Retail and Strong Supply Chain

The Indian retail market -- one of India's fastest growing industries -- is expected to grow from US$ 350 billion to US$ 427 billion by 2010. According to Euromonitor International, the Indian Retail market will grow in value terms by a total of 39.6 per cent between 2006 and 2011, averaging growth of almost 7 per cent a year.

Modern retail accounts for about 4 per cent of the total retail market in India. This share is expected to increase to about 15 -20 per cent with the entry of a number of corporates into the segment. Modern retail formats have grown by 25-30 per cent in India in the last year and could be worth US$ 175-200 billion by 2016.

Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods industry, which forms 44 per cent of the entire FMCG sales, is growing at 9 per cent and has set the growth agenda for modern trade formats. The prospect for growth of the branded segment is huge, as nearly 60 per cent of the average Indian grocery basket still comprises non-branded items.

Of the 12 million retail outlets (which is the largest in the world), over 5 million sell food and related products. Some of the large players in this market are Kishore Biyani’s Food Bazaar, Mukesh Ambani’s Reliance Fresh, Godrej Agrovet, the Aditya Birla Group, and the Tata Group (which acquired 70 per cent stake in Innovative Foods from the Amalgam Group) among others.

India’s large consumer base along with export potential and reforms in agriculture (such as opening up of many agriculture sectors for 100 per cent FDI, allowing farmers to sell their produce directly to buyers) have attracted a large number of corporates into the agricultural retail segment.

• For its e-Choupal scheme, ITC built internet kiosks in villages to provide farmers access to latest information on weather, market prices and foods in demand among other things.
• With a US$ 5.6 billion, multi-year investment in agriculture and retail, Reliance Retail will establish links with farms on several thousand acres in Punjab, West Bengal and Maharashtra.
• FieldFresh, planning to become India's first large-scale exporter of produce, will annually pay farmers over US$ 30,000 to lease land for vegetables, to hire tractors and to pay their workers.
• PepsiCo, with agriculture exports worth US$ 40 million, has launched a five-year program with the Punjab Government to provide several hundred farmers with four million sweet-orange trees for its Tropicana juices by 2008. It has also introduced farmers to high-yielding basmati rice, mangoes, potatoes, chillies, peanuts and barley for its Frito-Lay snacks.
• Fresh@, a food and grocery retail initiative of Heritage Foods (India) Ltd, is in the process of developing a 5,000-acre cluster farming complex to feed the retail network that will have 100 stores in the next few months.
• Kishore Biyani’s Future Group runs Big Bazaar and Food Bazaar, one of the most popular retail chains in India.

It is some serious money in the food market in India. But asking the question to myself are we ready yet to cater to such business. No synchronized supply chains or cold chain. How will this retail industry stand up on its own? There is an urgency for supply/cold chains in India and in the coming years we are goin to have global positioning system as well. The Times of India could not think of using GPS in supply chains this is what they had to say

These can be used to identify position and velocity in real time based on ranging arrangements. Access to the GPS-type system has important advantages in managing traffic, roadways and ports. It is also an important tool for police and security agencies to track stolen vehicles or those being driven by criminals. It has implications for national disaster warning and will be useful in commercial transactions dealing with sale and exchange of geographical and economic data.-- Times of India 29 Jan 2007

well they are right to some extent. It can be used in traffic, ports bla bla bla but hey -- what about using it in cold chain and supply chains to carry perishable commodities for one part of the country to another. and we will exactly know the exact second the commodities will be delivered. Companies can track their trucks real time and can give exact time for the time of delivery. Well just scroll down the to the hyperlink I have attached just to see how effective cold chains are and goods can be transported not only some 100 miles but across the country.

to see it bigger just follow the link http://www.smart-trace.com/images/stdiagram.gif