Thursday, December 1, 2011

FDI - Financial Dawn on India (or) Finalized.. Ditch India!

For people who have been bothering their brawls upon FDI… take a look here at the future of it incase the govt gets into place -  51% holdings to FDI...

Get ready for a pretty long read...


The major players who are expected to sow their seeds in the Indian soil are Walmart, Carrefour & Tesco.. among many others..

Key points on FDI bill:

• 51% stake in multi-brand retail routed through government approval

• These stores to be rolled-out in cities with more than 1 million population (there may be some 50 odd cities in India with such population)

• Minimum investment of $100 million is required

• Around half of that should be into backend infrastructure like – cold storage, transportation, etc.

• Have to source a minimum of 30% from small- and micro- Indian industries with a capital of less than $1 million dollars

Why FDI on multi-brand is good?

Walmart & its likes, can partner with an Indian company and sell their goods in India. Already Walmart and Bharti have been in talks and going about deals on the same.

High inflation in the country and the recent Euro mess have a lot to do with this decision. FDI can bring about reduced prices in the market with more supply and monetary inflow.

As such India is not the first country to do this policy update. Many emerging markets like Brazil, China, South Africa, Mexico, Thailand, Russia, Indonesia, etc. have more liberal policies than India on this front.

Let's take a look at the Chinese FDI success story:

China too started the same way as India – allowing 51% foreign equity and restricting to major cities, as early as 1995. They have now - only removed these restrictions after a decade of  its running by 2005.

China gave enough time (1995-2005) for the domestic players to grow up and compete with foreign competition and embrace the foreign model and now allow free competition in the multi-brand retail market.

Most of the top 10 retail companies in China, are domestic players from China amongst other foreign players. This shows that Chinese players didnt allow foreign players who are much bigger than what they are to compete them out of the market.

This has been proved even in India, in the telecom sector – Vodafone, Uninor & Aircel – exist with the homegrown Airtel, Idea & BSNL.

Bigger players don’t have a magic wand to drive out local competition from the market. Also their biggest strength of infrastructure and transportation in foreign markets is not something what they would get in India till date nor in China way back in 1995.

IBM earns more than the top 3 Indian IT companies in a year – yet they give IBM a run for their money during various contracts and bids.

FDI will help in organizing the domestic retail sector in a major way . Their investments might bring in mammoth changes in infrastructure, supply chain and logistics, better quality, money inflow to the country and employment of course.

This money is not for sure, the one that goes out of the stock market everytime someone sneezes in the Wall street or Europe!

FDI is expected to be lot more stable than FII money inflows..

Do you remember the time when taking a landline connection used to be such a hassle and look these days… how great the competition is.. telephone and internet providers guyz are queuing up offers and discounts for anything in the telecom sector.. this change is what FDI brought.. it’s a tested and tried method…

Hopefully this can be possible in the retail too.. it might spur competition and improve customer experience too..

If you see the ruckus going in the Parliament..its not about whether the policy is good for the consumers/customers or not at all…

How much low can Walmart go in a country known for its cheap labour and products that beat competition??!!(lolz..)

So from a customer point of view… FDI is a boon in the making!



Why FDI is bad?

India is the second largest producer of fruits and vegetables in the world and even then our food grains rot in the government warehouses.

The main topic of contention is that these bigger chains will drive the small outlets out…

Before we discuss on pros & cons of the FDI policy.. lets take a sneak peek into these companies first who may be entrants to our retail chain…

Walmart

Walmart is the world’s largest retail chain marker in terms of both revenue and profits. It is also the biggest private employer in the world.

Walmart does not charge a fee to its suppliers for their products to appear in their stores. It focuses on selling more popular products and gives incentives to its store managers to drop less-moving or unpopular products.

Walmart faces stiff competition in its homeland and Canada from other hypermarket chains. Their journey in foreign lands have not been easy too.

They entered Germany in 1997 and took the second place in market share. But due to stiff competiotion withdrew their operations from the country in 2006, selling all of its stores.

They entered Korea in 1998 and sold all of their 16 Korean stores too.

There have been several economic studies around Walmart and its operations in the US and outside. A 2007 study on Walmart mentioned – It was in the process of driving everyone else out of business but, to do that, they cut their prices to the bone, very, very low. Another study mentions – ‘They had successfully destroyed the local economy. In a community with a Walmart, astonishingly the price of commodities were 17% higher. They had carved an economic crater’.

Labor unions and environment patrons have criticized Walmart for its policies and business practices. Several labor unions blame Walmart’s anti-union stance. Others disapprove of the corporation’s extensive foreign product sourcing, treatment of employees and product suppliers, environmental practices, usage of public subsidies, and impact of their stores on local economies in which they operate.

After years of fierce fighting. Walmart has accepted labor union in China.

In 2007, a gender discrimination suit was filed against the giant in the US - in matters regarding pay and promotions to woman employees.

Carrefour

Carrefour is an international hypermarked chain based out of France. Second largest retailer in terms of revenue and third largest in terms of profit after Walmart & Tesco.

Carrefour is French for ‘Crossroads’.

It operates across continents in stores of all sizes.

Carrefour has some interesting facts with India. It already has its presence in India in Delhi and Jaipur. The first was opened in the NCR – Carrefour Wholesale Cash & Carry store spread across 5200 sq.m. Its second in Jaipur is also of the same type and size as Delhi.

For those who might be wondering how Carrefour is already into India when FDI regulations are not in place, let me familiarize you all with the Indian FDI policy in a lucid manner.

FDI policy in India does not allow foreign companies to open multi-brand retail stores in the country. India currently allows 100% FDI in single brand retail and 100% in cash-and-carry mode too. Thus global retailers opt for the cash & carry route to establish their presence in India. 51% share in multi-brand retail is still pending approval at the Parliament and is the sole reason for all this ruckus happening out there.

The French company has already been taken to court in cases of stocking insufficient quantities of advertised products on sale and another case of selling products at very low cost and accepting kickbacks from wholesalers. It was ordered to pay a fine of EURO 2 million on this case in 2007.

When India doesn’t even have a law/policy to handle such cases in court.. how do we bring these cases to justice?

They have also been penalized for selling less quantity than mentioned in the product labels and products on sale past their expiration dates in 2009. Do you think we will be able to successfully penalize them in India for such actions?

Carrefour has already closed its retail chain of hypermarkets in various countries including – Chile, Czech, HongKong, Japan, Mexico, Portugal, Russia, South Korea, Switzerland, Thailand, UK and the big bro – US.

Reasons for closure of business and operations include selling products at far below prices than local competitors, licensing for commercial spaces, etc. They have re-entered some of the above markets under a different banner or with a local partnership now.

TESCO

Retail giant based out UK – third it terms of revenue and second in term of profits behind Walmart.

Its market share in UK is around 30% now.

They are into banking, electronics, telecom, mobiles, internet, VoIP, fuel , tech support, film making, gold exchange, tyres and beauty salon apart from retail!!!

Tesco has one of its service centres in Bangalore & some outsourcing to India too. They had announced a GBP 60 million investment in India partnering with the Tata Group to open a cash-and-carry store in Mumbai.

I myself have personally seen Tesco products on sale at Tata owned retail chains like Star Bazaar in Bangalore, marketing and selling TESCO personal care products.

Like any other company, Tesco too faced corporate law suits. Worth mentioning are one from Thailand where Tesco was accused of aggressively expanding at the expense of small, local retailers.

In 2007, it was revealed that Tesco moved its headquarters from UK to the tax haven Switzerland. It was believed that this move allowed them to sell electronics, CDs and DVDs without VAT. The Swiss government in 2008 announced that it was closing a tax loophole being used by Tesco.

