Friday, January 18, 2008
New Retail Shops
New retail shops are opening up all over the city and all over India. This shop, called Reliance Fresh, is opened by the Reliance Industries. Here you get fresh vegetables and FMCG (fast moving consumer goods). The first store was opened here about a year ago and it was an instant hit because it sold good quality fresh fruits and vegetables in one place at reasonable rates. Reliance bought directly from farmers and planned to grow vegetables in its own farms. But as it started to open stores across India, it hit intense opposition in the North and East, particularly in the big but lawless state of UP, and also in West Bengal which has a communist government. Reliance stores were destroyed by angry vegetable vendors who were losing their business because of the new store. So Reliance changed its model a little and it started selling supermaket items in these places, and instead of going retail with vegetables, it is now going to sell cut vegetables and fruits on wholesale to other big supermarket stores. In some cities in India, you get cut vegetables and fruits, but not everywhere. With Reliance and other retail stores this will change now. I have read that Wal-Mart faces opposition in the US where it causes local businesses to close out, but here the opposition is very violent and destructive, and most of the time this spills into destroying public property. India is growing at an unprecedented rate and there is a large middle class emerging with good purchasing power, but if the growth is not inclusive of all elements of the society, they can cause disruptions and destruction, because afterall a large portion of the population still makes only about $2 a day! But those that have disposable income now due to the tremendous number of jobs are spending wildly. There is a pent up demand because many of the goods were not available in India before this, and now they are available and people have the purchasing power. Consumerism is here - with a vengeance! Unexpected changes are seen frequently. Due to the huge demand for housing (both owned and rented) in the cities, the land around the cities where vegetables used to be grown is being sold off. This has caused shortage of vegetables and their prices to go up sharply. Some other local and national companies have followed in the footsteps of Reliance and have opened up retail stores and they all seem to be doing very well.
As Reliance and others open retail stores across India, there would be a great demand for transport aircrafts. Right now commercial aviation is growing very rapidly in the passenger sector. Next would be the transport sector. I read somewhere that Mukesh Ambani, the head of Reliance Industries had announced that their transport aircraft would be piloted by women! This would open up great opportunities for women, who are already training to be pilots. Incidentally, Mukesh Ambani is the second richest Indian at about $48 bn after Lakshmi Mittal. Mukesh's brother Anil Ambani is close behind him at about $45 bn. Their father Dhirubhai Ambani is a rags-to-riches story.
International retailers such as German retail giant Metro, the French hypermarket Carrefour and the American retain giant Wal-Mart want to open stores across India. Wal-Mart has partnered with a company called Bharti and at least for now may not be using the "Wal-Mart" name when opening their stores to avoid problems. Carrefour may partner with Reliance.
"My first rule of consumerism is never to buy anything you can't make your children carry." -Bill Bryson
"Shopping is a woman thing. It's a contact sport like football. Women enjoy the scrimmage, the noisy crowds, the danger of being trampled to death, and the ecstasy of the purchase." -Erma Bombeck
"I love to go shopping. I love to freak out salespeople. They ask me if they can help me, and I say, "Have you got anything I'd like?" Then they ask me what size I need, and I say, "Extra medium." -Stephen Wright