Wednesday, June 17, 2015

Level Playing Fields in Indian Retailing

Equality debates have been heating up in India. Recently the press reported that an actress demanded wage equality between actresses and actors. The word ‘actor’ is now commonly applied to both genders and it’s now the ‘female actor’ and the ‘male actor’! So, I have to revise my sentence to negate the semantic distinction and mention that a female actor demanded wage equality between ‘female actors’ and ‘male actors’! Equality has been achieved in ‘word’ but it appears that in terms of wages in the tinsel world it is not yet a reality!

The Times of India carried an advertisement as part of its own Corporate Social Responsibility yesterday, claiming vociferous attention to gender equality that is denied under some laws that treat women as unequal second-class citizens. The advertisement copy read thus: “Identity in Crisis – Acknowledge the Individual in Every Woman” featuring Chanda Kochhar, ICICI Bank’s Managing Director. The advertisement said, ”The Hindu Succession Act says that in the absence of a spouse and childless, the property of a woman who dies without a will goes to the husband’s heirs. Why? Why not to her siblings or heirs?” The equality demand raised by TOI is only just and fair.

It’s the turn of retailers to look at equality rights now.  Just as the fourth estate has been highlighting equality demands, the modern retailers of India have lost no time in staking their claims. (The neo-modern ones are the online retailers who are pushing the brick and mortar moderns into the past, fast!). The big brick and mortar retailers have moved the Delhi High Court seeking justice for ‘level playing’ field with online retailers. High level discussions are on for allowing 100% Foreign Direct Investment in online B2C retailing in India and in brick and mortar it’s allowed only partially with conditions on investments. India is a land of small retailers with a statistical count of over 14 million tiny retailers. Consequent to that singular attempt to have level playing field with them, did the Government of India not allow FDI fully in the modern retail trade.

Arguments are centering on numbers. On the one hand pro-online retailers argue that the number of marketplace vendors that online retailers have been able to create is humungous with the large ecommerce organizations sourcing from as many as over three lakh suppliers who are the Micro Small & Medium Enterprises (MSME) in India. They say on the other hand that brick and mortar retailers have been able to develop only a few hundreds of vendors from within the country! And online retailers have been able to attract investors with billions of dollars while the brick and mortar retailers have not been able to garner even a tenth! Brick and mortar retailers cry foul saying that if FDI were allowed 100%, investments would pour in larger measures. The next question goes towards the concern of the Government of India for small retailers and what would happen to them if FDI were allowed 100% in brick and mortar retailing.

Level playing fields in retailing seem to go fathomless. Online retailers have been rocking the marketplaces and benefitting Indian consumers. The claim of big retailers may work more the other way than getting FDI norms in their favour. It may attract the attention of policy makers to lay conditions (like the ‘must source’ clause) for e-commerce organizations to source and sell majority of merchandise made in India (which if implemented may only do good for our country!) But, would that be just and fair to all including the millions of new online consumers? Or open FDI 100% in modern retailing considering retailing as one entity, that is, online retailers and brick and mortars combined, without any conditions? Would that be just and fair to the millions of small retailers who depend on the daily business from their petty shops for a livelihood? The Modi Government must have the answers!


                                                                                                     - Dr. Gibson G. Vedamani