This review first appeared on my previous microblogging effort on http://www.mouthshut.com.
The key finding of the report are encapsulated below:
1) An initial fall of 23% in terms of volume. This loss is made up in the subsequent years
2) No evidence of a decline in overall employment in the organised sector
3) Closure rate of the small kirana store @ 1.7% due to the Organised Retail Phenomenon. Total Kirana closed were @ 4.2%. Out of this 4.2%, only 1.7% were due to organised sector factors
4) Competitive response from traditional retailers through adoption of technology and improved business practices
5) Extension of credit to customers
Far more interesting is the anaylsis of the impact of / on customers
1) Increased Consumer Spending
2) Proximity is a major advantage of the small retailer
Increased Consumer Spending
This is something all of us should have observed! We do tend to pick up far more items when the full range is displayed in front of our eyes: that 10-rs pack of chocos; those cakes and tit-bits; small tinkers that we spot on shelves; the odd item with a deal too good to refuse; the latest kitchen gizmo; that shiney kitchen aid; that bunch of hankies we dont need; all those lovely toys for the kids… the list can be endless.
An Organised Outlet will be at least a km away – if not more. The very fact that the local kirana store is right next door is in itself a powerful advantage. This is particularly important since needs arise in a normal household practically everyday. Further, quite a few items are usually forgotten in our trips to the mall – or the brands we need are not available.
Both the above do not explain why is it that kirana concept is not only surviving, but also thriving. The adjustments made by this category can be said to be:
1) Convenient Timings
2) Credit Facility
3) Lower wait time in-store
4) Personalised Service
5) Smaller Pack Size Availability
6) Consumer Goodwill
7) Home Delivery
8) Facility of open goods: loose sale of packaged goods
9) Local Brands Stocking
10) Knowledge of Consumer Preferences
11) One-stop shop concept, with a wider range of products being stocked – viz. stationery, batteries, bakery items, snacks and sweet meets, ice cream, soft drinks,
12) Friendly replacement and return policies
13) Innovative new products especially in impulse categories
14) Perishables like milk – esp home delivery on coupons
15) Bill payment support to nearby households and other services
16) Stocking of all new product launches – faster than even the chains
The above small items, taken together, are creating a powerful force that is retaining the customer profile. On the customer front, what is happening is that the share-of-wallet, which was earlier 100% to the local kirana market, is now being shared between the organised retailer and the kirana merchant in a few segments of the market. For the lower segments of the population, the facility of smaller pack sizes, loose goods and credit are together ensuring stickiness. In fact, these last 3 factors are powerful strategies, given India’s demographic and income profile. As an example, I have frequently found that a 100g pack of my brook bond herbal variant of Red Label is not stocked by malls. I can think of quite a few other similar cases…
The other major factors in the equation are
1) Increased Consumer Spending
2) Increased Prices
3) Increasing Households and Population
4) Increase in Per Capita Income
These factors are growing the overall market: which is creating space for all the players!
” It has been openly acknowledged that a sizeable number of candidates, who were recently put up or elected to the State Assembly, at least in one State, had a known criminal record. There is no public outrage over it.”
“What is the practical course of action to prevent the mafia in Madhya Pradesh from striking again? The Chief Minister has ordered a judicial enquiry. This is the best way to ensure the truth about those who were behind the gory incident does not emerge, at least for a long time.”
” Things have now reached such a pass that you can speak and stand for honesty and adherence to the law only at your peril. Physical harm to you and your family are normally to be expected, and it is your luck if that does not visit you. This would not have been the case if these rapacious elements in society have not been lent unholy support by some of our elected representatives.”
“Finally, is it not time for the Apex Court to steamroll the reforms it had so eloquently pushed in 2006, in response to the PIL of former U.P. DGP Prakash Singh? Many former and present IPS officers are disappointed that the pace of reforms ordered by the Supreme Court has been painfully slow. Here again, the truth is that a number of Chief Ministers are opposed to these monumental changes, changes that are aimed at freeing the Indian Police from the stranglehold of small time street-level politicians.”
These are the words of an ex-director of the CBI.
If the Director of the CBI can state this so bluntly and in print… it is time to be worried with the state of our nation… seriously worried. Apparently, even the police is not in a position to stem the rot. First I was just concerned…
I am worried- deeply so. I am seriously worried- and I cannot forget that even a man as powerful as a CBI Director feels completely hopeless and helpless.
WAKE UP, INDIA!
Section 49-O is a section coming under the Conduct of Election Rules, 1961. It has nothing to do with the Constitution of India. It reads as follows:
“49-O: Elector deciding not to vote. – If an elector, after his electoral roll number has been duly entered in the register of voters in Form-17A and has put his signature or thumb impression thereon as required under sub-rule (1) of rule 49-L, decided not to record his vote, a remark to this effect shall be made against the said entry in Form 17A by the presiding officer and the signature or thumb impression of the elector shall be obtained against such remark.”
