Reliance Retail venture is a threat for enterpreneurship
Reliance Retail venture is a threat for entrepreneurship
It is great that reliance is investing heavily on the retail business ventures. They are planning to cover almost all parts of India. Retail business can be done by anyone who has more than a crore to 100 crores according to the capacity. They don’t need to be as big as reliance.
It is good from Retailers perspective:
This is very good news for retailers as they will get better price because of the bargaining power of huge purchase. This will be definitely welcomed by the consumers as they can get better price. More range of products could be available as they are planning to open it in smaller town’s too.
Why not big companies leave smaller business to smaller business community.
Even though it will be good for companies to start retail business they can leave these kind of retail business to smaller companies which will generate more entrepreneurs. This will make sure that we have more entrepreneurs in the country. This will make sure small guys can start small and grow. If larger companies like Reliance start these business definitely we will lose thousands of businessman and entrepreneurs.
600,000 Jobs.
Yes definitely to hear 600,000 people getting job is a great news for a country like India where unemployment is high. But the same number of employees are working at this moment too in the industry. If reliance start definitely more than 3,000 entrepreneurs / retail operators have to close shop and in turn many employees will be loosing jobs. It is definitely a disadvantage. If we now count the number of retailers employing it will be definitely more than a million.
Price pressure.
With the bargaining power, Reliance retail will be able to purchase at a cheap price which will in turn reduce the profitability of the manufacturer’s. Hence it will reduce the profitability of consumable product manufacturers. This is definitely not a big challenge as international retailers are likely to start operations in India it will be a reality. But they are not likely start in 1,500 cities and towns like Reliance at one shot. This makes a lot of difference and there will be sudden change in the manufacturer, retailer business model and affect the industry to a greater extent.
Reliance Mobile
Reliance Mobile was a very good business for the Indian economy. It needed huge investments and huge marketing funds. Companies like Reliance generated many entrepreneurs in turn who started retailing and marketing the services. If companies like Reliance start these kind of high investment needed businesses it will be good for the country, economy, employees, entrepreneurs and many more.
Capitalist world and business
We live in a capitalist world. Any one can start any business venture. Any business man can start any operation as long as it is profitable for him or the company. But companies with larger capital and capacity should start business by looking at it in a patriotic way too. If there are no other business opportunities available then they can start these kind of small retail business in large scale. If there are other business operations which needs larger capital why not companies like Reliance start those kind of operations
Business which needs higher capital
Shipping, bio-medical, aerospace and many other kind of businesses which needs higher capital are not yet started by Indian companies. For example to build a ship it takes around 6 years in India while in Japan it takes just 6 months. Companies like Reliance are the companies which can bring in billion’s of dollars and develop these kind of businesses. It will be a great advantage for companies like Reliance too as they are highly profitable in countries like Japan as they charge high amounts because of the higher cost. Korea and china have started doing this. If companies like Reliance start ship building business, definitely they also can deliver in 6 months time which will be a big advantage for the buyers. There are thousands of ships and they cost’s millions of dollars. These are definitely a large scale profitable business.
Government and Association.
Even though Government cannot intervene and stop the companies from setting up these businesses, Why not the government advice and provide information to the larger companies and make sure they start the untapped large scale business. Why not we have an association which can advice and have some control on the kind of business started by larger companies. They can also provide information about the larger investment business opportunities which can started by larger companies.
India and Growth.
India has achieved it’s highest growth, profitability and recognition by companies which were small in size but not with companies which are large in size like Tata, Bilra, Reliance and so one. Most of the IT companies were much smaller around 15 years - 20 years back. They all grew from almost nothing and generated very high forex funds, jobs and profitability for India. Most of the IT, Bio-medical and BPO companies are not from larger organizations like Reliance. We have exception of TCS which is from Tata as they are from Salt to HIgh technology. Other than that most of the businesses are from smaller companies. In this case again the larger companies are failing to do something new and different wihch can be done by smaller companies. They are failing India again. IT and BPO can be started small and grow but definitely there are a lot of businesses which cannot be started small. India’s larger companies just want to tap on to the known and proven profitable business only.
Responsibility, patriotism and profitability.
May be we all can start thinking how we can ensure to teach these three to the larger companies and how do we make sure they understand this will and make sure they look at this too before committing on a venture in the future. Can you all at least help to send this blog address to as many people as you know. Let us Indians tell them what is expected from them in the future.
If Really reliance want to do it they can operate in main cities and then go global and generate revenue from the INternational market which will be good for the country
