Small is big

Calcutta, Aug. 20: Next time you explore the net, don’t be surprised if you come across the website of your neighbourhood shop.

With large chains such as Pantaloons and Reliance set to invade every nook and cranny of the country with organised retail, small mom and pop shops are trying to spruce up services to match the big daddies. This has opened up a host of opportunities for the IT majors, who are warming up to the needs of small and medium retail outfits.

There are around 15 million unorganised retailers across the country and 98 per cent of them operate out of less than 500 sq ft. Companies like HP India and Cisco Systems have identified retail as one of the key business units or verticals.

“Retail is one of the three key micro verticals for HP India. The retail business is set to grow at 25 per cent compounded annual growth rate (CAGR) over the next three years at HP. A reliable and adaptive infrastructure is essential to cater to these retail SMEs, where companies like HP have a significant role. Furthermore, products like Microsoft Navision, which require an investment of Rs 15 lakh inclusive of implementation and independent service vendors (ISVs) providing single to five user licenses, will aid the retail SME growth,” said Ashok Pamidi, director, commercial accounts and base business of Hewlett-Packard India.

For Cisco, retail is a major focus area. Leading the SME growth, the share of revenues generated from non-metro towns and cities that used to be at 10 per cent of the turnover by value two years ago, is slated to comprise 25 per cent this fiscal covering 50 towns and cities nationally.

“When it comes to IT implementation in retail for companies like us, the bulk of our revenues comes from clients abroad, while Indian companies account for around 10 per cent of it. Product pricing is one of the key challenges, as leading applications such as Oracle and SAP are costly and are considered unimportant by the SMEs, who require only point of sales (POS) solutions. The problem is not in their awareness, but the scale of their business cannot justify such large investments,” said Ahiv Ajagane, assistant vice president and head of retail (vertical) business unit, Satyam Computer Services Limited.

The business unit comprises around 6 per cent of the group company’s revenues and expects to double its business with the current portfolio of clients in the next fiscal.