Lessons from HDFC and Bharti for Retailers

The beleaguered retail sector in India needs to look no further than the story of mobile telephony and housing finance for inspiration. India’s retail sector is still listless and its people frightened even after several industries have revived and the economy sizzles back to a 8.5% plus growth rate.

HDFC started in 1977-78 when the concept of housing finance was well-established in western countries but barely understood in India. It found it difficult to raise funds, had a disastrous IPO and lost money for a few years. The share quoted below the offer price for a long time. But it stayed on in the game and slowly the tide turned, first due to the underlying demand and then the liberalization in the financial sector. Today, it has a balance sheet size of more than two lac crores with its housing finance, mutual funds, insurance and banking businesses.

Bharti had difficult initial years, there were losses but it persisted. In just more than a decade of being in the game, it is a true success. It is highly profitable, a top employer, large and now setting out with global ambitions. Out of the twenty-five players who entered telecom, only three have survived.

Both these companies focused on a simple formula for success in new industries – vision, people and continuous learning. Survival in the new sectors also needs robust strategic thinking by the promoters or the top management.

The retail players can look at these giants and use the lessons effectively.


tiredpanda said…
The staying power is directly proportional to the Money power (of course with the right intentions & strategy et al.). Generally for large ventures one needs to have a milking cow in the shed to feed the tiger calf until it delivers.
Salil Sahu said…
Completely agree with you.

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