Isha Varma Anu Moudgil SIIB

Some Facts about FDI in Retail

Thailand : FDI entered in 1997 In 5 years, 60% of the then owned stores shut down Britain : FDI in between 81-99 No of independent shops fell by 50% Do we expect any better results in India ??

FDI will bring in NEW JOBS

US: 85% of Retail is Organised Walmart : 400 bn $ Turnover in US In 2005, 400 bn $ = Total Value of Indian Retail Industry ( 4.4% organised Retail) 2.1 Million Jobs in Walmart = 400 Million Jobs in India 21,00,000 = 40,00,00,000 21 Lakh > 40 Crore Is It. ??????

Penetration of top 20 International Retailers

Norway 99% Sweden 94%

Switzerland

88%

France

81%

UK

64%

Portugal

57%

If foreign retailers could capture 20 % of indian Retail Market , something about 8 Million jobs will be lost. Their level of efficiency mean they need less and less of people for each 1000 crores of Turnover - Business Line April 2005

FDI in Retail

Inflation

??

Inflation = fn (...) of

Fragmented and lengthy value chain

Crude Price Excess Liquidity (Stimulus Package) No unload (hoarding by Govt. )

Benefits to Farmers

Elimination of Middle Men : Increased Margins to Farmers.

Walmart in US

Every farmer has access to Computer High levels of Commodity Trading Condition of US farmers should be much prosperous. Isnt it.. ?????? US -- Direct Support to Farmers Why is US year after year giving indirect subsidies to farmers ? Acc to a UNCTAD Report if the green box subsidy is removed, the US Agriculture will collapse !!

Inviting Trouble for the Farmers

Contract farming-imposed on farmers-strict adherence to quality & schedule. Possible with Upsets in weather & infrastructural constraints? Decline in their number as companies tend to delist suppliers who do not come up to expectations. Premium from customers for improved quality and rejects to the farmers lowering their earnings.

Modernizing what Supply Chain?

Source: NSS Report, Household consumer expenditure in India

Reduce Middlemen : Efficient Supply Chain

Who are the intermediaries ???? transporters small traders Should we eliminate people who are bringing social development to the country. Should they lose jobs ????
Who will be the intermediaries in new system.. ??

Big Corporates Brand Ambassador Large Power CNBC Report says Retail wants to increase advertisement expens close to 1BN $, once the new norms are approved

Are these retail chains ready to be at back end ?

am hoping whatever finally comes out is clear. We would like to see the front end and the brand belonging to us.. & Certainly other players that we are in talk with also want the same
Mark Ashman, CEO Hypercity says I

Will imports from India by WalMart go up?

Wal-Mart emphasizes the amount that it sources from India, as a reason it should be allowed to build stores. 70% imports from China. A massive entry point of China's largely stateowned consumer goods. Wal-Mart could upset the import balance by importing massively from China rather than using local production. Manufacturing job losses.

Predatory Strategy

According to FICCI study, total turnover of the organized and unorganized retail trade in India is less than the turnover of Wal-mart. With its incredibly deep pockets Wal-Mart will be able to sustain losses in its Indian operations for many years till its immediate competition is wiped out.

MONOPOLY!!!

Results

High Real Estate Prices Land Acquisition : Displacement of people. Limited jobs in manufacturing. Cannot provide employment to semi-literate people
Form

majority of population

Pushing families below the poverty line. Creation of Monopolies. The main purpose defeated if focus is on front line instead of back end.