Retail insights

Citation

Broadbridge, A. (2008), "Retail insights", International Journal of Retail & Distribution Management, Vol. 36 No. 9. https://doi.org/10.1108/ijrdm.2008.08936iaa.001

Retail insights

Article Type: Editorial From: International Journal of Retail & Distribution Management, Volume 36, Issue 9

This issue of retail insights is themed around Indian retailing. It draws on work from Indian colleagues to raise our understanding of this little known and increasingly important retail market.

In the first paper, Jaya Halepete and K.V. Seshadri Iyer’s paper examines the Indian apparel retail market and applies the concept of Dunning’s (1981) eclectic theory to further our understanding of the clothing retail environment in India. Their paper provides a background to the macro environment, including the demographic composition of the Indian market, an overview of the economic and political situation, as well as cultural factors. They also outline the regulations, infrastructure and technology that impacts on the retail market. They then consider the micro-environmental factors of the clothing market, including Indian consumers and manufacturers before turning to the theory of the eclectic firm and the ownership, locational and internalization advantages. They advise that foreign retailers need to understand the strong and distinct culture, population and local conditions of the Indian market as well as some of the risks unique to India.

Anirban Sengupta takes an historical perspective and traces the development of Indian retailing, focusing specifically from 1971. He explains that in the mid-twentieth century the retail focus was on basic necessities rather than luxury items, and retailing mainly comprised of “mom-and-pop (Kirana) stores”, “wet markets” or “bazaars” and also government run public distribution shops and co-operative stores. Street vendors or mobile vendors have also been an important retail format in India. Nowadays self service rather than counter service outlets are the norm, and he argues that “modern retail” comprises large-scale, modern-format and organised retailing. The role of manufacturers, consumers and retailers have all impacted on the growth of modern retailers. Having outlined the move from counter service to self-service retail, Sengupta then outlines the emergence of four large-scale food retailers in India: Nilgiris Supermarket, MarginFree Supermarket, Foodworld Supermarket and Foodbazaar.

Jaya Halepete, K.V. Seshadri Iyer and Soo Chul Park explore the challenges Wal-Mart may face as it expands into the Indian Market. In so doing, they first provide a brief overview of the development of Wal-Mart in the USA and then trace its international expansion. They go on to examine the advantages and disadvantages of Wal-Mart’s entry (and subsequent exit) into Germany and South Korean markets using Dunning’s (1981) eclectic theory. They outline the unique distinctions of these markets and how Wal-Mart failed to respond adequately to the local markets, arguing that the local competitors were better placed to understand the needs of the local consumers. They explain that Wal-Mart’s entry into India is to be via a joint venture with Bharti Enterprises, a mobile phone company. Their findings suggest that Wal-Mart may face various locational challenges as well as ownership problems in their attempts to expand into India. The company faces competition from the large organised retail stores as well as the unrecognised retail “kirana” stores and family owned stores. The paper thus adopts a case study approach and may be useful in understanding the various challenges companies face in their attempts to internationalise their operations.

To complete the themed issue on Indian retailing, Rajesh Srivastava provides the western reader with an idea of the changing retail scene in India. He provides a brief description of the retail formats currently found in India and then goes on to describe some of the leading players in the Indian industry, Pantaloon, Landmark Group, RPG Group, K. Raheja Group and Tata Group.

Adelina Broadbridge