L Nitin Chordia - My Views on the Indian Gourmet Retailing Industry


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My Views on the Indian Gourmet Retailing Industry

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L Nitin Chordia - My Views on the Indian Gourmet Retailing Industry

  1. 1. + L Nitin Chordia Handpicked Gourmet - Gourmet Brands for India
  2. 2. + My Introduction  L Nitin Chordia is a Retail Business Sparring Partner / Consultant based out of Chennai, India  13 years of experience in the Retail Industry in India and US/UK geographies  Nitin has earned a M.Sc Retail Management degree from University of Surrey, UK and is currently pursuing the Certified Professional Strategic Advisor (CPSA) with the Category Management Association, USA  Lead Implementation Consultant for India’s 1st Gourmet Food store chain  Responsibilities included: Product Identification, Evaluation, Selection, Negotiation, Global Sourcing, Imports, Global Consolidation/Supply Chain, Category Management, Merchandising and Planogramming of Global Gourmet Food Products/Brands  Associated with Kurt Salmon Associates, (KSA Technopak, India) and Cognizant Business Consulting in the past helping their clients establish retail businesses and solve complex retail business problems - more recently using technology
  3. 3. + My Background  Worked as Sparring partner for a large German Food brand in India  Has been invited to the UK by DEFRA, Foods from Britain twice to represent the Indian Market opportunity to UK Food/Beverage Brands  Has assisted numerous global Gourmet brands understand the Indian Market Opportunity and set expectations with them of the Indian Market  Has extensive experience in building Retail Business Plans, P&L, Cash Flow statements, 5 year forecast along with Format/Category Definition, Merchandising and Store site selection  Has helped many Gourmet Food brands establish successful collaborations with Indian Importers/Distributors and has deep insights into their strengths & weaknesses
  4. 4. + My Background (cont…)  Extensive experience in Market Research/Analysis and Pricing Calculations /Benchmarking for Imported Gourmet Foods in India  Deep understanding of purchase habits of the Indian Gourmet Consumer  In-depth knowledge of import policies for food products into India  Exhaustive experience in the Brand Positioning, Competitive Positioning, Category Management, Merchandising planning and Product Introductions process of retailers  Extensive experience in Retail Operations and authoring Standard Operating Procedures (SPOP’s)  Advised very large retail store chains (in excess of 7000 stores) with their Point of Sale, Electronic Signage, Omnichannel, eCommerce, Mobile Commerce and Social Media Strategy (No ERP Exposure)
  5. 5. + Indian Gourmet Retailing Structure Consumer Importers Retailer Brands Legislation Industry
  6. 6. + My Observations (the current state of the ‘Poor’ Indian Gourmet Retail Consumer)  The aspiring Indian Gourmet Consumer stands underexposed to a well deserved ‘true’ and differentiated Gourmet Retail experience and many relevant gourmet brands.  In fact, many regular grocery brands are wrongly positioned as gourmet brands and many brands do not give the consumers a reason to buy! There is no clear understanding of the consumers segmentation (or micro segments) and what is more prominent is the lack of education while shopping. The consumer has not yet even decided his loyalties, hence, is influenced with each undifferentiated new format introduction/product in the market.  The Indian Gourmet Retailer has NOT been able to differentiate, Offer the right products, Apply a Category Management Approach to their offering, Educate the consumer, provide the right retail experience to the Consumer AND the right retail platform for the brand to introduce their products to consumers  Even at this nascent stage, retailers are already under margin pressures and are forced to rethink their gourmet offering and are tempted to dilute it to cover more masses. Increased dependence on importers (and their intuition) further limit their upside. Retailers are required to focus on their own needs (P&L, Break evens etc) rather than the needs of the Consumer and Brands leading to an easily duplicable and undifferentiated consumer experience and business model. Copyrights L Nitin Chordia, 2013 – Cannot be reproduced without Permission
