Will India's mom-and-pop stores perish with the arrival of modern supermarkets?

by Deepak Sharma on Saturday, June 30, 2007

CNNMoney has an interesting take on how the rapid growth of the retail sector in India is not having grave impact on the mom-and-pops as was feared.

Venu Gopal owns a slightly larger store opposite another supermarket a few kilometers away. Sitting on a stool behind a glass counter topped with plastic bottles of sweets and surrounded by closely packed shelves of rice, lentils, fruit juices and other groceries, he sells two or three sweets to children, a single cigarette to another customer, and tiny tobacco sachets every few minutes. "Our customers," he says, "come for small quantities."

Those are hardly the dire scenarios of doom forecast by opponents of India's retailing revolution, who have taken to the streets to defend the livelihoods of more than 12 million mom-and-pop shop owners. In May and June hundreds of demonstrators armed with stones and bamboo sticks sacked Reliance stores in three cities, including Delhi. In Kolkata merchants marched to protest a Reliance contract to redevelop their market.

But in Hyderabad, the epicenter of the revolution, where Reliance Fresh has opened 50 brightly lit, Western-style stores in the past seven months as the front edge of a nationwide rollout, the reaction has been more muted. And the evidence seems to suggest there's room for everyone - street sellers and mom-and-pop shops, known as kiranas, as well as large chains.

"Definitely there is room for both," says Doma Trivedi, a franchisee of one of Reliance's most successful supermarkets in Hyderabad, whose wife and brothers continue to run the family's kirana a few kilometers away. "Everyone will have his own business. Smaller shops give credit and cater to people shopping on their way home from work, while Reliance Fresh gives correct measured weights and guaranteed prices."

3 comments

3 cheers to the retail revolution. No way can any organised retail chain win over local kirana shops; clearly as these kirana shops have invested time and money ( giving credits and discounts) in using Customer insights; for their target population in their local colony. They recognise their customers by face, they know their family history, they understand the " available income" of their customer etc... It will take some time for " organised retail" to adapt to customer scenarios for their consumers.

by kanika on 12:11 AM. #

Kanika - Rightly said. It will take some time for Organized Retail to cater to Indian market in the way local Kirana stores are doing today. What I see normally is that people are going to Kirana stores for everyday items and on weekdays, while the same people frequent the More and Reliance Fresh kind of stores over the weekend. Indian customers are taking this as Leisure, Fun, Family level activity.

by Deepak Sharma on 12:24 AM. #

hi deepak....i m ananya from National Institute of Design....doing a project on retail....

well yes....i was just wondering what exactly draws people to supermarkets.

let us suppose if somebody has to buy some grocery item....and a supermarket and a kirana shop are at equal distance.....whom would you prefer and why ?

by ananya on 1:13 AM. #