1.
10 Retail Icons of India
RETAIL WASN’T
BORN YESTERDAY
By Devangshu Dutta
Retail is such a pervasive and dynamic a sector of the
economy, that it is impossible to identify a single point at
which modernisation began. I’ve met countless people who
perhaps entered the retail sector during the last 15 years,
and who mark the beginnings of modern retail around
then.
There is no doubt that there has been an explosion of
investment in retail chains in the past two decades, but
we need to acknowledge the foundation on which this
development is built. The current titans of the sector are
standing on the shoulders of previous giants who have
created successes and failures from which we are still
learning.
This piece is not an exhaustive history of the evolution of
the retail business in India, nor a census of all the brands
operating in this sector, but the aim is to capture the
flavours of the phases of development.

2.
11Retail Icons of India
EARLY YEARS
If we were to trace back the growth of “organised” retail
(mind you, I dislike that word!) or modern retail to the
first retail chains, we will have to cast our mind back
more than a hundred years. While many businesses of that
time have disappeared, a few pioneers continue to survive,
straddling three eras: the British Raj, the Socialist Raj and
the Liberalised Lion economy. The businesses that
continue to stand, having been through multiple
transformations, include:
• Higginbotham’s (1844) – beginning from Madras (now
Chennai), it spread to Bangalore, and then to other
locations and is known around southern India.
• Spencer’s (1863) – one of the earliest grocery retailers
to grow into a chain across undivided India, it moved to
Indian ownership in the 1960s and was acquired by the
RPG Group in the late 1980s.
• AH Wheeler’s (1877) – launched from Allahabad
Railway Station, it has been operating from railway
stations (along with Higginbotham’s in some locations) –
while it lost its monopoly in 2004, it has certainly played
a key role in the growth of paperbacks and magazines in
the country, keeping passengers company across billions
of kilometres of rail travel.
• Nilgiri’s (1905) – started with a small shop in Tamil
Nadu focussed on dairy products and other groceries, it
expanded to a large store in Bangalore in 1936 led by
the founder’s son, and then spread across the southern
states with a well-established reputation in dairy, bakery
and poultry products. In recent times it has been acquired
by the Future Group.
FIFTY YEARS OF INDEPENDENCE
The 1950s and 1960s remained fertile times, post-
Independence and before the heavy-handed Socialist Raj
truly began squeezing the life out of Indian businesses.
Leading textile companies such as DCM, Bombay Dyeing
and Raymond, and footwear companies such as Bata
and Carona established chains of retail stores including
company-operated stores as well as authorised dealers
operating under the companies’ banners.
The 1980s brought the Asian Games, colour television,
and a new up-to-date car model to India, all marks of a
new vibrancy. Over the 1980s, a new retail wave was led
by indigenous ventures such as Intershoppe (launched by
a fashion exporter), Little Kingdom and The Baby Shop
(children’s products), Nirula’s (fast food) and Computer
Point (home computers, PCs and accessories). Many of
these were certainly ahead of their time: the critical mass
of consumers had yet to develop, the business infrastructure
was inadequate, and funding norms were unsuitable to
the capital-hungry business of retail. Unlike the textile
companies that had large manufacturing and trading
businesses, these new retailers were like shooting stars,
glorious but visible for only a short period of time. This
period, unfortunately, also witnessed the degeneration
and disappearance of some of the older stalwarts
such as DCM and Carona that were beset by labour
disputes, management issues and disconnection from the
transforming market.
Numero Uno, an indigenous denim brand, was launched
in 1987 soon after VF’s American denim brands were
launched, and it took nearly a decade for Numero Uno to
reach other geographies in India. Nirula’s, one of the oldest
fast food restaurant chain based in North India, expanded
across the Delhi NCR in the 1980s and 1990s, and also
explored other cities, albeit with mixed success.
Future Group, which today has a large retail and consumer
brand portfolio, launched trousers under the name
Pantaloons in 1987, initially as a distributed brand, and
then denimwear under the brand name Bare. Within a few
years the company also launched exclusive stores by the
same names, to provide focussed visibility to the brands.
About a decade of growth later, the group launched its first
large format store under the Pantaloons name, but by now
covering a much wider range of products, which became its
launch pad for achieving scale.
The RPG group that had acquired Spencer & Co.
relaunched it in 1991 in a spanking, new format as
Spencer’s in Bangalore, and a short few years later

3.
12 Retail Icons of India
rebadged it again as Foodworld in a joint-venture with a
foreign partner. It subsequently went on to launch other
formats such as Musicworld and Health & Glow.
Also in 1991, the Rahejas converted an old cinema into
a department store, Shoppers Stop, aiming to provide
an international shopping experience, although initially
focussed on menswear. The store added women’s and
children’s sections in subsequent years and the second
store was launched four years later after the first one.
