FDI in Retail ?


These days , a lot of heated debate is going on re FDI in ” Retail ”

There are many camps , viz:

>  Brick-and-Mortar Retail traders

>  E-Com Retail Traders

>  Wholesalers

>  FDI Investors / Overseas Manufacturers

>  Single Brand vs Multi-Brand Formats

>  Payment Gateways

>  Central / State Governments

>  Tax Authorities

>  Bankers ………..etc

As far as I can see , the entire debate is centered around ” Retailing of Physical Goods ”

But how long before ” Retailing of Services ” too , enters the equation  ?

Or does anyone think that to be a far-fetched idea ?

Just wait for 2018 to arrive  !

Some 40 years back , marketing guru Ted Levitt wrote a seminal essay , aptly titled :

”  Marketing  Myopia ”

The central observation Levitt made was :

”  Why do companies fail to ask : Ultimately what business are we in ? ”

Among many example that he gave was the case of American Railroad companies

They believed themselves to be in ” Railroad Business ” – and failed to see that they were , really into the business of ” Transporting People ” !

So , along came the ” Car Companies ” and the ” Air Lines Companies ” which made ” Railroad Companies ” obsolete  !

Now , 40 years later , are ” Car Companies ” and the ” Air Lines Companies ” asking themselves : What business are we in ?

If the correct answer is : We are in the business of enabling people to meet and talk to other people :

then they would shift to Video-Conferencing / Holographic Projection business !

Or , if another answer is :

We are in the business of enabling a person sitting in hot Sahara desert to ” Experience ” the cool climate of Europe thru ” Virtual Reality ” ,

then they should be shifting to manufacture of future versions of Google Glass !

Levitt added :

”  If you don’t make yourself obsolete , then someone else will ”

And more and more , it is happening that , that someone is NOT even anyone from your current competitors !

Have physical goods retailers , considered that soon , retailing itself might become obsolete ?

And if that happens , the question of FDI in retailing too will disappear  !

A unknown guy sitting in a small cubicle in Estonia , will deliver to my grand daughter,  sitting in Mumbai , any physical consumer product , through the 3D printer , sitting on her kitchen platform  !

Or a Start-Up belonging to a bunch of 24+ something IIT guys would  set up :

” 3D Printing Kiosks ” ( like the PCOs of a few years ago ) ,

in 1000 cities / towns of India , to deliver at your doorstep ( obviously using Drones ! ) , any Foreign Brand product , at a moment’s notice  !

And a Central Government committed to Digital India , may even give them Rs 100 crores , by way of Venture Capital  !

For the quarreling parties of FDI , it is time to ask of themselves :

How can we stop being made irrelevant ?

How do we re-invent ourselves ?

How do we stop becoming obsolete  ?

How do we co-operate / collaborate to re-write the ” Rules of the Retail Game ” for the rest of the World  ?


hemen  parekh
11 July , 2015


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