News: In the war of brands, small re­tail­ers lose big time

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Busi­ness is not as usual any­more for the small ven­dors as the brand stores have tipped the dy­nam­ics of re­tail mar­ket­ing to their favour by cap­tur­ing the most of the gro­cery and fash­ion tex­tile seg­ments in the met­ro­pol­i­tan cen­tres of the coun­try.

In cities like La­hore, Karachi and Is­lam­abad, be­sides multi­na­tional gro­cery and con­sumer goods stores, some city based re­tail out­lets have also opened branches across the length and breadth of these cities. Small re­tail­ers in these cities are in a fix as ev­ery large fab­ric pro­ducer has opened hun­dreds of out­lets of their brands through­out the coun­try. These out­lets not only sell cloth but also ready­made ladies/ chil­dren dresses. In ad­di­tion, they also mar­ket shoes and ar­ti­fi­cial jew­ellery un­der their brand names. Some of them even sell gar­ments made by im­ported fab­ric and stitched in Pak­istan.

These brands do not deny their prod­ucts to the tra­di­tional small re­tail­ers but they (the re­tail­ers) can­not com­pete with the branded shops that of­fer dis­counts to reg­is­tered buy­ers and an­nounce dis­count deals on a reg­u­lar ba­sis. These branded out­lets have even branched out out­side Pak­istan paving way for soft launch of Pak­istani brands in Dubai, Eng­land, United States and Canada.

The or­di­nary re­tail­ers seemed to have been caught un­awares by the changes that have been tak­ing place in the mar­ket­ing for the past five to six years.

Ini­tially, they pinned the slow­down on the eco­nomic re­ces­sion; how­ever, they soon re­al­ized their mar­kets have been poached by the pro­duc­ers that have been sup­ply­ing them the fab­ric.

When the multi­na­tional gro­cery and com­mon item chains started open­ing a decade ago, the large gro­cery stores of the coun­try ex­pressed con­cerns fear­ing to­tal loss of mar­ket to them.

They, how­ever, sur­vived the com­pe­ti­tion by im­prov­ing their ser­vices, qual­ity, and rates, while the re­tails shops op­er­at­ing in larger mar­kets suf­fered as they could not match the pe­ri­odic dis­counts of­fered by the multi­na­tional chains.

Only the shops estab­lished in res­i­den­tial neigh­bour­hoods pushed their busi­nesses ahead with­out much prob­lem. It is be­cause the neigh­bour­hood con­sumers buy in smaller quan­ti­ties and on credit be­cause they are trusted by the shop­keep­ers. This fa­cil­ity is not avail­able at re­tail out­lets in larger mar­kets.

Most of those re­tail out­lets, which are un­able to hold on, are paving way for brands own­ers, who are either buy­ing or leas­ing those shops; whereas those, which are yet to find a buyer, are op­er­at­ing at loss or nom­i­nal profit.

Sim­i­lar phe­nom­e­non has been seen in sweet shops. In La­hore the or­di­nary sweet­meat/ con­fec­tionery shops are paving way for branded sweet­meat and gro­cery stores. Brands like Gourmet, Doce and Cakes and Bakes have set up shops in ev­ery nook and corner of the city wip­ing out the tra­di­tional sweet­meat mak­ers called ‘Hal­wais.’

These chang­ing trends are signs of a grow­ing mid­dle class in the cities. One thing that is com­mon in these brands is they mar­ket prod­ucts both for mid­dle and lower mid­dle seg­ments of the so­ci­ety.

Re­tail­ers are still ac­tive in elec­tron­ics as the num­ber of branded shops for mo­biles, tele­vi­sions, and re­frig­er­a­tors is lim­ited. The brand own­ers in these seg­ments are keep­ing their sales up by pro­vid­ing sat­is­fac­tory af­ter-sales ser­vices.

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