A move by retail behemoth Wal-Mart Canada into Bollywood fashion is causing ripples in Canada's South Asian merchant community.

The new "Bollywood Signature" line of women's clothing, unveiled last month at Wal-Mart stores in Ontario and British Columbia, is causing some smaller retailers to wonder about their new giant competition.

"I think they are attacking the small-business owner when they do stuff like this," says Sunny Khurana, who does the buying and selling for a 37-year-old family business that includes two Guru Bazaar Sarees and Fabrics stores and one Rokko Fabrics outlet, all in south Vancouver.

"For them, it's a matter of economics, if they don't make money on it, they'll get rid of it. In our case, it's our bread and butter, and we have to make it work."

Brennan O'Connor, Business Edge
Ranka Group fashion director Nina Snow with samples of Bollywood Signature fashions for Wal-Mart Canada.

Selling South Asian fashion is part of Wal-Mart's latest strategy in Canada, as it continues to roll out its "Store of the Community" concept.

Company officials say the idea is to identify multicultural population clusters around its stores, using data from market research firm AC Nielsen and the Canadian census. In turn, this information allows stores to stock merchandise that reflects the unique characteristics of the local communities and customers served.

The clothing is only available in a limited number of Wal-Mart's 298 Canadian stores, says Karin Campbell, manager of corporate affairs for Wal-Mart Canada.

"For us to be successful we need to be a store of the community," she says. "It's about understanding the community we serve and tailoring our merchandise to reach their culture and traditions."

The Bollywood Signature line consists of an initial nine traditional and ornate salwar kameez - three-piece South Asian suits for women - and is available in 15 stores - 12 in B.C. and three in Ontario.

The suits come with pants (called salwars), a long shirt or tunic (called a kameez) and a matching scarf (called a dupatta) and are characterized by rich and vibrant colours and feature hand-sewn stone and bead embellishments.

Apparel and design house Ranka Group of Companies of Markham, Ont., is supplying the line to Wal-Mart. It already provides the retail chain with children's wear, men's and ladies' clothing and winter accessories.

"They have strong South Asian roots. We approached them to design this line; we felt they had the expertise and the knowledge," says Campbell.

Ranka Group fashion director Nina Snow says the South Asian clothing is designed in-house, but manufactured in India.

"We employ a lot of South Asian people and everybody who found out about the line is thrilled. I've had a lot of people thank me profusely for doing this," says Snow. "The response we're getting is that it's convenient, it's a great price point and there's a lot of pride in the community that Wal-Mart is recognizing this South Asian community need."

Brennan O'Connor, Business Edge
Ranka Group International CEO Kash Sood and fashion director Nina Snow are supplying women's clothing to Wal-Mart.

However, individual merchants like Sunny Khurana in Vancouver sees Wal-Mart's entry as a potential problem for small businesses that sell similar merchandise. "On a personal level, we'll have to try and carry items that are different and give them (customers) better service.

"They (Wal-Mart) are not creating another market, the pie is the same size and they'll be taking a piece of the same pie," says Khurana. "We can adapt because we know the market, but I think some of the borderline businesses may not survive, they may hurt them.

"The whole gist is they're not generating any new business, they're taking the existing away."

Khurana's stores sell a variety of clothing and fabrics, including a wide range of salwar kameez. He says he can compete with Wal-Mart on price if he has to.

"I think you'll have some people who might shop there, it's very hard to say at this point. It's not like buying the same exact item. I'm sure they'll do some business."

Other merchants are confident that Wal-Mart's arrival on the South Asian fashion scene won't squeeze them out of business.

Sarab Singh, co-owner of the Chandan Fashion Centre in Toronto's Gerrard India Bazaar - described as the largest marketing place of South Asian goods and services in North America - says she is not worried even though she carries Bollywood-style jewelry, Bollywood-style sarees and a full selection of salwar kameez.

"No, this will not hurt my business," says Singh, whose store has been in business since 1985. "We carry pure dupioni silk and pure silk chiffon, plus I buy designer clothes.

"Our market, the Gerrard India Bazaar, is on the Internet. People from Germany, France, the U.S.A. and England always come on my street, though not all of them come in here."

Singh adds that, unlike Wal-Mart, her store offers an onsite tailor who can alter the outfits to meet a client's specific tastes.

Maureen Atkinson, senior partner with the Toronto-based J.C. Williams Group, a retail and marketing consulting firm, says Wal-Mart has simply taken a page out of what grocers have been doing for a long time - catering to their neighbourhood base.

"The thing about grocery stores, with their relatively limited trade area, is they have to respond to what the neighbourhood tastes are or they lose a big portion of their customers," says Atkinson. "On the food side, they're doing what a lot of good food retailers have already figured out what they have to do. On the general merchandise side, they're (Wal-Mart) probably more of a leader on that side."

Atkinson also says that when mainstream retailers introduce these types of products, it widens consumer horizons to items they normally don't buy. "I think it's good. The more we know about other cultures the better off we are."

Wal-Mart also says it isn't trying to bump small merchants out of the market.

"Wal-Mart Canada isn't in the specialty business and many great stores offer these products," says Campbell. "What we're offering is a great basic Indian suit at an affordable price and we're simply trying to meet the needs of our local South Asian customers."

(Laura Severs can be reached at laura@businessedge.ca)