The Rush for Retail

If you are one of those who follow business news closely, you would have realized by now that the most happening thing in India at the moment is Retail. Almost everyone, quite literally, has evinced interest in the booming Indian retailing industry and feel that organised retail is the way forward for future.

To mention a few: Reliance group has extensive plans to enter the Retail industry in a big way. The Tatas are also underway. Existing players like Pantaloon (with their Big Bazaar brand) etc are firming up for the stiff competition by having their own expansion plans. But the one that takes the cake is the alliance of Sunil Mittal's Wal-Mart. This move is said to be a masterstroke from Sunil Mittal.

But, why is everyone so interested in Indian retail? The answer seems pretty simple. Indian retail market is worth a mammoth 350 billion dollars. But only a paltry 20% of this is organised retail. The rest of the market is still with the small and medium roadside vendors. Herein lies the opportunity for growth. If anyone can capture even 5% of this market share, he will be having a 14-15 billion dollar Mcap. It is this money that is luring the whos-who of world retail to India.

However exciting these big numbers may seem, organised retail has its own set of problems. Firstly, crores of Indian families have small roadside shops and that is their bread and butter. Now with the big players planning to have so much coverage, these small players will be virtually wiped out from the scene. For the time being, this may be the case for only the vendors in big metros. But with the kind of money that is set to flow in, organised retail will soon enter small towns as well. What will happen to these vendors? People who had lived respectably till now by doing fairly good business, may be forced to do menial jobs for a living. Can the government do something to help these small shopkeepers? We need to wait and watch; However, at the moment, the future seems bleak.

There exists another not so obvious, but an equally dangerous problem. The retail segment is the last part in the customer supply chain. By this, I mean, it is the retail sector which is in direct contact with the customer. Therefore, anybody who is a major player in the retail industry will have the potential to control the country's economy. Now, the critical question arises-- Should we allow a foreign player to control our country's Last Mile, as it is referred to? This is a sensitive issue which needs to be addressed with due diligence.

Hence, organised retail, seemingly attractive at the first glance has more than its share of problems. We would be better off in solving them before the retail boom kicks in.

Why do I teach?

If you have read my previous posts, you would have known by now that I teach in a school. Not of any relevance, but I do.

Recently, one of my relatives (An itchy guy, who constantly tries to undermine the opposite party) asked me-- "How are you qualified to teach? When professional teachers are struggling to produce results, what can an amateur like you do"?

I kept quite for a moment. His argument was valid. Then, I said, "I intend to teach values to my students along with the subject. They have enough sources to pick up the academic knowledge. However, in today's self centered world, there are not many places to turn to for values. That's what I intend to teach my students".

The guy did not seem all that pleased. He growled, and said something in Kannada which roughly translates to-- "So, you claim to be a sea of virtues, huh"?

I had my reply ready this time, "No, I am not all that good at it. That's why I intend to teach them. I become a teacher simply by the virtue of the number of mistakes I commit. What better way to teach than having a live example of an ignorant person? One easily learns when one can understand clearly, the consequences of not learning".

My relative was puzzled. He took a long time to comprehend the meaning. Later he nodded his head vaguely. I could not decipher the meaning, nor was I inclined to. Someone else waved at me. Thanking God for providing me an escape, I moved on.

Development: The double edged sword.

Yep, I am back. Had taken a pretty long break... My hands were itching :). I am out of touch. Please forgive me if I am a bit rusty.

Yesterday, I was watching a popular news channel. It was unfolding the Singur controversy. For people who have missed it, Singur is a rural town in West Bengal where the Tatas want to set up their famed '1 Lac' car plant. The controversy is over the land. Farmers are not ready to forgo their land, but the state government is adamant to acquire it and hand it over to the Tatas. Violent protests have ensued and the town is facing a law and order problem.

As I explained to my mother, who was also watching the news along with me, I realised that this problem was not just specific to Singur, but it related to the whole country. Every developmental project has problems pertaining to land. The problems may be wide ranging-- From complaints of acquiring excess land to paltry compensation to compensation not reaching the deserving, etc etc.

But I realised these problems were only the tip of the iceberg. They can be solved through various means. But I feel the bigger problem is of a different kind. It is the scarcity of land itself. What will happen when every possible piece of land is industrialised? What next? What will happen to agriculture sector which employs more than 75% of our population? Where will the farmers go? Most important of all- What will we eat? All kinds of food we consume comes directly or indirectly from the farms. What will happen when farmer ceases to exist? I wonder whether that will be the beginning of the end.

The above mentioned scenario may seem a little far fetched for our generation. But it is bound to happen in some time if the same trend continues. The pace at which industries are growing is phenomenal. This acceleration of growth is partly due to farmers' dismay over their economic condition. The government's poor support system and low income forces them to sell their land and look for alternate employment. This leads to ills like mass migration and selective population explosion.

The solution? Well, I am not very sure. The way out may be to slow down on other sectors and develop and support agriculture based industries. That way, we can reduce the disenchantment of farmers and keep them motivated. After all, the principal need is to survive.

My mother, though, had a simple solution. She said that all the illegal lands of politicians, if seized, would be enough to build more industries than ever required. How I wish that was possible.

In essence, development, without any doubt, is a double edged sword. If used recklessly, it can destroy mankind in just one swipe.