Three very interesting articles appeared this week across the papers –
The first one, appearing in DNA talks about a paper written by two IIM-A profs on how retail in India is likely to stay local. It raises interesting points on how the larger retailers are already in India in various forms, and the larger imperative on the Govt is to reform infrastructure – something alluded to in my earlier post here. I would like to reiterate to all the advocates of the anti FDI policy that it would be really really difficult to wipe out the entrenched Kirana stores – unless they all become franchisees – which would be good as they would then have to come under the tax net.
The second article refers to how companies would have to change their understanding of the shopper – again, something that would become really critical to driving innovation and business growth – as the large growths that modern retail is currently seeing on the back of store expansions would slow down dramatically. There is a hint of self interest though, as the article interviews the marketing bosses of Tracy Locke, an international shopper marketing agency.
In last week’s post , I had shared an article on how the tier II cities have shown higher growths for modern retailers – with specific reference to Hypercity. This piece encourages retailers to explore the Tier II segment in depth. Simple and obvious reasons – low rentals => faster and higher profitability, people with spending power who aspire to the larger city lifestyles => higher and sustained growths, and no comparable options in the towns.
The last article tells us that Spar and Max Hypermarkets are not going to be partners any more. I think this was on the cards since some time now, as Spar had released a statement saying that they wanted to expand their footprint across the country rapidly, and were open to alliances with other partners who could take the business across zones.
That’s all for this week folks !
More to follow next week.
Cheers !