Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • Nepal protests
  • Nepal Protests Live
  • Vice-presidential elections
  • iPhone 17
  • IND vs PAK cricket
  • Israel-Hamas war
fp-logo
Retail FDI: Let the consumer decide
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
  • Home
  • Economy
  • Retail FDI: Let the consumer decide

Retail FDI: Let the consumer decide

Arjun Parthasarathy • December 20, 2014, 07:23:19 IST
Whatsapp Facebook Twitter

Foreign direct investment is a win-win situation for the mall, the retailer and the consumer.

Advertisement
Subscribe Join Us
Add as a preferred source on Google
On
Google
Prefer
Firstpost
Retail FDI: Let the consumer decide

Go to a big store in any mall and you will find that the person in front of you with hundreds of items is a so-called “kirana shop” owner.

Yes, the local retailer buys in bulk at big malls and sells it at a small profit to the local consumer. The consumer does not mind paying a slightly higher price from the retailer for the convenience he offers.

Home delivery, one-month credit and late opening hours are the reasons why consumers will continue to buy from the retailer for daily needs.

STORY CONTINUES BELOW THIS AD

The consumer, while buying from the small retailer for his or her daily needs, will still go to the big store in the mall for monthly shopping. However, that does not mean the retailer loses business.The consumer will buy goods in bulk at the mall but continues to purchase small items from the local retail shop. It is a win-win situation for the mall, the retailer and the consumer.

More from Economy
Budget 2024: These are the many hopes and aspirations of India's social development sector Budget 2024: These are the many hopes and aspirations of India's social development sector Is the United States in recession? Signs to watch out for Is the United States in recession? Signs to watch out for

[caption id=“attachment_143180” align=“alignleft” width=“380” caption=“The Indian retailer is smart. He has started to buy from big stores and sell it locally at a small margin. Reuters”] ![](https://images.firstpost.com/wp-content/uploads/2011/11/retailfdi.jpg "retailfdi") [/caption]

The big debate on retail FDI is completely off-track and unwarranted. Headlines of ‘mom-and-pop’ stores losing business, loss of living for many retailers, etc. do not have any justification.

If the consumer prefers to buy in the mall, he does so because of prices and not due to anything else. The local retailer will have to bring down prices to levels of those offered in big stores to survive.

That means better inventory management, better people management and use of systems. The consumer benefits from paying lower prices in malls for monthly shopping; he or she also pays lower prices for his or her daily shopping requirements.

In fact, the Indian retailer is smart. He has started to buy from big stores and sell it locally at a small margin. Eventually, the retailer will also learn to stock items that go off the shelf on a daily basis, while allowing the consumer to buy bigger and bulkier items at malls.

STORY CONTINUES BELOW THIS AD

The retailer will have less wastage of goods due to correct stocking policies and that will lead to overall efficiency in retailing.

The greater the number of big stores, the more intense the competition and lower will be the prices. The consumer will benefit with greater choices and better price discovery.

The retailer, too, will benefit as he can choose what goods to buy and from where for stocking in his store. The consumer who knows the prices of goods will not give business to a retailer who jacks up prices for better margins.

In turn, the retailer will understand that selling goods at jacked-up prices will not work and become more reasonable in pricing.

The quality of goods sold will also improve at the retail level. Big stores bring quality brands to the consumer. When that happens, consumers used to quality will baulk at buying sub-standard goods from a retailer.The retailer will then introduce better quality control, leading to improved standards in retailing.

STORY CONTINUES BELOW THIS AD

The existing malls are good examples of how big and small stores survive. Every city now has big retail stores and any localite will tell you that a small store that has been in existence for ages continues to exist.

In many cities, small and large stores exist side by side, and in many cases, the big stores are the ones that go out of business rather than the small ones. Subhiksha is a good example of mismanagement by a large retail chain that went out of business.

At the end of the day, it is the consumer who will decide whether to keep large retail giants or the small retailer in business.

Government policies will have nothing to do with consumer behaviour. The government has to make sure that the best is available to the consumer at the lowest price and that means opening up the retail sector to world-class players.

Arjun Parthasarathy is the editor of ** www.investorsareidiots.com,**a web site for investors.

STORY CONTINUES BELOW THIS AD
Tags
FDI retail Marketing Supermarket inventory kirana shop retail stores NotJobsButPassion
End of Article
Written by Arjun Parthasarathy
Email

Arjun Parthasarathy has spent 20 years in the financial markets, having worked with Indian and multinational organisations. His last job was as head of fixed income at a mutual fund. An MBA from the University of Hull, he has managed portfolios independently and is currently the editor of www.investorsareidiots.com </a>. The website is for investors who want to invest in the right financial products at the right time. see more

Latest News
Find us on YouTube
Subscribe
End of Article

Top Stories

Israel targets top Hamas leaders in Doha; Qatar, Iran condemn strike as violation of sovereignty

Israel targets top Hamas leaders in Doha; Qatar, Iran condemn strike as violation of sovereignty

Nepal: Oli to continue until new PM is sworn in, nation on edge as all branches of govt torched

Nepal: Oli to continue until new PM is sworn in, nation on edge as all branches of govt torched

Who is CP Radhakrishnan, India's next vice-president?

Who is CP Radhakrishnan, India's next vice-president?

Israel informed US ahead of strikes on Hamas leaders in Doha, says White House

Israel informed US ahead of strikes on Hamas leaders in Doha, says White House

Israel targets top Hamas leaders in Doha; Qatar, Iran condemn strike as violation of sovereignty

Israel targets top Hamas leaders in Doha; Qatar, Iran condemn strike as violation of sovereignty

Nepal: Oli to continue until new PM is sworn in, nation on edge as all branches of govt torched

Nepal: Oli to continue until new PM is sworn in, nation on edge as all branches of govt torched

Who is CP Radhakrishnan, India's next vice-president?

Who is CP Radhakrishnan, India's next vice-president?

Israel informed US ahead of strikes on Hamas leaders in Doha, says White House

Israel informed US ahead of strikes on Hamas leaders in Doha, says White House

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV