Thursday, December 07, 2006

Back doar entry ??

What America was a couple of decades ago India is now with unbelievable economic growth and abundance of opportunities. India has a plethora of fields to attract FDI and FII with almost all the sectors promising returns manifolds. Retailing is one such sector and one of the very few sectors with little Indian participation. Barring Future Group (Pantaloon and Big Bazar) and Tata, there is no much competition in the organized Retail sector and the Indian government rightly denied FDI in the retail sector to protect the local interests.

However there is still a lot left in, to tap on, in this $340 bn market which I feel, would benefit the Country, the Corporate and the Consumer if there is proper management. No doubt that India Inc would soon be in a milieu, which I call as the “Retail Revolution” which would benefit all the three aforesaid but that to happen, a bit more planning is needed. Here is where Wal-Mart figures in the scheme of things with its invaluable experience in the field and impregnable infrastructure. Mind you it is not crossing any norms

As per the dictionary definition, Wal-Mart is certainly not investing as a foreign player and instead has made a smart move in joining hands with Bharti groups. As per the JV pact the front end would be managed by the Indian giant and the back end viz, logistics and supply chain would be managed the international giant. The land for the retail stores will be acquired, leased or rented by Bharti group and the registration would be under the Bharti label, according to Mittal.

In this JV, Bharti is doing the Retailing job and Wal-Mart is just playing the role of the wholesaler and the protest staged by the Leftists is hollow and meaningless. As far as Wal-Mart stays away from opening a store under its direct control in India, everything is safe and sound. So what promises to be a symbiotic relationship should not be sabotaged
by political plays and the government should show a green signal for this venture.

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