The future of Om Stores
Shantanu Dutta | 13 Mar 2007
If it is ok for Indian multi nationals to grow, thrive and multiply,then why create a fuss about other companies coming and operating here ?
Standing amid the open sacks of rice, sugar and pulses that clutter the floor of the tiny Om Stores, the shop's eponymous owner, Om Prakash, cuts a forlorn figure.
Mr Prakash, whose family has run the ramshackle store in Delhi’s New Friends Colony for 30 years, is preparing to do battle with the juggernaut of progress thundering towards him in the form of the American retailer, Wal-Mart, and he's not looking forward to it. He is one of India's 12 million shopkeepers who fear being driven out of business by the chain of supermarkets that Wal-Mart is planning to open in every major town in the country. The first is due to open later this year.
Sonia Gandhi, the head of the ruling Congress Party, has expressed her alarm, however, over the influx of the big brand supermarkets. She wrote to the prime minister recently to voice concerns over the welfare of some 35 million people who depend on small shops for their livelihood. Their fate at the hands of big, foreign retailers could trigger a backlash against her party, which is well-supported among the rural poor. When I read of Sonia Gandhi’s letter, I could not help wondering as to how having set a process in motion, now it is possible to realistically reverse it.
Sure there might be agitations when the Vice President of Wal-Mart visits India and there might be temporary slow downs and hiccups , but the process is well nigh irreversible for the simple reason that these sort of projects in the long run will benefit a larger number of people than they will inevitably affect socially and economically.
In the days when Pepsi, in the first wave of liberalization was coming in, there was a lot of emphasis given to the fact that Pepsi was not coming to India just to sell fizzy drinks, but also to set up agro processing units that would increase crop yields. Today, many years after the initial battle has perhaps been forgotten, Pepsi survives because it benefited more people than it displaced – possibly the manufacturers of Campa Cola and the like. Then Coke came in and the Chauhans of Thums Up initially set up the Bombay Club to lobby for a level playing field, before they cashed in and sold the brand to Coke.
Some thing similar happened when KFC first set up their outlet in Bangalore. The restaurant was damaged, customers were threatened, and there was a lot of talk of how it would threaten the native born Udupi Hotels. A decade or so later, Coke, Pepsi and KFC (and these are only a few well known examples) all survive simply because the products they brought in were more enticing or useful to people than to the small minority that they might have harmed.
When India was a quasi socialist state, it was one thing to keep our doors and windows shut to the world and pretend that nothing existed outside of Ambassador Cars, HMT watches and Godrej Fridges. Today that era we have consciously dismantled and have opened up to the world. It is not just that Coca Cola or Wal-Mart that does business in India but also that Tata buys off Tetley and Corus, HINDALCO buys off Novelis and Taj hotels buy off classy Boston and London properties. When such things happen and Indian companies acquire other concerns and become multi nationals in their right (and presumably demonstrating the same characteristics that multi nationals else where do!), we celebrate it as a coming of age of the Indian industry which it is.
If it is ok for Indian multi nationals to grow, thrive and multiply and presumably adopt the practices of multi nationals world wide, when it comes to their impact on the local economy and their sensitivities to social concerns wherever they operate, then why create a fuss about other companies coming and operating here. Sure there needs to be regulation and legislation to ensure that basic national concerns are not violated. But by creating an environment where we discourage others from coming shopping to our shores, while we celebrate the same when our own home grown companies do so, surely we are to be accused of eating our cake and having it too!