India trade gains fresh momentum
01 March 2007 11:56
John Hey
The roving microphone, wielded by conference moderator Chris White, was really doing the rounds at Fresh Produce India (see p24-29).The lively discussion and keen audience participation underlined the fact that in India ‘there’s always another opinion’, but they also reflected the buzz being generated by the big changes afoot in the country and its fresh produce industry.
It’s four years since Market Intelligence last hosted a conference in India, with the Asiafruit Congress meeting in Mumbai in 2003. While that event generated plenty of debate, it was imbued with more of a sense of fatalism than excitement – a feeling that India was a land of huge potential, and always would be. It was a mood of resignation captured by the comment of one speaker who predicted that modern forms of food retailing would never take off in India during his lifetime.
Skip to 2007 and you can’t open a newspaper in India without reading about the latest major corporate to announce its entry to the country’s burgeoning modern retail sector. It is this retail ‘revolution’, coupled with the economic boom, that looks set to provide the impetus for India’s fresh produce sector to make real strides. Yet the speakers at Fresh Produce India were swift to counter some of the commonly-held notions about the Indian food retail sector and the market at large. Everyone singles out the supply chain challenge, resulting from a chronic lack of infrastructure, as the key hurdle to the modern retailers that are setting up shop in India, but Rajan Chhibba of Intrim Business Associates pointed out that the real challenge will be at the front-end rather than the back-end, where they must change the way fresh produce is marketed as well as the mindset and tastes of the Indian consumer. For instance, the Indian consumer ‘eats curry, not vegetables’, making fresh produce a value-driven purchase. He revealed that fruit and vegetable retail in India is low margin, high cost, not the other way around. Traditional small vendors with few overheads thrive in this climate, offering consumers a service that inspires loyalty.
Changing consumers’ behaviour may be the main hurdle for India’s modern retail sector, but there are plenty of others to overcome - poor infrastructure, shortage of expertise, high real estate costs to name a few. Indeed, it’s possible that the fledgling retail revolution will falter and fizzle out, given the size of the challenges ahead. But this looks unlikely, as major corporates are driving the push and the momentum has already been gained. Indeed, delegates to Fresh Produce India would have departed with a sense of the challenges and complexity of the Indian market, but a genuine optimism that the country is finally on track to deliver on the huge potential it offers.
The roving microphone, wielded by conference moderator Chris White, was really doing the rounds at Fresh Produce India (see p24-29).The lively discussion and keen audience participation underlined the fact that in India ‘there’s always another opinion’, but they also reflected the buzz being generated by the big changes afoot in the country and its fresh produce industry.
It’s four years since Market Intelligence last hosted a conference in India, with the Asiafruit Congress meeting in Mumbai in 2003. While that event generated plenty of debate, it was imbued with more of a sense of fatalism than excitement – a feeling that India was a land of huge potential, and always would be. It was a mood of resignation captured by the comment of one speaker who predicted that modern forms of food retailing would never take off in India during his lifetime.
Skip to 2007 and you can’t open a newspaper in India without reading about the latest major corporate to announce its entry to the country’s burgeoning modern retail sector. It is this retail ‘revolution’, coupled with the economic boom, that looks set to provide the impetus for India’s fresh produce sector to make real strides. Yet the speakers at Fresh Produce India were swift to counter some of the commonly-held notions about the Indian food retail sector and the market at large. Everyone singles out the supply chain challenge, resulting from a chronic lack of infrastructure, as the key hurdle to the modern retailers that are setting up shop in India, but Rajan Chhibba of Intrim Business Associates pointed out that the real challenge will be at the front-end rather than the back-end, where they must change the way fresh produce is marketed as well as the mindset and tastes of the Indian consumer. For instance, the Indian consumer ‘eats curry, not vegetables’, making fresh produce a value-driven purchase. He revealed that fruit and vegetable retail in India is low margin, high cost, not the other way around. Traditional small vendors with few overheads thrive in this climate, offering consumers a service that inspires loyalty.
Changing consumers’ behaviour may be the main hurdle for India’s modern retail sector, but there are plenty of others to overcome - poor infrastructure, shortage of expertise, high real estate costs to name a few. Indeed, it’s possible that the fledgling retail revolution will falter and fizzle out, given the size of the challenges ahead. But this looks unlikely, as major corporates are driving the push and the momentum has already been gained. Indeed, delegates to Fresh Produce India would have departed with a sense of the challenges and complexity of the Indian market, but a genuine optimism that the country is finally on track to deliver on the huge potential it offers.
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