BANGALORE: Target Corp, the US' third largest retailer, is aiming to set up shop in Canada next year. For its maiden overseas foray, the Minneapolis-based company has set its sights thousands of miles away on its technology centre in Bangalore.
From the Indian city, a 2,500-strong team, including architects, will draw up a blueprint to help Target in Canada. They will create the design for the stores and the layout of shelves, decide what the shelves should be stocked with and assist in setting a supply chain for over 100 stores that will be opened.
With $68 billion in sales, Target spends nearly $1 billion on technology. "Our India team and their contribution will be critical for the Canada launch," said Ken Kaiser, vice-president for corporate systems development, who was instrumental in setting up the retailer's India centre.
The India team will provide business intelligence by analysing the vast data with the company and lend marketing support. On the supply-chain front, it will play a role in how Target's merchandising team interacts with vendors and books orders.
This is the first time in its history of over a century that Target will move out of the US. The company does not have much room for error as it will be competing with the world's largest retailer, Walmart, which has been operating in Canada for close to two decades.
How Target builds its Canada business has crucial long-term implications as the firm wants to replicate its Canada learnings in its US business where it has over 1,800 stores.
The Canada launch will also be a proof of concept for Target and help it set the foundation for entering other countries.
Kaiser said Target's recent revamp and launch of its e-commerce enabled website was done almost entirely out of Bangalore. Target generates about a $1 billion in revenue through online sales.
Revamping of its internet portal for greater focus on online sales was a big bet on the Bangalore team, according to Kaiser. Till recently, Target used to sell its merchandise through Amazon.
"People said 'It is so mission critical, can we do this in India?' and we said, absolutely," Kaiser observed. Target is now trying to replicate the success by revamping the software systems used in its retail pharmacy division-the latest mandate for the Bangalore team.
Team strength grows ten-fold
Like several other US corporations, Target set up its Bangalore centre seven years ago, drawn by the technical talent in the city. But what was meant to be a 250-400 member team focused entirely on technology, has now grown tenfold and drives some of the key businesses and technology initiatives.
The company is now looking to grow this in-house team as it prepares for the Canada market and enhance its business with its outsourcing partners, including Tata Consultancy Services and Wipro. Of its total IT budget, over 50% is spent on these outsourcing contracts.
"Our growth in Bangalore will be much faster than our overall company performance. It will exceed what we are doing internally back in the US," Kaiser said.
Experts say global retailers have been keen to leverage India's strength successfully because of the top managements' commitment and understanding of the talent pool.
"The top management of these companies bought into the India story and they have been very focused on turning them into successes," said Sundararaman Viswanathan of Zinnov, a Bangalore-based technology market researcher and advisory.
"Also these companies have been able to break down their requirements to match the available talent. In Bangalore, for instance, there is very high availability of computer-aided design talent, so they can work on stores here."
Target's India story mirrors the success of its European counterpart Tesco, which has also set up a large back office in India that it has been able to scale beyond providing just IT support.
Experts say global retailers have been keen to leverage India's strength successfully because of the top managements' commitment and understanding of the talent pool.
"The top management of these companies bought into the India story and they have been very focused on turning them into successes," said Sundararaman Viswanathan of Zinnov, a Bangalore-based technology market researcher and advisory.
"Also these companies have been able to break down their requirements to match the available talent. In Bangalore, for instance, there is very high availability of computer-aided design talent, so they can work on stores here."
Target's India story mirrors the success of its European counterpart Tesco, which has also set up a large back office in India that it has been able to scale beyond providing just IT support.
No comments:
Post a Comment