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Version Retail
Are hypermarkets a boon to the retail industry?
Are hypermarkets a boon to the retail industry?
Jan 02, 2011
Did a common man ever think of buying his daily items of consumption like dal, rice, salt, sugar, fruits and vegetables from a fancy store a few years back or even purchasing a fancy item of clothing from a kirana? Both sounded absurd, unconventional until a couple of years ago but hypermarkets as they are called have become reality in today's world and are as ubiquitous as any kirana store down the road.
What is a Hypermarket?
The term ‘hypermarket' is not very familiar to many, which in simple terms means a superstore that combines the features of both, a supermarket and a departmental store. It is typically massive in size, and houses heterogeneous products and commodities, ranging from groceries, fruit and vegetables that kiranas store to all other product categories like apparel, electronics, cosmetics, cutlery, consumer durables that departmental stores offer. Until a few years back the concept of hypermarkets was nascent and people could only bank on kirana stores and other shops for their respective needs. It was Reliance Retail that first forayed into the retail space with ‘Reliance Mart' as its first hypermarket in India in the city of Ahmedabad. This format became popular and spread to other cities like Mumbai, Chennai and Pune. Saravana Stores, Spencers, Big Bazaar and Vishal Megamart are other names to reckon with.
The concept of hypermarkets has emerged now with greater benefits offering all kinds of goods under one roof. Hypermarkets that are pouring discounts have become largely popular with the masses and people are seen flocking such stores in large numbers. The hypermarket culture has thus taken retailing to a new level in India. The success of hypermarkets is evident and can be studied by taking the example of Big Bazaar. Big Bazaar is an Indian version of Wal-Mart. The reason for choosing Big Bazaar is that their targeted clientele is the middle class and the lower middle class of people who prefer goods that are value for money rather than branded items of snob appeal. Since the above two classes make up the chunk of the Indian population Big Bazaar has a wider customer base.
In strict economic terms, the retailing industry falls under the monopolistic form of market structure where there are many sellers and buyers and where product differentiation is the key to survival. The sellers have control over prices and volumes of production with the sole aim of profit maximization. The apparel industry is a fine example of monopolistic competition. On the other hand, a perfect competition is a market where both products and prices are identical. There are a large number of sellers and no single seller can influence the price. They are the price takers. Items of daily consumption like dal, rice, salt, sugar fall under this category.
What intrigued me as an analyst and a writer is that hypermarkets have brought in price differentiation in goods sold under perfect competition and that cannot be differentiated otherwise. Products of daily consumption as mentioned above are offered at highly discounted prices whose price remains identical if purchased from kirana stores. Thus aggressive selling through price competition can be seen and is the unique selling strategy of hypermarkets. Product differentiation can also be seen by combining different products across categories. The Sabse Sasta Din offers loads of discounts on product combos in different categories like the apparel, electronics, cutlery, groceries etc.
But how does the economics of a hypermarket work? Due to a large clientele, there is aggregation of demand, so mass production takes place that leads to economies of scale. Hypermarkets can thus operate on a no profit no-loss basis providing goods at very affordable prices. In an economic perspective, what are hypermarkets actually doing here? They are creating a space, a need, a demand for goods, and a demand that is artificial. A consumer otherwise may not have a need to buy certain goods, but after viewing flashy advertisements in the newspapers gets wooed into buying them. The same goods that a consumer may have to purchase at different shops are being made available under one roof and at throw away prices. The print media via newspapers and the outdoor media through billboards have a great role to play here. All items presented pictorially seem to be more attractive. Most of the times, a consumer would make a visit for the experience and not out of a genuine need to buy. This is an artificial demand. Thus the purchasing power has increased but without an equal rise in incomes. Hypermarkets are thus creating value out of nothing. They are the demand drivers in an economy. They boost demand in times of recession. In the current food inflation where vegetable prices have skyrocketed what is the role of the hypermarkets? I feel they have a great role to play. Procurement and storage of goods in wholesale quantities are areas where hypermarkets have an upper hand. If they are able to offer vegetables and essential items at lower prices consumers will not feel the pinch.
Lastly, the ongoing debate on whether the hypermarkets would wipe out the kirana stores is unfounded. The convenience of buying goods that a kirana store offers a consumer due to its proximity cannot always be given by hypermarkets. Secondly a personal rapport with your nearby kirana shopkeeper cannot be established with a hypermarket salesman due to the presence of large crowds. A kirana storekeeper may also allow regular customers to buy on credit and in recent times all kiranas are praoviding a service of home-delivery of the most essential items which makes purchasing very convenient. Thus kiranas are here to stay and as strong rivals to the booming hypermarkets.
About the Author
Rashmi Ponkshe
How can I run a retail version of Bioshock through steam?
I have a cd version of Bioshock 1 and i want to be able to run it through steam so i can chat in game but its not detecting. 
plus when i installed it it didnt have a desktop shortcut :O
There is a "Add a Non-Steam Game" option in Steam's "Games" tab. You can try that to add your game to Steam and use it's functions.
For the desktop shortcut: open your Bioshock directory, find the "Bioshock.exe" or the file with the most similar name to it, right-click on it, choose "Send To" then "Desktop"...
ROTF Voyager Stratosphere (retail version)
