FDI in Retailing in India

The following is in reply to Indy's comments on my initial post on FDI in Retailing in India:

No disagreements on your suggestion. But world over, to my best knowledge, globalization has been the trigger factor for organized retailing. The retail industry is fragmented not only in India or Asia but rather all over the world as the driving force for any retail shop is the humble entreprenurial spirit but over time as cities and nations develop, there are probably more than a million such "mom and pop" stores all over the country in a size like India. I don't know how much the Amul story can be replicated for the rest of the industries.

FDI in Retail would only enable us to move up the value chain much faster than anyone can imagine. Opening of the economy is the only way we can compete on par with the rest. This will have a tremendous impact to the end customer as the benefits like better pricing, experience, service and convience will follow soon. Employees at such places would get better packages too than ever before. Issues will be part of the capitalist model where the small and ineffiecient ones will die out over time and many entreprenuers will be scaled out. Thats the price we pay for globalization. Happens in every nation, not just in developing countries. Today the UK Grocery market is dominated by 6 major retailers who command about 70 % to 80 % of the market.

While we have all seen the effects of globalization, it does have its share of damage too. Travelling to many countries including Thailand and Japan, its ofen a wonder what is the state of globalization. My recent trip to Japan was an eye-opener as it made me wonder is this the reality of organized retailing and globalization. The market has exploded dramatically over the decades and with increased competition, the only driving force appears to be rock bottom pricing. Whatever happened to the service and the store experience. While there were a fair share of stores with what we look for in the store experience, the rest were just unbelievably huge malls and individual stores the sizes of malls that India has never witnessed. Stores are flooded with the latest and best merchandise no matter what the product is but its like an wholesale trade.

The concept definitely adds value to the consumer when he is price conscious, but the shopping experince is totally lost unless the 21st century shopping experience is walking through crowds of shoppers and standing in long lines for billing.

The following is in reply to Indy's comments on my initial post on FDI in Retailing in India:

No disagreements on your suggestion. But world over, to my best knowledge, globalization has been the trigger factor for organized retailing. The retail industry is fragmented not only in India or Asia but rather all over the world as the driving force for any retail shop is the humble entreprenurial spirit but over time as cities and nations develop, there are probably more than a million such "mom and pop" stores all over the country in a size like India. I don't know how much the Amul story can be replicated for the rest of the industries.

FDI in Retail would only enable us to move up the value chain much faster than anyone can imagine. Opening of the economy is the only way we can compete on par with the rest. This will have a tremendous impact to the end customer as the benefits like better pricing, experience, service and convience will follow soon. Employees at such places would get better packages too than ever before. Issues will be part of the capitalist model where the small and ineffiecient ones will die out over time and many entreprenuers will be scaled out. Thats the price we pay for globalization. Happens in every nation, not just in developing countries. Today the UK Grocery market is dominated by 6 major retailers who command about 70 % to 80 % of the market.

While we have all seen the effects of globalization, it does have its share of damage too. Travelling to many countries including Thailand and Japan, its ofen a wonder what is the state of globalization. My recent trip to Japan was an eye-opener as it made me wonder is this the reality of organized retailing and globalization. The market has exploded dramatically over the decades and with increased competition, the only driving force appears to be rock bottom pricing. Whatever happened to the service and the store experience. While there were a fair share of stores with what we look for in the store experience, the rest were just unbelievably huge malls and individual stores the sizes of malls that India has never witnessed. Stores are flooded with the latest and best merchandise no matter what the product is but its like an wholesale trade.

The concept definitely adds value to the consumer when he is price conscious, but the shopping experince is totally lost unless the 21st century shopping experience is walking through crowds of shoppers and standing in long lines for billing.