“Club of Knowledge Hunters”

Big Bazaar: Great Indian retail story turning niche & premium

Posted by superstar23 on November 2, 2008

In its infancy, organised retail in India has become amoebic—flexible and ever changing. While the great Indian retail saga has just be

gun, the unpredictable Indian customer is forcing retailers to shun their morphed formats and be a little more experimentative than before. Across cities, retailers are providing a range of brands and products to match consumer preferences.

Sample this: While Future Group’s Big Bazaar closed its two outlets in Ahmedabad, it launched its ambitious luxury format Ethnicity recently. Considering the urban-poor consumer in one pocket of the city couldn’t help the group realise its target, it has now focussed on the cash-rich consumers. The uncontested king of Indian retail, Kishore Biyani, however, is unperturbed with closures and intends to introduce yet another format ‘Central’ to the city in near future. “For any retail venture, the success rate is mere 20-30%. So, I do not think that there are any issues with stores closing down,” asserts the man who gave the country its first taste of organised retailing. Pantaloon Retail (India) zonal chief (Gujarat) Anand Adukia adds that there is room for every player in this kind of market. “You have to keep experimenting and create a category to click with your customer,” he says.

Sector analyst Harish Bijoor points out that under the present circumstances change is the only constant. “Big Bazaar operates on the cafeteria approach whereby the retailer intends to convert footfalls for groceries to generate sales for other products like garments, consumer durables, et al. However, considering Big Bazaar has not been able to sustain consumers’ interest (in Ahmedabad) making it difficult for the company to continue with it, the group has decided to focus on Ethnicity and Pantaloon that are niche categories. Big Bazaars are the dollar stores of India, but as competition in the ‘mass category’ is huge, Future Group is learning from its experience and becoming amoebic in its offering. It has not arrived at a format and depending on a city it is changing its approach,” he points out.

No wonder then that the much-touted RelianceMart in Ahmedabad from the Reliance Retail stable has shrunk its operations by one-third to accommodate its partner Marks & Spencer in the same property. Reliance is even considering merging the management of hypermarkets (Reliance Hypermart), supermarkets (Reliance Super) and convenience formats (Reliance Fresh) just a year after these formats started as separate profit centres to make its retail arm more efficient.



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