Chairman – JGA, Southfield MI USA
In Retrospect: 2012
The main change was that the whipsaw legislation related to international retailers finally appears to be resolved. The resolution sticking is unique in itself, as it seems to have been approved, disapproved, or approved many times over the last few years.
Arrival of FDI
With the FDI becoming a reality, Indian retailers are looking to find ways to maximize their way out of retail or in other words, determining how to make their physical assets more appealing in a potential purchase scenario, or guard to defend their territory against incoming retailers by internationalizing their business. In particular, this reinforcement of their business position in second and third tier cities can help them win in places where the international retailers most likely will not, and/or will, take a long time to enter. I assume the “unorganized” market will also benefit as it will have a much better reason for being a strong alternative to organized retail, not just a habit -- with areas in terms of local product, fresh product and unique perishables. It will help improve standards in the traditional retail marketplaces, with the organized retailers focusing on a different type of value-add. By that I mean the organized retailers harnessing their strength in areas such as logistics, product development, product innovation as their value-add, versus the traditional local retailers who might focus on a retailer-toindividual credit, localization of market goods, and personal service.
Looking Ahead: 2013
I believe in the end, the international players will “teach” the supply chain how to deliver, though some will fail, others will succeed. And those that succeed will take those lessons and apply them, not only to the work that they do with international retailers, but to the domestic retailers as well.