Impact of FDI in retail

Huge investments in the retail sector will see gainful employment opportunities in agro-processing , sorting, marketing, logistics management and front-end retail.

* At least 10 million jobs will be created in the next three years in the retail sector.

* FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen.

* Foreign retail majors will ensure supply chain efficiencies.

* Policy mandates a minimum investment of $100 million with at least half the amount to be invested in back-end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. This is expected to considerably reduce post-harvest losses.

*This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because food, which perishes due to inadequate infrastructure, will not be wasted.

* Sourcing of a minimum of 30% from Indian micro and small industry is mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation.

* A strong legal framework in the form of the competition is available to deal with any anti-competitive practices, including predatory pricing.

* There has been impressive growth in retail and wholesale trade after China approved 100% FDI in retail.Thailand has experienced tremendous growth in the agro-processing industry.

* In indonesia, even after several years of emergence of supermarkets, 90% of fresh food and 70% of all food is still controlled by traditional retailers.

Fear of Suppression..!!

Its the hot topic nowadays whether Indian system will let foreign Retailers survive here..!! Everyone right from the highly educated professional up to the thumb-king chatter, can be found discussing about the so called ILL EFFECTS on Indian small retailers due to the open entry of Global Retail giants like Wall Mart, Carrefour and Tesco etc..
But the fact behind the scene is the extreme fear and psychological pressure that has been created on the minds of Indian Retailers as they are neither in mood to change themselves nor are capable to change..!! Today's alert customer only wants the best product and service at the reasonable prices which Indian Retailers aren't willing to give. It has been continuously said that Small firms will get closed down and thousands of people will lose earning..??? Is it for sure...???
When we can face or challenge any of the worst calamities in our country right from the Wars, Tsunamis why cant we face these foreigners..??? When we talk about the globalization, where is its practicability..?? Government of India has certainly not done anything good to improve economy, so when something good has become possible, why are we not accepting it..??
Improve your supply chains, improve your offerings, bring innovations, use technology and see where you will be...!!! Why blame others when we ourselves cant do anything better..?? When these foreign players can gain profits by operating at lakhs of miles apart from their own destinations, why cant we do it by sitting at our own homes..??
Its just a fear of suppression that has raised the noise....!!

Some of the Retail FDI proposals made by the govt. India

   Cold storage facilities for farmers to prevent post-harvest losses.

   In case of FDI’s more than 51%, 30 per cent of product sourcing would have to be done from village and cottage industries as well as small and medium enterprises, so as to benefit this sector.

   Hoding that only 53 Indian cities with a population of 10 lakh and over would attract FDI proposals by virtue of the policy provisions, govt assured that small retailers would not only coexist with big players, but also grow by 13 per cent in the coming years.

   The decision on FDI in retail has come close on the heels of another major policy rollout -- the National Manufacturing Policy -- which envisaged increasing the manufacturing sector's share in the GDP from 16 per cent to 25 per cent in 10 years and create 100 million jobs.

Economic and Governance Reforms is Must

In a recent statement by Mr. Mukesh Ambani, Chairman, Reliance Industries, he has said that India has seen the extravagant economic growth in last few years. But the traditional style of governance has been the biggest obstacle in the country's overall growth. Young and worthwhile population lies in the age group of 20-35 yrs and they need to highly motivated for the applicability of country's economic growth.
Hence, it is must for India that style of governance and the economic policy should be changed. The focus should be on the improvement in Education and Healthcare systems, as these two are the only ones responsible  for keeping growth in the flow. For this achievement, Globalization along with Liberalization is to driven and so governing policies need to be modified and advanced.

Understanding Chinese business culture and etiquette (Courtesy-www.chinese-culture)

The Initial Approach

Chinese business contacts are mostly referrals; essentially a business relationship is struck based on another business associate recommendation. The best prices and deals often comes from a strong recommendation.

However, it is common today for cold calls and direct contacts, given the availability of the internet and the competitive nature of Chinese businesses. You may source from the internet, trade fairs, catalogues and brochures, advertisements and approach the Chinese companies directly through a call or email.

Alternatively, if you are seeking to invest in a factory in China, you can approach a investment committee or a business advisory directly. They will be able to advise you on your best location based on your industry, raw material and manpower needs. Please contact us directly if you have such a need and we'll be glad to advise accordingly.

Business Relationship in China
Chinese business relationship inevitably becomes a social relationship after a while. Unlike Western business relationship which remains professional and perhaps, aloof, even after a long time, Chinese business relationship becomes a social one.

The more you share your personal life, including family, hobbies, political views, aspirations, the closer you are in your business relationship. Sometimes, a lot of time is spent discussing matters outside of business, but then a lot of time, the other party is also making up his mind about your deal based on how much he sees your personal relationship with him.

Seniority is important in China
Seniority is very important to the Chinese especially if you are dealing with a State owned or government body. Instead of addressing the other party as Mr or Mrs so and so, it is always appropriate to address the other party by his designationie Chairman So and So, Director So and So or Manager So and So.

When giving out namecards or brochures, make sure you start with the most senior person before moving down the line. When giving out a namecard or recieving one, ensure that you are stretching out with both hands with the card. Remember to face the card you are giving out in a manner such that the recieving party gets it facing him correctly.

Giving Face or Gei MianZi
Giving face (aka giving due respect) is a very important concept in China. You must give the appropriate respect according to rank and seniority. For example, if you are buying gifts for an initial contact, make sure you buy better gifts for the senior managers instead of buying similar gifts across the board.

Similarly, sitting positions in a meeting room or a dining table is accorded accordingly to rank, importance and seniority. It is good to seek advice before embarking on your first meeting with Chinese business contacts to avoid making the wrong move.

Gifts and Presents
Unlike earlier days when China was very poor, gifts, especially of Western origin was especially appreciated. Today, China produces and imports almost anything imaginable and gifts are no longer a novelty.

However, gifts are always appreciated and especially in the smaller cities or towns, will continue to play an important part in your business relationship. Do note that if you are indeed giving gifts, make sure the senior people get a better gift or at least gifts perceived to have a higher value than their junior staff.

Similarly, expect to recieve gifts from the Chinese, especially Chinese art products. It is polite not to refuse, especially if it is not of too high a monetary value.

Lunch/Dinner in China
There is no business talk in China without at least one trip to a restaurant. Sometimes, a trip is made to the restaurant even before any business discussion take place! Inevitably, the restaurant will always be a grand one and you are likely to be hosted in a private room.

There is an elaborate seating arrangement for a Chinese business meal. There are fixed seating positions for the host and the guest and then they are seated again according to seniority. This is a very important aspect of a formal dinner and it is important that you follow the rules accordingly. However, it seems that the Northern Chinese are very particular to this formal seating arrangement while the Southern Chinese has loosen the formalities somewhat.

Controversial Issues in China
There are some taboo areas in social conversations with the Chinese. Try to avoid these conversational topics as much as possible. I have seen many nasty arguements as a result of these topics:

1. You must not mention that Taiwan is an independent state or a country.
2. You must NEVER praise the Japanese or be seen to be good buddies with them
3. You can condemn Mao Tse Tung but avoid critising Deng Hsiao Ping
4. You must not praise Shanghai in front of natives of Beijing and similarly vice versa

Other than that, you are pretty safe to converse with the Chinese anything under the sun!