What was the urgency of this FDI in retail of all other reforms. May be a coincidece, but two recent events needs to be checked carefully. Sahara groups entry into Retail business from nowhere and Supreme court verdict against Sahara to return the illegal deposits of Rs.20000 Crores back to public (which was being expected by everyone). It is well known fact that Sahara group is funded by corrupt politicians across party lines. Don't get surprised if Sahara enters into a JV with a foreign company (sometimes even a new company setup abroad) or is bought out by a company who wants to enter into retail business in India. The black money amassed by congress and other politicians will be routed through FDI into Sahara retail business which will be used to pay back the depositors of Sahara group, majority of whom are none other than these politicians or their cronies.
Re: Sahara group entry into retail in august
by raju on Sep 24, 2012 04:41 PM
How will this affect coman man and the price of the product and our economy. Honestly, iam confussed. Can you enlighten me.
Re: Re: Sahara group entry into retail in august
by Suddhasatwa Ghosh on Sep 25, 2012 02:19 AM
Good question. To some extent there should be pressure on manufacturers to lower the MSRP, to be fair to all. But then this profit margin is there to help the shop owners/and middlemen for their subsistence. I agree with such retailers coming in, things will become cheaper for everyone. But then at what cost? At the cost of the livelihood of so many people who are not much educated to pursue anything else. Farmers and other manufacturers will be expected to produce in huge quantity at a very small profit margin per piece. If they cannot keep up with this demand, they will just go out of business. There will be cut throat competition in producing efficiently - in which Chinese/Mexican manufacturers fair better. Again, government should not just blindly copy some other country, without first understanding and addressing the differences in the social, economic stucture. Even in the USA, people are feeling the effect now. In the last 50 years, because of such retailers like Walmart, all manufacturing jobs (with tech skills) moved to elsewhere. It did not affect much till now because USA was rich with resources to spare, and there were newer forms of innovations to counteract. Slowly, USA moved from a manufacturing to a service-based society - the effect is like slow-poisoning. Now when the innovations are not happening much, and global economic pressure has moved jobs offshore, suddenly people are realising that there is absolutely no backup plan in place.
Re: Re: Sahara group entry into retail in august
by Suddhasatwa Ghosh on Sep 25, 2012 02:20 AM
Good question. To some extent there should be pressure on manufacturers to lower the MSRP, to be fair to all. But then this profit margin is there to help the shop owners/and middlemen for their subsistence. I agree with such retailers coming in, things will become cheaper for everyone. But then at what cost? At the cost of the livelihood of so many people who are not much educated to pursue anything else. Farmers and other manufacturers will be expected to produce in huge quantity at a very small profit margin per piece. If they cannot keep up with this demand, they will just go out of business. There will be cut throat competition in producing efficiently - in which Chinese/Mexican manufacturers fair better. Again, government should not just blindly copy some other country, without first understanding and addressing the differences in the social, economic stucture. Even in the USA, people are feeling the effect now. In the last 50 years, because of such retailers like Walmart, all manufacturing jobs (with tech skills) moved to elsewhere. It did not affect much till now because USA was rich with resources to spare, and there were newer forms of innovations to counteract. Slowly, USA moved from a manufacturing to a service-based society - the effect is like slow-poisoning. Now when the innovations are not happening much, and global economic pressure has moved jobs offshore, suddenly people are realising that there is absolutely no backup plan in place.
Re: Sahara group entry into retail in august
by Rajaram on Sep 24, 2012 05:06 PM
U have rightly hit the nail in the head. All these FDIs are to convert black money in foreign countries to be channelised to India to make it white through benamis and escape any punishment (if given by the electroate). Sonia/Rahul/Robert every body will be benifitted through this FDI
We should not doubt on MMS capability to bring economic reforms, but it is congress adamancy that economic reforms are brought against people protest. People are to be made ready or have early polls.
