x Abu Dhabi, UAETuesday 25 July 2017

Grocers still face many hoops to jump through

Ankur Bisen, the vice president of retail for Technopak, talks about the hurdles facing retailers from abroad over setting up in India.

Ankur Bisen, the vice president of retail for Technopak, a consultancy, talks about the hurdles facing retailers from abroad over setting up in India.

Why does foreign direct investment (FDI) into retail seem to be facing challenges?

Retail is a complex subject for the simple reason that it involves multiple stakeholders. If you look into reforms in India in any other sector, they were pretty straightforward. Retail involves stakeholders all the way from farmers and wholesalers, retailers and then, of course, the final consumer. These functions are extremely fragmented in India.

So how long will it be before it really takes off?

Some people are saying in any case nothing is going to happen until the 2014 elections now and they think it's wait-and-watch for the next one and half years and after that let's see which government gets installed and what is the appetite of that government to continue with the reforms.

But maybe retailers could benefit from moving quickly on the opportunity.

The other argument is that waiting will take away the precious time of entering the market and learning about the market, so the view is that whatever half-door opportunity is given, retailers should just enter and make their presence felt and when the time is right then you actually scale up. A typical example is McDonald's. When McDonald's entered India about a decade ago, there were all sorts of apprehension about food, about farmers. But McDonald's entered and got farmers and consumers on board and it has got such strong traction that politically it has become irrelevant to oppose McDonald's because farmers are happy and consumers are happy.

There's still a lot of opposition to FDI into multi-brand retail. Is there any chance the decision could be overturned?

There's no reference point where a policy decision has been rolled back by one government over a decision that was taken by a previous government.

 

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