retail: Rajasthan likely to feel early effects
Times of India,
September 17, 2012
Rajasthan is set to be in the forefront to feel
the early ripple effects of the foreign retail
giants if one looks at the profile of the nine
states that have given consent for allowing
foreign direct investment in multi-brand retail.
With Bharti-Walmart, Carrefour and Metro Cash &
Carry already present in the wholesale segment in
the state, Jaipur is expected to be among the
first of the cities to see a multi-brand retail
store by a global major.
"Jaipur has that visibility and would be very much
on the radar of these companies as they begin to
kick off their ventures in India," said S G Vyas,
the promoter of a textile company in the city.
Unlike in Delhi or Mumbai, a store in a city like
Jaipur is likely to throw up multiple
ramifications associated with the presence of
these big multi-national retailers.
While the small kirana stores have learnt from the
presence of domestic retailers that their
businesses and services are unique and cannot be
replaced by these foreign companies, the most
affected are likely to be the middlemen. Moreover,
with proper infrastructure, the wastage of farm
produce will be curtailed to a large extent.
"Farmers will get a better price for their produce
as these companies will source directly from them
without the middleman's help. Almost 40% of our
produce is damaged due to lack of proper roads,
transportation and storage facilities. These
companies will invest in back-end as well. The
overall impact will result in prices becoming
cheaper for the consumer," Pradeep S Mehta,
secretary general, CUTS International.
The back-end facility can supply products at a
cheaper rate than what a distributer, for example
of a soap company, sells to a kirana store.
"These retailers have national tie-ups with the
manufacturers and get products at cheaper rates
than what the dealer gets. The distributor is
likely to lose but the kirana store owner will
gain," said a manager of a leading retail chain in
Experts in the sector said the retailers will need
a strong workforce to man operations across the
value chain and create huge opportunities. They
said the presence of such stores will also attract
good brands and give boost to the realty market
which has hit a plateau.
Rahasthan has close to half a dozen cities with
more than 10 lakh population where foreign
retailers could open stores. Brands like Big
Bazaar and Reliance Fresh already have a presence.
But the impact so far has not affected the
traditional businesses in any significant way. The
experts; however, cautioned that Wal-Marts and
Carrefours will make a difference as these
companies will not depend on the mandis.
Initially, the domestic retailers had also planned
operations basing on farm-to-form concept. But
today, they too depend on the mandis.
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