Empowering Consumers with Ready Credit will Fuel Retail
Monday, September 10, 2007
Empowering consumers with ready credit is how Kishore Biyani, CEO of the Future Group, expects to build his retail business. On the last day of the India Retail Forum, Biyani, elaborated on the future of retailing in the session on ?Future Yet to Unfold?. Mumbai: Empowering consumers with ready credit is how Kishore Biyani, CEO of the Future Group, expects to build his retail business. On the last day of the India Retail Forum, Biyani, elaborated on the future of retailing in the session on ?Future Yet to Unfold?.
“The consumption boom will drive retail in India. We need to look at innovative ways of making money available to the consumer,” he said. With the intention of growing the consumer?s consumption basket, Biyani recently launched Future Money, a consumer financing scheme, at his Big Bazaar stores. The Future Group also believes in giving loans to its employees to spend at its stores. “Taking the model of countries such as Brazil and Mexico, where retailers have turned financers, Biyani expects to emulate the same model in India.
“We are talking to the RBI and other institutions that can help in bringing about a change in the savings pattern of consumers,” said Biyani. At the same time, he believes in being cautious about lending. “Our experience shows that some of the biggest frauds happen with the initial loan seekers. We believe that the default ratio should not be less than six per cent in this business and there should be checks and balances to manage this business,” he added.
Govt aiding growth
Meanwhile, the Government is also aiding the growth of retail in the country. For instance, the Department of Posts is taking the initiative to develop 1,800 plots of land with acreage of half to two acres for retail purposes, according to S. Samant, Chief General Manager, Business Development, Department of Posts. The projects will be undertaken through public-private partnerships, he said.
C.K .Vaidya, Managing Director, Godrej Agrovet, stressed on the profitability of having stores at village and taluka levels, where his company operates many convenience stores and said, “Problems of land and trained personnel exist at these levels too, but if we can address them properly, a chain of stores is very much possible in these rural areas, since the customers are there.”
Continue reading “Empowering Consumers with Ready Credit will Fuel Retail“