It might be good for the farmers, who might get better prices for their produce now, and might be better for middle and upper middle class consumers, who may be able to get better quality stuff cheaper, but it would lead to loss of many small and medium businesses, and lw income consumers who cannot afford to buy at the Walmarts and Tescos....
In the long run, it may not be the best bet for the local economy, as proven again and again, dubbed the Walmart effect.
I disagree (alas, everyone takes their familiar old corners of the room). First, the motivations of introducing FDI in retail are suspect. There is no compelling internal need for India to go for this at this time. The government is being arm-twisted into this by Walmart and the US govt. The virtues of Walmart seems to be lost on Europe, UK, for instance. They have their supermarkets, but they certainly do not have the all-swallowing Walmart. That is because they have a healthy distrust of monopolistic forces, which leads me to the second reason why FDI in Retail is a bad idea.
FDI in retails in not suitable for anyone, not just India. A Walmart is a middleman that has monopolistic control on suppliers. In the long run, any economical efficiency is gained from the forces of a free market. When Walmart walks in with its dollars, it will wipe out the small fry and squeeze the suppliers. That is not a free market and not good for anyone except Walmart. This is true even for the US- they just don't realize it.
The farmers are going to trade the trouble of dealing with a local middleman to dealing with an international middleman- that is not an improvement.
My stand is the "Don't know". Hey Krupa! did you know that Wall-mart is accused of bribing officials in a Latin American country for obtaining permissions etc. (he whisper is that the higher ups were aware of it.) In our country one shudders to think of what may happen. But again what may happen? Krupakar! pardon me for saying that a knife is a knife and is deadly whether yielded by a white hand or a black hand! So, do you think that an Indian Bania middleman must be allowed to operate and it is not wise to allow a white middleman! Both classes will send money out of India. The first as black money (Appropriate) and the white man as white money - profit earned. No improvement I agree but not worse either.
The farmer may get a better price but in the long run the crop pattern and the price may be dictated by the FDInvestor. As an alternative is it better to have Ambanis dictate the price (the other idea was to go in for corporate agriculture.)? The answer is to eliminate middlemen and political price control mechanisms. But if allowed, this may lead to a spiraling price rise of essential commodities and will ruin the middle class. So, probably we are better off as it is, but we can try and curb the middleman and discourage black money (exaggerated profits of middle men). But that Utopia is still far off. Undoubtedly the quality of stuff sold will improve and the consumer will get things at a better price too. But this requires vigilant and active consumerism and less corrupt official machinery which (both) we do not have. If we have them, our local merchants themselves will have to give better service at affordable cost.
Free market mechanisms have all ultimately squeezed out the small fry and have caused monopolies Krupa! We do need some governmental control. Free market Mantra is anathema to me. Why single out wall mart? Others too will follow to pick us clean.
As to the small and middle size neighborhood grocers--they need a lesson. The way they fob off bad stuff, contaminate even food stuffs, under weigh and under measure--they are cheating and robbing the consumer blind. At least the Monoliths will have to give good measure and quality as the penalties will be heavy and they cannot escape punishment easily by bribing a petty local official. The stores will come up only in about 50 cities (now) and may be even later they will come up in 500 towns. The neighborhood grocer will not go anywhere. He will be retailer for wall mart stuff as most of the Indians will not go to Wall mart but to a local man only as they need credit. Similarly how many low salaried people will travel 10km to a wall mart outlet for a 1000 rupee grocery bill? How can a daily wage earner hope to shop at wall mart? It is only the top 10% noveau rich, card wielding young India that will go "wall marting". Even if it is a 49% FDI like Bharati-Wllmart, these people will flock there for a chance of pushing the cart down the aisle. That is because they are Brand conscious and elitism conscious. Otherwise, I do not see a big problem. May be the future will see a change in incomes and shopping habits but right now I do not see a big threat.
And the 30% investment in the back end infrastructure to be built, bought or supplied by Indians is expected to generate employment and income for the jobless youth. Which youth?
India the global capital of diabetes .make sugar not affordable to common man. obesity let the costs of food stuffs skyrocket. .people save money on beauty parlours and gyms.effortlessly women can go to zero size the indian govt now itself is very much commited about the health of its citizens
hoteliers have mastered in making oil free dosai and shrinking the sizes of idli poori and sweets
nri wives will not object the husband,s return to india since walmart tesmo costco and tomorrow macys and target will be there in india also . indian wives can now boast "this is from bed bath and beyond or macys like that.
economy improves as more card wielders fail to pay the huge sums and end up in diwala and properties can be confiscated and as a sequela heyday for psychiatrists.
husbands can escape from nagging wives as windowshopping keeps them busy
UNEMPLOYED YOUTH(mla koduku mp koduku etc)and enterprenuers(odipoyina or maaji prajaprathinidhulu)can get employment
Folks, before all of you jump on my throat, if you read my last comment, I did indicate that in the long run, it is not beneficial for the local economy.
However, I agree with Nanna in that for India, this will not impact the corner grocery "kottu". It will impact the small and mid-size supermarkets in the Tier 1 and possibly Tier 2 cities at most.
