Saturday, January 27, 2007

Adapting to local ways of business

Speaking at the World Economic Forum in Davos, Ajay Dua Secretary in the industry of commerce and industry, said that global retailers must adapt their strategies and operations for India, especially keeping in mind that small mom and pop retailers should not be affected by global retailers business. To an extent, I think it's all right to say that, but the bottom line of any business, or any successful business, is to make money. If a store is lacking in some way, then consumers will not shop there and so with the big boys of international retail coming to India, any mom and pop store that is inefficient should be aware that someone down the road is likely to take away their customers.

It all comes down to doing a job well, to reading customers right and providing something different from other stores, protecting and excelling in your USP. No amount of regulations can keep a bad business alive. Take me for instance, I used to do all my shopping at a little mom and pop or kirana store across the street. Why? He had similar prices to all the supermarkets and hypermarkets nearby and delivered all the products to my doorstep at a moment's notice. If I wanted, I could have taken some credit from him too, at no extra cost. So, his USP was being able to deliver one item or an entire month's worth of shopping in 10 minutes. Unfortunately, he has not been doing too well lately. I realized he was not always giving the same specials and offers that the larger stores had (since now Spencers, Food Bazaar and HyperCity all send out weekly flyer's with their specials) and that he always charged the MRP (Maximum Retail Price) where as the organized retailers were always a bit less than the MRP.

So, as long as kirana store keepers focus on what makes them unique and provide a service or product that others either cannot or cannot do as well, then they are safe. Adaptation to local environment is absolutely necessary, but definitely not to safeguard inefficient shop keepers. I wonder when the government will realize they only need to govern the country and not run its airline, stores, hotels etc.

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