Will telephony become Free in India? Will telephony just become Internet telephony? Will 4G networks and IPV6 track the entire world with 300 Billion IP adresses? Will VOIP calls be much better than analogue calls? Will your thumb recognition become your worldwide biometric identity? Read to know more...
If we were to go by the growing clout of telecom operators in India and the fierce fight among them for Bandwidth, it's a rare chance that the telephony would become free. However, based on my previous post on how the TSPs might just turn into ISPs, this might just become true. Even the government of India through their BSNL and MTNL services is planning to launch 2MBPs free broadband internet connection by 2009.
At-least for Youth it might be...
There have been not so old instances of free service providers like Tiger etc which failed to attempt such a concept. Though, I guess it was too early for Indian markets. However, looking at how wireless telephony has expanded in India and why mobile marketing should work in India. I do see a large Youth market out there (Youth Ages 10-24, by 2025 is estimated at 349,200,000 by Population reference bureau) who would not mind listening to a 5 sec ad after every 15 minutes that they spent on phone; if there phone calls were free of charge. (Or probably the premium telephony for business users where they don’t get ads, but they pay higher rental charges.) Also they are given an option of a unique single online mobile wallet for multiple purchases in which they need to buy a monthly recharge wallet card varying anywhere between Rs 99 - Rs 1000.
So, what I am essentially saying is, having an online mobile wallet which gets recharged by a payment of Rs. X/month, like from a recharge coupon which can be bought from a local shop. (Even this will get eliminated when we will have 4G network and IPV6 so that every device will have an IP address and just a Biometric thumb recognition would be your worldwide identity.) Now, they get to talk free and have to listen to some Voice / Video Ads and probably text messages. What they just need to do is probably use the mobile wallet to buy the services being offered to them through promotions on their mobile.
Why should I buy from my Mobile Wallet?
Well anyways, wouldn’t you be buying your monthly required items like a deo or a Movie DVD (after watching the trailers on mobile) or may be a grocery or something similar? And if you get to buy the same through a Mobile phone through a special promotion being run and it gets delivered to your doorstep…obviously an hassle free shopping experience (oh did I say that Oil prices are always rising and travelling has become a challenge, specially if you have stayed in places like bangalore, mumbai, dubai etc). You can browse through the online store on your mobile and choose and pay directly through your mobile wallet safely by your biometric signature check on your mobile phone.
What’s in it for the Supplier?
Cheapest media to connect and advertise directly in the hands of the consumer. No large real estate investment, no large set-up required, no middle men’s commission, just pure B2C delivery of products.
How can you implement this?
Initially promotion of the Mobile Commerce or M-Commerce can be supported through certain specific low cost campaign launches from advertisers like contests, freebies etc. and over a period of 2 years when we see M-Commerce becoming popular, the TSPs (or WiISPs), would start charging the advertisers for the AD time which will again be contextual content ads targeted according to the buying or other behavior of the audience.
Is this model sustainable?
This is the question which we have to answer and will get answered only by looking at the response to the mobile advertising’s success in India. Would Indians accept the technology and would prefer to buy on Mobile or would still want to visit the store to buy? Would the telephone calls be completely free or the companies like Skype or Google charge the consumers to call? Would internet broadband become a reality on mobile phones or would it still be marred by the technology?
I see the light of positive hope and this approach of Mobile driven sales and marketing catching up in next 2 years time.
Showing posts with label Retail in India. Show all posts
Showing posts with label Retail in India. Show all posts
Sunday, January 13, 2008
Sunday, November 25, 2007
Bangalored – Not Anymore? – Real Estate giving jitters – Companies moving out of Bangalore
Bangalored – Not Anymore? – Real Estate giving jitters – Companies moving out of Bangalore
With the real estate prices skyrocketing in the main business centers within Bangalore city limits, the city is set to see companies moving out of Bangalore.
The term Bangalored meant people in other parts of world loosing their jobs to people in Bangalore. However, Are bangalorians set to see terms like Cochined? Hosured? Mysored? Chandigarhed? Or probably Eastern Europed? Or Czeched?
