New Delhi: Last year, U.P. Gupta, 36, spruced up his small grocery store in Noida, on the outskirts of Delhi, giving it the look and feel of a modern retail outlet.

He air-conditioned the 400 sq. ft Gupta Stores, introduced self-service—allowing customers to pick products off shelves—and started accepting credit cards.

The effort increased both footfalls and sales, but it also drove up shoplifting, one of the scourges of the modern retail business. Fed up with the losses, Gupta spent Rs22,000 on a closed-circuit television (CCTV) surveillance system some months ago to deter shoppers from leaving his store without paying.

Alert: Mangalore-based Paradise Burkha House recovered the Rs2 lakh it invested in anti-theft systems in the first year itself.

From Karnal to Sholapur, the concern is leading neighbourhood store owners such as Gupta to employ anti-theft measures such as CCTVs and the tagging of products as they allow shoppers direct access to merchandise.

This has offered a new business opportunity to two US-based anti-theft systems makers—Checkpoint Systems Inc. and Tyco International Ltd— which have developed stripped-down systems for India.

A standard anti-theft tag system, used by retailers the world over, not only issues shoplifting alerts but can also be networked with data centres to gather information on the number of visitors, purchases and instances of shoplifting.

The stripped-down version’s “function is just to beep (every time an unbilled product passes through the exit door) and nothing else", said Darmesh Lamba, who heads Checkpoint’s India operations.

“The difference between the two is like a full-service airline and a no-frills airline," added an executive who manages sales for Tyco, on condition of anonymity.

Tyco’s team of about 50 researchers came up with the tagging system that costs a third of the standard version. “This product was conceptualized with the intention of reaching mom-and-pop stores," the executive said.

Tyco’s low-end surveillance systems come with local components that can adapt to India’s notoriously erratic power supply and voltage fluctuations, besides running on battery-powered back-up.

“In India, the (electric) power is not clean and comes with a lot of noise, which interferes with the magnetic field the system creates," explained the executive from Tyco. The voltage can also fluctuate between 90 and 270 volts, he said.

Tyco’s business from small retailers is growing at 40% a year, while Checkpoint expects almost 35% of its total revenue this year to come from the unorganized sector. The company did not earn any revenue from this sector until a few years ago.

“All these guys (small store owners) have the aspiration to be better," said Ramesh Jayaraman, managing director for Tyco in India. “They always look at the top guys and think if they could get there."

Encouraged by the response, Checkpoint plans to take its stripped-down tagging systems to China and Pakistan. Tyco, too, hopes to sell its range in Brazil and China.

But the bulk of the Indian market itself remains to be tapped. Indian modern retailers currently spend 0.19% of their sales on loss prevention measures, lower than the global average of 0.31%.

But as awareness about security measures increases, manufacturers expect modern retail losses to decline in the next three years. Lamba predicts India’s anti-theft business to grow at 35% a year.

Retailers such as Mangalore-based Paradise Burkha House are adding to this growth.

Two years ago, after shoplifters decamped with Rs30,000 worth of dresses from Paradise, the shop spent Rs2 lakh to purchase Checkpoint’s stripped-down tags for 6,000 items and a CCTV system.

“Theft was a big problem since we opened in 1992," said Fahad, the store manager, who uses only one name. “But the investment in the equipment was recovered in the first year itself and there has been no major theft after that."