In Current Events - The Retail Revolution By Anoop Verma, Delhi,India
Despite being crowned as an agricultural nation, during the 1950s, 60s, 70s, and 80s India was dependent on grain imported from other nations. During the 1950s we were producing less than 50 million tonnes of food and that was not sufficient for our huge population. Then came the beginning of the Green Revolution and things improved to a large extent. But the irritating restrictions on the movement and consumption of food grains remained.Now India is sitting on the verge of another revolution that promises as breathtaking results as the Green Revolution. The phenomenon is called “Agri-Retail”. One major problem that our farmers have faced is lack of markets where they can get a good enough price for their products. They were forced to sell their products to middle men who pocketed all the profits.
But that is set to change with the rise of Agri retail outlets in India’s urban areas. These retail outlets buy directly from the farmer and sell the products to urban customers, thus eliminating the need for middlemen. Statistics shows that farmers who are selling their products to organized retailers like Reliance Fresh, Subhiksha, and others get about 20% more for their products.
The retailers have developed hi-tech handling mechanism to ensure that the agricultural produce purchased from the farmer is in fresh condition when it reaches the end customers in the cities. Buying agricultural products from organized retailers is getting very popular in urban areas, because the young crowd generally prefers to shop in a clean and hassle free environment. At times the products sold at these fancy outlets turn out to be cheaper than those being sold in the neighborhood Mom & Pop stores and that proves to be an added attraction for customers.
But it is in areas outside the realm of agricultural products that organized retail has made its biggest impact. During the past few years there has been a definite pickup in the expansion spree of organized retail. The bigger cities are already dotted with a plethora of shopping malls that provide everything that you may need under one roof. The Big Bazaar Stores are a favorite middle class haunt. Now the focus of organized retail is turning towards the tier-II towns.
According to a research paper by KSA Technopak and ICICI Property Services, tier-II towns and cities will witness major retail format developments of less than 1,00,000 sq. feet by 2006. It says that the retail boom, 85 per cent of which has so far been concentrated in the metros, will percolate to smaller cities and towns and that the contribution of these tier-II cities to total organized retailing sales will grow to 25 per cent.
The booming BPO, software, and telecom industries have a lot to do with the boom in the retail sector. Young Indians, between 20 and 24 years, are finding jobs straight out of college. They have disposable income that’s totally discretionary and about 20 to 30 per cent higher than prevailing wages. Such young earners love to splurge and they the best place to spend lies within the cool ambience of the neighborhood shopping mall.
In many ways the boom in retails is helping to create a new breed of consumers. Retail companies are hiring in a big way and they are offering great salaries. One of the major retail players Reliance has announced that it will be taking in close to 1 million new employees in the next five years. Where are these new employees going to buy their daily needs? Where else but from shopping malls like Reliance Fresh.
Most of the world's leading brands, including like L'Oreal, Espirit, Louis Vuitton, Marks & Spencer, Tommy Hilfiger, Louis Phillipe, Levis, Pepe, Lee, Arrow, Dockers, Red Tape, Clairns, Hugo Boss, Tiffany, Bulgari, Ecco, Chambor, Revlon, Philips, Corelle, Magppie, Nike, Reebok, Parker, Ray Ban, Lego and Mattel, are now present in India. This is definitely a good time to start spending the extra cash that you may have been hoarding for all these years.
I support your views. Many dissidents often do so to gain publicity. Neighbourhood stores will continue to have their clientele. They have one big advantage that organised retail does not have- that is one can just call up and have something delivered at home and pay at the end of the month- this is different from credit/debit cards as the person has to visit personally. Most kirana stores offer a 'book' system wherein customers pay at month end.
In fact post retail boom, these stores too have undergone a revamp and are innovating. Its the customer (us) who benefit.
As regards, unemployment you have hit the nail on the head.
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The people who oppose the entry of big retail in India are only people with vested interests. Mostly they are corrupt politicians who are protesting, because they want to keep the country poor in order to preserve their vote banks.
You are right there are many advantages of big retail and now it has become part of Indian culture. It is difficult to imagine Delhi without stores like Reliance Fresh, Big Bazzar, Spencers etc....
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good post
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I wonder if you haven't been reading about the impending famine that is already pulling the world painfully? The HIndu paper in its local page runs a survey daily on how the BPL people have had their income affected by the price rice thats on...the Rice eating states have already started feeling the punch and the price of rice has shot up from 13 per kilo to 22 per kilo in less than a month. The people who have been used to rice as a staple diet are perplexed and go hungry even now...The tier II towns will mostly come inside such places and the disposable incomes are already changing the cultural fabric around here...it is scary, and I wonder wheat happens when these MNCs push the guys out after their working juices have been sucked dry...who will look after them and their family? We dont have a social security system which takes care f such things...the trend is going criminal to keep up incomes and show of life...
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Suneetha, the famine is basically the creating of the Global Warming lobby that is being led by Rich US politicians like Al Gore.
Al Gore lives in a 16 bed room mansion that has two heated swimming pools and he drives in big cars and flies in chartered planes and still he wants dirt poor Indians to cut down on their electricity use and on the food that they eat. Why doesn’t Al Gore try to loose some weight for a change. I think he is fat.
Because of propaganda by Global Warming lobby, 30% of US grain produce was diverted to producing ethanol. Huge amount of crops in Asia and South America are being used to create ethanol. That is why we have food scarcity.
Food scarcity has to be squarely blamed on the leftist Al Gore who is diverting food products into ethanol production. That is why people in India and Africa are starving. The food that we could eat is now being used to produce ethanol, which Al Gore will use to fuel up his cars and planes.
It is time to take out a morcha to expose the Global Warming hoax.
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