About the union of Stock Market Dynamics and Astrology, a union of fundamental & astrologic analyses
Thursday, December 01, 2011
The 200,000 Crore Indian Retail Market
The allowance of FDI in Retail has stunned the country. The Opposition parties are up in arms and the PM says there is rollback on FDI.
The estimated size of the Indian Retail Market is 200,000 Crore and it will expand to one trillion within a few years. Organised Retail is only 2%. It is 20% in China.
90% of the small retailers, do not pay tax to the GoI. They operate on a small margin fo 4-7% after all their expenses and the GoI is soft on them. For over decades, they have been serving the Indian consumer and the kirana stores number 12 million. Some of them provide credit facilities and door delivery. They have been the all time fourites for the FMCG companies to introduce and promote new products. But all this changed in 2000 CE, when Organised Retail was born in India. Organised Retail, was then considered to be more costly and innovative, even by the urban consumer. But then Organised Retail has come a long way since then and India is poised for the Retail Revolution.
Organised Retailers are not competing with the kirana stores and both coexist. They compete with other organised retailers. Advertisement spend has gone up and you can see ads of the organised retailers in all newspapers and electronic media. In fact, the kirana stores have not lost business. They have become better than before due to competition.
The logic that small kiranas will run out of business is a big myth. We have one billion people to feed, dress and house and there are plenty of opportunities at the bottom of the pyramid.
Capital infusion is the biggest benefit of the new policy. 50% of the 100 milliion cap should go to back end infra and this means an FDI of 2.5 billiom. Even though the Indian players, Tatas, Ambanis or Birlas have enough capital, what they lack is intellectual capital. We have to get the know how from the international partners the ways and methods to run that business more efficiently. They have been runnning their business for years and FDI comes often bundled with technical, managerial and labour force skills.
Astrologically, as India is receiving the adverse transit influences of Jupiter and Saturn, there will be chaos and the Opposition parties are just proving that. Till May, problems may persist due to the Jovian adverse stance.
Yesterday, the stock market went up, but then we cannot take anything for granted. The current political situation in India will affect the stock market. In October, the exports have only grown 10% to 19 billion. One hopes that the 300 billion export target will be achieved this year.
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