Calcutta, Nov. 12: The Retailers Association of India has teamed up with IT companies to develop technology solutions for small and medium retailers.
“We are working with IT companies to develop front-end products for the small and medium retailers which will lead to better inventory and cash management,” said Gibson Vedamani, president of Retailers Association of India.
The move will equip the retailers to structure their businesses more efficiently and allay fears of being displaced by bigger players.
IT companies are betting big on retail SMEs as the demand for technology solutions in this sector is on the rise.
Firms such as Polaris, GDA Technologies, SAP, Cisco, IBM and HP are creating products for small retailers having stock keeping units of less than 5000.
Small and medium enterprises (SMEs) contribute nearly 20 per cent to IBM’s revenues, while SAP is looking to garner 50 per cent of its revenues from the segment by 2010. Cisco is looking at a 25 per cent increase in its revenues from SMEs this fiscal.
“Retail is one of the three key micro verticals for HP India. Business from SMEs is set to grow at a compounded annual growth rate (CAGR) of 25 per cent over the next three years. A reliable infrastructure is essential to cater to these retail SMEs where companies like HP have a significant role,” Ashok Pamidi, director (commercial accounts and base business), Hewlett-Packard India Pvt Ltd said.
According to New-York based AMI Partners, SMEs in India spent over $3 billion in hardware last year, a growth of 20 per cent.In 2006, SMEs comprised about 38.5 per cent of the Rs 61,761-crore IT market in India.
Expenditure by SMEs, including retail, is set to grow at a CAGR of 30 per cent in the next three years.
“The market for IT expenditure by retail SMEs will be huge with each store making a substantial investment,” said Vedamani.
There are over nine million SMEs in India with an average IT spend of Rs 30 lakh, which is 0.21 per cent of their revenues.
“We want more small and medium retailers to enjoy the benefit of technology solutions. AT present, most of them go by instinct on what sells, how stocks turn and issues on inventory discipline. Such solutions will help them to structure their business,” said Vedamani.
