I personally feel that we do have a huge market which would give these companies ample opportunities to capture market share in their respective domains. Also, since most of the products sold in these stores are low involvement products, I feel it would be a case of the ‘Early bird catches the worm’, more than any other thing. Retaining customers would prove to be the biggest challenge.

The sheer scale of these companies hints that they do have the economies of scale to provide competitive prices. Hence we can rule price wars out to an extent.

So this points towards lots of Customer Loyalty programs etc in the offing.

No updates on the reliance outlet in hyderabad yet, will update as and when i get any info.

Regards,

Venkat

Any update on how the Reliance initiative is going on in Hyderabad? What I have come to learn from secondary sources is that Reliance is finding the Hyderabad market a little challenging as of now. And the store is still struggling to pick up.

However, the direct procurement model is an interesting concept - something that Reliance can utilize to the fullest given its existing logistics and supply-chain network.

Even I am looking at the developments with a keen eye and waiting for something more concrete vis-a-vis company performance and results.

Hypermarket concept would still remain a ‘testing-the-waters’ case. Primarily because the concept is still to catch people’s fancy. Mumbai saw the launch of Hypermarket - one of the first attempts to target the top-end format in retail. I do not think that it is faring any better than a Spencer’s or Big Bazaar.

I still believe that the real action will start once the biggies come in. Just heard on the news about the Wal-Mart and Bharti strategic partnership. The game is heating up now :-).

Cheers,
Gagan

Very nice article.

Regarding the reliance venture, ‘Reliance Fresh’ ,they have decided to go in as a dedicated grocery superstore.In Hyderabad, The efficiency of Reliance’s much talked about farm to folk supply chain is being put to test. This particular store is directly procuring from the farmers of Andhra Pradesh, Karnataka and Tamil Nadu giving it a quality and pricing advantage, something that Reliance hopes will fuel its success.

Next in line are different formats that will also house a pharmacy, and section for apparel and consumer durables.

And six months later, Reliance hopes to roll out its hypermarket format . It would be interesting to be see how successful this strategy turns out to be.