Multi-brand retailing failures in India

Abstract

The last few years have seen both the boom and bust in multi-brand retailing in India. Many major Indian companies such as Reliance Industries, Aditya Birla Group and Tata Group entered multi-brand retailing drawn by the 40 percent growth rate seen in the 2006-2008 periods and the Indian government policy protection against foreign firms2 entering multi-brand retailing in India. However, many multibrand retailers in India have fared poorly in the recent past and some have reduced their number of stores or have closed down.Clearly the current economic downturn has made Indian consumers more conservative, but the failure of many multi-brand retailers has much to do with their inability to build an effective and consistent strategy for their business. Evidently, these multi-brand retailers failed to develop a strategy that created superior value for customers, either through cost advantages that could be passed on to customers as significant savings, or by providing superior service compared to small local stores.