Magazines Archives - 2012 July

Bharti Retail upgrades payments system to meet its growing footprint
Story 2 - Special Report

India's Bharti Retail LIMITED has recognised the barriers many retail companies face to further expansion and has taken steps to improve its treasury practices.

AS Asian retailers continue to expand geographically on the back of the region's economic success, it becomes vitally important to maintain central visibility and control over cash flows and payments so that cash, risk and financing decisions are made in the overall interests of the group.

Major Indian retail company, Bharti Retail Limited, offers a case study on how the implementation of more sophisticated payments processes can aid efficiency and provide a strong foundation for future growth.

Given the challenging conditions in many OECD (Organisation for Economic Co-operation and Development) countries, the emerging markets are growing ever-more significant to global economic growth. Indeed, recent research shows that by 2030, emerging markets will represent 70% of the world's US$180-trillion GDP compared to 52% of US$73 trillion in 2010.

The effect of this changing landscape on the Asian retail sector is two-fold: firstly, it has sparked the emergence of a growing consumer class, with high growth markets such as China and India becoming increasingly important; and secondly, it has enabled the rapid expansion, on a global scale, of retail companies headquartered in these countries.

Now is, therefore, the time for retail companies to improve their core financial and treasury systems in order to benefit from the affluence that is starting to spread through Asia. Some companies, such as Bharti Retail, have recognised the barriers many retail companies face to further expansion and have taken steps to improve their treasury practices.

Payment problems of an increasing footprint

Bharti Retail is a wholly owned subsidiary of Bharti Enterprises and one of the major players in modern retailing in India. It operates more than 150 Easyday Neighbourhood and Easyday Market compact hypermarket stores.

Successful retail companies run many branches. However, this presents several challenges, not least of which is the ability to collect payments from each store. Many retail companies settle for systems that are incapable of handling the logistical challenges associated with collections from multiple stores. This means that collecting payments is often a complex process, prone to error.

Mirroring India's own economic achievements, Bharti Retail's footprint in India has been increasing. It needed to organise collections from stores in cities and smaller towns, and pool the payments into its main account before the end of each day — a logistical problem accentuated by the region's geography and subsequent widespread nature of its retail branches.

To view full story, get a copy of Retail Asia. To subscribe, please download the subscription form from http://www.retailasiaonline.com/subscription.html