“The Indian economy is still in great condition and in all probability will continue to grow. It is in a stage of massive transformation. There is a slowdown. It is not like a dead end,” said Rakesh Biyani, JMD, Future Retail Ltd.
He was in conversation with Kumar Rajagopalan, CEO, Retailers Association of India, at the Chennai Retail Summit 2019 organised by RAI.
“I am tremendously excited by the opportunity in India. About 15 years ago, I thought the same. Today also I think the same. One has to work hard to deliver on the opportunity,” Biyani added.
According to him, India is on the cu’sp of crossing the $2,000 per capita income (PCI) level; maybe by next year. It has been seen in all the countries where the $2,000 PCI was crossed that the market goes through a massive transformation in the following decade. That’s the time when retail starts growing due to the gathering pace of consumption.
Consumer shift
For instance, growth in categories such as clothing, processed foods, home care and personal care will see much faster growth compared to core commodity categories. The reason, he said, is simple. Beyond $2,000 PCI , aspirations grow much faster and people’s consumption patterns shift. That is the opportunity one needs to look at. It happened in many countries, and is going to happen in India also. Keeping this in mind, Future Retail, which is present in fashion, food and home sector is investing accordingly, he said.
With the transformation on, it is becoming difficult for people to change and adjust. The consumer is changing and the transformation in the taxation system has happened. Maybe the government could have done it more easier, more simpler.
“The GST is a reality. Everybody has to adjust to it. Demonetisation happened, and it was a reality, and beyond us. There was just not enough time. There was a huge cash flow cycle that took a pause, and there were several reasons for it,” he said.
“In the last 20 years of being in the retail business, everything has always not been smooth. There have been a lot of learnings and mistakes but each of the mistakes has only made us stronger,” he said.