Monday, August 22, 2011

Does Laos need a Big C (or any other) supermarket?

On the Lao FAB list (members only) is an interesting discussion about weather Laos needs a Big C supermarket or not. While some people say it is good because it establish a supply chain management, jobs, taxes and a distribution channel for local producers, others argue that it brings profit for Thai companies, and they will be the ones who supply the markets.

Someone else pointed out that supermarkets will kill the small shops and markets.

First of all, Seven Eleven proves that there is a market for small shops if they are part of a chain that can compete with its purchasing power. Laos is far from developing it's own supermarket chain, for several reasons (mainly lack of investors and no benefits like tax exception). For the suppliers, supermarkets buy usually as close as possible if the price is compatible. If they can save money (and tax) with Lao eggs, they would buy Lao eggs - if the quantity and quality is guaranteed. But this might be an issue.

In general, I think foreigners should be careful to deny Lao people any development. I haven"t seen a better model than regulated capitalism and open markets right know, and as far as I know the system in East Germany failed. So, it is nice dream to have a country of happy people and small shops, but reality is different. Lao people want to participate in consumption, as they do every week when they go to Thailand. Just some cannot afford that. But should they denied having access to local supermarkets then?

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