ABSTRACT
The various chapters in this book highlight the significance of regulatory intervention in enabling the coexistence and sustenance of otherwise competing formats and business models that apparently represent different stages of development. Regulations in all these countries have revolved around a combination of transformative, collaborative and restrictive actions to create or preserve opportunities for existing small-scale domestic retailers (Reardon and Gulati, 2008). In the case of some countries, transformative regulations were enforced to raise the operating standards of hygiene and quality of traditional stores to make them more competitive with the modern retail stores in the organised sector. In Brazil, a number of modernisation programmes were introduced with governmental aid which resulted in the transformation of the milk production chain and the wheat industry. As a result traditional formats traded up under regulatory compulsions to match up to higher and more consistent standards of hygiene and quality. Transformative regulations in these markets have not necessarily had an impact on store size and location – suggesting that trading up in emerging markets is not necessarily in terms of efficiencies of scale but is more about raising standards of quality, scale of operations notwithstanding. Restrictive regulations have been imposed on new foreign entrants in terms of their location, opening hours and store design to protect the traditional stores and give the latter some time to become more competitive. Large international retailers such as Tesco have come under regulatory impediments to trade down in terms of store size, choice of location and opening hours. Restrictions have been imposed on the large retailers to regulate their entry into big cities or other particular places. It is worth noting that these foreign entrants are large global retailers whose ownership is most likely to be both international and tradable, thus in reality belonging to no particular foreign country.