Premise:
Not just the living cost but the costs have gone up in all respects in Bangalore. Whether it is salaries, cost of living, daily groceries, house rents, office space rents, taxes and expectations…almost everything has gone sky looking.
So if you were a 50 – 150 employee organization running in a busy business centre or a focal business area in Bangalore, you would be paying anywhere between, Rs. 70 – 150 / Sq ft of office space cost. With these things in mind, we are talking about almost a 100% increase in rents since past 3 years. Resulting in increased operating costs and decreased margins. Eventually cuts in company expenditures leading to options like either looking for a cheaper space outside Bangalore or doing employee cut.
Considering most of the companies face a 10-20% attrition rate and they would want to keep the hiring and training costs low, employee layoff is the most risky proposition. So companies are looking out for various ways to cut their op-ex.
Reasons:
If you were thinking organized retail is the best thing which is happening to Bangalore with over 20 shopping centers and retail malls opening within past 3 years, Bangalore is getting modernized and seeking high paced positive growth.
Here is a realty check. Considering the revenue a retail shopping mall / food complex is going to make on a monthly basis would be much higher as compared to any company paying as a rent. The malls, retail chains and similar sorts are ready to shell out almost 200% more than what the regular companies / young entrepreneurs can give as rents. So obviously the land lords would want more moolah and boom, the deals get signed with the highest bidding retailers.
Large office spaces like Whitefield/ITPL/Electronic City are anyways facing issues of long traveling hours for employees, unsatisfied employees, increased travel costs, higher stress levels, increased residential real estate prices putting pressures of increased salaries, higher expectations and more…Companies like Wipro, infosys and many more are even adopting policies like allowing employees to work from home, stay in their home cities and moving their bases to 2nd rung cities already.
Bangalore not an entrepreneurial heaven any more.
Not just retail, companies are these days being pushed to revise the rent agreements signed long back. This again, is giving jitters to companies working for long in same places. The entrepreneurs are seeking it difficult to get a reasonable office space at a cost that they can afford and which is aborting a lot of ventures which could have burgeoned into tomorrow’s infosys’.
What’s Government doing?
After year’s of resistance and so many court cases, Delhi government decided to shut down commercial establishments in residential areas. This lead to shops moving into malls and shopping centres authorized for the same. In turn led to people moving to move out of expensive places in Central Delhi to Gurgaon, Noida, Faridabad, Ghaziabad and more. The city saw a rental price correction and more organized businesses.
What is Karnataka government thinking? Are they going to keep allowing commercial shopping centers in residential and office areas? Is their any policy to control this? When are they going to wake up? Is their going to be some regulation on the rentals? Or will the government just bother about who is taking the Seat in Assembly?
Strangely while all this is happening, the CM and rest are busy in their new mid term election games. Pathetic situation of city’s infrastructure doesn’t bother them. It is painful when they cut 33% of my salary as a tax and I do not see infrastructure in front of me. And then I see my money is being wasted for an unwanted state elections.
Closing thoughts:
With the distanced attitude of the government, poor infrastructure, no means to control prices. The “Bangalorians” are all set to see job cuts, jobs moving out of Bangalore, consolidation in salary hikes, surrounding cities taking over, or you never know, Bangalore loosing it’s image as silicon valley to a realty stone valley.
With the real estate prices skyrocketing in the main business centers within Bangalore city limits, the city is set to see companies moving out of Bangalore.
The term Bangalored meant people in other parts of world loosing their jobs to people in Bangalore. However, Are bangalorians set to see terms like Cochined? Hosured? Mysored? Chandigarhed? Or probably Eastern Europed? Or Czeched?
Premise:
Not just the living cost but the costs have gone up in all respects in Bangalore. Whether it is salaries, cost of living, daily groceries, house rents, office space rents, taxes and expectations…almost everything has gone sky looking.
So if you were a 50 – 150 employee organization running in a busy business centre or a focal business area in Bangalore, you would be paying anywhere between, Rs. 70 – 150 / Sq ft of office space cost. With these things in mind, we are talking about almost a 100% increase in rents since past 3 years. Resulting in increased operating costs and decreased margins. Eventually cuts in company expenditures leading to options like either looking for a cheaper space outside Bangalore or doing employee cut.