Anna, I disagree with you quite a bit. In India, so called "organized retail", which is buying goods from shops and stores is at <10%. In developed countries such as US, organized retail accounts for around 85% of total purchases. The rest are flea markets, garage sales, cute artsy shops on ebay.com and Etsy....
When there are standards, it becomes easier to inspect and enforce, leading to consistent quality and prices.
Regarding UK, its not Walmart, rather it's Tesco and ASDA(which was bought by WM). I did some research into the UK market a while ago for work. quote from the research paper "British law has a very relaxed approach to foreign direct investment, and most foreign companies are treated in a similar way to UK-based companies. In addition, the UK government offers generous tax allowances such as research and development tax credits in order to draw in overseas investment"
"Informal retailing is very significant in the UK, as there are a large number of markets selling a wide and diverse range of products. Markets struggle to compete with supermarkets and other high street shops."
Top top 10 retailers in UK account for 40% of the market.....It's the same story in Australia, in France or Germany.
As big retail enters a country, the market inevitably consolidates...
And when we are talking reatail, remember it is not just food and groceries. It is the consumables such as soaps and shampoos, toys, housewares, fabrics..... This is where the bigger impact will be not the fresh vegetables, which are hard to transport and store because of Indian infrastructure and other day to day groceries, which are typically purchased in small quantities anyways, making a trip to Walmart worthlss for such trifles.
As long as the impact is more on the luxury / brand goods and "non-essentials", I am all for external competition coming in and forcing prices and quality...
When Walmart or Carrefour offers a 30-day return policy, standing behind their toys, I would rather buy from there, than buy at a local store, paying 2000 rupees where Aditya or Arjun were able to break them in a matter of minutes.....
BTW, sorry about the numbers...It's my day job, researching the state of retail and commerce in various countries, as part of the team responsible for finding international opportunities for eBay....
Good points, all. The summary seems to be: - the impact, whatever it is, is limited, as the likes of Walmart are not likely to hit small towns or the lower middle class - the impact may be positive for those segments of society and for the non-essential product set, by driving all retailers towards a higher quality and lower pricing
I guess I agree. A lot will depend on how the government administers this- I have not read the notification yet.
I still have concerns on the general trend this indicates. India will prove to be the dumping ground for Chinese products via Walmart etc. Selling imported goods is the only way Walmart can make money in India. As you all pointed out, there are not going to enough Walmarts here for them to command a differential pricing or quality from local suppliers.
8 comments:
It might be good for the farmers, who might get better prices for their produce now, and might be better for middle and upper middle class consumers, who may be able to get better quality stuff cheaper, but it would lead to loss of many small and medium businesses, and lw income consumers who cannot afford to buy at the Walmarts and Tescos....
In the long run, it may not be the best bet for the local economy, as proven again and again, dubbed the Walmart effect.
I disagree (alas, everyone takes their familiar old corners of the room). First, the motivations of introducing FDI in retail are suspect. There is no compelling internal need for India to go for this at this time. The government is being arm-twisted into this by Walmart and the US govt. The virtues of Walmart seems to be lost on Europe, UK, for instance. They have their supermarkets, but they certainly do not have the all-swallowing Walmart. That is because they have a healthy distrust of monopolistic forces, which leads me to the second reason why FDI in Retail is a bad idea.
FDI in retails in not suitable for anyone, not just India. A Walmart is a middleman that has monopolistic control on suppliers. In the long run, any economical efficiency is gained from the forces of a free market. When Walmart walks in with its dollars, it will wipe out the small fry and squeeze the suppliers. That is not a free market and not good for anyone except Walmart. This is true even for the US- they just don't realize it.
The farmers are going to trade the trouble of dealing with a local middleman to dealing with an international middleman- that is not an improvement.
My stand is the "Don't know".
Hey Krupa! did you know that Wall-mart is accused of bribing officials in a Latin American country for obtaining permissions etc. (he whisper is that the higher ups were aware of it.) In our country one shudders to think of what may happen.
But again what may happen?
Krupakar! pardon me for saying that a knife is a knife and is deadly whether yielded by a white hand or a black hand! So, do you think that an Indian Bania middleman must be allowed to operate and it is not wise to allow a white middleman! Both classes will send money out of India. The first as black money (Appropriate) and the white man as white money - profit earned. No improvement I agree but not worse either.
The farmer may get a better price but in the long run the crop pattern and the price may be dictated by the FDInvestor. As an alternative is it better to have Ambanis dictate the price (the other idea was to go in for corporate agriculture.)?
The answer is to eliminate middlemen and political price control mechanisms. But if allowed, this may lead to a spiraling price rise of essential commodities and will ruin the middle class.
So, probably we are better off as it is, but we can try and curb the middleman and discourage black money (exaggerated profits of middle men). But that Utopia is still far off.
Undoubtedly the quality of stuff sold will improve and the consumer will get things at a better price too. But this requires vigilant and active consumerism and less corrupt official machinery which (both) we do not have. If we have them, our local merchants themselves will have to give better service at affordable cost.
