I have been in India for much of this week as part of the retail study tour I’m undertaking with a colleague from my Tower Systems newsagency software company. We have been broadening our experience and knowledge of retail beyond what we already knew from Australia, New Zealand, the Pacific Rim region, the US and Europe.
This week in India we have seen very different retail situations from the structured to the unstructured. Just as we have seen over the last three weeks in the Philippines and Vietnam, the retail section is highly competitive – way more so than what we are used to in Australia.
There are kind of districts where similar businesses clump together. In Vietnam, in Ho Chin Minh City, we were in the photocopy services district (seriously) and saw at least twenty photocopying businesses right next to each other.
In India this week we saw something similar. For example, we passed through what could only be described as the ladder district – at least eight or ten ladder shops in a row. Yes, ladders.
I took the photo on the road from NOIDA to Delhi to illustrate the competitive situation evident not only in India but also in Vietnam and the Philippines – competitive photocopy businesses located next to each other. There were more than the two photocopy businesses in the photo.
Seeing this up close competitive situation has left me wondering what it would be like with a newsagency next to another newsagency. Or a string of twenty newsagencies next to each other. Imagine the challenge of differentiation. Imagine the opportunity of this.
I think this is an interesting prism through which to view and run our businesses …. How we would operate if there was a competitor (or more) next door.
Yes, I know that we have competitors in various categories: magazines, stationery, greeting cards. That is not the same as a business just like yours located right next to you.
How would you act? What would you do to differentiate? How would you compete?
I am certain that if we think about such an intense competitive situation we will soon discover ways we can differentiate our businesses today. The Indian photocopy service businesses in the photo have to. Beyond price – as price is the easy way to differentiate. No, it really comes down to customer service, the customer experience.
Our need to differentiate around customer service is one of the key takeaways from by recent trips overseas.
We have to run our businesses and compete as if there is a business exactly like ours next door to us.
Now is not the time for us to be average.
In Indonesia , HK or singapore , we have centers for mobile phone , eloctronics, garments or anythiong else. people from around the country buying them singlely or wholesale and they send them all over the country or export them. we used to have a hardware store any like in india they are at least 20 next to our shops. our margins are between -5% to +15%. we have very high turnover and 300 milion pop. not like australia
why stock an item with -5% margin…. i have heard of lost leaders, but below costs??
Actually you will find that there is a limited number of (fatcat) distributors for an area and these side by side outlets are a kind of subagent for them.
Having lived there I can say they certainly don’t compete on service. It’s more a case of trading skills and trying to find points of difference in other product offers and price points.
Eg where we lived we would buy our papers and mags from a guy who was also a money trader and gave us really good exchange rates.
Peter, yes margin sometimes was below cost due to competition or overstock or goods that we import have not arrived at port but somebody bought them all with better exchange rate.
Full marks for your endeavour. You must be the most widely travelled Australian newsagent in history. In fact you’ve probably travelled further in the last year than all newsagents combined in the last 10 years.
Peter I’ve been very lucky to have had the opportunity. Tower Systems serves in excess of 1,750 newsagents and 2,500 independent retailers in all. Knowing what other retailers are doing, in all sorts of situations, is key to innovation. The recent trips have been wonderful, eye-opening and challenging.
I can’t see that style of retailing in parts of emerging Asia surviving once the big boys move in. Their real competition is yet to arrive.
Peter not sure if I agree. In the Philippines we saw the most amazing mega malls including international brand representation. Then there were markets outside the malls. In the US we see malls and then more local situations. Indeed, the majors now have a local market strategy as they think that local is where they will see growth.
Fair enough, it must be different in reality to what I’ve seen on television. Everything shown on television from the United States has reported the devastation wrought by multi nationals on mom and pop businesses from the city to the country. And in India I saw a program reporting the mass upheaval on traditional market and family run businesses with the arrival of joint venture supermarkets. Local businesses may still thrive, but I think the days of “ladder” stores and groups of stores all selling the same items might be numbered.
Hard to say. In Vietnam I was in the photocopying district in Hanoi and saw a run of at least 25 photocopying businesses in a row.
There is no doubt that retailing is changing the world over. What we know today will be quite different 5 and 10 years from now – the challenges of our channel aside.
if we talke about retailing, yes. when the big boy like fourrecarre big giant megamall coming , it devastated alot of traditional retailers, that’s why we quit our business before we lost our business there. megamall fourrecarre sells everything from chips to motorbike in store.