![\"handshake\"](\"http:\/\/rai.net.in\/blog\/wp-content\/uploads\/2013\/02\/handshake.jpg\")
<\/a><\/p>\nThe theme of the discussion was on whether Retailers can collaborate with one-another. There have been examples of successful, collaboration- based business models in India \u2013 the most prominent of them being AMUL. But there have also been examples of failures \u2013 e.g. loose collaborations of grocers in Rajkot and among retailers in Delhi which failed on perceptions of cartelization.\u00a0 More importantly the panel commented on the fact that there are a myriad range of small examples of collaboration \u2013 whether for sourcing product, dealing with FMCG manufacturers or creating collaboration across value add services (e.g. laundary pick up & Delivery services at retail outlet) which are not reported on by the media because the collaborators are small, unlisted companies.\u00a0 This groundswell of innovation is across cities, segments and components of the value chain.<\/p>\n
Some other insights:<\/p>\n
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- Collaboration is more than just \u201cbulk buying\u201d \u2013 but its easiest to start with bulk buying since there can be an immediate commercial impact on all the participating collaborators.<\/li>\n
- It works best when there is symbiosis \u2013 i.e. the collaborators do not compete with each other. The boundary could be geographical (same category of retail \u2013 e.g. electronics) in different cities.<\/li>\n
- It does require the partners to give up a certain degree of autonomy \u2013 to \u201clet go\u201d and to trust the other partners. This is why collaboration models take time to mature. \u00a0There was speculation on whether a \u201cprofessionally\u201d managed company could collaborate better than an owner-driven company,\u00a0 because the latter would struggle to \u201clet go\u201d \u2013 but that phase of the discussion was not conclusive.<\/li>\n
- Collaboration can be a source of competitive advantage. Between the Kiraanas and the organized retail is a whole segment of mid-market retail – \u00a0which was christened by Gulshan Bakhtiani (Director – Wellness Forever) as \u201cOrganizing Retail\u201d. These retailers act like \u201cmodern\u201d retailers \u2013 they provide cash memos, adopt technology,\u00a0 work on a self service model i.e they look and feel like organized retailers. But their relevance to their local catchment is high and is unlikely to change anytime soon because of their ability to cater to the individual consumption tastes of the 2 to 5 km catchment that they serve. This is most visible in categories such as food and beverages.<\/li>\n<\/ul>\n
Collaboration can also help Indian retailers \u201ctake on\u201d\u00a0 the wave of overseas retailers expected after FDI related investments materialize \u2013a view expressed by Chetan Sangoi (Owner, Sarvodaya Supermarkets) and seconded by Mark.\u00a0\u00a0 Its interesting to note that not all large global retailers have succeeded outside their home market (e.g. Carrefour, Metro who tried to enter the US,<\/p>\n
Tesco\u2019s move into continental Europe), event as consumer product companies have. See graphic below.<\/p>\n