Friday, 2 December 2011

Is FDI (in retail ) good for India?

Bringing Walmart/ Tesco to India - How good is the choice??
Though it would take time, surely these big giants are going to wipe out all other small shops in India.( we have seen what happened to our Bovanto and Thumbs up because of Pepsi and Coke)

From a consumer point of view :-
First, most of our poor & middle class people would try to buy things in small quantities. (Here it is possible to buy groceries even in 50 gms.) But, I still remember my first shopping experience in US. Being newly married I was blinking at half kilo of mustard in my hand and wondering whether to use it for rest of my life.

Secondly, many of them keep accounts and buy things purely based on mutual trust. and how about mega shops? There will be a sales man staring at your back and enough hidden cameras silently watching  and waiting for you to steal a thing or two.

Third, Are they going to create jobs? maybe..But, many people are going to loose their freedom of being an enterpreneur which even our tech savvy engineers don't have..

Government says prices would come down. But from my experience, we will always buy more things in these shops than, what we are intended. Also unless you are level-headed, you would fall for "Buy 5 liters of coke and get one rat poison free!!" kind of marketing gimmicks.

Finally, the kirana shop and its owner are part and parcel of our every day life. Though it sounds like a line taken out from R.K.Narayan's book, we can't deny that the shopkeeper (remembering &)calling our children by name is something special in India.

There is only one advantage though - Walmart would be a perfect place for family hangout in the week-ends, unless your children don't listen to your no-nos.

May be my little knowledge in economics keeps me one sided. Please write to me.. I am all ears. 

4 comments:

  1. Good One vigna !!

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    "Buy 5 liters of coke and get one rat poison free".. Anand

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  2. Subramanian Says
    Iagree to disagree Vigna. Wallmart or for that matter any other foreign Retail shop come in a big way with lot of space in cities main centre. In U.S.almost all the people have car and they can easily reach the shop but in Inida many people do not even a cycle. The Kirana shop will stil continue to grow. It will be easy for the Kirana shop owners to purchase the items from the retail shop at cheaper prices in bulk and the retail shop purchase in bulk and naturally their prices are chep. We have seen in many countries in Wallmart parttime work is done by students and they continue their studies by earnining their livelyhood. Read todays Times India, you will understand how Kirana shop owners are confident to tackle the FDI

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  3. @Subramanian: Perippa, I still think it is dangerous to let the retail giants control the price and the market in India.(Similar to what happens to petrol price by leaving it in the hands of oil companies)

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  4. V.Subramanian says

    You would have seen the comments of Rajul Gandhi in one of his meeting in UP. While the debate is bit more complicated than a pack of chips costing more than the price the potato farmer is given for a kg of potato, FDI in the long run would possibly profit rather than hurt people. Farmersin Ludiana who have been dealing with Bharati-Wallmart for a while now are already talking of 25% rise in gains. There are other benefits that are becoming increasingly obvious.
    (This message is based on the report in Times of India dated 19/12/2011)

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