Tag Archives: Metro

Indian States are Putting More Roadblocks in front of Walmart Expansion

New Orleans   Two reports yesterday from Dharmendra Kumar, director of the India FDI Watch Campaign affiliated with ACORN International, point out how far the superstore giants like Walmart, Carrefour, Tesco, and Metro really are from being able to freely enter markets throughout India.  This is largely a story that the global business press is missing as they tout the rise and fall of the stock market without trying to understand that there continues to be a huge struggle over these issues of foreign direct investment in multi-brand retail.

            First and foremost, when Prime Minister Singh announced that he was pushing forward the modification, he could only do so generally at the parliamentary level.  Specifically each of the twenty-eight India states, not to mention the seven territories, has the right to independently decide whether to allow this FDI expansion in their jurisdictions.  As of this date, only 11 of the 28 states have indicated a willingness to tolerate such expansion with 17 thus far militantly opposed.

            As Dharmendra reported yesterday, there continue to be more roadblocks. 

            Walmart had teamed up with India-based Bharti in recent years to operate a “cash-and-carry” business that sold only to other businesses and not the general public, something like Sam’s Clubs the United States.  The Government had indicated that a “group” business like Walmart-Bharti had certain restrictions, but in recent years the ambiguity of the “group” business definition had allowed them free rein.  No more. 

            To quote from Dharmendra’s report:

On 3rd June 2013, Govt. of India defined Group firms as two or more enterprises that directly or indirectly are in a position to exercise 26% or more voting rights in the other enterprise or appoint more than 50% members on board of directors in the other enterprise. Amidst widespread opposition to the Walmart’s backdoor entry of FDI in Multibrand retail (through Bharti-Walmart, the 50:50 joint venture between Walmart and Bharti for operating Cash-and-carry outlets in India), in April 2010 Govt. of India framed a policy that asked cash-and-carry businesses (Bharti-Walmart) to limit their sale to group firms at 25 per cent of their turnover. In absence of clear definition of what group firms meant Bharti-Walmart’s cash & carry business (20 Best Price Stores) continued to sale almost 85% of their products to Bharti Retail’s 200 Easy Day stores.

Now, Bharti-Walmart will either have to limit its sale to Easy Day to 25 per cent of its turnover or restructure its corporate structure.

 

There can’t be happiness in Bentonville over this new clarification.

 

Yesterday the Indian Department of Industrial Policy and Promotion (DIPP) was also meeting and was expected to also propose additional heartburn for the superstore outfits.   India FDI Watch expected the following actions:

It is likely that the DIPP

 

– Would ask global superstores to invest 50% of only the first tranche of investments (minimum $100 million) in back-end infrastructure.

– Would declare that the 51% foreign direct investment limit in multi brand retail is composite one, including FDI and foreign institutional investment (FII).

– Would allow superstores to create back-end infrastructure in states that do not allow any FDI in multi-brand retail

             Forcing the big boys to put their investments up front rather than only in the logistics and supply at the backend of a retail operation almost puts a bull’s-eye specifically on the usually smiley-face of Walmart.

            There’s a lot more fight to come in India over FDI’s expansion into retail.

Indian States and Walmart Expansion Audio Blog

Facebooktwitterredditpinterestlinkedinmail

Notes on Japan for My Father

Seoul  The economic news from Japan is grim.  Exports, the lifeblood of much of the country’s economy was down 10% in September to the lowest point in 30 years reflecting the continuing aftershock of the worldwide recession, aggravated by a currently unresolved land and trade dispute with China that led the downturn.  One person I visited recently commented sharply that the new government in power after decades of effective one-party rule, simply didn’t have the relationships in China and elsewhere to solve problems in the back channels with the finesse and face saving that is a mandatory requirement in this part of the world.  Regardless, you wouldn’t know there was even an economic hiccup in Tokyo or Sendai which were maintained so spotlessly that seeing a piece of litter almost provoked a double-take from me each morning if I beat the sweepers out.  Major construction in downtown Tokyo also seemed to be roaring forward.

My father, a WWII navy veteran was typical of that generation in being tight lipped about the war, partly because he spent much of it in the NROTC at Milsaps and Tulane preparing to be a lieutenant.  He shipped out finally for the far east after the war was effectively decided, hitting a number of ports after a Pacific crossing including Tokyo, though that’s as much as I really ever heard him say.  Nonetheless there’s little doubt that had he been with me, he would have been surprised, if not astounded, at this almost obsessively ultra-modern country and its third largest global economy.

Here are some random notes, he would have enjoyed, as you might as well:

  • Signage is ubiquitous and very, very detailed!

  • There are public facilities, but this isn’t India, and they are dignified and discrete.

  • This is vending machine heaven!  The popular bottles of green tea drunk by people everywhere turned out to have a Coca-Cola label on the top of the bottle.

  • New since my last visit was 40-inch hard barrier blocking the Metro tracks from the push of commuters, broken only by the automatically opening gates.  I was told, perhaps correctly, that the city had built these barriers in the six-years since my last visit because too many salarymen a little tipsy from some after work libations were falling fatally on the tracks.  Something had to be done, so they did it.

  • There’s a lot of smoking still, but best be careful where (even though many public restaurants still allow smoking surprisingly), even outside on the street, where there are constant warnings.

  • Remember when Japan was the gold standard for electronics?  They seem to feel that they still are, especially if you pause for a second and try to take the full measure of a parking meter.  Remember when they were simply metal stumps that swallowed coins?

  • Not everything is new wave, because in our work there’s still a bit of old school.  Both the police and a number of protestors sport plain plastic megaphones around their necks to give raised voices something of non-electronic boost.

  • The leaflets may be multi-colored with glossy paper and galloping graphics, but collating is still by hand just as it was more than 40 years ago when I first made flyers and shuffled them together with forms in welfare rights.

  • Anime “animals” of all shapes and sizes are pervasive and Hello Kitty is still out of control but that sort of playful or infantile imagery still gave me no response when I was asked about the full-bodied “frog” at the Anti-Poverty Campaign rally, I could only say, “Was that a frog?

Facebooktwitterredditpinterestlinkedinmail