Changing times
The biggest fear when organized retail entered India around a decade ago was that it would obliterate the neighbourhood family store. A lot has happened since then
Future Retail’s merger with Bharti Retail is a parable about competition. The biggest fear when organized retail entered India around a decade ago was that it would obliterate the neighbourhood family store. A lot has happened since then. Many retail firms have struggled. Neighbourhood stores have modernized. The deal announced on Monday suggests that consolidation has begun. The rapid shift towards online buying means big box stores are under pressure. Some are adapting to new realities by embracing e-commerce.
The lesson here is a simple one. The most potent competition comes from new ways of doing things rather than through lower costs. Nokia was undermined by the rise of smartphones. Mobile phones finished off public call offices. SMS is under threat from services such as WhatsApp. It is much the same in the retail trade. Big firms with ambitious retailing plans have not been able to keep the digital commerce innovators at bay. That is the true lesson of the merger.
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