Considering most of the companies face a 10-20% attrition rate and they would want to keep the hiring and training costs low, employee layoff is the most risky proposition. So companies are looking out for various ways to cut their op-ex.
Reasons:
If you were thinking organized retail is the best thing which is happening to Bangalore with over 20 shopping centers and retail malls opening within past 3 years, Bangalore is getting modernized and seeking high paced positive growth.
Here is a realty check. Considering the revenue a retail shopping mall / food complex is going to make on a monthly basis would be much higher as compared to any company paying as a rent. The malls, retail chains and similar sorts are ready to shell out almost 200% more than what the regular companies / young entrepreneurs can give as rents. So obviously the land lords would want more moolah and boom, the deals get signed with the highest bidding retailers.
Large office spaces like Whitefield/ITPL/Electronic City are anyways facing issues of long traveling hours for employees, unsatisfied employees, increased travel costs, higher stress levels, increased residential real estate prices putting pressures of increased salaries, higher expectations and more…Companies like Wipro, infosys and many more are even adopting policies like allowing employees to work from home, stay in their home cities and moving their bases to 2nd rung cities already.
Bangalore not an entrepreneurial heaven any more.
Not just retail, companies are these days being pushed to revise the rent agreements signed long back. This again, is giving jitters to companies working for long in same places. The entrepreneurs are seeking it difficult to get a reasonable office space at a cost that they can afford and which is aborting a lot of ventures which could have burgeoned into tomorrow’s infosys’.
What’s Government doing?
After year’s of resistance and so many court cases, Delhi government decided to shut down commercial establishments in residential areas. This lead to shops moving into malls and shopping centres authorized for the same. In turn led to people moving to move out of expensive places in Central Delhi to Gurgaon, Noida, Faridabad, Ghaziabad and more. The city saw a rental price correction and more organized businesses.
What is Karnataka government thinking? Are they going to keep allowing commercial shopping centers in residential and office areas? Is their any policy to control this? When are they going to wake up? Is their going to be some regulation on the rentals? Or will the government just bother about who is taking the Seat in Assembly?
Strangely while all this is happening, the CM and rest are busy in their new mid term election games. Pathetic situation of city’s infrastructure doesn’t bother them. It is painful when they cut 33% of my salary as a tax and I do not see infrastructure in front of me. And then I see my money is being wasted for an unwanted state elections.
Closing thoughts:
With the distanced attitude of the government, poor infrastructure, no means to control prices. The “Bangalorians” are all set to see job cuts, jobs moving out of Bangalore, consolidation in salary hikes, surrounding cities taking over, or you never know, Bangalore loosing it’s image as silicon valley to a realty stone valley.
Thursday, June 21, 2007
Contd. Organized Retail in India
I suggested earlier that government regulation is needed....Atleast First step taken by government.. ..however this may not be the best policy adopted...but it is somewhat similar to whats done in other parts of world.
Article in Economic Times, Front page, 18-june-2007, Bangalore edition
Big grocery retailers may come under licence raj
SHOPS SPREAD OVER 10,000 SQ FT, RETAILING FOOD AND GROCERY, TO NEED LOCAL NOD
Mayur Shekhar Jha & Rajat Guha NEW DELHI
THE government is mulling the introduction of a licensing regime to regulate grocery, fruits and vegetable retail in the country. As per the model being considered by policy makers, any shop dealing in retail of food and grocery items such as atta, edible oil, fruits and vegetables, and spread over 10,000 sq ft will mandatorily have to seek licence from the local urban body managing that area. The objective is to check unfettered growth of grocery retail and to protect small kirana stores by restricting the mushrooming of organised retail outlets in a particular catchment area. When implemented, the licensing policy will have a direct impact on all hypermarkets where selling of food and grocery items is proposed. Both Reliance and Bharti plan to operate huge hypermarkets, ranging from 50,000 sq ft to even 1.5 lakh sq ft in certain cases. The retailers will be allowed to operate only in a specified catchment area, thus minimising the scope of competition between them and local kirana shops. For one, in the case of Delhi, the MCD, which is the administering authority in most areas, will be empowered to give these licences. Large mega outlets and hypermarkets will be asked to operate from outside the city. The policy is being worked out by the commerce, urban development and labour ministry. According to sources, the move has come at the back of Left parties’ demand of regularisation of retail. “The Ministry of Urban Development is already finalising zonal plans. The zonal plans for Delhi will be ready by January next year. Subsequently, the same model will be followed in other states. The move is aimed at protecting the interest of local kirana stores from unfair competition thrown up by large corporate retailers,” a senior government official said. Zonal plans divide a city or town into different zones, specifying areas for mixed land use. These plans are then incorporated in the city’s master plan. However, when implemented, the mandatory licensing will not impact the basic food and grocery format of retailers like Reliance and Future Group and the proposed Bharti Retail.
