Turning up the heat in India

“The notion of what is a luxury and what is a basic need has been upended in Bombay. Every slum has a TV.” Maximum City, Suketu Mehta, 2004

Retailers of every kind are intent on cashing in on the US $330 billion Indian consumer market. Despite the restrictions on foreign retailers, which mean they must find Indian partners to work with, Debenhams, Mothercare, M&S and Argos are all gaining a foothold. Shopping centres such as InOrbit, Atria and Cross Roads are being built all over Mumbai and are providing a modern, air-conditioned shopping experience.

So what are the practical issues to be overcome in terms of setting up systems to work in India? Having recently set up EPoS in Mumbai, Rachel Maclean has first hand experience of the difference.

“Even simple things like receipt formats can be a challenge as prices in rupees generate such large numbers. An additional complexity is paise rounding (rupees are subdivided into paise). Although prices are often set in paise, and paise are used for electronic transactions, cash transactions are rounded to the nearest 50 paise as these are the smallest denominations of coins.”

“All goods in India have a maximum retail price (MRP) above which it is illegal to sell goods. It is common practice to show the customer saving on MRP on the receipt. This may require an additional pricing field within the system.”

“Finally, do not underestimate the complexities of tax and accounting requirements. Taxes vary by region in India, are complex and tightly regulated.”

Technology is not the only challenge. Organised retailing is facing fierce opposition from India’s millions of independent retailers. Reliance Retail had to close 20 stores days after they opened in October and there have been protests about the imminent arrival of Walmart. Whatever the challenges it is likely that the vast market opportunities will continue to attract retailers from all over the world to this fascinating country and the transition from independent retailing to large chains is probably inevitable.