7 Eleven Archives - Anshul Punetha

Finally, after a lot of flip – flops and political wishy washy, Dr MMS’ government has announced a “selective” FDI roll out policy in organized retail, one that is subject to agreement by the respective state government. While this does not mean a full scale influx of modern retailers, it does provide an environment for a “pilot” roll out, one that helps both sides to understand what the other brings to the table, instead of merely reacting to sentiments.

Given this context, Mr Rajan Bharti Mittal’s interview in Business Standard comes as a breath of fresh air.
See it here. He points out that Modern Retail is currently 6% of India’s retail pie, estimated to grow to 20% in the next 20 years. He also refutes the job losses claim by explaining that the Indian model is different – to quote – “This study is for a type of market very different from India. This sort of real estate is not going to be in our cities, people are not going to shop 20 miles away, people don’t have transportation, big houses. We don’t purchase goods for months like Americans do”

He adds that the cost of real estate & the fact that stores have declined overall (because store level profitability is still a pipe dream for most chains) mean that India’s retail story would look to a different model. And not to forget the MRP and Competition Commission mechanisms, which are influential factors by themselves.

Global Post has a bunch of links to articles on this debate. The most interesting remark on the page is a quote from the article by Padma Rao Sundarji writing for Outlook – She says –

“Walmart’s stores were mostly situated away from big cities.The idea of driving out after a hard day’s work and walking long aisles in search of dinner amidst lawnmowers and washing machines turned Germans off. For that matter, there is a German retailer at every street corner. These competitively priced stores cover 90 per cent of the consumers’ daily needs. Even their cheapest sections do not compromise on quality.”

Isn’t that familiar ? Or should I say, what would you rather do ?

The 7 Eleven story from Thailand also finds a mention – highlighting the fact that the threat to old retailers is not from the large hyper markets, but rather from the smaller, franchisee based 7 – Elevens. And guess the number of these stores in Bangkok itself ? Nearly 3300 !!! Compare that with the 4800 number for the total number of modern retail outlets in India, quoted by Mr Mittal in his interview – it is clear that we are missing the wood for the trees.

My humble takes on the same points, published earlier are here.

Its good that this debate has started to see some common sense and business logic based arguments at last.
I sincerely hope that more and people become aware of this discussion, and are able to understand this better, even add to it, so that our leaders can see the folly of rhetorical arguments !