The British magazine ‘Private Eye’ identified it mentioning – Tesco utilizes offshore holdings like Luxembourg and other partnership agreements to siphon out money avoiding a corporate tax to the tune of GBP 50 million a year.

It also did a sting and exposed that – Tesco was depositing GBP 1 billion with a Swiss partnership and then loaning out the money from it to Tesco stores overseas, thereby transferring profits through interest payments. This scheme is still in existence and is estimated to cost the UK exchequer GBP 20 million a year in corporation tax.

In 2008, Tesco was also traced to Cayman islands – where companies setup by Tesco deliberately. They planned to sell their UK stores to Cayman Island-owned companies and then they will lease it back to Tesco. Thus can evade corporation tax in UK, plus there is zero corp tax in Caymand islands.

People of UK themselves have been opposing Tesco stores opening in their counties citing various above reasons.

And we in India – are longing for one…!!!!

Other major retail market players include – Colruyt (based out of Belgium) which already has opened one of its office in the IT-borne area of Hyderabad.

Waitrose – another leading retailer sell their products over various Hypercity outlets throughout the country.

Major issues in India against FDI:
  • Weak laws and loopholes
  • Previous business/investments crimes not brought to justice yet
  • Totally corrupted politics
  • Lack of goodwill for the country/people from political leadership
  • Few big honchos might benefit
  • Rich and poor divide to get more larger
  • More westernization in lifestyle
  • Not enough law amendments or body to book malpractices
  • Outdated labour laws
  • Farmers are already not getting their due - FDI can worsen it
I am not taking any stance for or against FDI.. neither have I graduated from LSE.. :)

I m just trying to bring out facts so that people can form opinions and voice them in unison.. for a better India tomorrow..

So next time where are you shopping – Walmart or Roadside cart?

COURTESY: Wiki and various other Internet resources on FDI and economics.. my thanx to them!! :)
Cheers,
Revathy

Tuesday, July 5, 2011

Installing Husband......

This blogpost is basically one of the interesting mail fwds i received....

Could relate to this very very much......Felt how true it is.......give it a read.. n hv ur share of laughs...


A woman writes to the IT technical support guy:

Dear Tech Support,


Last year I upgraded from Boyfriend 5.0 to Husband 1.0 and I noticed a distinct slowdown in the overall system performance, particularly in the flower and jewellery applications, which operated flawlessly under Boyfriend 5.0.


In addition, Husband 1.0 uninstalled many other valuable programs, such as Romance 9.5 and Personal Attention 6.5, and then installed undesirable programs such as NEWS 5.0, MONEY 3.0 and CRICKET 4.1


Conversation 8.0 no longer runs, and House cleaning 2.6 simply crashes the system..

Please note that I have tried running Nagging 5.3 to fix these problems, but to no avail.


What can I do?


Signed,
An upset wife



_______________________________________________________________________________________


And here goes the reply:
 Dear Madam,

First, keep in mind, Boyfriend 5.0 is an Entertainment Package, while Husband 1.0 is an operating system.


Please enter command: ithoughtyoulovedme.html and try to download Tears 6.2 and do not forget to install the Guilt 3.0 update.


If that application works as designed, Husband 1.0 should then automatically run the applications Jewellery 2.0 and Flowers 3.5.


However, remember, overuse of the above application can cause Husband 1.0 to default to Silence 2.5 or Beer 6.1.


Please note that Beer 6.1 is a very bad program that will download the Snoring Loudly Beta.

Whatever you do, DO NOT under any circumstances install Mother-In-Law 1.0 (it runs a virus in the background that will eventually seize control of all your system resources.)


In addition, please do not attempt to reinstall the Boyfriend 5.0 program. These are unsupported applications and will crash Husband 1.0.


In summary, Husband 1.0 is a great program, but it does have limited memory and cannot learn new applications quickly. You might consider buying additional software to improve memory and performance.


We recommend: Cooking 3.0 and Hot Looks 7.7

Good Luck Ma'am!

