FDI in Retail!

N

NinByChoice

Skilled
Sorry for my ignorance but i too was watching this thing on NDTV news, but did not understand what this meant :S

Anyone care to explain a bit in noob language ?
 
Multibrand retail = selling more than 1 brand of products = Walmart, Amazon
Single brand retail = selling only 1 brand of products = Apple store, Gucci

Foreign companies are not allowed to start retail stores in India. They have to form a joint venture with Indian company (Bharti-Walmart) to start operations (49% ownership max for foreign partner = non-controlling stake). There are also various other restrictions on the supplying company and where/how much the goods are sourced from. This is why you dont see Walmart or Ikea here.

A lot of these restrictions will now be removed. The holding limit for foreign company is increased to 51% for multi-brand retail. And 100% for single brand retail.

This should also mean major changes for currently franchised restaurants - PizzaHut, Dominos, KFC, McDondalds, TacoBell. The parent companies will now be able to setup shop here directly instead of just authorising YumFoods or JubilantFoodworks to use their brand names.
 
This is not exactly the greatest move by the govt. The same thing happened when Globalization first took place, our then Finance Minister... u guessed it Dr.Manmohan Singh opened our gates to the likes of Coca Cola and Pepsi which utterly obliterated our home grown brands like Torino et al. Ofc the situation has improved by leaps and bounds but this almost gives totalitarian powers to the foreign investors. And our vested interests might actually suffer.

On the other hand with the arrival of companies like Hyundai , Honda, Chevy, Ford the quality of Maruti, Tata has gone up exponentially. So if the same thing happens in the retail sector then its all for the good. But too much foreign investment is never a good thing. Just ask America.
 
memnom said:
This is not exactly the greatest move by the govt. The same thing happened when Globalization first took place, our then Finance Minister... u guessed it Dr.Manmohan Singh opened our gates to the likes of Coca Cola and Pepsi which utterly obliterated our home grown brands like Torino et al. Ofc the situation has improved by leaps and bounds but this almost gives totalitarian powers to the foreign investors. And our vested interests might actually suffer.

On the other hand with the arrival of companies like Hyundai , Honda, Chevy, Ford the quality of Maruti, Tata has gone up exponentially. So if the same thing happens in the retail sector then its all for the good. But too much foreign investment is never a good thing. Just ask America.
Click to expand...
Your 2nd para saved your post lol. Why deprive your people of quality from increased competition, who cares if its foreign or not? Don't force me to drink only Torino just because its Indian.

And its Indians who will be working in thousands of jobs Walmart will crease in the end while getting more streamlined and trustable services over their local grocers. Yeah a lot of those stores will die, this is what we call development and advancement. With Walmart these stores will have to try harder, stock more, slash prices to survive or be razed off and its not all that bad.
 
Yum foods is not an indian brand operating on behalf of others. It actually owns pizza hut, kfc , taco bell and a few others.
 
@params7, Saved? as opposed to... what?

Im not saying u have to drink torino cuz u are an Indian, im saying that giving WalMart, IKEA free reign over what they can and cannot do is not good for this nation. Thats why there was a previous law which mandated that FDI/FII can only hold 49% stake in everything.

Why do you think there is still Protectionism in the auto,steel sectors to name a few?

Yes its gonna create millions of jobs, just as Infosys, TCS, CTS, Wipro have done, there in lies the crux of our problem, we as a nation are PROUD to be in service. Development and Advancement should not come at the cost of our small scale business owner, u expect a 1000 Sq.ft local grocery guy to go against Wall-mart or is it that he just doesn't matter?

Look i get your point, u expect one to take his better half to a place where she can get everything she needs with curtsying attenders and bail in under 30 mins. My point is its not all great as its touted to be. I'll still feel safe if some Indian guy held more than 51% shares in walmart. All of this becomes irrelevant if India had significant presence[FDI] in EU or the Americas but we don't.
 
