Retail executives turn entrepreneurs as urban consumers drive demand for niche products, services


December 16, 2011

Sarah Jacob , The Economic Times

Bangalore, December 16, 2011

So what if the Walmarts and Carrefours can’t yet sell their wares directly to Indian consumers, the country’s retail industry is buzzing with activity as several honchos quit jobs to play entrepreneurs.

Former Hidesign CEO Kunal Sachdev and former marketing GM of Page Industries, Nischal Puri, are among the latest in a growing club of retail professionals who have traded in their huge pay packets for their own wall art chains, lingerie brand, beer cafes and so on.

Driving them are the new urban consumers, whose everincreasing demands and expectations create space for several niche businesses and new approaches. "Functional consumption is getting relegated to rural India; urban consumers are beginning to pay attention to the badge value of the brand, its packaging and retail experience," says Nischal Puri, who recently floated a lingerie brand, Beyouty.

Puri, who helped Page Industries introduce exclusive outlets of innerwear brand Jockey in the country, will open an exclusive Beyouty store in Bangalore early next year.

Sachdev, meanwhile, has launched Folia, a brand of wall art pieces that hold plants in them, with two standalone outlets in Bangalore and shopin-shops across home decor stores. He will soon take the brand to the UK, where his Hidesign experience helped him make many contacts. Their experience of playing key roles for top retail brands through their highs and lows are clearly a big advantage for these professionals-turnedentrepreneurs.

"The retail segment grew tremendously until 2008 after which the slowdown too gave several senior executives valuable experience to start out on their own," says Devangshu Dutta, chief executive of retail consultancy Third Eyesight.

This experience gives them the courage to go ahead in spite of a slowdown in consumer demand and increasing competition from large national and international brands.

Indian retailers and brand owners such as Future Group, Reliance Retail, Aditya Birla Nuvo, Arvind Brands and Tata Group are expanding rapidly across lifestyle segments from apparel to footwear to food & beverage, while on an average 20 big international fashion brands have been entering the country every year since 2005.

Serving the young

But retail executives say existing brands have not kept pace with the young Indian consumer who spends easier but demands more. This is where a lot of opportunities lie.

"The economic conditions are tough today. But anytime is right for an entrepreneur with a good concept," says Pradeep Gidwani, who last year quit as MD of Carlsberg India to set up The Beer Cafe along with Reebok India’s former head honcho Rahul Singh.

The Beer Cafe, opened in Gurgaon late last year, introduced a new self-serve concept where consumers buy a swipe card and use it to pour their own beer; no reservation, no loud music, no bouncers. The two partners have now split with Singh buying out Gidwani’s rights in The Beer Cafe.

While Singh will focus on North India, opening 10 outlets in six months, Gidwani will take the beer cafe concept to cities such as Bangalore, Mumbai, Pune, Hyderabad and Kolkata under a new brand name. It will be yet another venture for Gidwani, who had been part of the start up team of Foster’s, Diageo, Red Bull and Moet Henessey in India.

For Singh, besides The Beer Cafe he has set up a 44,000 sqft indoor golf lounge called Golfworx in Gurgaon. The golf lounge operationally broke even this year and will soon be taken to Bangalore and Mumbai, says Singh, who brought Nike Golf and apparel brand Greg Norman Collection to India.

Opportunities galore

While these professionals attribute their decision to turn entrepreneurs to their urge to take on new challenges, some experts call it stagnation at the top.

"As the retail industry in India consolidates, senior executives are finding it harder to move up the ladder. They are either tying up as distributors of international brands or setting up their own," says Gaurav Marya, president of Franchise India Holdings.

In any case, there are opportunities galore in the emerging consumer society. "There were far too many opportunities in retail," says Jaydeep Shetty who quit Future Group as its new business development head to launch his own women’s western wear brand Mineral.

"Even average and poor concepts were succeeding in the market," says Shetty, who helped the country’s largest retailer launch concepts such as Central malls, lingerie brand Etam and accessories brand Holii.

The goodwill of having worked with Shoppers Stop and Future Group helped him open western wear brand Mineral’s shop-in-shops at these department stores.

Mineral will add outlets at High Street Phoenix, in Colaba, Thane and Bangalore next year. Some analysts, however, are critical of concepts that are not tried and tested, particularly when rentals, raw material costs and loan rates are high and consumer demand is slowing.