The world that we live in

This is a step backwards in my opinion, a huge step backwards if if goes through. Some news reports are reporting that due to the pressure from opposing parties, the government might introduce a license system in the retail sector so that it can protect small unorganized retailers. Local municipal corporations will have the power to decide where large retail stores come up in the city, depending on whether small retail stores will be adversely affected or not.

I really don’t see how it will benefit the common man, as you can’t force people to shop at stores that have bad customer service, higher prices and a haphazard way of stocking and reordering merchandise. Most small retailers sell products over the listed MRP, and consumers earlier didn’t have any other choice but to pay that price, but now that there are lots of choices available, consumers will shift loyalty to stores that offer the maximum benefit, financially as well as in service and convenience.

In the overseas markets, the concept of large retail stores that specialize in a narrow range of products is quite common. These type of stores are called category killers or big box retailers, for the power that comes with their size. In India, the concept is yet to catch on, although the first few steps have already been taken. Reliance Retail’s consumer electronics venture Reliance Digital and Tata Group’s Croma are both perfectly poised to convert themselves to category killers at a later time. It just waits to be seen how and when they do.

The major difference in how retail functions here and in more developed markets like the US is the non-availability of space. In the metro cities, where the main spending population lives, there is a severe shortage of large retail space along with space for parking. So, even if category killers do come to India, they will have to adapt slightly to the local market conditions.

After all that hullabaloo with small-scale local vendors protesting outside Reliance Retail stores has led to the company to come up with some partnership plans with local fruit and vegetable vendors. A couple of stores in Hyderabad and Ranchi are already testing out the concept. Reliance is offering two options to local vendors, to either join their stores and get a fixed fee or to buy vegetables from them at their lower prices and share their profits. It waits to be seen how well the initiative works and if people find it good enough to stop protesting. Well, there’s no guarantee in that, as they are sure to find something else to protest against, but it’s definitely a step in the right direction for Reliance.

Reliance Retail’s long awaited Hypermarket is set to open in July this year. The hypermarket will be called Reliance Mart and the first store will open in Bangalore. Reliance’s hypermarkets will be in the range of 40,000-200,000 sq ft, with the Bangalore store coming in at 180,000 sq ft. The announcement of the new hypermarket was made by the President and CEO of Lifestyle Reliance, Bijou Kurien. The company will open a second hypermarket in Gujarat.