Knowledge@Wharton India edition has a great article on Organized Retail market in India and what kind of challenges companies are facing setting up Organized retail in India. The article has senior executives from Best Buy, Staples and Aditya Birla Retail, who participated on a panel titled, "New Paradigms in Indian Retail," at a recent Harvard Business School conference sharing their experiences setting up Stores in India.
Unused to modern, organized retailing, the Indian consumer is still figuring out how to extract value -- beyond lower prices -- from the stores, supermarkets and shopping chains that are popping up everywhere. Meanwhile, retailers face other challenges: Indian consumers shop frequently and are used to traveling short distances to their stores; brand penetration is lower compared to developed-country markets; and interstate goods movement is fraught with taxes, delays and other inefficiencies.
"When you enter emerging markets like India or China, you really learn only through experimentation," said Kal Patel, executive vice president of emerging business at Best Buy. He recalled that when he worked on Best Buy's China launch a few years ago, "we had to throw away consumer research. The assumptions you have from a top-down marketing standpoint don't stand up in these markets."