India has just taken pole position for ambivalence. After five years of white papers and debate, foreign retailers who were invited to participate wholeheartedly in multi-brand retail have been shown the door with dizzying speed — all in a fortnight.
The boot-them-out argument that overseas multi-brand retail will kill small stores is hollow, given that the entry of local heavies such as Big Bazaar, More and Reliance Retail has hardly dented the corner-shop economy. If anything, the two segments don’t really compete for the same shopper. The real threat from deep-pocketed international retail isn’t to the small shops but to local rivals backed by big business. That’s where the Tescos and Ikeas of the world will compete head-on — in stocking, procuring, best practices and consumer experience.
For a start, India’s street-shop buyers don’t fit into the big supermarket world. Shopping, even for groceries, is an involved process for the majority. Housewives pore over mangoes for soft spots, furtively break the tips off okra to check tautness and poke fish for freshness, before they buy. They then engage in what’s arguably the most endearing part of their experience — bargaining. This also establishes the stars of the marketplace — the measure of which has some proportionate link to the ability to hammer down prices.
It doesn’t quite end there. Indians have a near umbilical relationship with the corner shop. It’s where you call for two eggs — that’s right, just two — when the uninvited dinner guest arrives, and for 30 days of credit. The neighbourhood storekeeper has a mnemonic mastery on the consumption pattern of households. Husbands will swear that they can turn up at the shop and vaguely ask for the brand of cooking oil that the household buys, with no clue what it is, and return triumphantly with the right brand. The only person who can rival the bania’s knowledge is probably the mother-in-law.
Small shopkeepers are so fiercely competitive that they can often be capable of a devotion seen only in pet Labradors. Who else will indulgently procure just one bottle of an obscure brand of hair oil to restore the grandfather’s receding hairline? Well, certainly not Big Bazaar or Sainsbury’s.
This brings us to where the real fight and coup will take place — in the stores that battle for a miniscule percentage of India’s elite shoppers who want the big supermarket experience. So why should these consumers, who won’t give much of their custom to kirana stores anyway, be kept away from a better shopping experience?
It’s hard to find a convincing reason. Foreign investment in retail will do what international competition did to good old Ambassador and Premier Padmini. It will give consumers choice and a leg-up in experience. Let consumers, who are far from stupid, decide winners in the organised retail game. Overseas money will create jobs in the organised sector for thousands and spawn a back-end to service the sector — from packaging to food-making to farm supplies. It will create advertising and need marketers. To survive, all big-box retailers will be forced to innovate; just deep pockets won’t do it. All of this will feed into the economy.
Indian companies still have an advantage over their foreign counterparts, because they know the consumer, understand local politics and often have the heft to influence government policy in their favour. In what promises to be a bitter rivalry, the consumer shouldn’t have to take a backseat.
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Let’s fire all the guns, but along supermarket shelves, not off the shoulder of the guaranteed survivor — the friendly neighbourhood street-shop.
Anjana Menon is a Delhi-based writer