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COLUMN

Is it retail invasion?

Asjadul Kibria
Two separate news items have appeared at almost the same time.
One is from the next-door neighbour: a cash-an-carry superstore in India is to be opened under a joint venture between India's Bharti Group and Wal-Mart, the world's largest retailer. It is the first initiative through which foreign capital enters India's retail market, with large expansion plans.
The other is within the country: ACI Logistic, a subsidiary of ACI Group, has unveiled plans to expand its retail chain business outside Dhaka.
The basic similarity is that big businesses are aggressively entering the retail sector in different economies.
In India, the formal entry of Wal-Mart may be the latest event. But the process of 'Wal-Martisation' was initiated some years back when Indian conglomerates began investing in the retail sector.
RPG Group, Pantaloon Retail, the Wadias, the Rahejas, Aditya Birla Group and Reliance Group now have a strong presence across India and are trying to scale up operations. Although the move has faced some resistance in many places, growth is present.
Thus the number of superstores in urban India are rising rapidly and attracting consumers to buy in bulk from the stores, enjoying several comforts. People are apparently happy as they are walk across the spacious floors, picking products from shelves. From household consumer durables to groceries like rice, vegetables, onions, and potatoes are all available under a single roof.
Superstores like Agora, Meena Bazar and Nandan are also growing in Bangladesh, although at a slower rate. Shapnaw, the initiative of ACI Logistic, is the latest in the rally. Beside these large superstores, a number of medium and small superstores are also flour-
ishing.
Superstores offer a wide range of products so that people can make their weekly or monthly household shopping. To attract consumers, there are various promotional offers. The dazzling malls with chilled interiors also accept credit cards, reducing the risk of carrying cash. People do not mind bearing additional costs because of such amenities, in comparison to traditional kitchen markets and street vendors.
Although the number of superstores is still low and mostly centralised in the capital, there is a trend of setting up semisuperstores in other big cities in the country. ACl's move to disperse, outside Dhaka and Chittagong is an indication that retail marketing opportunities around the country arc being
grabbed.
Despite insufficient information regarding the size of the country's retail market, it is clear that millions earn their livelihood from it. The volume of retail transactions is also big undoubtedly. However, the retail sector in Bangladesh is pre dominantly informal or unorganised. There are no reasonable or comprehensive official data on the sector. But big businesses have surely researched the market.
Interestingly, strong corporate houses have mostly entered the retail sector on a large scale.
Rahimafrooz extended operations to the retail sector by establishing Agora, after consolidating operations in automotive and power and energy'. Gemcon Group set up Meena Bazar, after a strong foothold in other areas, including
the food and beverage industry.
ACI Limited has also consoli-dated its position in pharmaceuticals and agribusiness, prior to starting the new venture.
Against this backdrop, one can now put forward a relevant question: Is the entry of big businesses in the retail market in Bangladesh a retail invasion?
In fact, when big businesses take control of the supply chain of a country and outnumber the people who depended on retailing essentials, it is termed as retail invasion. It is also known as 'Wal-Martisation' as it is an attempt to overturn the traditional way of selling goods. Indian fortnightly magazine Frontline made extensive coverage on the subject in die context of India two years back.
As big businesses have strong
financial and logistic support, they can easily grab the supply chain of essentials and other household items. Superstores also have large storage capacities with preservation facilities. But traditional retailers, hawkers and street vendors enjoy no such facilities.
Traditionally, retailing is a way of life for millions of poor in the country. Thus, displacing people from the job will aggravate poverty further. Although an expansion of corporate entities in the retail sector in the country is still nominal, current trends show that they are moving forward. The mow is organised and formal. It is not possible for small retailers to fight and sustain in the long run, unless alternate measures are taken.
The writer is a journalist and can be reached at asjadulk@gmail com