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Changing Face of Kirana

The Indian manufacturers and marketing companies have resorted to an aggressive promotional activities in the kiranas by hiring exclusive shelves. Products of these companies get captive shelf space, a win-win situation for both the parties. Certainly the aggressiveness has come in the wake of the arrival of foreign companies with cash-and-carry operations.

While many of these companies are prospective suppliers to the larger formats, but at the same time they are well aware of the negotiating power of the large formats. Every Day Low Price (EDLP) most prevailing strategy of large formats is again cause of worry. This has also given the kiranas a shot in the arm, in terms of improving their own image. The kiranas are getting more organized coupled with more customer friendly environment. Kiranas have also resorted to innovating ways of Customer Relation Management, largely being seen as domain of large corporate till now. Price war, which has been prevailing in the FMCG sector benefiting the consumers, is going to go further with the business model of the larger formats founded on "low prices for consumers and squeezing costs out of the system".

The brand manufacturers need to walk the tight rope while planning their response to large formats to ensure that while they get to supply the retail giants, they also don't alienate the local kiranas. While dealing with the large buyers like Wal-Mart or Reliance Retail, they need to understand the relative power structure of the buyers and them will change. National brands, such as Hindustan Lever and Procter & Gamble, should find innovative ways to help kiranas with tailored services to ensure they also thrive and do well.

Kishore Biyani - face of Indian Retail Industry - says, "In India, no retailer has made big money so far. The money is in the peripheral activities; it's never in the retail itself. It's the power of retail that gets you the money; it's never the transaction that gets you the money." The ambivalent tone of the statement suggests that the underlying dynamics of stand-alone retail are not attractive.

Local Kirana is here to stay for ever, in its new avatar!

Concluded.

* Contributed by: -
Rakesh R. Panday, is an independent Brand Consultant at Jamshedpur and also enrolled in Ph.D. Programme at www.bitmesra.ac.in with subject, "Managing Brand in Retail - Study of Major Initiatives in India".