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China invades retails shelves

As Indians scale newer heights of consumption, retail shelves are becoming showcases of the competitiveness (or, in some cases, the lack of it) of Indian manufacturing.

As Indians scale newer heights of consumption, retail shelves are becoming showcases of the competitiveness (or, in some cases, the lack of it) of Indian manufacturing. And ever larger sections of these shelves are getting filled by products from China, particularly in categories like toys, home décor items, luggage, consumer electronics, appliances, and stationery.

Almost all organised retailers are reporting a growth in Chinese imports. “In a global economy, it is inevitable that Indian products will find markets abroad and foreign goods will be sold here,” says Hans Udeshi, CEO (General Merchandise), Pantaloon Retail.

Spot the dragon
 

Samar Shekhawat, Vice President (Marketing), Spencer’s (RPG group), wonders aloud: “Why would we go to China if Indian manufacturers can give us the same or better quality, variety and price?”

Competitive products from China and other countries are benefitting Indian consumers and India Inc. should have no objection to it, says Venugopal Dhoot, Chairman, Videocon Industries. “Remember, only quality Chinese products are gaining market share in India, not the shoddy ones. For example, Chinese consumer electronics are not selling here,” he adds. Dhoot, however, acknowledges that some small producers “will have a problem” and only the “fittest will survive”.

Narayanan Ramaswamy, Director, KPMG Advisory Services, agrees that it’s quite possible that in the next few years, some Indian industries will succumb to competition from imported goods, but most Indian manufacturers will pull up their socks and compete hard. “Organised retail has started a process of discovery for Indian manufacturers. They are finding their own strengths. And they are preparing to give a fitting response to imported goods,” he says.

Shekhawat says Chinese products are winning only in categories where Indian industry has failed to provide quality products at competitive prices.

The bottom line, then, is simple: Indian manufacturers will have to shape up; or they will get edged out of their home market in some product categories.