I have a paper in 2 hours on Supply Chain and Management and I cant explain how important is globalization in today's world... There is no boundaries or markets which cannot be explored... Local brands and regional companies wont survive if they dont plan on expansion and reaching out to international clients... Business doesn't work on sentiments... It works on money... The millions of jobs in India due to outsourcing and millions of factories in China is not because of anything but globalization... Trade Blocs like NAFTA come and go but true globalization is the key for any development....

A very good and interesting video about how globalization has changed things for good or bad in India... Its a long one so if you have time do have a look...

[youtube]8quDb3FIUuo&[/youtube]

Me off to exam now.... Cheers
 
I would anyday take better service then waiting for Indian companies to reply to my queries.

When I pay my hard earned money , I want the best service. I dont care whether it is Indian or Firangi.
 
There are restrictions in place, for them not to run haywire. They can operate in cities where the population is >= 1M. Minimal investment of $100M, of which 50% has to be for back-end operations and supply chain mechanisms. Back - end <> land/property. 30% of the sourcing from SMI.

I think the door has been opened, but not crazy wide. Good decision, should help the economy.
 
The decision came because of all the wrong reason.

How big you people think but kishore biyani's pantaloon have no funds for expansion now.They do big sales and sale 20-40 crore rupee product in a day on sabsa sasta din.But what they get in hand is miniscule 1-2 crore profit.With that money you cant expand.Also the government every year increases property taxes on this commercial units plus rents of shop.Now even banks are worried about their NPA book hence no finance coming from them.

Hence the stock of Pantaloon which the year started was trading around 300-400 just few days back fell upto 145-150.Now they all wanted funds and government is already worried about the airline sector.If they started funding this than again some textile sector will start crying.

They cant give FDI note to airlines straight away but for retail it was long pending.Hence a better route to take retail out of this dol-drum.Allow FDI.Now what will happen is pantaloon and shopper stop and very less chance of trent might get sold into foreign company's hand(like pantaloon being sold to metro or carefour was doing rounds).

Thats the reason pantaloon stock is jumping because now the company will be sold to foreign hand who have their pocket deeps or they can get easily finance from their capital economy at very low interest.Infrastructure for foreign player is ready they just have to give cash and with 20-30% stake biyani will do expansion and foreigners just will worry about profit .
 
^ but pantaloons store keeps items which are way overpriced.

i mean even a big bazaar has items which are reasonably priced. not so with pantaloons.

their sabse sata din offer (festival offer @ pantaloon) is a joke.
 
ggt said:
^ but pantaloons store keeps items which are way overpriced.

i mean even a big bazaar has items which are reasonably priced. not so with pantaloons.

their sabse sata din offer (festival offer @ pantaloon) is a joke.
Click to expand...

The loss in big bazaar nullifies pantaloon overpriced strategy.Pantaloon in-brand wear command 60% profit on single sale.But now because of less sale all are hit hard by excess stock with no money to buy new.

Regarding big bazaar personal experience regarding cosmetics i find it quite pathetic and chaos sometimes especially once i was around deo counter and i was seeing one sale person keeping an eye on me as if i will steal the product.I opened the main cap and the broken inner seal falls down and the chap comes running over me saying i have to buy that product as i broke that seal.

I made a deal ill buy it if next 5 random bottle i pick and not more than 2 of their seals are broken.I opened next 5 bottles and 3 another seal goes down and rest 2 didnt had the seal.The chap ran away saying i have work at some other counter.

Now i only use food counter and avoid others.
 
government is trying hard to get reforms 2.0 well and running or else there is no way to get the indian growth up... good move
 
All we want is the best service. Most you guys may have experienced the pathetic and mean service offered by the retailers as if they are doing us a favor by selling to us. At least the entry of the biggies will straighten them up a little I guess. Also, if the small time retailers can provide good service and products, I wouldn't mind giving the biggies a skip.
 
^^ Walmart operates a stores in a JV with Bharti (Airtel). The procurement and supply chain division is a separate entity.

aka911 said:
Yum foods is not an indian brand operating on behalf of others. It actually owns pizza hut, kfc , taco bell and a few others.
Click to expand...

Yes, you are correct. Im still wondering if YumIndia is a 100% subsidiary of Yum USA or just a licensee of the brands of Yum.
 
Back
Top