Re: Re: Economic reforms
by kapil dev on Sep 24, 2012 04:50 PM
dear friend, If you talk to any person who is close to MMS then U ll know about his capability. His friends Say he is Dubbu!!! Yes he cant do any Ghotala, Because he has no capability to do that. he is Simply a dabbu.!!! u better understand he has been placed there AS PM so that other people can loot India and then say dont blame PM he has not done anything and then after few days PM has to read there written stmt. we have take hard decision. we need to fight with public and rise diesel, LPG & other general items (BY FDI-) think logically Foreign companies ll come and sell items in less price?? they are coming for doing Charity or what??? HLL, colgate, Cococola came with few lakh and now there turnover is in crore. this congress govt is thinking us fool, says FDI ll increase employment. just go & see Bharti Walmart store person working there r exploited like anything, they have very high pressure .....people request you for our own country benefit dont ever vote Congress and its alliance any point of time from now. take a pledge v ll never see this congress govt further nor his any individual partners
Simple understanding is missing among people..... its chinese goods which would be sold by american companies so how does India and Indians gain from it except for the fact that we "might" get few things at some lesser price but then quality would be compromised.
What about walmart selling chinese rice and dal as its landed cost might be cheaper as compared to Indian produce????
What we are missing is basically the cold storages, carriers with freezers, efficient logistics to cut down on wastages in moving goods from producer to consumer and too many middleman for the goods to be cheap for the consurmer........ but do we need to sell off the nation to do all these?????
Re: FDI in retail...... Do we really understand the need?
by Inzy Bhai on Sep 24, 2012 04:14 PM
Jitesh I doubt if you have read the notification on FDI clearly. This bogey of Walmart etc swamping India with Chinese goods is completely misplaced & is being raised by middle men who are going to be most affected. These middle men are responsible for price increases ranging from vegetables to other perishable commodities which forma a large basket in calculating the Inflation Index. For your information Walmart (Punjab & Haryana) & other majors like Carrefour (East Delhi) are already present in India. Walmart operates under the brand of Easy Day & is in partnership with Bharati who have the majority stake. None of these retail biggies can come into India without having an Indian partner since the maximum share permitted is 51%. Easy Day has recently opened a massive store in Gurgaon & there are only Indian products. Low cost Chinese products do not stand a chance to compete with Indian products.
Secondly they have to invest $100 million within 3 years & the major investment is going to be in backend like logistics, cold chains etc. So where is the fear? The terms & conditions are extremely tough for them. Also they can open stores only in areas with population in excess of 1 million people. So let us welcome this additional investment as this will drive growth & maybe the panacea for reducing inflation.
Re: Re: FDI in retail...... Do we really understand the need?
by Jitesh Agrawal on Sep 24, 2012 04:29 PM
And this is what happens when you read the articles published by congress mouthpiece.
Do you have any idea what is the model of operation for walmart, carrefour and metro in India?????
That is purely cash and carry wholesale trade and not retail.
Do you have any idea what are walmart shelves stocked with in america?????
Forget america the world over where ever these giants are operating they are completely stocked up with chinese produce, so how will it be any different in India, infact with reduced logistical cost the % would be even higher.
As far as terms and conditions are concerned, I hope you have heard the story of arabian trader and his camel...... you cannot undo things remember.
Re: Re: FDI in retail...... Do we really understand the need?
by Ravi Israni on Sep 24, 2012 04:34 PM
Dear Inzy
Your comments - invest upto 100mn in 3 yrs? it is nothing. a small IT company with 100 employees has turnover of more than 100mn per year. additionally these companies create opportunities for service industries around them ( in terms of real-estate, food and other services).
Also the initial condition of 30% procurement from local suppliers has already been watered to "preferably". this blue prints are very difficult to track and are never maintained.
Re: Re: Re: FDI in retail...... Do we really understand the need?
by Rekha Thakur on Sep 24, 2012 04:39 PM
100m$ at least 100 people in a minnow city like patna have that much of cash and more just think about big cities,its peanuts,
Re: Re: FDI in retail...... Do we really understand the need?
by Rajaram on Sep 24, 2012 05:12 PM
How do you say that the products sold at easyday are Indian make? They are Indian make but belongs to colgate, pamolive, debeers, Johnson&johnson etc which are actually MNCs and not Indian companies. In fact the products made exclusively in India like Dabur etc are very less in the inventory of displays.
Apart from the logical aspects whatever being discussed. The biggest thing which we are missing in this discussion is common sense. Why we lock our house when we are not there and close the door when we are there common sense. Why we don’t discuss our family problem in open forms and discuss within family or close group common sense. Why when we sign MOU photograph get clicked but why photograph will not get clicked when we take bribe common sense. Idea is if begin a country or family you have problem. Why not we are solving this problem within family or close group, why we are opening door of our home. What everybody feel foreign retailer come and do charity common sense. And what we are going to teach our children “if you have any problem don’t try to solve it, take the help of other what if they are taking more money from you, what if they say you are a fool, what if they will say you are useless, poor and underdeveloped “. Better decide it’s not about wall-mart or any other foreign retailer but it’s about every Indian you and me. I will not say think twice before commenting. Rather think thousand time before favoring this decision.