This is only a provision for abstaining from voting or at the best negative voting. It does not provide for cancellation of polling if the 49-0 votes are more than the candidate’s majority or provide that the candidature of the contestants will be removed and they cannot contest the re-polling, since people had already expressed their decision on them.
In fact in the PROPOSED ELECTORAL REFORMS by the Election Commission of India, which was forwarded to the Prime Minister of India on 05/07/2004, the following reform was proposed;
“7. NEGATIVE / NEUTRAL VOTING
The Commission has received proposals from a very large number of individuals and organizations that there should be a provision enabling a voter to reject all the candidates in the constituency if he does not find them suitable. In the voting using the conventional ballot paper and ballot boxes, an elector can drop the ballot paper without marking his vote against any of the candidates, if he chooses so. However, in the voting using the Electronic Voting Machines, such a facility is not available to the voter. Although, Rule 49 O of the Conduct of Election Rules, 1961 provides that an elector may refuse to vote after he has been identified and necessary entries made in the Register of Electors and the marked copy of the electoral roll, the secrecy of voting is not protected here inasmuch as the polling officials and the polling agents in the polling station get to know about the decision of such a voter.
The Commission recommends that the law should be amended to specifically provide for negative / neutral voting. For this purpose, Rules 22 and 49B of the Conduct of Election Rules, 1961 may be suitably amended adding a proviso that in the ballot paper and the particulars on the ballot unit, in the column relating to names of candidates, after the entry relating to the last candidate, there shall be a column .None of the above., to enable a voter to reject all the candidates, if he chooses so. Such a proposal was earlier made by the Commission in 2001 (vide letter dated 10.12.2001).
(A petition by the People.s Union for Civil Liberties seeking such a provision filed at the time of the recent general elections is pending before the Hon’ble Supreme Court)”
This, combind with the right to recall as demanded with Team IAC, can indeed be a powerful lever on the political class of India. For there is only one thing that the politician is scared about: Loss of power, and the vote. This lever – if used legally and effectively – can indeed by a solution….
On the income aspect, there are again 2 factors at play: the first is perception and the second has to do with expenses. Given that the internet has not yet become a need, a necessity for the majority of users outside the top 8 – 10 cities of the country, there is a perception in place that expense on broadband connectivity is a luxury, or a needless expense. This perception will only recede with the increasing awareness levels and usage of technology. The second factor is actual expenses: shelling out Rs. 1000 for a true broadband connection with 1 mbps speeds calls for a heavy investment for a typical household: this expense takes the total expense on communication to above Rs. 2000 per month given that there will also be 2 mobile connections at least in operation. That makes this a very significant share-of-wallet for a normal household, and places high-speed broadband firmly out of reach of most normal middle class consumers. Further, when people have not even experienced high-speed connectivity and the supporting applications for the same, one cannot expect them to upgrade to 4G. Please note that I am talking about high-speed plans with decent usage limits: 1 mbps unlimited with 5 GB high speed limits at least.
This factor can be seen in the various prepaid broadband and 3G plans in evidence – 1-day, 7-day vouchers; 1GB limit vouchers, cheap postpaid plans with low limits of 1GB – 3GB at less than 500 Rs. which are meant to pull in non-users and get them to experience the world of high-speed connectivity. This fact itself is a powerful indicator of the state of the market, and that things are on a learning curve. This market is still at 256/512 kbps, and the customers first need to experience the high-speed phenomenon. Further, the awareness of applications needs to increase. And third, either rates have to come down – or PPP has to increase for it to be a mass market. This does not mean that there is no market: indeed, there is a very large market as evidenced by increasing penetration of smartphones, PC and Laptop Sales, Data Usage on 2.5G networks (GPRS). The challenge is to convert these customers to high-speed customers through exposure to applications through any means that are available – for example, net-kiosks; bundled handsets (as tried by idea and vodafone); gaming parlours and websites; support to application developers; links via sms; co-advertising with events / websites / applications etc. There can be any number of strategies for that. And this is precisely what the telecom industry is currently working on.
The last point is that the trade needs to settle down and get into working mode after the tough 2011 year. Some sense of order needs to emerge especially as a huge amount of investment has gone into 3G networks, completing 2.5G rollout obligations, network upgradation. This is painfully evident on the stock market performance and the ballooning debt of the sector due the above factors. Thinking about a further upgradation does not seem to be warranted in this scenario. This does not mean that the industry forgets 4G. I am advocating an increased focus on content and application development, customer education initiatives etc: in other words, the development of an entire ecosystem that engenders increased usage of data. Data consumption increase will directly translate into revenues for the industry: which will make 4G far easier to introduce.