Friday, March 30, 2007

A Tale of Two Businesses.....

Each street has its small shop, where one gets to buy grocery, provisions, newspapers, soft drinks and other articles of daily use. The shopkeeper is trustworthy and he personally caters to the needs of his customers. He loves children the most and always has special chocolates and ice creams for them. I grew up in such an atmosphere and loved Kumar Annachi, who ran a small provision shop at the end of our street.

All cities in India are dotted by countless such shops which are managed by Agarwals, Singhs, Nairs, Raos and Sens and Guptas. India entered into the era of globalisation and modernisation in the late eighties and early nineties, the concept of malls, where all items were made available under one roof began to gain acceptance among the common public. Shopping Arcades like-Spencer's Plaza, Singapore Shopping Centre, Forum, Shriram Arcade, Alsa Mall, began to do brisk business.

This led to the boom in the retail chain management. Brands like Lifestyle, Westside, Pantaloons, Subhiksha, Vitan made an entry into the Indian market. The convenience of a complete shopping experience appealed to the common man, and the early days of the IT boom saw the pay-packets becoming fatter. Suddenly there was a lot of money to spend and a lot of products to buy. The commercial boom had started.

Now Reliance has moved into the retail segment and started its chain of Fresh stores, which sells vegetables, fruits and provisions. Reliance has appointed people to source the vegetables and fruits directly from the farmers to avoid any brokerage to be paid to middlemen. The traders in Koyambedu one of the largest vegetable markets in India, have started a protest demanding Reliance to close down, as they say they are losing their customers.

Wal-Mart is all set to start operations in India through a tie-up with the Bharti(Airtel) group. If Bharti enters India, then it will be a catalyst in the death of small business groups. Already Walmart has led to the death of many shops across America.

On the flip side these entrants in the retail market promise to provide employment to around 75, 000 people by the end of the year 2007. Young men and women are gettting jobs as salespersons with a decent salary of Rs 4,000 to Rs 5,000. So in a way it is good for the economy.

So how will the system work, will both sides co-exist or will the multinational giants take over the small traders, only time will tell.

1 comment:

Mughil David said...

With outsourcing, globalisation becoming the buzzword.. its obvious that small time traders will suffer the most.... yet survive ..... as you say its the big malls that are doing brisk they know the pulse of the buyers... the positive aspect is that these retailers can provide business to many unemployed .... but on the flip side the small time traders will also survive the race ... might be with a change in selling strategy as nature has its own balance....
In my opinion i think both retailers and small time traders will remain in the business as its a race...

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