A slew of economic measures taken in our country since liberalization has catapulted India to its next level of growth. Our cabinet has taken these decisions in a well-planned and thought-out manner for the last two decades and there have been negligible instances of decisions being put on hold for fear of the allies or the opposition turning antagonistic. Similar decisions have been taken boldly amidst many a furore though. Even as sectors like telecom opened up for FDI in India many raised eyebrows initiating a debate of who is going to the beneficiary - the foreign investors or the Indian telecom companies? But the fact remains that customers in the remotest areas of our country continue to enjoy the benefits! I was sitting in a teashop by the service road along the highway in the outskirts of Satara in Maharashtra a few weeks ago and I could hear the common man discussing service levels in a customer care centre of a telecom service provider! If the reach of mobile phone service has not been to the extent that we have achieved in India, where could any man in a village near Satara have learnt the service obligations of service providers?
A case in point is Foreign Direct Investment in retailing in India. We have put the decision of opening up FDI in multi-brand retailing on hold, fearing the imminent fall of the government. Our decisions are now based on the ability of satisfying opposing political forces so that there would be no ruffling of feathers at the throne chamber. We all know that a bunch of research studies has been carried out and the most significant one was done by ICRIER a couple of years ago which clearly stated the benefits of bringing more investments to the organized retail sector – one of the major benefits being the opportunities to employ people who would otherwise be unemployable and the other being augmented margins to the farmers besides value addition to them by virtue of training and handholding.
Twelve million retailers are just shown as a cause for attaining political mileage whereas we put the interests of the rest one hundred and eight million people of our country at stake! And a good percentage of these small retailers will rediscover themselves. A small convenience store retailer in Mulund, underwent a three-month professional programme in retailing at a reputed management institute in Mumbai in Mumbai in 2002 and since then he has organized his store very well. He has a Point of Sale (POS) system and does very effective inventory management without letting any FMCG supplier force-stock his shelves by schemes that usually upset stock-turns a great deal! He has even changed his freezers to enjoy the benefits of saving electricity consumption cost. He has an effective customer relationship practice which operates ‘through the back of his palm’ offering door deliveries too. Many more such retailers have learnt the ropes of efficient small store retailing. I came across an enviable collection of Christmas stars in a small store at Nazareth, a small town in the southern most part of India and when I praised the retailer’s merchandising skills he whispered that he got them directly from an all India level manufacturer in Kerala directly. He also told me to come a week later to buy firecrackers from him at a good price! Sourcing is his great strength!
But alas, I also saw the fishermen in Kanyakumari who risk their lives and fish, but handover the whole catch to middlemen! None of the fishermen who fish there have their own outlets to retail or wholesale, for that matter! Today everything is becoming organized and transformed. Take our Indian railways. The stations are clean, the food is good and passenger convenience has been looked into, thanks to just one minister who aggressively initiated a large-scale transformation. He had great guts!
Even as internet retailers charge a ‘listing fee’ which is paid as a commission for the suppliers to gain presence on their websites (which is the only margin for the service provider), a few brick and mortar retailers tried to implement the same practice which could affect our small and medium entrepreneurs largely. This is being highlighted as a practice against law and now organized retailers do not charge any such ‘listing fee’ from suppliers.
Will the sun rise in this sunrise industry? Or will it remain a Farfetched Dream of Indians?
- Dr. Gibson G. Vedamani
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