Author of this article clearly lacks big picture view and has tried to compare apples with oranges. There is no comparison between our country and USA, with respect to the basic infrastructure, transportation modes, distribution of population between rural / semi-rural (towns) / urban areas, spending power, family structure, etc, etc. Though we have big malls coming up rapidly, how many middle class families would be able to go to those malls in their cars (if at all they own one) and pick up items in bulk? Most of the people purchase from small shops because they buy in small quantity (hand to mouth scenario), knowing well that the small shops cheat their customers big time, with sub-standard goods and adulterated stuff. Everybody talks about protecting the interests of small shop owners, but nobody seem to be bothered about the end customers.
Re: As Consumer, why deny us the cheap goods?
by Hebbar R on Sep 24, 2012 03:42 PM
All these are insignificant as the consumer is subsidising the inefficiency and corruption of the Govt.
Re: As Consumer, why deny us the cheap goods?
by dev singh on Sep 25, 2012 03:16 AM
If you try to analyse the impact it is going to have on common people - factory workers, farmers, retailers, small traders and suppliers then only will understand the gravity of the matter.
If your livelihood is not going to be impacted by cheap chinese products that will be sold in stores then you are all happy. People who are who are going to lose out to the unfair competetion from china will have no other choice but to commit suicide. Afterall, MMS is not concerned about common people of this country. Why this hurry in opening up the retail sector? Why not to do this in phases? First make our labor laws at par with China and potential competetiors and then gradually open up any sector for FDI.
Re: As Consumer, why deny us the cheap goods?
by subbu ramasamy on Sep 25, 2012 04:19 AM
Your assumption Wall mart is cheap is far from Truth! I am now on my first visit to US and contrary to my expectations the prices are sky high here! One Onion 1$,One Tomota(BIG)1$ and so on.Most of the consumer durables are of Chinese make but in no way they are cheaper.I purchaed a ordinary suit case of chinese make (90% of all suit cases are of chinese make) at 50$ whereas a similar quality one in Chennai Ranganathan Street will be available for 400 rupees!The modus operani of these multinational marts is first sell at throw away price until local small business is killed and then jackup the price as they like.(Just like coca-cola-Pepsi).Now here in US in most of the wrtie ups Americans are chanting Buy American even if it costs more!As Mamta rightly said MMS who has the slave mentallity has sold out India-that is the truth!
I am a middle class person buying groceries & other household products for the past 30 years. For the early 20 years, I relied only on traditional small retailers for my needs & for the past 10 years, I have been purchasing both from big retailers(malls) & small retailers(mom&pop stores). Let me narrate my experience. 1)Cheating & lack of transperency - Most of the Small retailers are not transperent about their dealings & many try to outright cheat the customers. Big retailers are very transperent on pricing, minimal cheating. 2)Discounts- Big retailers offer many discounts & pass on discounts offered by Manufacturers. Small stores often try to retain the discount themselves or offer them only if the customer insists. 3)Efficiency & time saving - Big retailers are efficient, handle rushes well. In small retail u have to wait for long, deal with grouchy delivery boys, squabble for change. 4)Variety- Big retail display a variety of products. Small retailers stock or push products which give them fat margins. 5)Experience - Shopping in Malls is far better than jostling in dingy,squalid shops. I am sure millions of customers have a similar experience. If Mr.Venkatesh can offer people like me a better alternative to small retail other than Walmart, I can accept that. But don't glorify small retail & rubbish Big retail, coz none is going to accept it.
Re: Why lament?
by Hebbar R on Sep 24, 2012 03:44 PM
The problem is that most people only see benefits for themselves. Justifiably so. But, what about the Nation? In the bargain of these small benefits that you are talking about, we may loose independence itself. Besides, there is going to be serious repercussions on the FE front as well - though over a period of time.
Re: Re: Why lament?
by Corporate Honcho on Sep 24, 2012 03:54 PM
How will you lose independence?