Free market mechanisms have all ultimately squeezed out the small fry and have caused monopolies Krupa! We do need some governmental control. Free market Mantra is anathema to me.
Why single out wall mart? Others too will follow to pick us clean.
As to the small and middle size neighborhood grocers--they need a lesson. The way they fob off bad stuff, contaminate even food stuffs, under weigh and under measure--they are cheating and robbing the consumer blind. At least the Monoliths will have to give good measure and quality as the penalties will be heavy and they cannot escape punishment easily by bribing a petty local official.
The stores will come up only in about 50 cities (now) and may be even later they will come up in 500 towns. The neighborhood grocer will not go anywhere. He will be retailer for wall mart stuff as most of the Indians will not go to Wall mart but to a local man only as they need credit.
Similarly how many low salaried people will travel 10km to a wall mart outlet for a 1000 rupee grocery bill? How can a daily wage earner hope to shop at wall mart?
It is only the top 10% noveau rich, card wielding young India that will go "wall marting".
Even if it is a 49% FDI like Bharati-Wllmart, these people will flock there for a chance of pushing the cart down the aisle. That is because they are Brand conscious and elitism conscious.
Otherwise, I do not see a big problem. May be the future will see a change in incomes and shopping habits but right now I do not see a big threat.
And the 30% investment in the back end infrastructure to be built, bought or supplied by Indians is expected to generate employment and income for the jobless youth.
Which youth?
India the global capital of diabetes .make sugar not affordable to common man.
obesity let the costs of food stuffs skyrocket. .people save money on beauty parlours and gyms.effortlessly women can go to zero size
the indian govt now itself is very much commited about the health of its citizens
hoteliers have mastered in making oil free dosai and shrinking the sizes of idli poori and sweets
nri wives will not object the husband,s return to india since walmart tesmo costco and tomorrow macys and target will be there in india also
.
indian wives can now boast "this is from bed bath and beyond or macys like that.
economy improves as more card wielders fail to pay the huge sums and end up in diwala and properties can be confiscated and as a sequela
heyday for psychiatrists.
husbands can escape from nagging wives as windowshopping keeps them busy
UNEMPLOYED YOUTH(mla koduku mp koduku etc)and enterprenuers(odipoyina or maaji prajaprathinidhulu)can get employment
so let us welcome fdi in all sectors
Folks, before all of you jump on my throat, if you read my last comment, I did indicate that in the long run, it is not beneficial for the local economy.
However, I agree with Nanna in that for India, this will not impact the corner grocery "kottu". It will impact the small and mid-size supermarkets in the Tier 1 and possibly Tier 2 cities at most.
Anna, I disagree with you quite a bit.
In India, so called "organized retail", which is buying goods from shops and stores is at <10%.
In developed countries such as US, organized retail accounts for around 85% of total purchases. The rest are flea markets, garage sales, cute artsy shops on ebay.com and Etsy....
When there are standards, it becomes easier to inspect and enforce, leading to consistent quality and prices.
Regarding UK, its not Walmart, rather it's Tesco and ASDA(which was bought by WM). I did some research into the UK market a while ago for work.
quote from the research paper "British law has a very relaxed approach to foreign direct investment, and most foreign companies are
treated in a similar way to UK-based companies. In addition, the UK government offers generous tax
allowances such as research and development tax credits in order to draw in overseas investment"
"Informal retailing is very significant in the UK, as there are a large number of markets selling a wide and
diverse range of products. Markets struggle to compete with supermarkets and other high street shops."
Top top 10 retailers in UK account for 40% of the market.....It's the same story in Australia, in France or Germany.
As big retail enters a country, the market inevitably consolidates...
And when we are talking reatail, remember it is not just food and groceries. It is the consumables such as soaps and shampoos, toys, housewares, fabrics..... This is where the bigger impact will be not the fresh vegetables, which are hard to transport and store because of Indian infrastructure and other day to day groceries, which are typically purchased in small quantities anyways, making a trip to Walmart worthlss for such trifles.
As long as the impact is more on the luxury / brand goods and "non-essentials", I am all for external competition coming in and forcing prices and quality...
When Walmart or Carrefour offers a 30-day return policy, standing behind their toys, I would rather buy from there, than buy at a local store, paying 2000 rupees where Aditya or Arjun were able to break them in a matter of minutes.....
BTW, sorry about the numbers...It's my day job, researching the state of retail and commerce in various countries, as part of the team responsible for finding international opportunities for eBay....
Good points, all. The summary seems to be:
- the impact, whatever it is, is limited, as the likes of Walmart are not likely to hit small towns or the lower middle class
- the impact may be positive for those segments of society and for the non-essential product set, by driving all retailers towards a higher quality and lower pricing
I guess I agree. A lot will depend on how the government administers this- I have not read the notification yet.
I still have concerns on the general trend this indicates. India will prove to be the dumping ground for Chinese products via Walmart etc. Selling imported goods is the only way Walmart can make money in India. As you all pointed out, there are not going to enough Walmarts here for them to command a differential pricing or quality from local suppliers.
kaakulanu kotti gaddalaku veyatam gouri
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