  7. 7. + My Observations (the current state of the ‘Poor’ Indian Gourmet Retail Consumer)  Many global Gourmet Brands have not seriously invested into / focused on the Indian market and do not treat India as an export ‘destination’ and priority market yet  Some brands have had past experiences where they were not easily able to understand the Indian climate/consumer. This lack of involvement and lack of support to the trade in India, in spite of the India growth story being widely publicized, results in the lack of availability and education to the Indian consumer.  India is one of the few growing economies where the Importers of gourmet brands are also the brand representatives and many have all along been hitting and missing with product introductions. They face the regular challenge of the product being available via alternate channels and regulations are becoming more intense.  Many importers assemble a container load of products and ship the consignment, NOT with the intention to import the brand again. On the other other hand, importers have also given up exclusive distribution of brands after investing many years into developing the brand in the Indian market BUT not meeting with the desired success. Importers struggle with the lack of knowledge of the consumption/shopping behavior of the end consumer and are required to focus their energies to satisfy the trade rather than thinking of the end consumer. Further, Importers have not been successful in communicating the brand promise & story to the end consumer. Copyrights L Nitin Chordia, 2013 – Cannot be reproduced without Permission
  8. 8. + My Observations (the current state of the ‘Poor’ Indian Gourmet Retail Consumer)  Most recent changes in food Legislation also impacts the imports of food products for the Gourmet industry making it increasingly challenging. It increases the time taken for the introduction of a new product and is prohibitive to product trials.  This has a negative impact on sustainable availability of gourmet products in the market. The consumer choice and adoption suffers as a result.  While the gourmet retailing Industry is just entering its growth stage, the online channel is already a disrupting threat to the industry with easier reach to end consumers, easier shopping and better prices. Loyalty does not exist. Period. The industry has not yet started addressing sustainability and social sourcing at the large scale.  Retailers have NOT been able to match their own offline experience with their online experience (hence letting other pure online players establish quite easily). Many products sold at retailers are are available online quite easily. The industry has not been able to completely enforce the retailers to implant the social or community differentiation in their offering with focus on sustainability and the environment. The consumer is not entitled to a omni-channel retail experience. Copyrights L Nitin Chordia, 2013 – Cannot be reproduced without Permission
  9. 9. + My Belief  2014 will be the defining year for Gourmet Retailing in India.  Global Gourmet brands will start looking at India as a more serious investment market  Retailers will start investing efforts towards improving their supply chain, sourcing, Loyalty Program, Instore Experience, Implementing a category management approach towards merchandising and feedback mechanism to further their understanding of shopper behavior and increase collaboration with brands directly to build their understanding of categories.  Retailers would invest seriously into their private label and omni channel program in order to sustain/increase their margins and differentiate from competition  Existing retailers would look at consolidating stores in current markets and actively look at newer untapped markets to expand. Retailers will focus on increasing profits/productivity per sqft rather than focus on sales per sqft.  The gourmet food retailing scene will attract more interest from international brands/retailers (based on relaxation of FDI rules in multibrand retail as of 2nd August 2013) and considering that the Indian retailers have not managed to create too many entry barriers, the consumer could benefit from some very interesting developments and fast paced activity in the Gourmet Retailing space in 2014. Copyrights L Nitin Chordia, 2013 – Cannot be reproduced without Permission
  10. 10. + My Mission  To make it more meaningful for a Global Gourmet Food brand to enter and establish their business presence in the Indian market by: 1. Understanding the History/Vision of the brand and mission for India 2. Introducing the Market Opportunity and current trends 3. Setting right expectations (Retailer/Distributor/Consumer Mindset, Legislations etc towards Gourmet Food Brands) 4. Identifying the right product/assortment (at the right price) 5. Identifying the best medium/platform(s) to reach out to the micro segments (via Distribution/Sales Points) 6. Using Offline and Online Media & Digital technology to reach the right consumer segments/micro segments 7. Being the Brand Custodian and representing the brand 8. Constantly Monitoring and Reporting ground realities / sharing updates
  11. 11. + Thank You! Making Collaboration Work! nitin.chordia@gmail.com +91 96000 NITIN (64846) http://in.linkedin.com/in/sparringpartner