Subsequent large scale retail expansion only came about
towards the end of 1990s.
Little Kingdom is a notable example that I would like to
dwell on briefly (partly for the purely personal reason that
it was my first retail job!). The business was launched in
1987, headed by alumni of the illustrious IIMs around
the country, built on processes and IT systems that could
have been the envy of many retailers even 25 years later.
The company – Mothercare India Limited – was the first
purely retail company to start up and launch a public
issue in 1991. During the early 1990s, it was the largest
retail chain present across the country, in its categories. In
1991, it also attempted to bring the first home computer,
Spectrum, to forward-thinking parents through a mix
of in-store sales and door-to-door direct-selling. It was
admittedly one of the first to expand internationally,
opening a franchise store in Dubai in 1992. During its
short life, the team launched multiple brands and formats,
including Little Kingdom, Ms (a womenswear brand), The
Baby Shop, and became a partner to the international giant
VF Corporation’s Vanity Fair lingerie
brand in India. But, by the mid-
1990s – financially overstretched
between multiple brands and formats,
and backward integration into
manufacturing – it was gone.
Physical retail was not the only
avenue being explored for growth
during these decades. An Indian
company imagined replicating
the success of western catalogue
companies, and launched the
Burlington’s mail order catalogue
retail venture and even became
a joint-venture partner of one
of the world’s largest catalogue
retailers, Otto Versand (Germany).
Other models included direct sales
business, such as the Eureka Forbes
introducing vacuum cleaners through
demonstration parties (which was
emulated for the Spectrum home
computers mentioned above). With
the growth of private television
channels, products also began being
promoted during non-peak hours
through infomercials, though serious TV shopping was
still a few years away, coming up in the mid-2000s with
dedicated teleshopping channels.
THE FOREIGN HAND AND CORPORATE
RETAILING
The 1980s and 1990s also saw the launch of international
brands from global giants such as VF Corporation (Lee,
Wrangler, Vanity Fair), Coats Viyella (Louis Phillippe,
Van Heusen, Allen Solly), Benetton (UCB and 012), Levi
Strauss, Lacoste, Reebok, adidas, Pepe and Nike, grocery
retailers such as Nanz (a three-way German-US-Indian
partnership) and Dairy Farm International (with RPG
Group’s Spencer’s Retail) and Quick Service formats such
as Domino’s, McDonald’s, Pizza Hut, Baskin Robbins
and KFC.
India was reopening to business, global management
consultants were writing glowing reports about the
untapped potential of the (mythical) 200 million middle-
class customers and global retailers wanted to own part of
the action.
Due to the lack of large-format stores and suitable
environments, international brands that entered the Indian
market during this phase needed to create exclusive stores
to ensure that the brand could be communicated holistically
to the consumer, in an environment that was more in
the brand’s control, and many of them were, in a sense,
“forced” to become retailers in India.
However, around 1996, a very senior
member of the cabinet is reported to
have said, “Do we need foreigners to
teach us how to run shops?” It was
an unexpected condemnation, coming
as it was from a person and a party
otherwise seen as champions of an open
economy. It slammed the doors shut to
foreign investment and, to my mind, the
sector is still yet to fully recover from
that ban and the policy contortions
that have come over the years to allow
international brands and retailers to
play a more active role in the market.
Internal weaknesses compounded the
decline or exit of some businesses.
Nanz folded due to various operational
challenges and lack of adequate
experience. British retailer Littlewoods’
wholly-owned subsidiary pulled out due
to problems back home, and in 1998
sold the sole store to the Tata Group,
which eventually renamed it Westside.
Future Group, which
today has a large retail
and consumer brand
portfolio, launched
trousers under the
name Pantaloon in
1987, initially as a
distributed brand, and
then denimwear under
the brand name Bare.
Within a few years the
company also launched
exclusive stores by the
same names, to provide
focussed visibility to
the brands.

4.
13Retail Icons of India
Despite the early hiccups, India continued to attract
international players on account of the high growth
and changing social norms. Not only was there greater
purchasing power available amongst more Indian
consumers, there was a shift in consumer attitude from
saving to spending. Several brands, including fashion,
luxury and quick service formats, entered the market
through licensing, franchising, and joint ventures.
During this period the domestic retail market also drew
in more corporate houses, attracted by the apparently
abundant market opportunity for them to mine alone or to
act as a gateway for foreign companies interested in
India. Most were significant diversifications from their
existing businesses.
