Financial Daily from THE HINDU group of publications
Sunday, Oct 23, 2005
Financial Daily from THE HINDU group of publications Sunday, Oct 23, 2005 |
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Industry & Economy
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Foreign Direct Investment Marketing - Retailing `Concerns about Wal-Mart, other giants unfounded' Our Bureau
Mumbai , Oct. 22 MR Stephen Goh, Executive Chairman, Retail Asia, a Singapore-based regional trade magazine, has dismissed concerns about Wal-Mart and other global retailing giants displacing the domestic industry as totally unfounded. He said the opening of retail sector for foreign direct investment was, therefore, logical and beneficial. Mr Goh made these remarks after presenting the ranking of the top 500 retail companies of the Asia-Pacific region at the Retail Asia-KPMG-Euromonitor road show in Mumbai. "Same concerns were raised in Indonesia and China, but they have hugely benefited from allowing Wal-Mart, Metro and other global retailing players," he said. "They create huge job opportunities and reduce cost of products for consumers. Indonesia, a smaller market in comparison to India, has seen this phenomenon. In terms of economic opportunity, India is the new China," Mr Goh said. Certain political parties and trade associations in India have raised concerns that these big retailers would increase the price of products after establishing their monopoly. "Where is the question of this? Wal-Mart cannot do this, as they will be pitted against other players like Metro or Carrefour," Mr Goh said. He, however, cautioned that welcoming these giants did not mean they should be allowed to indulge in unfair trade practices to wipe out other players. "Microsoft and Wal-Mart have tried to do so in the US but they have been dealt with severely," he said. Ranking of the 500 companies, cutting across 14 economies of Asia-Pacific, is based on total retail turnover. Euromonitor International, a research consultancy firm, has compiled the report for Retail Asia. For compiling the report, Euromonitor studied annual reports of companies, conducted field research and trade interviews. Japan clearly dominates in terms of overall sales and has the highest retail per capita sales. Some 72 Japanese companies made the 500-company list, while India has 17, Australia (40), China (87), and Taiwan (48). Japan's Aeon Group has emerged as the largest retailing company in the region, followed by another Japanese company Ito-Yokado group. Woolworths (third rank), and Coles Myer (fifth rank) were the only two non-Japanese companies in the top 10. The highest ranked Indian company on the list is Bata, ranked 287. Nearly 20 per cent of the top 500 retail companies were departmental stores, while 16 per cent were hardline stores (dealing in single product). Clothing, footwear and accessories stores comprised 12 per cent and supermarkets comprised nearly 13 per cent of the list. "The annual growth rate of departmental stores has been estimated at 24 per cent, which is faster than overall retail," said Mr Deepankar Sanwalka, Head, Consumer Market Practice, KPMG India.
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