Monday, May 26, 2008

Wal-Mart effect in India: Big Bazaar and others saturating ‘Kirana’ stores’ markets

The retail sector is estimated to grow at 13% annually to $590 billion b 2011-12 in India. While the organized retail contributes 16% annually, the unorganized sector (neighbourhood shops, kirana, mom and pop stores, outlets) contribute hardly anything now - its a gloomy picture for their business nowadays. This wal-mart effect will hit the domestic small retailers for a huge six, and the kirana stores realize the early threats. No wonder they vandalised the hundreds of Reliance Fresh opened early this year.

I guess that the Wal-Mart effect is good for Indians. All Americans are aware that they save atleast $500 annually by shopping at Wal-Mart and availing of discounts and other things. If Indians start saving like that, we are gonna get rich pretty fast!!

Kirana stores and domestic markets are no good :
  1. They offer no choice to the urban shopper
  2. No bargains, no low prices --unethical selling habits
  3. Ridiculously high prices on defective products --shopkeepers fleece you!!

On the other hand, wholesalers like Big Bazaar, Reliance Fresh, Subhiska and now Bharti-Airtel save us a lot of money by buying in bulk and buying directly from manufacturers, thus spending less on commissions to middle-men. In turn, the provide huge savings to us. The last time I shopped at Big Bazaar, I saved a cool Rs. 300 on discounts, free coupons, and free sugar packets!!

Its time you stop going to your friendly neighbourhood store , instead take your whole family to Subhiksha or Big Bazaar.

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