Why India is the No. 1 Destination for Setting up a Retail GCC

Adidas recently announced its decision to set up its first Global Capability Center (GCC) in India. This strategic move is set to bring key Finance processes like Source-to-Pay, Financial Planning and Analysis, Invoice-to-Cash, and Record-to-Report in-house to India. By doing so, Adidas aims to streamline its Supply Chain Management and Finance functions, complementing its operations in the US market.

This move by Adidas is part of a larger trend that’s reshaping the Global Retail landscape. Over the past decade, numerous Global Retail Leaders have recognized India’s potential as a hub for innovation and operational excellence. For instance, Target’s GCC in Bengaluru has become a crucial center for technology innovation, driving advancements in areas like Artificial Intelligence, Machine Learning, In-house Engineering, Data Science, and Computer-generated Imagery.

Meanwhile, Lowe’s GCC in Bengaluru houses over 4,200 employees¹, delivering value-driven services across Technology, Business Services, and Shared Services for their global home improvement business. The momentum is building, with Zinnov projecting a significant increase in new GCC establishments over the next few years, as retailers recognize India’s potential for driving innovation and operational excellence

But what makes India the No. 1 Retail GCC Destination?

• Access to Talent: India’s Retail GCCs² are powered by over 34,000 highly skilled professionals, driving innovation and digital transformation for global headquarters. This number is set to grow significantly, given India’s robust annual output of graduates. This vast reservoir of talent, spanning both tech and non-tech domains, is a primary draw for Retail giants. To understand the scale of talent India provides, consider this: according to the Zinnov-nasscom GCC Landscape Report 2024, there are over 120,000 skilled professionals in AI and Machine Learning alone, underscoring the country’s technological prowess. India offers a diverse skill set that’s crucial for cutting-edge Retail operations.
  
  
• Robust Digital Infrastructure: India’s robust digital ecosystem, characterized by high-speed internet connectivity, rapid investments for expanding Data Center capacity, and a tech-savvy workforce, creates an ideal environment for GCCs. This infrastructure facilitates seamless global collaboration, enabling rapid innovation and faster time-to-market for new solutions like AI-driven Analytics Platforms, Cloud-based Enterprise Applications, and IOT-enabled Supply Chain Management Systems. The result? Dramatically reduced operational costs and accelerated delivery of cutting-edge Retail technologies like Guest Order Management Systems, AR/VR Shopping experience, etc.
  
  
• Economic Resilience: In a global landscape marked by economic uncertainties – from rising interest rates to inflation concerns – India stands out as a beacon of stability. While major economies grapple with these challenges, India’s relative insulation from global economic turbulence makes it an attractive destination for GCCs. Companies like Adidas are leveraging this stability, combined with India’s cost advantages, to drive innovation even in challenging times.
  
  
• Supportive Government Policies: The Indian government’s proactive stance in fostering a conducive business environment has been a game-changer for GCCs. Initiatives like “Skill India” focuses on developing talent in areas crucial for retail, such as data analytics and AI, ensuring a ready workforce for GCCs while “Digital India” has improved digital infrastructure, benefiting retail GCCs through enhanced e-commerce capabilities and efficient supply chain management. This government backing has catalyzed the rapid growth of India’s GCC sector, with an increasing number of Retail giants setting up shop each year.
  
  

Functions Supported by Retail GCCs in India

Retail GCCs in India have evolved to support a wide array of critical functions, demonstrating their strategic importance in global retail operations. These functions can be broadly categorized into two main areas:

Technology & Digital Functions

1. Digital Commerce: Developing and managing e-commerce platforms, online stores, and mobile apps.
2. IT Infrastructure and Cloud: Designing, implementing, and maintaining IT infrastructure, including data centers, networks, and cloud platforms
3. ERP (Enterprise Resource Planning): Implementing, managing, and supporting ERP systems for core business processes like Finance, HR, and Supply Chain
4. Cybersecurity: Protecting sensitive data and systems from cyber threats through security measures and incident response
5. Store Systems: Developing and maintaining point-of-sale systems, inventory management software, and other store-specific technologies
6. NOC/SOC (Network Operations Center/Security Operations Center): Monitoring and managing network and security operations to ensure system uptime and security
7. Analytics: Analyzing data to gain insights into customer behavior, market trends, and operational efficiency
8. Emerging Technologies: Exploring and implementing new technologies like AI, Machine Learning, Blockchain, and IOT to drive innovation
9. IT Support: Providing technical support to end-users, troubleshooting issues, and maintaining IT systems

Business & Retail Functions

1. F&A Shared Services (Finance & Accounting): Handling financial transactions, accounting, and reporting
2. Merchandising: Managing product assortment, pricing, and promotions
3. Store Operations: Supporting store operations, including staff management, inventory control, and customer service
4. Customer Service: Providing customer support through various channels, including phone, email, and chat
5. HR Shared Service: Managing HR functions like Recruitment, Onboarding, Payroll, and Employee Relations
6. Order Management: Processing and fulfilling orders, ensuring timely delivery and accuracy
7. Supply Chain and Logistics: Managing the flow of goods from suppliers to customers, including transportation, warehousing, and inventory management
8. Marketing: Developing and executing marketing strategies, including advertising, promotions, and public relations

With more than 10 Pure-Play Retail Enterprises projected to set up new GCCs in India within the next 2-3 years, India is poised to redefine global retail technology. In the coming years, we can expect to see India’s GCCs at the forefront of developing next-generation retail technologies, from AI-driven personalization to revolutionary supply chain solutions.

For Retail companies eyeing the future, the message is clear: India’s GCC ecosystem offers an unparalleled opportunity to stay ahead in the rapidly evolving Retail landscape.

Footnote:

1. Source: Zinnov-nasscom India GCC Trends – Quarterly Analysis Q1 CY2022 ↩︎
2. Retail GCCs: Retail GCCs are offshore services units established by Multinational Corporations (MNCs) to perform strategic functions, leveraging knowledge-based talent, cost and operational efficiencies. Pure Play Retail GCCs include organizations like Walmart, Tesco, Target, Lowe’s Hudson’s Bay, etc. ↩︎