Transnational Channel: Distribution Beyond Boundaries

Producers produce and consumers consume. Such a well-defined activity. But what about the connecting link? How do the products actually reach the consumers? What are the missing links of the supply chain? How are the goods distributed from the manufacturers to the end-users?

Most of us are aware of the distribution strategy. there are two distribution channels: the wholesale channel and the retail channel. But are these two traditional channels enough in this age of globalisation? The answer is no. Businesses dependent on only these two channels have the risk of lagging behind their competitors in this era of consumerism. 
Transnational Corporations (PC: hubpages.com)

To cover this risk the retail industry has seen the development of another distribution channel called transnational channel. As the name suggests, the operation is involved in multiple nations. Transnational channel involves merging of all the channels viz offline, online, wholesale and retail into one omnichannel. 

The evolution of transnational format dates back to 1980s when the home market of the manufacturers and retailers got saturated. American and European retailers sought expansion of their market in East and came at loggerheads with complexities due to the differences in culture , demography and regulations. However, acceleration in FDI promoted the emergence of transnational firms in the 1990s and vice versa. 

There are various considerations when it comes to transnational retailing. The important ones are creating a proper product mix, selecting the store locations, optimising the supply chain and planning a good marketing strategy. 

Examples of transnational firms : Tesco (UK),Carrefour(France), Walmart(US), Metro(Germany), IKEA(Sweden)

Two formats under this channel are:
Duty-Free and Travel Retail Stores
Duty-free and travel retail are retail outlets for international travelers. The products in this format are exempted from local taxes and duties. These stores are usually found in the airports, seaports or the international railway stations.

A Duty-Free store (PC: travel-news.co.uk)
Online Stores
Online business has revolutionized the retail industry by erasing the boundaries and making the world a global village. 
Powered by Blogger.