Article in Economic Times, Front page, 18-june-2007, Bangalore edition
Big grocery retailers may come under licence raj
SHOPS SPREAD OVER 10,000 SQ FT, RETAILING FOOD AND GROCERY, TO NEED LOCAL NOD
Mayur Shekhar Jha & Rajat Guha NEW DELHI
THE government is mulling the introduction of a licensing regime to regulate grocery, fruits and vegetable retail in the country. As per the model being considered by policy makers, any shop dealing in retail of food and grocery items such as atta, edible oil, fruits and vegetables, and spread over 10,000 sq ft will mandatorily have to seek licence from the local urban body managing that area. The objective is to check unfettered growth of grocery retail and to protect small kirana stores by restricting the mushrooming of organised retail outlets in a particular catchment area. When implemented, the licensing policy will have a direct impact on all hypermarkets where selling of food and grocery items is proposed. Both Reliance and Bharti plan to operate huge hypermarkets, ranging from 50,000 sq ft to even 1.5 lakh sq ft in certain cases. The retailers will be allowed to operate only in a specified catchment area, thus minimising the scope of competition between them and local kirana shops. For one, in the case of Delhi, the MCD, which is the administering authority in most areas, will be empowered to give these licences. Large mega outlets and hypermarkets will be asked to operate from outside the city. The policy is being worked out by the commerce, urban development and labour ministry. According to sources, the move has come at the back of Left parties’ demand of regularisation of retail. “The Ministry of Urban Development is already finalising zonal plans. The zonal plans for Delhi will be ready by January next year. Subsequently, the same model will be followed in other states. The move is aimed at protecting the interest of local kirana stores from unfair competition thrown up by large corporate retailers,” a senior government official said. Zonal plans divide a city or town into different zones, specifying areas for mixed land use. These plans are then incorporated in the city’s master plan. However, when implemented, the mandatory licensing will not impact the basic food and grocery format of retailers like Reliance and Future Group and the proposed Bharti Retail.
Monday, June 18, 2007
Organised food retailing can increase rural income
One of my batchmates from IIM C sent this article on our group mail. and the following is what happened post it...
http://www.thehindubusinessline.com/2007/06/14/stories/2007061401910500.htm
Pranav sent the following article:
------------------------------------------------------------------------------
Organised food retailing can increase rural income, cut inflation: Crisil Will facilitate better supply chain management, create efficiencies
--------------------------------------------------------------------------------
The findings make a strong case for providing an impetus to organised retail of food and grocery.
