Who is afraid of FDI?

I am totally flustered with this onslaught of views on FDI in retail. As i started thinking about it myself, felt i should too add my analysis on this subject which might be different from what many an expert is saying.

Consumer seems to have been forgotten on this entire discussion and how it is going to affect him is not talked about much. Let us look back and re-visit our own neighbourhoods after the advent of Indian giants into the organised retail.

BEFORE ORGANISED RETAIL (BOR)
POST ORGANISED RETAIL (POR)
1
BOR Branded commodities for limited products, dependence on retailer for the quality & measurement
POR More branded commodities, some shop brands, giving better price n quality
2
BOR Rice n wheat staple diet, totally dependent on what the retailer stocks
POR More varieties, better stocking, easy to buy, transparent weighment
3
BOR Vegetables sold at mandi or on carts, not allowed to pick n choose, measurement suspect, min quantity compulsions
POR Shopping in comfort, more organised outlets (not necessarily big names) selling produce. No restrictions on min quantity you buy, electronic weighment, computerised billing for better transparency
4
BOR Very few items door delivered, mostly monthly purchases
POR Even less than Rs.100 purchases door delivered, salt/bread/eggs, you name it everything is door delivered. (even liquor in few cities)
5
BOR Medicines, one had to go the shop n buy, bill needed to be demanded
POR Door delivery, discount stores (Medplus), chain stores (Apollo Pharmacy) with buy any where facility (for pre-deposited money with bonus value), credit/debit card payment
6
BOR Purchase only across the counter, Kirana list a must, so that you dont forget, consumer offers not well displayed
POR Convenience shopping (some places with air conditioned comfort), new products displayed well, consumer offers, shop offers, bonus mileage points on purchases
7
BOR A job delegated to servents as you are not comfortable going there
POR Consumer is happy to go and do their own purchases, buys what he wants and can make sure expiry dates are under control
8
BOR Fake labels, wrong measurements, adulteration(still prevalent in small town India)
POR All issues addressed where organised retail is present, cant say for sure about Bharath n it's villages
9
BOR Make do with what is available, limited choice
POR Segment wise retail Local, Regional, National & International names offering more n more choice with better quality n VFM

Now this is something which we have witnessed in the last decade for our own comfort and betterment of our living standards. As they say with higher choices more cash outflow n less savings. This is being justified with higher incomes at all levels.

In this process have we seen shops closing down or transforming themselves. A case study i would like to quote is the Vegetable mandi's in Chennai city. In every locality there were outlets selling fruits n vegetables (Pazha Mudhir Cholai's), sourcing their goods from Koyambedu wholesale market. They were offering certain comfort to the shoppers with their own innovative methods. This was an improvement from the old system of going to specific local markets where the produce was spread out on the floor and you had to interact with abusive vendors. Then came the 'Fresh' outlets offering air conditioned comfort while shopping for the same products. Some of these 'Fresh' owners approached these Pazha Mudhir Cholais to become their franchisees, how ever these enterprising business persons chose to transform their business rather than give in to these 'Fresh' chains.

Today these outlets have electronic weighing machines, computerised billing, whether you buy 44 grams or 1025grams. Boys are trained to use computers, no one is complaining as they pay for what they buy and are in a position to pick n choose the freshest fruits or vegetables.

Let us look at our neighbourhood Kirana merchant, has he shut shop after the big name super bazar's came into existence, no he hasn't, he has improved his customer service, making sure he gives the people groceries n more, which have been inevitably forgotten to be picked up from the supermarket as the consumer is slowly forgetting the 'Kirana List' and cant run every time to the supermarket. Thanks to the parking woes it is the local Kirana guy who stands in taking care of the door delivery. No one is complaining as there is enough business to all.

Coming to the so called big supermarkets like Walmarts, there are some ares where they could make a difference but certainly not in the commodity and food product area. We Indians do not prefer to buy food products in bulk (traveling long distance) either due to space constraint or our eating habits. Fruits n vegetables are always preferred to be purchased periodically as much our refrigerator might allow us. Meat also people prefer fresh meat compared to cold storage stuff, that is the reason, still we have neighbourhood meat shops doing good business. With all this whom is it likely to affect. Products, if our industry does not have the scale and is not competitive, they are likely to suffer as products will be imported by these mega shops and sold attractively to the consumers. It would be up to our industry to shape up n deliver quality products at good prices.

Even here if one looks at it, today we are seeing a huge spurt in local brands of furniture, White goods stores ramping up and increasing the number of outlets so that the consumer doesn't have to travel long distances for their needs. National players like E-zone, Croma, R-Digital making their presence felt with outlets coming up in towns with less than one mil population. With FDI coming in they are likely to sign up with international names or much better get funding to fight the giants.

It is noted some enterprising shop keepers going n buying in bulk goods which are being sold on deep discounts (a price which he cant demand from his supplier) at these mega outlets and sell them in their outlets.

In all this, we the consumer how are we going to be affected, will we not benefit with better service, better customer care and attractive pricing, then why are our politicians protesting on our behalf about this FDI in retail, is this the most pressing issue in our country, cant they take up inflation n corruption which are bothering us much more.