Wednesday, February 16, 2011

Retail Consolidation : Observations from the Indian Market

In one of my earlier study on understanding retailing in villages, I had observed how retailers in the smaller villages had more generic offerings (even homogeneous) but as the population of the villages increased more specialized retailer would come up. I could not empirically test it but then there is some support in the theory and logically also it makes sense because a specialized retailer would survive only a certain minimum scale.

Now on my recent trips to the markets in some of the Meteors gave me a different flavor of how things are evolving, at one end we have the emergence of these more specialized retailer, like Mobile stores (driven by the mobile revolution), baby care stores like Baby center catering exclusively to needs to babies and pregnant mothers ... and at the other end of the evolution the smaller specialized stores like the chemists and consumer durable shops are becoming more more generic in their offerings. I still remember a couple of years back when I was looking for a camera roll (yes people still buy it!!) I could get it in a near by chemist store who was literally stocking everything which a typical grocer would do, and chances of you getting a specialized medicine was also low.

Some of these changes can be attributed to the emergence of organized retail and consumer willingness to travel some distance to buy products at these larger format stores. The smaller shops are reacting by adding more categories to gain economies, but a lot these need to studied in order to document this evolution and how it will impact the retail structure in the country….



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