Wednesday, April 25, 2007

Retail Blitzkrieg

The retail boom in India has just begun. With giants like Reliance, ITC, Pantaloons, Bharti etc jumping into this bandwagon (Walmart not far away), this blitzkrieg may simply wipe out all the small and medium vendors. We also hear that global players like Walmart are not keen on sourcing the products locally, they may do it from China where they get better margins.This boom may certainly increase employment opportunities for the huge number of youth in the country, the job market being projected at one lakh plus. There's a serious point of concern here. What would be the plight of local traders, the kirana shops and supermarkets from whom we’ve been buying our grocery for ages? We can already see the impact of Reliance Fresh on push-cart vendors and the like. Competing with it are Fresh@, and other similar ventures.

There’s no doubt that big retails outlets offer more variety, at competitive prices. But I sometimes found it difficult to resist my temptation to buy more and often buy ‘unnecessary’ stuff getting lured by the brand or display. A small outlet close to my home would serve my needs in a better way, where my purchases are need-driven and not greed-driven. Added to it are questions about sourcing the produce. Who’s actually getting benefited in the whole chain? Government initiatives like Rythu Bazaar can save the farmers from the middlemen to some extent, but I’ve often found these direct sellers cheating people in weighing the stuff as the prices are fixed.

One of the ways to face the giants is prepare small vendors like the push-cart guys. This is how ITC is planning to compete with big brands by giving professional training and customer skills to these people whose livelihood depends on day-today sales. Sounds like a workable strategy to combat the undesirable effects of giant retails.

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