Tobacco, paperboards, agri-commodities and hospitality
conglomerate ITC ventured into retailing through Wills
Lifestyle and as well as its rural initiative e-Choupal
in 2000, followed by John Players and Choupal Sagar
respectively. Pantaloon Retail launched a partial
hypermarket format Big Bazaar in
2001 and went on to Food Bazaar
in 2002, Central in 2004, Home
Town and Ezone in 2006. Reliance
entered in 2006 with multiple stores
of Reliance Fresh being opened
simultaneously and over the next few
years the company expanded through
multiple formats such as Reliance
Mart, Reliance Digital, Reliance
Trendz, Reliance Footprint, Reliance
Wellness, Reliance Jewels to name a
few. Telecom major Bharti set up a
joint-venture with Wal-Mart at the
back end, while the Tata group tied
the knot with Woolworths and Tesco
in two separate businesses supplying
its retail stores, even as it expanded
its successful watches and jewellery
businesses, as well as Westside.
Even a retail operation like Fabindia,
born as an export surplus outlet of
a handicraft product business found
investors to back a rapid expansion spree, becoming more
of a corporate retailer than a front-end for producer
organisations and craftspeople.
Through the 1990s and beyond, the market remained
in ferment. In 1997 Subhiksha, a small modern retail
format for food and grocery was launched. Venture-funded
Subhiksha expanded rapidly and over the next decade grew
to 1,600 outlets. However, in 2009 the business closed
down owing to a severe cash crunch, amidst accusations of
criminal mismanagement and fraud.
New product areas emerged highlighting the pace of change
of lifestyles, cafes prominent among them. Café Coffee Day
opened its first store in 1998 in Bangalore and became the
largest organised coffee chain in India by far, albeit now
living under the shadow of the recent death of its founder.
Barista was also launched in 1999 as India’s Starbucks-
wannabe, found its footing, scaled up and lost its way,
going on to be sold to Tata Coffee and the Sterling Group,
who turned it over to the Italian coffee company Lavazza
in 2007, who also exited seven
years later. Its current owner, the
Amtex Group, is itself going through
financial troubles in some of its key
businesses.
In the last two decades, while some
retailers have gone out of business
due to unrealistic business plans,
mismanagement or lack of funds,
most have taken opportunities
to rationalise their operations
by shutting down unviable or
underperforming locations, aligning
businesses to market needs, assessing
their brand consistency across
various touch points, improving
organisational capabilities right down
to front-line staff, and focusing on
unit productivity.
It’s not just Indian retailers that have
faced trouble. Foreign brands have
had their own share of problems
Despite the early
hiccups, India continued
to attract international
players on account of
the high growth and
changing social norms.
Not only was there
greater purchasing
power available
amongst more Indian
consumers, there was
a shift in consumer
attitude from saving
to spending.

5.
14 Retail Icons of India
– some have overestimated the market, or their own
relevance to the Indian consumer, while others have had
misalignment with their Indian franchisees or joint-venture
partners. A number of foreign brands and retailers have
also churned partners, or exited the market outright, but
most remain committed and invested in the market for the
long-haul. The last few years have also seen the successful
launch and humongous growth of global leaders such as
Zara and H&M, even mass-market Chinese retailers like
Miniso, as well as the largest investment commitment made
by Ikea (about US$2 billion).
SHOWING ON A SCREEN NEAR YOU
The late-1990s also witnessed a
dotcom frenzy that led to a plethora
of travel sites, and a few product
sales businesses such as Fabmall,
Rediff and Indiamart.
However, the online market lacked
critical mass in the 1990s and
early-2000s. Despite apparent
advantages of the online business
model, success depended on internet
penetration (low!), the appearance
of value-propositions that were
meaningful to Indian consumers
(questionable), investments in
fulfilment infrastructure (lacking)
and the development of payment
infrastructure (regulation-bound).
Malls and shopping centres – the
new temples of retail – seemed to
be sucking up all of the consumer
traffic, in any case.
By the mid-2000s the business had
reached just about Rs 8-9 billion
(US$ 180-200 million), despite 25 million Indians
being online. Dotcoms became labelled dot-cons, with an
estimated 1,000 companies closing down. However, multiple
changes took place in the mid-2000s, among them being
the price disruption of the telecom market and explosion of
mobile connectivity, as well as a renewed funding appetite
among venture funds.
This laid the path for growing the second crop of
ecommerce in India. Billions of dollars of investment was
poured into creating India’s Amazon wannabes, the high
streets ran red by ecommerce-fuelled discounts, aggressive
advertising budgets (most promoting discounts) and
mergers/acquisitions pushed through by venture investors.
After more than a decade of the second coming, India’s
ecommerce business accounts for a market share of total
retail in the low single digits. India’s Amazon – if one can
call it that – is the Flipkart group, now owned by Walmart,
bought at an eyepopping $21 billion valuation and still
bleeding cash, and the runner-up is relentless Amazon that
continues its aggressive push to own what could be one of
the three largest markets in years to come. The Chinese
internet giants Tencent and Alibaba are also trying to hack
piece off the market, having fulfilling their aim of kicking
out Western competitors from their home market.
