In a bid to latch on to the retail juggernaut, small and medium sized retailers too are beginning to cut their teeth on technology like big retail players. According to market estimates, 25 such retailers implemented Enterprise Resource Planning (ERP) solutions last year. This year, say experts, the number of such retailers is set to grow to 35-40. SMB or tier II retailers are defined as players with turnovers under Rs 800 crore and 200 shops. The number of such retailers, at present stands around 250. ?The most of such demand is seen coming from the North and South of the country. In the West, the market is almost saturated and in the East, organised retail is yet to pick up in a big way,? says Abel Correa, country manager, JDA Software India, a retail and supply chain ERP solution company.
The total retail and logistics ERP market stood at $253 million in 2006 according to Springboard Research. It expects the market to cross a billion dollars in 2010 with a CAGR of 44%. Going forward, a section of tier III retailers, estimated at some 3,000 in number, are also expected to increase spends on IT. Market estimates also put the average capex on these projects for purchasing software and its installation at around Rs 2 crore. Further, one pays about 20% in terms of installation costs. Says retail and supply chain software solution provider JDA Software?s Correa, ?We have 15 such projects in the pipeline and expect the revenues from such players to contribute 30-40% of our total revenues going forward.? He adds that while most of these entrepreneurs spared no expense for basic software, they wanted to cut costs on implementation. Other ERP companies like Oracle and SAP too are witnessing the same trend.
?We have definitely seen an increase in demand from small and medium businesses (SMB) for retail ERP solutions,? says the Oracle spokesperson.
The Springboard Research also had 355 retail players marking ERP spends as the largest part of IT solution deployed over past two years while a further 38% said that they would invest in an ERP over the next 12 months.