:D

Saturday, May 21, 2011

Buttery Flattery!!!!

Bac again.. this time with some gyan...

Yeah.. far from spirituality.. this blog is all about tastebud bliss!!!

Shud i rather call it.. Buttery bliss... ??? :)

I hv always been a hard-core fan of butter [Most can make it out wit my size!!! :)]

My butter has started tastin better after i laid my hands on this article...

So without any more delay lets jump on to the gyan of the day - BUTTERY FLATTERY!!



Mr. Butter is a dairy product made by churning cream or milk. It is generally used as a spread and a condiment, as well as in baking & pan frying. Butter consists of butterfat, water and milk proteins.

Butter, as an animal fat, contains both saturated fats and cholesterol – the two dietary ingredients that increase blood cholesterol. Cholesterol in foods, on the other hand, has little effect on blood cholesterol in most people - claims a survey!!!

BUTTER GYAN TIME!!!

  • Butter is rich in the most easily absorbable form of Vitamin A necessary for thyroid and adrenal health.
  • Contains lauric acid, important in treating fungal infections and candida.  
  • Contains lecithin, essential for cholesterol metabolism.
  • Contains anti-oxidants that protect against free radical damage.
  • Has anti-oxidants that protect against weakening arteries.
  • Is a great source of Vitamins E and K.
  • Is a very rich source of the vital mineral selenium.
  • Saturated fats in butter have strong anti-tumor and anti-cancer properties.
  • Butter contains conjugated linoleic acid, which is a potent anti-cancer agent, muscle builder, and immunity booster
  • Vitamin D found in butter is essential to absorption of calcium.
  • Protects against tooth decay.
  • Is your only source of an anti-stiffness factor, which protects against calcification of the joints.
  • Anti-stiffness factor in butter also prevents hardening of the arteries, cataracts, and calcification of the pineal gland.
  • Is a source of Activator X, which helps your body absorb minerals.
  • Is a source of iodine in highly absorbable form.

 Reference:


Friday, April 8, 2011

Candles! Colors!! Concepts!!!

Hey buddies... Trust you all are doing gr8 for urselves..

Came across this interesting article in a mag recently...

Plain yet good read for all in my own style.....

Candles just don’t bring light into your life but also gets love, happiness and prosperity with its glow.

Wanna know how..

Just pay a little more attention to the color next time you set out to buy candles...

GREEN: Green is significant for fertility and perenniality. A green candle’s glow brings prosperity, abundance of joy and wealth in life.

If you are looking out for a job or wanna get promoted.. spread the light from a green candle and lighten your life!!



YELLOW: This bright shade symbolizes power, inspiration, memory and intelligence.

If you are looking to win somebody’s heart or wanna become there confidante.. go for yellow!!



RED: This color is renowned for the feeling of love and romance it spreads across people’s lives.

It denotes energy, enthusiasm, health, cheer and happiness. By lighting a red candle one can keep being lazy at bay and get energetic.

Boost up your romance life by going for a red candle!!



GOLDEN: Jus like the way gold glitters, this color adds shine to your life. This color is known to get good luck and mutual affection and love. It also stands for victory and prosperity.

Light a golden candle for love and prosperity in your life!!



BLUE: The very word of blue brings inspiration.

Light a blue candle for mental peace, good wishes and stability!!



ORANGE: The light from an orange candle takes you to the inner world of the soul... moving you out of all the materialistic presence around you.

It gets you full josh in life and makes you an attractive persona. It also symbolizes friendship.



PINK: If you are out looking for good friendship, love and peace in life.. go for a pink candle!!



WHITE: This candle stands for simplicity, purity and faith. It is also significant for peace, security and pity.

It helps soothe and relax your mind if you are amidst an argument or your mind is stuck in a conflict.



AQUA: Denotes the translucent or transparent candles. Boosts your creativity and knowledge.



PURPLE: This denotes respect for others.



No doubt candles are evergreen gifting options.... :)