FDI-financed retailers in China took between 5 and 10 years to post profits, in large part because of huge investments initially made. The technology adoption is largely limited. [32], Warehouse stores are retailers housed in warehouses, and offer low-cost, often high-quantity goods with minimal services, e.g. Chengal Reddy, secretary general of CIFA claimed retail reform could do lots for Indian farmers. The decision will boost agriculture and allied sectors, manufacturing, logistics, integrated cold chains, refrigerated transportation and food processing facilities in a big way." Well over 30% of food staples and perishable goods produced in India spoil because of poor infrastructure and small retail outlets prevent hygienic storage and movement of the goods from the farmer to the consumer.,[31][32][33], One report estimates the 2011 Indian retail market as generating sales of about $470 billion a year, of which a minuscule $27 billion comes from organised retail such as supermarkets, chain stores with centralised operations and shops in malls. Yet, China hasn't become a vassal of imperialists, enjoying respect from all global powers. With the relaxation in international investments in Indian retail, India's Foodworld expects its global relationship will only get stronger. A 2012 PWC report states that modern retailing has a 5% market share in India with about $27 billion in sales, and is growing at 15 to 20% per year. Indian potato farmers sell their crop for Rs. India is one of the fastest growing retail markets in the world, with 1.2 billion people. Supporters of retail reform who have voiced the need to promote organised retail include Chief Ministers of several states of India, several belonging to political parties that have no affiliation with Congress-led central government of India. More buyers will compete for farmers produce leading to better support for farmers and to better bids. In addition, customers may be required to pay annual membership fees in order to shop. The November 2011 retail reforms in India have sparked intense activism, both in opposition and in support of the reforms. The converge of affordable technology from POS industry, cloud infrastructure, mobile platforms and low cost bandwidth is largely fuelling the adoption of technology by small retailers. Additionally, contrary to some concerns in China, post retail reforms, the number of traditional small retailers also grew by 30% over 5 years. I fail to understand why political parties are taking an anti-farmer stand and worried about half a million brokers and small shopkeepers". Consumers purchase food products on a very regular purchase cycle – e.g. international retailers should be prohibited in order to create a playing field for local retailers SOURCE.[83]. A report that lists some of the evolution over last 20 years. [18] Access to the shelf or product storage area is limited. India has highest number of outlets per person (7 per thousand) [76][77], On 1 December 2011, an India-wide "bandh" (close all business in protest) was called by political parties opposing the retail reform. Even in states where opposition political parties are in power, many ignored the call for the shutdown. Organised retailers will reduce waste by improving logistics, creating cold storage to prevent food spoilage, improve hygiene and product safety, reduce counterfeit trade and tax evasion on expensive item purchases, and create dependable supply chains for secure supply of food staples, fruits and vegetables. [18], As the name implies, a give-away shop provides goods for free. A co-operative store; also known as a co-op or coop, is a venture owned and operated by consumers to meet their social, economic and cultural needs. This leads to increased economic activity, and wealth redistribution. The Pepsi and Coca-Cola example is meaningless in the context of Indian beverage market. Competition and investment in retail will provide more benefits to consumers through lower prices, wider availability and significant improvement in supply chain logistics. In areas of very low population density, a general store may be the only retail outlet within hundreds of miles. Amusement arcades, also known as penny arcades in the US, is more modern incarnation of the eighteenth and nineteenth century shopping arcade. It reasoned that the sources of domestic retail are primarily local whereas international retail affects domestic manufacturing activity and hence reduces employment opportunities. [94], Existing Indian retail firms such as Spencer's, Foodworld Supermarkets Ltd, Nilgiri's and ShopRite support retail reform and consider international competition as a blessing in disguise. [42], A number of merger and acquisitions have begun in Indian retail market. This was an obstacle to IKEA's investment in India, and that it will take IKEA some time to source goods and develop reliable supply chains inside India. One has to see what one’s capacity is".[75]. It is argued this was the case of the soft drinks industry, where Pepsi and Coca-Cola came in and wiped out all the domestic brands. There has been no interest in foreign direct investment in cold storage infrastructure build out. However, there are detailed figures for Belgium, the Netherlands and Luxemburg. In addition to eliminating the "middle-man", due to its status as the leading retailer, suppliers of goods are pressured to drop prices in order to assure consistent cash flow. For example, Australia's restaurant group Lentil as Anything operates on a pay whatever you feel is right model.[19]. By supplying a wide assortment in a single category for lower prices a category killer retailer can "kill" that category for other retailers. Types of Retailing Store Retailing : Department store is the best form of store retailing, to attract a number of customers. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus. States have a right to say no to retail FDI within their jurisdiction. Such reforms Professor Bhagwati argued will accelerate economic growth and make a sustainable difference in the life of India's poorest.,[26][27], A 2007 report noted that an increasing number of people in India are turning to the services sector for employment due to the relative low compensation offered by the traditional agriculture and manufacturing sectors. It is a huge industry in terms of size and according to India Brand Equity Foundation (IBEF), it is valued at about US$395.96 billion. The government is already operating on budget deficits. Finally, most transactions at unorganised retail shops are done with cash, with all sales being final. This kind of market is very ancient, and countless such markets are still in operation around the world. Experts claim that cold storage infrastructure will become economically viable only when there is strong and contractually binding demand from organised retail. [15], The customer can shop and order through the internet and the merchandise is dropped at the customer's doorstep or an e-tailer. The supermarkets can be anywhere between 20,000 square feet (1,900 m2) and 40,000 square feet (3,700 m2). Shriram Gadhve of All India Vegetable Growers Association (AIVGA) claims his organisation supports retail reform. [40], The organised retail market has a share of 8% as per 2012. In this announcement, India requires single-brand retailer, with greater than 51% foreign ownership, to source at least 30% of the value of products from Indian small industries, village and cottage industries, artisans and craftsmen. For example, the article claims:[85], Many business groups in India are welcoming the transformation of a long-protected sector that has left Indian shoppers bereft of the scale and variety of their counterparts in more developed markets.[74]. Fifty million children in India are malnourished. Arcades continue to exist as a distinct type of retail outlet. [43] There are many modern retail format and mall companies in India. The unorganized retail shops source their products from a chain of middlemen who mark up the product as it moves from farmer or producer to the consumer. This leads to about 30% losses in certain perishable agricultural output in India, on average, every year.[21][24]. The approval requirement was relaxed, and automatic permission was granted in 2006. As of 2008, rapid change with investments to the tune of US$25 billion were being planned by several Indian and multinational companies in the next 5 years. [104], Social impact and controversy with retail reforms, Controversy over allowing Foreign retailers.
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