Business Daily from THE HINDU group of publications
Wednesday, Oct 17, 2007
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Business Daily from THE HINDU group of publications Wednesday, Oct 17, 2007 ePaper |
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Marketing
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Retailing Web Extras - Politics
Divya Trivedi Mumbai, Oct. 16 In a market where many companies are bullish on retail and investing huge amounts into the sector, Reliance Retail has been a target of much of the protest action against organised retail. “Reliance is our no.1 enemy followed by Wal-Mart and Bharti, because they are partnering with Wal-Mart,” said Mr Dharmendra Kumar of the India FDI Watch, at the recently held anti-retail protest meet at the Azad Maidan here. “I find it very interesting that there are other organised retailers who continue to operate in these areas,” Mr Gunender Kapur, CEO Reliance Retail, told in an interview to a television channel. Reliance Fresh outlets have come under attack in States like Uttar Pradesh (where the State Government has banned its outlets while those of other retailers like Food Bazaar continue to operate), Kerala, West Bengal and Jharkhand. Middle-men protestAccording to some protestors, Reliance is procuring from the farmers and selling to the end-consumer at a price that is cheaper than what the alternative distribution channel involving five crore middle-men are able to do. “Today, Reliance is buying from the farmers, displacing the middle-men, and selling at cheaper rates. But once they control the market, they will be in a position to buy at cheaper rates and sell at higher prices,” anticipated Mr Narendra Anasaheb Patil, General Secretary, Mathadi Kamgar Union. The threat of higher prices that Mr Patil is referring to should at least keep consumers interested in watching the battle evolve in the days to come. Reliance opened 15 outlets in a single day alarming the small players and middle-men, said Mr Dharmendra. “Also, they are opening small neighbourhood shops, directly competing with the small kiranas, affecting their business,” he added. ‘Scapegoat’Analysts are of the opinion that the company is being made the scapegoat because of its image of a conglomerate. “Reliance in India represents what Wal-Mart does in the US and so it is intimidating the small players,” said Mr Hemant Kalbag, AT Kearney, adding that the company is actually changing the paradigm in retail by making products cheaper.
According to Mr Harish Bijoor, consultant, there is an incumbency factor at play. “Reliance has the image of a big player in the market and the protestors are drumming up support against the company by mobilising large numbers of people to rally from the fruits and vegetables businesses, which are the lowest common denominators.” Speaking to Business Line earlier, Mr R. Subramaniam of Subhiksha said that Reliance was being perceived as a soft target as they had have a lot at stake. Commenting on why some retailers were being hit, he said that announcements of contract farming and several crores of investments have directed their anger against a particular entity. More Stories on : Retailing | Politics | Reliance Industries Ltd
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