat retail centre and other VR centres apart from the competition?
VR has adopted a ‘Master Retailer’ approach with a dual focus on retailer and consumer communities. We do this by creating high performance retail environments with strong urban connections. Virtuous Retail’s centres are unique in that they are positioned and developed as community-oriented lifestyle centres, which provide world class experiences with local cultural tastes and preferences in mind. Our pan-India network of centres gives the retailer community an opportunity to think strategically about scale. The entry of an institutional player such as VR into the sector enables the development of a whole retail ecosystem.
VR Surat will be the region’s first contemporary community destination offering premium lifestyle retail to the city.