--------------------------------------------------------------------------------
Chennai June 13 If organised retailing manages a deep and widespread penetration of the food and grocery sector, farm incomes could increase even as consumers pay lower prices, according to a latest study by Crisil Research. The study suggests that the resultant rise in farm incomes and in rural spending could boost GDP. Only one per cent of the Indian food-retailing sector is currently organised as against countries such as the US where the penetration is 80 per cent. Crisil estimates the total avoidable supply chain costs in the food and grocery chain at Rs 1,00,000 crore. About 57 per cent of this is due to avoidable wastage, the rest due to costs arising out of multiple storage points and multi-layer commissions. Farm realisations are, as a result of this wastage, only 35-40 per cent of the final retail price as against 60-65 per cent in countries such as the US. Inefficiencies push the final price paid by the consumer to 2.6 times that paid to the farmer. Organised retail practices, however, invest in better supply chain management and could create efficiencies by way of disintermediation and enhancement of transportation and storage facilities, which could in turn lead to reduction in commissions and lower wastage of produce, says the study. According to Mr Sudhir Nair, Head, Crisil Research, if one-third of these savings (Rs 33,500 crore ) are passed on to the consumer in the form of lower costs, it amounts to 3.5 per cent of the country's spend on food items (Rs 9,51,000 crore ). "This can play a significant role in lowering food inflation," it says. Food inflation was 8 per cent in 2006-07, while overall inflation was at 5.4 per cent. Mr Nair goes on to argue that if two-thirds of the savings from supply chain efficiencies are passed on to the farmer, farm incomes can grow by more than 37 per cent to Rs 2,50,000 crore. Crisil estimates that if farmers then spend 80 per cent of this incremental income, an additional spending of Rs 53,600 crore — nearly 1.7 per cent of India's GDP— would get added to the economy. In a teleconference with the media, Mr Nair admitted that the savings equation could be more biased towards the consumer, as against their own estimate of two-third of the savings going to the farmer, depending upon the way consumer preferences and retailing practices evolve. However, he maintained that the findings made a strong case for providing an impetus to organised retail of food and grocery. Do modern retailers in India really generate supply chain efficiencies? Mr Nair told Business Line that such players were, indeed, better in managing the supply chain. Wastages for such players were found to be about 3-5 per cent of retail price as against 15 per cent otherwise.
-----------------------------------------------------------------------------------------------
I wrote:
Good English but full of Heat but no substance in Indian context....better supply chain etc is good but at the expense of Local street hawker's job...? In country like India...adundance of manpower is already a challenge in front of government to provide them with jobs...here we are talking about taking away thousands of more jobs....by giving better supply chains...we r going to give more jobs in terms of new jobs but one section of people is going to suffer for sure....and the small entrepreneur having his business is going to get uprooted... Government has to ensure the dirty price politic games should be avoided some regulations which can regulate the retail industry is getting important day by day to dave the interest of common businessman and workers workign with them.Just my personal view, you can differ!
------------------------------------------------------------------------------------------------Pranav Clarified:
Few observations on your connotation:
a) “Good English but full of Heat but no substance in Indian context..” CRISIL is Indian company incorporated in 1987. There AOF has been Indian Market and PSU on whole. Thus this is not observation from foreign player but this is study from organization with Indian roots and deep rooted knowledge of Indian businesses, culture and they are well aware of issues that lie in Indian contex towards retailing. Apart from them KSA Technopak hold the rapport at international level in market research and retailing in India. They have already roped in Pantaloon, DLF, TSV as customer. Wal-mart Bharati are on there way to use their services to promulgate their retail business, here in India. There is indian context here :).
b) “here we are talking about taking away thousands of more jobs....by giving better supply chains”
Two wrongs does not make one Right. Point here is if government is incompetent in certain areas businesses cant be restrained from growth. It’s just a perspective, on how you see thing; improving the SCM(supply chain management) in India will help consumer to avail commodities at lower prices. Also if Supply chain evolves and develops to expected level this will generate innumerous jobs. To leverage such large upcomming system ancillary business will also grow around new retail and supply chain developments. Aaian leading to more jobs and better prospects.
e.g. ANAND as an NGO removed middlemen from dairy product business, despite of doing so it created more job opportunities then what existed before and consumer had better offering at lower price.
Same was the case with Telecom industry in their days of infancy. There was huge skeptic about it but today same telecom has created huge job and business opportunities. They have enlarged the scope of business thus swelling the customer base and eventually call tariffs plummeted. Consumers are benefited with more employment opportunities.
Lastly improving the supply chain mean reducing the cost of moving goods effectively and efficiently. Although this would lead to job cuts and business loss in few sectors but this will be counterbalanced with new opportunities that will come along.
This is how I perceive this retail fiasco in India.
In business if you don’t innovate you w'll die. !!
----------------------------------------------------------------------------------------
I clarified:
Good observations, Thanks for sharing your point of view, I appreciate the effort!