However, the wild card has just been played by the Reliance
Group – having moved from textiles to fibre to oil, the
group has made its move into telecom and data (didn’t
someone say, “data is the new oil”?). It has strategically
pushed handsets and cheap data plans into the hands of the
consumers and, according to the latest announcement on Jio
Fiber, will soon offer High Definition or 4K LED television
and a 4K set-top-box for free. The play is to grab as much
of the customer’s share of spend on products and services
(including entertainment) as possible.
LOOKING AHEAD
Possibly the biggest driver of modern
retail in the coming years will be the
shift in the demographic structure of
the country. The young consumers who
are joining the workforce now are a
distinctly different set from previous
generations. This is a generation that
has grown up in the liberalised economy
and has been exposed to innumerable
choices since their childhood. The most
important factor is that these consumers
are increasingly located outside the top
10 or 20 cities in the country, and are
becoming more accessible as both physical
and virtual access improves for them.
A large number of them may have
only occasionally, or perhaps never,
experienced modern retail first hand
while they were growing up, but they
have seen this upmarket environment
emerge before them and are not shy of spending within it,
even if it is only on select special occasions. Most of them
are handling mobile phones (even if it is their parents’)
while still in school and being socially active online even
on the go. Certainly most of them have hardly ever visited
tailors, growing from one set of ready-to-wear clothes to
another. It is this set of young consumers whose outlook
and habits will drive retailing very differently in terms of
product categories and services in the future.
There is another significant set of consumers whose number
is swelling annually: that of working women. As they add
to the discretionary household income available to spend,
they gain influence in purchase decisions, and with them
the entire household’s lifestyle also undergoes a shift.
There is a greater demand of time-saving solutions and
convenience products to make their lives easier. Modern
retail environments where their various needs can be taken
care of under one roof, and convenience pre-packaged
products are natural winners in this shift. Ready-to-wear
products for women, grooming, beauty and personal care,
Even a retail
operation like
Fabindia, born as
an export surplus
outlet of a handicraft
product business,
found investors
to back a rapid
expansion spree,
becoming more of
a corporate retailer
than a front-
end for producer
organisations and
craftspeople.

6.
15Retail Icons of India
women-oriented media products, processed foods and eating
out get a boost. Another important shift is that, due to
busier lifestyles, they are time-crunched and more likely
to rely on branded products and services that they can
trust. However, given the nascent stage of the market, these
brands could just as well be retailers’ own labels, if they are
managed well.
In terms of business, significantly greater efficiency needs
to be achieved, both at the front-end and in head office
and supply chain operations. Process and system-led
planning and execution needs to become the norm. With
India’s burgeoning population, people are treated as a
cheap resource: on the contrary, each extra person can be
expensive beyond just their salary cost to the organisation.
Each extra person adds some friction to decision making,
reducing the responsiveness of the business. Smart business
will begin to realise this, and look closely
at employee efficiency and effectiveness in
the context of the overall business, rather
than just in terms of individual costs.
Even as the retail business in India is far
from saturation, and fragmented growth
continues, the business will also undergo
consolidation simultaneously, as large scale
retail operations are enormously capital
intensive. Mergers will be a strategy that
will be explored to improve the viability of
many businesses in this sector.
Should you be tempted to think that,
squeezed between large corporates,
international retailers and ecommerce
giants, it’s “Game Over” for smaller
domestic retailers and brands, let me say that the India
retail story is not only not over yet, but continues to be
written and rewritten. As the market grows and matures,
retail businesses also need to differentiate themselves,
investing more in product selection or even product
development through private label growth to help them
stand out in the market. A one-size-fits-all strategy doesn’t
work in a country as diverse as India. For the size of
the market, we have surprisingly few brands, many of
them virtually indistinguishable from their competitors.
Development on this front, of indigenous brands and
product development capabilities, is an absolute must.
The good news is that already there is more talent available
than ever before. Most importantly this management pool
has experience of the retail sector not just in good times but
during (many) downturns as well.
Eventually, what is needed is a
mix that will be healthy for India’s
ecosystem at large for a long time
to come. This will not be delivered
by a blind transplantation of
international templates or a rapid-
fire expansion across the country,
nor by fearful protectionism or
regional parochialism. It will
only be achieved by the evolution
of market-appropriate business
models and a mature approach
that can be make the Indian
retailers robust enough to grow not
just domestically, but possibly even
globally over time.
In terms of business,
significantly greater
efficiency needs to be
achieved, both at the
front-end and in head
office and supply chain
operations. Process and
system-led planning
and execution needs to
become the norm.
About the Author: Devangshu Dutta, chief executive of management consulting firm Third Eyesight (http://thirdeyesight.in) and
managing partner of PVC Partners (http://pvcpartners.com), has been working with the retail sector for about 30 years. Devangshu
has been involved with businesses across a wide range of sectors, both offline and online. (Twitter: @devangshu)