Many a times, it was debated whether FDI in retail is good for India. I don't want to reopen Pandora's box by discussing about FDI. I want to present a realistic picture of Indian retail. Lets not discuss how big is the Indian retail market and how businesses can make money by organized retail. First let's understand what customers got from established retail houses in India:
1. Long queues : If you go to any retail store today, you will find long waiting lines at payment counters. First of all number of counters will be less and even then half of the counters will be closed. Only God knows the real reason for such poor service. I asked about it to one of my friend who works in retail. He said that we want to give a feel to Indian customers that they are in a crowded place. What the Hell?
2. Higher Prices : If I am buying something in Walmart USA, I know that I will get the best rate in the market. Even if I am buying from some other retail chain in US, I will get a reasonable rate. In Indian retail stores, I compared the price of goods at organized retail stores and at street shops. There is a clear difference in the price. To my surprise organized retail is charging far more than street shops. This difference is not 10-20% but between 100% to 2000%. Organized retail should be more efficient in its cost management. Ideally organized retail should charge less. Either Retail stores are inefficient and hence not required or They are cheating us and hence not required.
3. Poor Service : If you buy anything (let say water purifier) from any retail store, you will get poorest possible service. A street shop will provide you 24-48 hours turn around time and will meet it. A organized store will again provide you turn around time of 24-48 hours but do not expect any results before 72 hours. Here service is poor on two counts : 1. False promise 2. Delay in service
Once you pay the money, do not expect any response from representatives at these stores
4. Open Exploitation : Every worker in these retail houses is working for (at least) 12 hours daily. They are poorly trained and not given proper break from work. Its open exploitation and it seems nothing can be done.
5. No Innovation : Indian retail is poorly copied model of US retail. There is no innovation to provide high level of service to Indian customers. First of all US standards of service are far above than what service these stores provide. Secondly, there is no Indianization of service to serve the customers better. Thirdly cost of these stores seems really high as none of them are in profit.
Over all, organized retail in India doing no good to people or itself.