In my comments I didn't question CRISIL's credibility neither i said govt is incompetent or not. What I mean here is, Organized sector, with improved supply chains is a good thing, however in Indian context, at what cost? You have to leverage the resources best....India has manpower, as a citizen what would you want....jobs for all or jobs for only few and rest kept lurking in search of job and food? Not to mention the crime which gets fuelled.
I already mentioned that there will be new jobs created however they will not be for the people who are going to loose there jobs. Putting pressure on middle men is good to give better rates to customers, but organized retail is also playing dirty price wars of initially killing the competition wwith low prices and then increasing the prices....for these reasons, I said govt has to regulate the retail pricing.
Mr Nair's comment "if two-thirds of the savings from supply chain efficiencies are passed on to the farmer, farm incomes can grow by more than 37 per cent to Rs 2,50,000 crore." Who takes gurantee of this "IF"? Organized sector is driven by profit motives similar to unorganized sector, I don't see a reason why the organized sector would give better prices to the rural cultivators? Considering they would be investing in improving supply chains, adding infrastructre, managing their human resources, killing competition, managing initial losses etc.
Lastly Mr Nair admits "that the savings equation could be more biased towards the consumer, as against their own estimate of two-third of the savings going to the farmer, depending upon the way consumer preferences and retailing practices evolve."
So he also knows that this estimate is wrong!
However as mentioned, if govt regulates this, atleast the improved supply chains might help the rural farmer.
Hope this clarifies my point.
-----------------------------------------------------------------------------
Your comments.....
http://www.thehindubusinessline.com/2007/06/14/stories/2007061401910500.htm
Pranav sent the following article:
------------------------------------------------------------------------------
Organised food retailing can increase rural income, cut inflation: Crisil Will facilitate better supply chain management, create efficiencies
--------------------------------------------------------------------------------
The findings make a strong case for providing an impetus to organised retail of food and grocery.
--------------------------------------------------------------------------------
Chennai June 13 If organised retailing manages a deep and widespread penetration of the food and grocery sector, farm incomes could increase even as consumers pay lower prices, according to a latest study by Crisil Research. The study suggests that the resultant rise in farm incomes and in rural spending could boost GDP. Only one per cent of the Indian food-retailing sector is currently organised as against countries such as the US where the penetration is 80 per cent. Crisil estimates the total avoidable supply chain costs in the food and grocery chain at Rs 1,00,000 crore. About 57 per cent of this is due to avoidable wastage, the rest due to costs arising out of multiple storage points and multi-layer commissions. Farm realisations are, as a result of this wastage, only 35-40 per cent of the final retail price as against 60-65 per cent in countries such as the US. Inefficiencies push the final price paid by the consumer to 2.6 times that paid to the farmer. Organised retail practices, however, invest in better supply chain management and could create efficiencies by way of disintermediation and enhancement of transportation and storage facilities, which could in turn lead to reduction in commissions and lower wastage of produce, says the study. According to Mr Sudhir Nair, Head, Crisil Research, if one-third of these savings (Rs 33,500 crore ) are passed on to the consumer in the form of lower costs, it amounts to 3.5 per cent of the country's spend on food items (Rs 9,51,000 crore ). "This can play a significant role in lowering food inflation," it says. Food inflation was 8 per cent in 2006-07, while overall inflation was at 5.4 per cent. Mr Nair goes on to argue that if two-thirds of the savings from supply chain efficiencies are passed on to the farmer, farm incomes can grow by more than 37 per cent to Rs 2,50,000 crore. Crisil estimates that if farmers then spend 80 per cent of this incremental income, an additional spending of Rs 53,600 crore — nearly 1.7 per cent of India's GDP— would get added to the economy. In a teleconference with the media, Mr Nair admitted that the savings equation could be more biased towards the consumer, as against their own estimate of two-third of the savings going to the farmer, depending upon the way consumer preferences and retailing practices evolve. However, he maintained that the findings made a strong case for providing an impetus to organised retail of food and grocery. Do modern retailers in India really generate supply chain efficiencies? Mr Nair told Business Line that such players were, indeed, better in managing the supply chain. Wastages for such players were found to be about 3-5 per cent of retail price as against 15 per cent otherwise.
