Its the problem of choice: FDI

I friend of our family recently remarked, "Even if Walmart comes to India they would soon close shop because of the great inefficiencies of the Indian workforce".

I thought the statement was hilarious. Yes, we the people of India have a great attitude towards work. Anyway, I wanted to talk about FDI, Wal Mart and all the brouhaha which comes along with it. Yes, it can lead to consumption of endless cups of Bru coffee. But now, the verdict is out. We all can watch and wait for Walmart, Carrefour and I don't know what else.

So what is the big deal about FDI? Its already in India in the form of the MacDs, KFCs, Pepsi and so on. Its time the others followed. I think asking the foreign brands to source their produce (mostly potatoes and tomatoes)  and raw materials from Indian farmers is a reasonable expectation. Drought, fertilizers, rising costs are bigger problems for the farmers than FDI. I think major improvements in PDS or as my husband says, scrapping of the PDS will bring more difference into the farmers' lives than stopping FDI.

What does FDI mean to me? Well, it means - more choice? If I chose between Nilgiris, Nuts n Spices, Fresh@, now I am going to have to include 2 more stores to my list. And seriously, it only means more headache to find a parking spot.

I am not an economist and I don't know the rural economy as much as I do the urban. I don't think people are going to stop shopping in T Nagar or Purasaiwalkam just because they have a Walmart down the street. I don't think the "Buy 1 get 2 free" offers are going to lure customers away from their Pothys or Chennai Silks. Walmart does not know what it is up against.

Take my own example, I  do not get my monthly groceries from the mall or anything resembling a mall. I get them from the shop around the corner, the 'kirana' shop or 'Annachi kadai'. The best part is I get it door delivered and on the same day. These guys know their business. I get a good discount on the basic provisions like rice, wheat, pulses, sugar etc. Nowadays, the smaller stores also pack their stuff in sealed plastic bags to resemble that sold by the supermarkets.

I don't know why Indian small businesses should be so worried about FDI in multi-brand retail. We already have a number of domestic players in the same sector like Reliance, RPG, Heritage, Future Group etc which are competing with the local stores. I think the competition and comparison is actually in the luxury goods section. I don't want to shop for different kinds of sugar or dal unless I am looking for the organic variety. I would go to a supermarket only for special items like breakfast cereal, pasta, cheese, sauces and other processed food.

When it comes to retail clothing sector, I don't know if we need any more players. Chennai atleast has so many retail stores for readymade clothing that a foreigner might think that fashion is a big thing here. Just look at T Nagar, how different is Chennai Silks from Pothys or RMKV or Sri Kumaran. In the end it boils down to what you are familiar with I guess. I can't find my way out of Chennai Silks or Saravana Stores. I am a little more comfortable with Sri Kumaran. But I will never go there more than once or twice a year.

The differentiating factor between Big Bazar or Reliance Fresh and the shop around the corner is personalised service. I can ask the shop keeper to stock up on some of the items I wish to buy regularly and he might actually oblige me if I was a regular customer. The shop keeper is able to identify his customer by face whereas that is never going to be possible in any of the mall-shops. I call these Walmarts mini malls because they are huge. I don't want to spend all my time going through all the aisles and spend all my money buying something that I may not need. 

I think the advantage of having a Walmart near you is the convenience it offers on a rainy day. Yes, you could get away from the rain, shop, eat or just walk around. It is going to be no threat to our local small businesses. Atleast not in Chennai.