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    Hello and welcome to a chat with Nivedita Mookerji where we try to make sense of the government's retail sector policies


    Hello everyone

  • J


    Why is the government not allowing FDI in multiple-brand retail even when the consumer is ready to pay for good quality products instead of 'China made, Karol Bagh sold' ones?


    The government is not allowing FDI in multi-brand because it was voted on that promise. It will not want to upset the cart (read kiranas or neighbourhoood mom and pop stores) . The fear is that there may be huge job losses in the unorganised sector if FDI is allowed. However studies have proved that impact may be there initially, but will taper down over a period of time. Also, greater fear should be from online now rather than FDI because e-commerce is the biggest disruptor.

  • R


    Do you expect the government to bite the bullet and open up the retail sector to single-brand foreign companies? Why, or why not?


    Actually, the govt has opened single brand to FDI already. In fact, the credit should go to the UPA govt for allowing 100 per cent FDI in single brand. That is when the biggest furnishing company of the world IKEA put in its application to invest over $1.5 billion in India. ...While UPA took that step, conditions linked to the policy were tough to comply with. Recently, NDA government eased the sourcing norms. One can start sourcing 30 per cent from India only three years after setting up the first store. ..Also, companies like Apple which find it hard to source from India can be given a breather in terms of sourcing conditions.....That said, single and multi-brand are divisions (artificial !) created by Indian lawmakers. Such distinctions dont exist elsewhere in the world.

  • R


    In a time of increasing retail inflation, what should the government be doing to smoothen supply side constraints? the GST Bill will alleviate some trade obstacles, but a lot more remains to be done.


    In terms of retail policy of the government, there's no intervention that it is planning to contain inflation. But of course increase in supply will ease things a bit, for which restrictions in terms of ownership structure should be removed as far as possible..

  • M


    Why is the government not allowing FDI in multi-brand retail? With so many websites now selling clothes and fashion accessories, are the days of retail outlets (shops) numbered?


    Traditional retail is unlikely to die in a hurry in India. But the signs of e-commerce over taking traditional retail are hard to miss. Retail sector is growing at 5.8 per cent compounded annually in the past four years. Projection is it will grow at 12 per cent in the next five years. Modern retail will grow at 20 per cent. Juxtapose that with ecommerce growth--35 per cent now and 40 to 45 pc in five years.....You get the answer.

  • K


    Increased FDI in retail will help create new jobs and bring investments into India. But when the Modi govt talks about ease of doing business, why does it seem opposed to retail companies? Is it to help rent seeking for Indian companies in retail?


    Yes you are right that FDI will create jobs. But thats one side of the story. Every political party and every govt comes with some baggage and commitment. Tough to go back on that. Ease of doing business, without allowing FDI in multi brand, is what they are trying....But one must remember that NDA govt has not changed the multi brand FDI policy brought in by UPA govt. NDA is opposed to it, and every player on earth must be aware of the mindset of this govt. That is the approach of this govt so far. Till now.

  • S


    How much business does online retail generate in India? Why are the online retailers like Flipkart, Amazon and Snapdeal still posting losses?


    Thats a very good question. Online retail is worth about $16 billion in India now. Thats a big number considering it was just a single digit sector not too long ago. And dont miss the growth numbers in e-commerce. Its growing at 35 per cent currently and expoected to grow at 40 to 45 per cent in next five years......On why Flipkart and Snapdeal and Amazon are still making losses, they are doling out huge discounts to compete with each other to be able to be at the top of the pecking order. As long as the total sales is more, their valuation will go higher and higher. Its a valuation game, to put it simply.

  • A


    According to a recent report, Flipkart suffered Rs 2,000-crore loss in the recent discount war with Snapdeal and Amazon. What is the revenue/sustenance model of such firms? Why and how do they continue to get funds from global PE and VC bigwigs, given their magnitude of loss?


    Yes, thats true. Flipkart is in the red big time. It does not look too worried. Globally, Amazon has hardly ever made profits. So its a choice between growth and investments versus profits. On how Flipkarts of the world are running their business, they are being funded by the biggest VCs globally. Both sides are eyeing big valuation numbers and a future exit potential.

  • S


    Madam, what happened to the Walmart corruption probe?


    Walmart corruption probe was more at a global level. That continues. In India, where Walmart was supposed to have bribed officials at various levels, that investigation is also on. Enforcement Directorate is also looking at various facets of the Walmart case, but more to do with FDI violations...Walmart right now is only a wholesale player in India, having split with Bharti recently, leaving all hopes of multi-brand .

  • N


    Do you see Aditya Birla Group's fashion portal abof listing on stock exchanges? What do you think is the future of this online retailer, given the stiff competition in this space and the fact that it doesn't even offer heavy discounts...!!


    Indian big businesses are all experimenting with e-commerce now. Its a good beginning, is all I can say now. Its a long-term game, more the merrier. Tatas, Ambanis will come in soon with their big time e-commerce business soon.

  • A


    Why do we hear so much about Alibaba in India?


    We hear about Alibaba because its growth has been magical. Its IPO recently took our breath away. Every Indian ecommerce company is dreaming of an Alibaba like growth and Alibaba like IPO. It's cool to think that another Asian company has done so well. Amazon is further away in our psyche. Also, Alibaba has been making its presence felt in Indioa, through investments in Snapdeal and Paytm. There's bigger game waiting to play out.r