-----------------------------------------------------------------------------------------------
I wrote:
Good English but full of Heat but no substance in Indian context....better supply chain etc is good but at the expense of Local street hawker's job...? In country like India...adundance of manpower is already a challenge in front of government to provide them with jobs...here we are talking about taking away thousands of more jobs....by giving better supply chains...we r going to give more jobs in terms of new jobs but one section of people is going to suffer for sure....and the small entrepreneur having his business is going to get uprooted... Government has to ensure the dirty price politic games should be avoided some regulations which can regulate the retail industry is getting important day by day to dave the interest of common businessman and workers workign with them.Just my personal view, you can differ!
------------------------------------------------------------------------------------------------Pranav Clarified:
Few observations on your connotation:
a) “Good English but full of Heat but no substance in Indian context..” CRISIL is Indian company incorporated in 1987. There AOF has been Indian Market and PSU on whole. Thus this is not observation from foreign player but this is study from organization with Indian roots and deep rooted knowledge of Indian businesses, culture and they are well aware of issues that lie in Indian contex towards retailing. Apart from them KSA Technopak hold the rapport at international level in market research and retailing in India. They have already roped in Pantaloon, DLF, TSV as customer. Wal-mart Bharati are on there way to use their services to promulgate their retail business, here in India. There is indian context here :).
b) “here we are talking about taking away thousands of more jobs....by giving better supply chains”
Two wrongs does not make one Right. Point here is if government is incompetent in certain areas businesses cant be restrained from growth. It’s just a perspective, on how you see thing; improving the SCM(supply chain management) in India will help consumer to avail commodities at lower prices. Also if Supply chain evolves and develops to expected level this will generate innumerous jobs. To leverage such large upcomming system ancillary business will also grow around new retail and supply chain developments. Aaian leading to more jobs and better prospects.
e.g. ANAND as an NGO removed middlemen from dairy product business, despite of doing so it created more job opportunities then what existed before and consumer had better offering at lower price.
Same was the case with Telecom industry in their days of infancy. There was huge skeptic about it but today same telecom has created huge job and business opportunities. They have enlarged the scope of business thus swelling the customer base and eventually call tariffs plummeted. Consumers are benefited with more employment opportunities.
Lastly improving the supply chain mean reducing the cost of moving goods effectively and efficiently. Although this would lead to job cuts and business loss in few sectors but this will be counterbalanced with new opportunities that will come along.
This is how I perceive this retail fiasco in India.
In business if you don’t innovate you w'll die. !!
----------------------------------------------------------------------------------------
I clarified:
Good observations, Thanks for sharing your point of view, I appreciate the effort!
In my comments I didn't question CRISIL's credibility neither i said govt is incompetent or not. What I mean here is, Organized sector, with improved supply chains is a good thing, however in Indian context, at what cost? You have to leverage the resources best....India has manpower, as a citizen what would you want....jobs for all or jobs for only few and rest kept lurking in search of job and food? Not to mention the crime which gets fuelled.
I already mentioned that there will be new jobs created however they will not be for the people who are going to loose there jobs. Putting pressure on middle men is good to give better rates to customers, but organized retail is also playing dirty price wars of initially killing the competition wwith low prices and then increasing the prices....for these reasons, I said govt has to regulate the retail pricing.
Mr Nair's comment "if two-thirds of the savings from supply chain efficiencies are passed on to the farmer, farm incomes can grow by more than 37 per cent to Rs 2,50,000 crore." Who takes gurantee of this "IF"? Organized sector is driven by profit motives similar to unorganized sector, I don't see a reason why the organized sector would give better prices to the rural cultivators? Considering they would be investing in improving supply chains, adding infrastructre, managing their human resources, killing competition, managing initial losses etc.
Lastly Mr Nair admits "that the savings equation could be more biased towards the consumer, as against their own estimate of two-third of the savings going to the farmer, depending upon the way consumer preferences and retailing practices evolve."
So he also knows that this estimate is wrong!
However as mentioned, if govt regulates this, atleast the improved supply chains might help the rural farmer.
Hope this clarifies my point.
-----------------------------------------------------------------------------
Your comments.....
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