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| Vol. 2 Issue 2 - February 2007 In this Issue
The Bharti, Wal-Mart deal is still making waves, both in India and abroad. While the firms are going ahead with their plans - recruiting people, leasing space and so on – political bigwigs and the left parties have expressed concern over the deal and what it will do to the local fabric.
This is not totally unexpected, but it surely is surprisingly late in the day – the left parties and Congress President Sonia Gandhi have expressed concern over the entry of international retailers into an India traditionally served by smaller operators. While the retail sector continues its onward journey at the same dizzy pace, we are sure a few international players must have paused….
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The big news this month is not highly encouraging…Congress President Sonia Gandhi and the left parties have expressed concern over allowing international majors entry into India – their focus is firmly on the small players who have traditionally served this market. The recommendation is that the Government go slow or reconsider allowing foreign direct investment in the retail sector. Analysts are still working out the odds on the kirana v/s organized retail major battle, vacillating between saying that the two sets of entities will co-exist happily, each serving different needs and predicting doom for the kirana store, who perhaps would find the pace daunting. We would like to go with a variant of the former prediction….yes, they will co-exist – but only as long as the Indian consumer weighs his options in favor of the kirana – paying MRP at an outlet that’s a stone’s throw away versus paying better prices, but at the cost of a longer trip to the nearest retail outlet. In any case, most of India still prefers to walk to the nearby kirana store for nearly everything! This will change if and when the biggies set up outlets in every other street, in every neighborhood – which they will, if the numbers make sense. But this will take time. For a sector caught in the frenzy of here and now, what economist John Meynard Keynes said about long run economics…”in the long run, we are all dead” holds true….at least in the short run!
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We continue inching forward; always learning more about the sector that has India interested and excited. Our Retail Newsletter, is being downloaded nearly through the month…more importantly, we have an increasing number of readers posting a query on our site India Reports (www.india-reports.com). This is feedback of another kind; it keeps us on the roll, thinking and analyzing as we answer these queries, and prepares us to move on to the next level with new reports and analysis. You can help us by sending your suggestions … how do we become the preferred newsletter in the Retail space? Write to us: Featured Product India-Reports latest whitepaper is on Medical Tourism with a focus on Bangalore.
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Chillibreeze Team
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