The retail sector in India has seen incredible growth over the last few years. It has seen many corporate houses that had very little experience in this sector venture in and actually achieve a good amount of success. Future Groups Big Bazaar and Reliance Industries Limited (RIL) owned Reliance Retail are two such brands. After mulling over various strategies to expand operations, the two retail giants have decided to rope in local Kirana-walas with a view widen product reach and expand their operations to newer territories.
The two brands are following different paths for the same. Mukesh Ambani owned Reliance retail are speeding up their expansion of wholesale cash-and-carry stores. On the other hand, Big Bazaar, owned by Kishore Biyanis Future Group has undertaken its Big Bazaar Direct Programme in this, Kirana Stores can become a franchisee for the big retailer.
Analysts say that this move by both the retail chains is bound to increase growth. Big organized shopping mall type stores may not be successful in small towns or villages. Hence, pushing products through these small grocery stores or Kirana Stores is highly beneficial for the brand in the long run.
At the same time, small traders remain skeptical of this move are not too optimistic on being co-opted by the big boys. Praveen Khandelwal, secretary-general, Confederation of All India Traders, was quoted as saying, Organized retailers are in the business for making profits and are least bothered of the small traders. They use predatory pricing tactics to ultimately wipe-off the smaller guys. Even their wholesale stores are nothing but retail in disguise, since they are giving membership to anyone, when it was only meant to be for traders.
Nothing seems to have deterred the people operating Reliance Retail though. The RIL owned entity which commenced operations in 2011 has opened 12 more stores in the last 10 months. And theyre not slowing down; this pace of expansion is growing. A person close to the retail chain said, We are catering to institutional consumers, hotels, resorts, cafes, catering companies etc, but kiranas are among the biggest target group.
The Reliance owned stores have also made in-roads into the wholesale store business. Its converting some of its stores into wholesale store businesses. About a million partners i.e., institutional customers have signed up for the wholesale business. Small shop owners, as well as people who own grocery stores in small towns are being part of member meetings to understand their needs. When contacted, a company spokesperson said only three stores are being converted and it will continue to expand across all formats, including retail and wholesale.
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