News: Global retailers must adapt to India
(TNN 27/01/2007) Davos - India’s message to global retail giants like Wal-Mart, Carrefour and Tesco is loud and clear: Adopt a different business model so that mom-and-pop stores can co-exist with the big brother. The country will not be able to welcome retail majors at the expense of 15 million kirana stores. “If global retailers expect to get a significant portion of the growing retail pie in the developing countries, they will have to adopt different business models for each country,” said Dr Ajay Dua, secretary in the ministry of commerce & industry.
While participating at a discussion on ‘Innovation in Retail’ at the World Economic Forum on Friday, he said differentiation will have to be both at the stage of entry as well as in their subsequent operations. He said the model “will necessarily have to be based on unique country characterisation and no single global model will be adequate.” All markets of any significant size have concerns about safeguarding retailers who, in case of India, number about 15 million and provide employment to 22 million.
“While organised retail formats in all the emerging markets are growing, given the rise in disposable incomes and rapid additions to the middle class, they will have to co-exist with the traditional mom-and-pop stores which have their own place,” he said.
The global retail chains need to adopt an approach which not only takes care of the national laws and regulations, but also build on the strengths of the small retailers, he said. “The small shopkeeper provides huge business opportunities to organised logistics, processing sectors and retail chains, both domestic and foreign, in terms of their becoming suppliers of better quality goods and services and technology to the traditional outlets,” he added.
While participating at a discussion on ‘Innovation in Retail’ at the World Economic Forum on Friday, he said differentiation will have to be both at the stage of entry as well as in their subsequent operations. He said the model “will necessarily have to be based on unique country characterisation and no single global model will be adequate.” All markets of any significant size have concerns about safeguarding retailers who, in case of India, number about 15 million and provide employment to 22 million.
“While organised retail formats in all the emerging markets are growing, given the rise in disposable incomes and rapid additions to the middle class, they will have to co-exist with the traditional mom-and-pop stores which have their own place,” he said.
The global retail chains need to adopt an approach which not only takes care of the national laws and regulations, but also build on the strengths of the small retailers, he said. “The small shopkeeper provides huge business opportunities to organised logistics, processing sectors and retail chains, both domestic and foreign, in terms of their becoming suppliers of better quality goods and services and technology to the traditional outlets,” he added.
posted by InCar Group Press Room at 19:30
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