So, you will persist with substandard quality products with no customer service - all in the name of giving greedy local retailers some room. The small kiranas who differentiate with quality and service will survive. The kiranas who offer credit for the local populace - which is what happens in small towns, villages and even cities - will continue to survive.
The big retailers will not hurt the local kiranas more. The people who they will hurt more is the middlemen procurers/distributors. If the FDI retail can improve efficiency in supply chain/procurement, it will help reduce prices and help the common man.
Instead of wallowing in filth and not trying to improve standard of living, let us try to uplift the nation.
Note that quite a few companies have become players globally only after they faced competition from foreign players in India.
Re: Re: Why lament?
by SUNDEEB NAIR on Sep 24, 2012 04:00 PM
I am not selfish. Just comparing the obvious differences between both formats. But how long can we hide behind the walls of protectionism & fear the Chinese competition. I don't see the ageing & stagnating economies of US, Europe or Japan as a threat. How can they with their high costs compete against us. We have to dismantle our archaic laws & shed our incompetence. We should be directing our efforts in this direction, instead of railing against Big retail.
Re: Re: Re: Why lament?
by Inzy Bhai on Sep 24, 2012 04:29 PM
Sundeeb I absolutely endorse the points you have made. I will narrate my own experience to you. In South Delhi there is a store called Garg Store in Yusuf Sarai. A few years ago when he saw his customers slipping away to Big Bazaar etc. he altered his style by offering discounts on every product. Also one gets personalized service since the employees know almost all customers well. Today I prefer to shop from him rather than go to a Big Bazaar or anyone else. The only issue is that his shop is small, congested & billing is only at one counter but his quality is second to none. Also he is honest in his dealings. So this fear of big retail is a bogey raised by middle men who are going to be severely hit soon. Chains like Walmart have more complex issues like theft, security, parking etc to deal with. it is not going to be so easy. In all this the biggest gainer is going to be the consumer so why are we fighting for nothing.
Re: Re: Re: Re: Why lament?
by SUNDEEB NAIR on Sep 24, 2012 04:52 PM
Inzy Bhai, academics often ignore practical issues on ground while arguing their case. It is consumers like u who know what is better for them.
Re: Why lament?
by subbu ramasamy on Sep 25, 2012 04:29 AM
The so called efficiency due to the mass marketting concept can not be beneficial in the long run.Once big markets estabilish themselves the small businesses will go out and then start the trouble.To buy a tooth pick you wil have travel by your car to the centralised market-what about the social cost of burning fossil fuel,what about the cost of travel,what of the cost of time spend(If you value it).Friend look at it in total-donot look at small benefits and jump to conclusion.Even in US we donot have varities in super markets as is available in India-we are forced to buy what they sell-else you may have to travel another 5 miles looking for another one!!
I am a middle class person buying groceries & other household products for the past 30 years. For the early 20 years, I relied only on traditional small retailers for my needs & for the past 10 years, I have been purchasing both from big retailers(malls) & small retailers(mom&pop stores). Let me narrate my experience. 1)Cheating & lack of transperency - Most of the Small retailers are not transperent about their dealings & many try to outright cheat the customers. Big retailers are very transperent on pricing, minimal cheating. 2)Discounts- Big retailers offer many discounts & pass on discounts offered by Manufacturers. Small stores often try to retain the discount themselves or offer them only if the customer insists. 3)Efficiency & time saving - Big retailers are efficient, handle rushes well. In small retail u have to wait for long, deal with grouchy delivery boys, squabble for change. 4)Variety- Big retail display a variety of products. Small retailers stock or push products which give them fat margins. 5)Experience - Shopping in Malls is far better than jostling in dingy,squalid shops. I am sure millions of customers have a similar experience. If Mr.Venkatesh can offer people like me a better alternative to small retail other than Walmart, I can accept that. But don't glorify small retail & rubbish Big retail, coz none is going to accept it.
Re: Why lament?
by Hebbar R on Sep 24, 2012 03:57 PM
One would wish that you had similar vehement questions about corruption in Govt as that is the one that is eating away the vitals of this nation and forcing a sell out to foreign conglomerates.
Re: Re: Why lament?
by SUNDEEB NAIR on Sep 24, 2012 04:08 PM
I do have very vehement views on corruption. But to fight corruption, we need more transparency & computerization. We should support programz like RTI Act, Aadhar ID scheme, Whistleblowers Act, Lokpal Bill. The solution is within. Cursing foreign corps won't help.
