Tuesday, August 12, 2008

Indian Retail Chain

With the entrance of UK's largest and economical retail chain Tesco entering Indian market; the competition is set to raise in the Indian retail chain. This is the third foreign retail chain entering the Indian market. Previously Wal-mart, US & Carrefour, France entered India with the partnership with Bharti & Wadia Group respectively.
Currently there is government restriction for these groups to operate only at the wholesale level. This is an attempt to maintain the traditional 'kirana stores' of India. What is the future of Indian retail chain? There is a possibility that the government might liberalize the policy to give access to the foreign players in the direct consumer market. There are already a few consumer dealers like Reliance & Subhiksha who operate regionally.
With the competition from these foreign players, the Indian retail sector is growing organically. What should the Indian counterparts do to neutralize the competition from the foreign players? The Indian players might be interested in improving the supply chain management to reduce cost and improve efficiency. This could be done easily by parterning with the Kirana stores instead of setting up new outlet. Thus, with the traditional way of business i.e through 'Kirana stores' the big players can reach the customers easily and cheaply.
Apart from this, the Indian companies should improve the quality of its product to international level. The adulterant should be brought to zero level. With cheap labor power in India, the operating cost can be minimized with focus given to quality.
Let us wait for the maturity of Indian retail chain in near future with organic competition between Indian & foreign companies.

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