Future Group to expand retail business

India’s #Future Group expects to raise its turnover to US$15 billion in the next five years from US$3.4 billion reported in 2016, its joint managing director #Rakesh Biyani has told Hong Kong business community.

Addressing a seminar on “Access to Retail Market in India”, Biyani projected a 200 per cent increase in the value-added product imports over the next five years.

“We have set a target to grow to $15 billion from $3.4 billion in this next 5 years because we cater to this customer base (aspirational). That’s where the larger opportunity is,” he told 140 businessmen at the 14 March seminar organized by the #Hong Kong Trade Development Council (HKTDC).

Elaborating, he said India and Hong Kong have huge potential in building retail business.

Hong Kong is the ideal business partner for Future Group to achieve its goals, as well as for retail companies across India.

“Hong Kong typically tends to be trendier and more quality-oriented,” he said.

“Hong Kong now is really the place for sourcing entry level, good priced products in the better and best category, that’s where Hong Kong has the opportunity and we are now very keen to expand our share of those products. And we think we can work with Hong Kong manufacturers.”

As for the top trading categories for his company, Biyani identified fashion, food and home decoration.

“Clearly in fashion footwear and accessory, there’s a lot we can work together with designers and companies out here (Hong Kong) and look at how to get the latest trend, cut the lead time around that and take it back to India.”

In terms of home improvement and decoration, he said that Hong Kong had much in common with cities in India, with people in both places living in smaller homes.

“When it comes to home in the next four to five years, we’re going to see a lot of demand in terms of more consumers are going to be decorating their homes and making them trendier.

“So, Hong Kong manufacturers understand the art of using small space in the most optimum manner. And some of that product knowledge can go back to some of the urban cities of India,” he said.

“India is the fastest growth economy in the world,” said Biyani, adding that the population of influential consumers will grow to between 350 million and 400 million by 2020, which is similar to the entire population of the United States.

“There are lots of people in India who are looking for differentiated products. Meanwhile, there’re more than 30 million retail stores in India, which is about one store for every 100 people. This is where the challenges come from,” he pointed out. “The retail market has been changing.”

Biyani noted that the affluent consumers are shifting from daily necessities to fashion, accessories, beauty and electronic products. With higher disposable income of the affluent consumers, they look for quality products but also competitive and affordable prices.

“There’re lots of changes happening here, particularly for the mobile penetration while Indians are getting exposure to the world. No one is living in a small town now but in the Internet world.” Indians are socially connected and they are used to social media platforms such as Facebook and WhatsApp, he stressed.

India has the fastest-growing number of Internet users, close to 460 million currently. Besides, the country has the world’s cheapest mobile data service plan, only one-third of the US and half of China’s.

“We have large young population, now 60 per cent of the population is under 40 and the average age will be 29 in 2020,” he said, implying that the potential growth for e-commerce and online shopping is tremendous.

He noted that Indian consumers demand value, not necessarily the cheapest, but the best value.

Biyani also pointed to the fact that the Indian government is reforming the tax regime, which is expected to bring about more competition among local and imported brands.

At the same time, he said that retail space in India was expanding rapidly.

“Currently, we have close to 20 million square feet of retail space in operation in India. And we’re looking at expanding our network about 14-15 per cent per annum. So that’s adding about another two to three million square feet of new retail space every year.” fii-news.com