There is an interesting article in WSJ today which makes the case for 100% FDI in India's retail sector. The author makes the claim that, "the arguments for opening up retail start with the technology, expertise and funds that this would bring to build robust supply chains across the nation. This would reduce wastage (estimated at 30% to 40% of total production), improve food safety, hygiene and increase overall efficiency."
While this argument is fairly logical the key question is would you undertake a challenge of this magnitude if you were running a successful retail chain in say US or UK? The culture of small corner shops and community based transactions are very strong, even in big cities. What would break their monopoly and why would local consumer turn to a "foreign" shopping experience? Cost, Quality, Brand? Can a new market entrant take on decades of community rooted businesses, understand shopping ethics and create their own identity?
It is one thing for Government to open 100% investment but how many retail companies have investment muscle and creativity to break a complex market like India?
While this argument is fairly logical the key question is would you undertake a challenge of this magnitude if you were running a successful retail chain in say US or UK? The culture of small corner shops and community based transactions are very strong, even in big cities. What would break their monopoly and why would local consumer turn to a "foreign" shopping experience? Cost, Quality, Brand? Can a new market entrant take on decades of community rooted businesses, understand shopping ethics and create their own identity?
It is one thing for Government to open 100% investment but how many retail companies have investment muscle and creativity to break a complex market like India?
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