Monday, June 13, 2005

FDI in Retail - Ignoring Indian Enterprise

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What is wrong with our own Entrepreneurs?

For the better part of half a century after our Independence, the economic environment was stifled with the License Raj and the intensely restrictive policies of the Government with the result that the innate business acumen, enterprise and risk taking abilities of our Entrepreneurs could not be utilized adequately. Indian Entrepreneurs have done well for themselves in other parts of the world against heavy odds. Indian businessmen, who found success in distant lands but were at one time driven out of the host countries penniless, once again achieved success due to sheer grit.

During the decades after independence, had the Indian Entrepreneurs been given the required freedom to seize the opportunities in this vast market that is Bharat, there is no doubt that they would be competing successfully with the world.

That was not to be, and it is only in the last few years that they are enabled to use the newfound opportunities. Even in this short period, they have done well for themselves. The number of Super brands that are growing and the number of sophisticated Retail outlets that are being established, are proof of our own abilities. All this is being done, largely, based on our own strengths. If the Government prefers Organized Retail, we are already seeing Organized Retail growing fast, WITHOUT foreign players. Supermarket Format, Hypermarket Format, Department Store Format, fully stocked shelves with ever-increasing choice of goods, modern Merchandising and displays, sophisticated Mall and Shop designs, modern packaging, bar-coded labels, …everything seems to be there. As far as the Supply Chain is concerned, most of the larger stores already work closely with their suppliers, developing products that the customer wants and improving logistics. The number of Suppliers is also growing; many amongst the suppliers are even involved in international selling and aware of the need to adapt to market needs. The Retailers also now have access to imported specialty products. Those who establish and manage these new Retail Trade formats - whether Shopping Malls or Supermarkets or Department Stores - are successful and savvy businessmen, young entrepreneurs and qualified managers, of whom there is no dearth in the country. They are well-travelled abroad and understand the new Retail concepts. What they lack in knowledge of orgnization and management can well be acquired. The country also boasts of an Institution of Retail Management where the managers of the future can be trained.

And, what would be the fate of the thousands of consumers’ co-operatives and the Superbazars? Also not to be forgotten are the millions of small shops which have served the country well over the years. Can the Government not show some original thinking and encourage the Indian Retailers to develop alternative Retail Formats e.g. an Indian version of a Souk in the Middle East?

As the economy is growing, the Retail Trade is growing in tandem too, keeping pace. Retail Trade is one area where, whether it is the rather dismissively referred to as ‘Mom and Pop’ store or the more organized store Format, the country seems to already have what is needed. To invite foreign entities in this field is, by implication, to downplay the efforts of our homegrown entrepreneurs and to have no faith in their ability to deliver. To invite foreign entities at this stage is to deny the Indian talents, the opportunity to grow to a level where some day, they could challenge the very global players, which the Government so eagerly wants to welcome.

It would be only fair to finally give the Indian Entrepreneur, a chance to prove his mettle. Having struggled and survived in this country, it is the Indian businessperson who deserves a chance to partake in the growing Pie. The Indian Entrepreneur needs to be given some time and space to develop the Retail Sector into a vibrant and thriving Sector to meet the new challenges of Global competition which will certainly have to be faced eventually. That is his just due and to deprive him of the same by allowing, at this stage, Global players who have not faced the tough past in this country as he has, would be most unfair. And, lest it be forgotten, when the Global players are here, this country would become a new battleground amongst them and the Indian Entrepreneur would be the first to suffer – on his own turf.

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At June 18, 2005, Anonymous swadeshi-inspired said...

I agree with the comments.
We have sen examples of highly successful new entrants like Foodworld, Pantaloon etc. and they are doing great!!


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