Comments on: Allowing FDI in retail will enlarge scope, bring fresh capital, and increase competion, say industry leaders, welcoming Eco Survey http://www.indiaretailbiz.com/blog/2009/07/03/allowing-fdi-in-retail-will-enlarge-scope-of-sector-bring-fresh-capital-and-increase-competion-say-industry-leaders/ Capturing the Excitement of Retail Biz in India Fri, 27 Nov 2009 09:10:48 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: Nishu Kr Gupta http://www.indiaretailbiz.com/blog/2009/07/03/allowing-fdi-in-retail-will-enlarge-scope-of-sector-bring-fresh-capital-and-increase-competion-say-industry-leaders/comment-page-1/#comment-5942 Nishu Kr Gupta Fri, 03 Jul 2009 05:03:57 +0000 http://www.indiaretailbiz.com/blog/2009/07/03/allowing-fdi-in-retail-will-enlarge-scope-of-sector-bring-fresh-capital-and-increase-competion-say-industry-leaders/#comment-5942 FDI will no doubt accelerate this process, but there is strength in the argument that we should not give in to the lobbying power of the multi-nationals just because they are looking for growth not found in the mature Western markets. India should extract from these Western retailers what India needs, including technology, know-how and best practices not available in India currently.Once the local players have become large enough to face the competition (2 to 3 years), let it be fair game. Let the best player win. And as evident from the experience of Walmart in countries like South Korea and Germany, Retail is a highly local business. It is not always the player with the deepest pockets that wins. Ultimately, it is the company that understands the customer the best that will have the largest market-share. Big Retail is here to stay. Assuming that improvements in infrastructure and lower real estate costs become a reality, Big Retail still has a long way to go before satisfying the highly diverse needs of the Indian population. As a result, there will be a steady-state where Big Retail will co-exist with Small Retail. The role that the government plays in the next few years will decide how quickly and harmoniously we reach this steady-state. NKG FDI will no doubt accelerate this process, but there is strength in the argument that we should not give in to the lobbying power of the multi-nationals just because they are looking for growth not found in the mature Western markets. India should extract from these Western retailers what India needs, including technology, know-how and best practices not available in India currently.Once the local players have become large enough to face the competition (2 to 3 years), let it be fair game. Let the best player win. And as evident from the experience of Walmart in countries like South Korea and Germany, Retail is a highly local business. It is not always the player with the deepest pockets that wins. Ultimately, it is the
company that understands the customer the best that will have the largest market-share.

Big Retail is here to stay. Assuming that improvements in infrastructure and lower real estate costs become a reality, Big Retail still has a long way to go before satisfying the highly diverse needs of the Indian population. As a result, there will be a steady-state where Big Retail will co-exist with Small Retail. The role that the government plays in the next few years will decide how quickly and harmoniously we reach this steady-state.

NKG

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