Aditya Birla Retails plans expansion in India

Aditya Birla Group, the business conglomerate is set to increase the number of its retail outlets in India. The company is on an expansion mode and has announced to increase the number to 500 such retail stores across India. The group entered into the Indian retail business a year ago and has 400 retail outlets called 'More'. It has strong presence in the cities of Delhi, Mumbai, Chennai, Vadodara, Bangalore, Hyderabad, Mangalore, Pune, Mysore, Vizag and Vijaywada. During the launch of its Vadodara outlet of 'More', Mr. Kumar Mangalam Birla, Chairman of the group, said by the end of March 2008 the numbers of 'More' retail outlets to be increased to 500 from 430. Mr. Birla points out that his company's first retail store was launched in Pune, in May 2007 and now has presence in almost all major and minor cities of India. Industry sources believe that at this rate of growth the company may also end up the financial year 2008-2009 with 500 new stores of "More". Dedicated Electronic Supermarkets are also in the pipeline of the company and is expected to roll out a few outlets very soon.

He further said that the estimated size of the Indian retail market is around US $ 300 billion and the cumulative market share of supermarkets and hyper markets in India is less than 4%. Although the Indian retail sector is registering decent growth but huge potential is still untapped and the multi-chain retail stores are yet to reach their desired level of growth in India. He added that the Indian consumer was long due for world class shopping experience and with increased per capita income the target seems achievable. Mr. Birla also said that his company has aggressive expansion plans across India. At present the company has two mega-stores in the country and it wishes to increase its number substantially soon. Mega-store is a shopper's paradise it offers more than 60,000 products catering to each and every need of a household.

The company has already identified few development sites and is on the look out for more viable options for infrastructure development. With the launch of India's first hypermarket - the 'More Mega Store', the company took a giant step in making its mark in the organized retail market of India. This colossal hypermarket is about 70,000 square feet and the average size of each mega store would be of around 80,000 square feet. Further, these giant retail stores house around 60,000 SKUs of different types and brands of merchandise. Mr. Birla said that 10 more hypermarkets are on offer.

He points out bottle necks like high real estate prices in the Tier I cities, which is a stagnating factor and most of the second rounds of hypermarkets can be expected in Tier II cities. Moreover, glitches like protest from traders and middleman towards growth of organized retail in India may eat away the growth opportunity it offers.