India is undergoing a retail revolution. Delhi’s first modern supermarket opened last week and saw more than 8,000 customers on its first day. Most of India’s 1 billion people buy their goods from the millions of mom-and-pop shops that line the streets, which offer unpredictable quality. But this environment marks the way that it has been done for years.In a revolutionary move, Reliance Retail is opening modern supermarkets that offer air-conditioning and labeled fresh packages of everything from carrots to flour to sugar. The popular stores have begun taking business away from the local business owners, and because in India, many people own their own business and do not want to work for others, the new stores have provoked considerable criticism.

In response, Reliance is building a supply chain that provides small vendors access to products as well. Although product transportation remains rather inefficient, with 40% of products going bad before even reaching customers, Reliance is confident that it knows the Indian customer and carefully avoids bombarding the country with stores, as Wal-Mart has done in other locations. The company plans to create a half-million new jobs and continue to expand the chain.

By the time other companies choose to move into India, Reliance likely will have a strong hold on the market. By law, international companies must partner with Indian firms to do business, so Wal-Mart and Carrefour have yet to expand to India.

The arrival of supermarkets represents a huge change for India, not only because of the change in consumer behavior but because it marks a shift in the entire retail industry. Ultimately, higher-quality products and improvements to the transportation system demanded by the new model should prove beneficial to the country.

Discussion Questions:

1. What steps is Reliance taking to ensure the success of its marketing strategy?

2. In a global marketplace, what advantages does Retail Reliance still have?

Laurie Goering, “India Grapples with Growth of Modern Supermarkets,” The Baltimore Sun, February 04, 2007.