Retail chains chained

Retail chains chained

The government's plan to prohibit big retailers from operating
outside provincial capitals could hinder the development of
marketing services, which are vital to the program of enhancing
consumers' appreciation of domestic products. The plan, disclosed
after the first cabinet session on poverty alleviation early last
week, appears to be an emotional and unproportional, rather than
rational and pragmatic, response to the concern for small
businesses.

No one is denying the need to reserve particular areas of
business for small enterprises to protect them from direct,
fierce competition with the big players. But when it comes to
marketing services, an outright, blanket ban on big retailers or
retail chains to do business in regency towns could prove to be
counterproductive. Such a measure runs against the market forces
and trends. It also will deny small local retailers access to
better retail technology and concepts, hinder retail development
at the expense of domestic manufacturers and tax revenue for both
the central and local administrations.

Compulsory partnerships, either through subcontracting
arrangements for procurement or rental space in department stores
and modern shopping centers to small firms, may be more effective
in enhancing the development of small businesses. Such
partnerships would facilitate the transfer of new technology and
skills.

The format and concept of retailing need constant adjustments
to the constantly changing ways of people's lives and needs,
brought about by economic development and the dramatic progress
in telecommunications. Small retailers, let alone ministores,
obviously cannot afford to make the adjustments themselves.

Domestic retailers, to remain competitive and capable of
attracting more customers, should always monitor demographic
trends, changes in work patterns, lifestyles and shopping habits
of consumers, and tailor their concepts and strategies to the new
trends and changes. Retailing is a continuous process of
adjusting the assortment of goods and prices to daily life and
the purchasing power of a wide variety of consumers. For example,
as land costs in major cities have risen far beyond the
purchasing power of most salaried workers, housing complexes have
tended to move to the suburbs and retail outlets obviously should
follow to retain customers.

Because people's habits and needs reflect the income strata
and individuals' educational levels, there is always a wide range
of business opportunities for all kinds of retail formats, from
the traditional, open wet market, roadside vendors and minimarts,
to supermarkets and mega department stores. Hence, regencies or
towns outside provincial capitals can accommodate big, medium and
small retailers.

Totally closing regency towns to big retailers will not
enhance the development of small retailers, especially if such a
measure is not supplemented by training programs specially
designed for small traders. Business partnerships are the most
effective means of helping upgrade the skills of small retailers.
Such a scheme would be sustainable in the long term because the
relationships would be mutually beneficial.