Jul 14, 2010

How big retail spreads its wings

Despite what the Indian Council for Research on International Economic Relations (ICRIER) in New Delhi says about FDI in retail, the US has been colonised over the years by Wal-Mart and the tribe. It has virtually wiped out the neighbourhood 'mom and pop' stores. Many of the cities/towns in the US look as if these are centered only around Wal-Mart or the other big retails. There is nothing else in these mofussil towns/cities.

Nevertheless, the malignancy is now spreading to India.

After having played havoc with the economies of the Latin American countries, which fell quite early to the World Bank/IMF prescriptions, the menace is now eyeing the lucrative market of India. With Prime Minister Manmohan Singh facilitating the entry of these big retail chains in India, and with the Opposition parties also bitten by the FDI bug, I don't think it will be too late before the big retail spreads its wings.

This is also because of faulty socio-economic analysis.  I wonder, for instance, how the ICRIER study concludes: "there was no evidence of a decline in overall employment in the unorganised sector as a result of the entry of organised retailers." It is primarily for such manipulated reports that the country is faced with its worst-ever crisis. The DIPP discussion paper (that we talked about yesterday) is also based on such flawed analysis or on the basis of lobbying documents prepared by the industry groups like FICCI/CII/ASSOCHAM.
Anyway, I have received an interesting digital flowchart. You need to click on this link, and then press the play button (in the centre of the US map), and you will get to see how the malignancy spreads.

Watch the growth of Wal-Mart and Sam's Club

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