12 Aug 2012

Thoughts on commerce III - FDI in Retail

The Indian consumer is a highly under appreciated group. Partly our fault, of course. While all other groups form unions and call a day off work, we grumble a bit and buy what's available. Which is why, when the government and the Indian industry wrangle about FDI in retail, the discussion is foreign retailers vs desi retailers. The real losers are never taken into account - the Indian consumer. Not letting foreign retailers into our hallowed markets will not affect those foreign retailers much. I'm sure they'd like to have India as a market - we don't spend much, but our sheer numbers will probably make up for it. But if they don't get India, they won't be heart broken. China is so much bigger, and they didn't break their hearts over not getting a foothold there.

When Indian retailers say they will lose business and have to shut shop, what they are really saying is that they have knowingly been selling Indian consumers sub-standard products, because they knew we have no where else to go. They have, effectively, been stealing from the consumer, by forcing them to pay more for low value goods. The value of your money is equal to the products you can buy with it. So far, Indians have been made poor because although they have the money, they don't have the goods. Although Indians have distinctly different sizes, no manufacturer or retailer has bothered to provide us clothes and shoes of our sizes. We must depend on what they make for international sizes. Even then, I've found much better quality and fit in the discount shops in America, than in our upmarket malls in India. Manufacturing laws have discouraged innovation and the rise of small shops which make cheaper and utilitarian products for the Indian kitchen. In spite of the number of diabetes and arthritis patients in the country, we cannot access the right foods and products for these diseases. All the S.E. Asian countries have better markets than ours.

In other words, our retailers have let us down. They really have no right to prevent foreign retailers from trying to give us a better life. 

1 comment:

Rakesh said...

very interesting take.. never really thought of it from the consumer angle.. hmmm.