Saturday, September 8, 2007

Hyper Market Vs Small Retail Store Format

On the occassion of Independence Day in India in 2007, Relaince Retail opened the largest Hyper-Market in India called Reliance Mart in Ahmedabad. The hypermarket is spread over 1.65 lakh sq.ft. and deals in all types of merchandise under a single roof.

However in India the Hyper Markets have not done very well in the past. There have been some attempts in the past, that have not grown the way it was planned for. Around the world, eight of the 10 biggest retail chains revolve around different variants of hypermarkets. So Wal-Mart has its Sam’s Club, Carrefour its own signature hypermark, as does Tesco, Metro, Krogers, Sainbury’s and Aldi’s. However people aware of retailing know that retailing is a country/culture specific thing and the same formats are not successful all over the world.

In 2004, RPG Retail had opened up the mega-mart "Giant" with ambitious plans for growth, that never took wings. incidetally, Raghu Pillia who is now heading the Reliance Megamart efforts was heading RPG Retail's efforts. Giant was later renamed "Spencers" and has not grown as planned. Similarly, K Raheja’s Hypercity has not grown beyond the single big-box store in Malad. It’s the same story with Star India Bazaar, the hypermarket from Trent. Magnet, another hypermarket floated by Ashok Maheshwari, a Mumbai-based entreprenuer, hasn’t done much either: it has opened two stores in nearly two years of existence.

The only success story has been Big Bazar from Biyani's Future Group. It has went from a three store operation in 2000 to a chain of 66 currently.

However, what is growing presently are the small store formats. Subhiksha, with its 1200 sq. ft. discounting format has become the largest domestic retail chain, on the verge of become the first 1000 store chain. Reliance Fresh, now close to 300 stores, Aditya Birla Retail’s More and ITC’s Choupal Fresh are all making waves as small retail formats.

The organised retail market in India has just started gaining steam. It will evolve over the years and would be interesting to find who wins the battle at the end.

Share your views on the evolution of retail in India. Where would you like to shop?

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