Indian stores fear global behemoths

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Indian stores fear global behemoths

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Smaller general stores in India are mostly family businesses which pride themselves on service. Managing them is passed from parents to offspring. They may run you a tab, so you can pay for things at the end of the month. Many deliver. They place India among the highest shops per capita countries in the world.

This sort of store is called a Kirana. India has some 50 million of them, and some 200 million people’s livelihoods depend on them.

Kiranas are independent retailers, not generally linked together. They are embedded, pocket-like, in dense neighbourhoods. Supermarkets need costly land so often build outside central locations. Their sort of organised retailing in India (supermarket trade) only accounts for around five percent of the activity.

But the increase of middle incomes there makes a sector estimated to be worth hundreds of billions of euros a year a very juicy prospect for investors. The projection for 2020 is a trillion euros. In the cut and thrust, many kirana-keepers are afraid of becoming extinct.

They have defined flexibility, hole-in-the-wall ingenuity and tenacity, understanding the importance of keeping customer loyalty, but some predict the worst.

“This will have a deep impact,” said one elderly, downcast grocer. “It will fuel unemployment. Small shopkeepers will be forced to close because they will not be able to meet their expenses.”

Foreigners seeking new pickings will need to meet some challenging conditions. Retailing to Indians on a grand scale is not for the faint of heart.

The new government policy lets international chains own a controlling stake of 51 percent as long as a city has more than a million people and the state it is in agrees to receive their minimum 77 million euro investment, and providing the venture sells at least 30 percent made-in-India goods.

Traders, transporters, manufacturers, farmers and other suppliers all stand to be affected, weaving a new social fabric in India with the advent of major global retail firms.