| Allowing Foreign retail entities like Wal-Mart, Tesco will not give much value-add to the retail growth, feels Kishore Biyani, Managing Director of Pentaloon Retail India Ltd.
In a hard hitting article in Indiatimes.com he questions the wisdom of ' gift wrapping our 1.2 billion consumers to them?' 'Should we allow them to dominate us? Remember, this is not automobile or oil and gas or power or metal sector that we are talking about. What is it that a Walmart can do that an Indian retail company cannot?,' is what he wants to know.
Retail is an infrastructure business. Organised retail is growing at 40% in India . Walmart cannot grow it faster, for if it were possible, Indian retailers would have grown it. So, what is the BIG attraction? Is it Investment? Retail is not a capital-intensive business. Indian retailers will invest faster than foreign retailers because they understand India'
'Indian retail has been serving 1.2 billion people, half of them at the bottom of the pyramid. If the likes of Walmart invest $500 million in supply chain management, as they claim, the prices cannot remain at this level. At their return of investment (ROI) of 18%, they will expect $90 million annually. Either the Indian customer or the Indian vendor will suffer, or both'.
He suggests if they are so keen they should be asked to develop the luxury segment first. 'At 3% organised share if India is attractive, at 10% it will be more so! If there is a hurry, then open up lifestyle retail first. Let them expand the consumption in the upper end of the market by bringing luxury and home goods. This way they can demonstrate all that they are saying. Also, the Indian government will save foreign exchange as this set of Indian customers won't travel abroad to shop.'
Read the complete article in http://timesofindia.indiatimes.com/ |
