FDI in Organized Retail: Is it worth the hooplah?

barkha dutt @BDUTT replied to you:

BDUTT barkha dutt
@change_thinker thats my problem with it
Nov 28, 5:12 PM via web
In reply to…

change_thinker Manishankar Prasad
@BDUTT Kiranawala wil always b around, organized retail will always cater to UrbanIndia n not Bharat, Walmart promotes monoculturalization
Nov 28, 5:11 PM via web

The above exchange of views with Barkha Dutt, sets the stage for the burning rage over something deeply effecting all in India. There has been massive hype, over the FDI decision taken by the Indian Cabinet to clear the long standing proposal. Foreign Direct Investment has been a bone of contention as overseas players in organized retail have the monetary muscle, the technology and the know-how for a trade, the Brits and Americans have mastered, with the french not too far behind (Tesco, Wal-Mart and Carrefour for the uninitiated). I had encountered supermarket organized retail in Oman, the first time i traveled ‘phoren’ about 15 years back, they were clean, organised with smiling faces, although fake at supermarket counter in contrast to the kirana-wala next to our building, who used to over-charge us every time we went, with his faulty weighing gauge.  Well, the ‘udhari’ system might not work at a big bazaar, but  the friendly neighborhood ‘Guptaji’ , may lend temporary credit for a packet of milk, when you are out on a morning walk without the wallet.  The discourse in the Media, clearly seems to polarized over the issue, which has clearly diverted attention from the more pressing JanLokPal bill (a masterstroke by the Congress). This what an opposition leader said today as I read in a tweet a while back-

Sharad Yadav: “The East Indian Company came as cloth merchants but the Congress party is giving away the entire retail market ”

There has been Indian players in the organized retail space in India since the past decade. They all started with a bang, but only a few remain as the Indian consumer is very price conscious, impulse buying is not really Indian, we come with detailed budgeting with check-lists at the supermarket. The Indian retail players have constantly bled, and I guess the move for 51% FDI in organized retail is a way of bailing out the existing players, rather than big players making a dent. The technology transfer in cold storage supply chain management is something Indian players can learn from a Wal-Mart, as it offers the lowest prices due to the sheer volume game it prefers to engage in.  Farmers are at an advantage as they hope to get better prices than at APMC Mandi’s. I do not think any more players in the market will create that much of an impact as the local mom n pop store will cater to a demand that a big hyper-market cannot. They both have their own spaces to fill in. Jobs will get created in the Organized retail space as more smaller shops will close as they really cannot compete on prices and services with the Big Guys. Urban consumers are set to have more options and better prices.

A regulator needs to put in place to monitor cartelizaton for food prices, as hording on a institutional level may take shape. People need to made aware of the pitfalls of excessive consumerism. Choice is good, but addictive retail therapy ruins families. In my opinion, India is a unique market, every region in India with its special cultural and demographic needs, will be a challenge for the MNC Player. Getting into the market is easy with 100 million USD, but surviving and thriving is an altogether different battle. Welcome to India, i would say to Wal-Mart, bring it on!

2 thoughts on “FDI in Organized Retail: Is it worth the hooplah?

  1. This system is creating a competition… a very unjust and one sided competition. A very strange observation may it be the fight for the Loakpal bill or its the FDI, no one is ready to mend the existing system which has the capabilities of doing the job.

    All they want is change so that they can show off.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s