In India, shopping for household items is usually done in small "kirana" (literally, grocery) shops. Items such as food grains, vegetables and in some cases livestock are sold unpackaged, by weight, at very cheap rates. For such goods, supermarkets would be hard pressed to match these rates. Where supermarkets excel is at selling packaged goods, which have comparatively less appeal for the majority of Indian shoppers, especially if one looks beyond urban areas.
Some multi-national players in the Indian market seem to be aware of this, and have taken the wholesale route. Notable names are Metro, a German company which does cash-and-carry retailing everywhere else; and Carrefour, a French company. Tesco only sources from India.
Indian companies, who understand the mindset of the Indian shopper, compete with the small shops by going the hypermarket route, where goods are once again sold unpackaged and by weight, at wholesale prices. This market is currently dominated by the "Big Bazaar" chain owned by Pantaloon, and "Spencer's" outlets owned by RPG Enterprises, both Indian companies.
A new major entrant to this market is the Indian giant, Reliance Industries Ltd (RIL) which plans to enter both the supermarket and hyper-market business. They plan to open over 1,500 supermarkets and 1,000 hypermarkets across the country.
As per current reports, Wal-Mart is also going to open both supermarkets and hyper-markets. With such tough competition from incumbent players as well as a major new player, Wal-Mart has some interesting times ahead in India.
Watch this space for more reports as information becomes available.
