Emerging barriers for international firms because they cannot flow

Emerging countries have weak
distribution channels, and this is one of the negative character of emerging
countries. In
emerging markets, regional differences in shopping behaviour based on brands
are more likely to reflect differences in distribution systems (Schlager and Maas, 2013). Weak channels create
disadvantage for supplying products by the international firms. In large cities of
emerging countries, distribution channels are often through small,
hole-in-the-wall shops such as the ”paanwalla” shops in India, the ”tiendas de la
esquinas” in Mexico, and ”sari-sari” stores in the Philippines (Banga
& Mahajan, 2005). The
lack of railways, roadways for big lorries, securities and electricity of roads
creates serious barriers for international firms because they cannot flow
products across country. As Jean-Luc Chereau, head of Carrefour in China suggests,
lack of distribution channels (railways) effected seriously on this issue
because they try to serve fresh foods and vegetables to their customers across
the country, but transportation time is 3-4 days between each big city reason
to this is, always they were trying to transport their products with big
lorries.  In some developing countries,
villages don’t have retail outlets at all, and some distribution opportunities,
such as market days or carnivals, are temporary in these areas. Egede E. (2013)
argue that government requirements have a significant impact on distribution
channel selection, because “Local Content” Laws may require products be
manufactured (fully or partially in the local countries). Agents may be forced
on manufacturers rather than own their distribution network. The standard
channels of retail and wholesale organisation are not many and the agency, traders,
merchant dealers and distributors are all government-controlled structures that
do not support the market operations as obtain in the developed economises. In emerging countries
there are few end-to-end logistics providers, which allow manufacturers to reduce
costs. Decreasing cost will increase international firms trade with emerging
countries.

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