Last few days I have been hearing a big hue and cry about India allowing FDI (foreign direct investment) into retail sector. I don’t think it is worth the hype it is given. Here are my reasons as to why
- The biggest fears is like companies like Walmart will take over mom and pops stores.When ever I visited Walmart or similar retail stores here in US, the first thing that amazes me is the size of these damn things. In India we can build a multi story complex housing 30 to 40 stores in the size of 1 Walmart. So, if Walmart were to truly open in India, I doubt if they can be located in prime locations in the heart of the city.
- One big thing I miss in US is the ability to try out new products for everything from cookies to soaps and are sold in in bulk. Growing up in India that was not the case.
- The mom and pop stores have established a customer base to themselves, there are advantages to buying from these stores on a regular basis, Like free home delivery, credit for the purchases and so on. I am sure the foreign retailers won’t offer such things anyway.
- The arrival of Mcdonalds and other Pizza-Burger places back in 2000 or so were considered a threat to the local fast food chains. I didn’t see that happen either. From what I can see the Pizza-Burger places seem to have found a balance with the local fast food places and have found a way to co-exist peacefully.
- One more example from my early child hood days were the introduction of Hopcoms (neighborhood stores selling veggies and fruits only) in Karnataka, if I remember right, they are government sponsored and I still don’t see them having eliminated the street vegetable vendors in any part of the Karnataka state. Another such example is the Janata Bazaar.
- On the other hand, I see the foreign retailers with their huge supply chain as a plus point. They can probably figure out a way around the incidents where the farmers were dumping tomatoes on the streets for the lack of better market. I personally doubt this though, it might go the other way completely.
- Last but not the least, I prefer my neighborhood Iyengar Bakery’s fresh bread and cake any day anytime over the stale and frozen ones from big retails.