New Delhi, March 21: If you can’t beat them, get them to join you. On that note, Mr Mukesh Ambani’s Reliance Retail plans to sing its way into small towns. The company’s retail outlets, particularly those of its green grocery chain, Reliance Fresh, have faced protests, at times violent, from political parties, small shop owners and vendors who feared a loss of livelihood, forcing it to either withdraw or curtail operations.
Reliance Retail now hopes to get over the odds by ma
king the small shop owner a partner in business. The focus is on non-metro cities where one option, among several, is to make the small shopkeeper an equity partner. Only sketchy details of the plan are available. But the broad idea, according to company officials, is to approach shopkeepers with 2,000 to 4,000 sq. ft of owned space.
The shopkeeper will have to handover the space to the company on an equity-sharing basis. The company will then renovate the store, infuse technology, place locally hired hands to man it and provide logistical backup. But the ownership of the space will remain with the shopkeeper.
As a carrot, this may work with the shopkeeper but the company still has an uphill task convincing some states. Uttar Pradesh and Kerala have banned Reliance Fresh ostensibly on ideological grounds; West Bengal had allowed it but some partners in the ruling Left Front saw to it that the few outlets that had opened were shut down.
In several other states, the chain is present only in small towns after its big-city outlets were vandalised. As a result, Reli-ance Fresh today has only 460 outlets across the country, woefully short of the March 31 target of 1,000. The hope is that by offering a "partnership" scheme to small shopkeepers, seen as a vote-bank by political parties, Reliance Fresh will be able to overcome the political opposition and allay fears about driving the corner shop out of business.
The new scheme is not a franchise arrangement, ass-ert Reliance Retail executives. Reliance Fresh head Gunender Kapoor believes this will work. "Retail is a huge market in India, and there is ample opportunity for all players, big or small, to co-exist," he says. Over the past year, Reliance Fresh has faced the heat from traders’ associations and political parties, who claim that the retailer is trying to indulge in a price war with small traders.[From Internet]
king the small shop owner a partner in business. The focus is on non-metro cities where one option, among several, is to make the small shopkeeper an equity partner. Only sketchy details of the plan are available. But the broad idea, according to company officials, is to approach shopkeepers with 2,000 to 4,000 sq. ft of owned space.
The shopkeeper will have to handover the space to the company on an equity-sharing basis. The company will then renovate the store, infuse technology, place locally hired hands to man it and provide logistical backup. But the ownership of the space will remain with the shopkeeper.
As a carrot, this may work with the shopkeeper but the company still has an uphill task convincing some states. Uttar Pradesh and Kerala have banned Reliance Fresh ostensibly on ideological grounds; West Bengal had allowed it but some partners in the ruling Left Front saw to it that the few outlets that had opened were shut down.
In several other states, the chain is present only in small towns after its big-city outlets were vandalised. As a result, Reli-ance Fresh today has only 460 outlets across the country, woefully short of the March 31 target of 1,000. The hope is that by offering a "partnership" scheme to small shopkeepers, seen as a vote-bank by political parties, Reliance Fresh will be able to overcome the political opposition and allay fears about driving the corner shop out of business.
The new scheme is not a franchise arrangement, ass-ert Reliance Retail executives. Reliance Fresh head Gunender Kapoor believes this will work. "Retail is a huge market in India, and there is ample opportunity for all players, big or small, to co-exist," he says. Over the past year, Reliance Fresh has faced the heat from traders’ associations and political parties, who claim that the retailer is trying to indulge in a price war with small traders.[From Internet]
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