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Foreign Direct Investment
RESEARCHING REALITY INTERNSHIP| 2012

FDI in Multi-brand Retailing: Lessons from China

Submitted by: Kaanan Gupta
CCS Working Paper No. 258 Non Summer Research Internship Programme 2012 Centre for Civil Society www.ccs.in

FDI in Multi-brand Retailing: Lessons from China 2012

Table of Contents
Introduction............................................................................................................................................. 3 Proposed FDI Policy for MBRT in India..................................................................................................... 5 FDI Policy for MBRT in China.................................................................................................................... 5 Four major dimensions of the policy on FDI in MBRT...............................................................................6 Impact on Small Farmers.............................................................................................................. 6 Photo 1. A Hebei farmer sells his produce in a Beijing neighbourhood.....................................7 Impact on Organized Domestic Retail Chains............................................................................. 7 Table 1: Top 10 Chinese Retail Chains 2010..............................................................................7 Impact on Traditional Retail........................................................................................................ 12 Figure 1. India and China’s Organized Retail Market Shares...................................................14 Impact on Supply Chain............................................................................................................... 14 Impact on Consumers.................................................................................................................. 15


References: AFL-CIO. n.d. Wal-Mart’s Impact on India’s suppliers and small businesses. [report online]. Accessed on 19 march 2012 at http://www.indiafdiwatch.org/fileadmin/WARNstorage/indiwm.pdf Agencies. 2012, FDI in multi-brand retail to benefit domestic players: Experts. [newspaper article online]. The Financial Express, Friday, 27 January. Accessed on 1 March 2012 at http://www.financialexpress.com/news/fdi-in-multibrand-retail-to-benefit-domestic-playersexperts/904631/3. Deloitte China CB&T Group. 2011. China power of retailing 2011. [report online]. China: Deloitte China Consumer Business & Transportation (CB&T) Group. Accessed on 3 April 2012 at http://www.deloitte.com/assets/DcomChina/Local%20Assets/Documents/Industries/Consumer%20business%20and%20transportation/cn _cbt_ChinaPowersRetailing2011_181011.pdf Devonshire-Ellis, Chris, Tse, Cindy, Shira, Dezan and Associates. 2012. India and China’s Retail Industries Compared. [article online]. Accessed on 12 April 2012 at http://www.2point6billion.com/news/2012/02/02/india-and-chinas-retail-industries-compared10759.html Dutta, Devangshu. 2011. FDI in Retail: More Heat than Light. [newspaper article online]. Financial Express: FE Reflect, Saturday, 26 November. Accessed on 23 March 2012 at http://www.financialexpress.com/news/more-heat-than-light/880586/0 Elliott, John. 2011. Tesco and Wal-Mart fuel Indian political crisis. [Riding the Elephant blog online].Independent Blogs, The Foreign Desk - International dispatches from Independent correspondents. Accessed on 1 March 2012 at http://blogs.independent.co.uk/2011/12/01/tescoand-wal-mart-fuel-indian-political-crisis/ Government of India. 2010. Issue of Discussion Paper on Foreign Direct Investment (FDI) in MultiBrand Retail Trading. Department of Industrial Policy and Promotion, Ministry of Commerce & Industry. Guruswamy, Mohan and Sharma, Kamal. 2006.FDI in Retail-II: Inviting more Trouble? [report online]. New Delhi: Centre for Policy Alternatives. Accessed on 6 March 2012 at http://www.indiafdiwatch.org/fileadmin/India_site/CPAS_report_2.pdf Guruswamy, Mohan, Sharma, Kamal, Mohanty, Jeevan Prakash and Korah, Thomas J. 2005. FDI in India’s Retail Sector: More Bad than Good, Economic and Political Weekly. Vol. 40, no. 7: 619-623. Kandarpa S.G., Tarun. n.d. FDI in Multi-Brand Retail In India - A Larger Pie Or A Scrunched Nut [article online]. Accessed on 10 March 2012 at http://www.mbaskool.com/businessarticles/finance/946-fdi-in-multi-brand-retail-in-india-a-larger-pie-or-a-scrunched-nut.html Krishnan, Ananth. 2011, Chinese retailers give global giants run for money. [newspaper article online]. The Hindu, Friday, 2 December. Accessed on 9 April 2012 at http://www.thehindu.com/business/Economy/article2681679.ece Manshu, 2011, FDI in Multi Brand Retail is Great. [article online]. Economy, Tuesday, 29 November. Accessed on 7 March 2012 at http://www.onemint.com/2011/11/29/fdi-in-multi-brand-retail-isgreat/ Mariwala, Harsh. 2011. FICCI President’s Reaction on FDI in Retail. [suggestion online]. New Delhi: FICCI. Accessed on 19 March 2012 at http://www.ficci.com/Sedocument/20169/fdi-policy.pdf 20 | Researching Reality Internship Centre for Civil Society FDI in Multi-brand Retailing: Lessons from China 2012 Mathur, Sameer and Martow, Cara. 2011. Global Retailing Strategies: How are Wal-Mart and Best Buy doing it in China? [blog online]. Budding Markets. Accessed on 23 March 2012 at http://www.buddingmarkets.com/ Mathur, Anurag. 2005. FDI in Retail, Business Cognizance, The IIT A e-Magazine. Volume 1, Issue no. 6. Accessed on 7 April 2012 at http://bcognizance.iiita.ac.in/aug-sep05/brainwave_1.htm MBA Universe.com. 2011. Essay Topic of the Day: Is FDI in Indian Retail the need of the hour? [article online]. Accessed on 29 February 2012 at http://www.mbauniverse.com/article.php?id=5292 Mukherjee, Arpita, Satija, Divya, Goyal, Tanu M., Mantrala, Murali K. and Zou, Shaoming. 2011. Impact of the Retail FDI Policy on Indian Consumers and the Way Forward. [paper online]. ICRIER Policy Series, No. 5. Accessed on March 18 2012 at http://www.icrier.org/pdf/Policy_Series_No_5.pdf Mukhopadhyay, Joy. n.d. Supply Chain Management: A Comparative Study between Large Organized Food and Grocery Retailers in India. [paper online]. Bangalore: National Seminar on Logistics &Supply Chain Management, IASMS. Accessed on 12 March 2012 at http://www.iasms.in/pdf/nationalseminar.pdf Nedungadi, Prakash. 2011.FDI in retail: Countries like Germany, South Africa and UAE have benefitted from modern retail [newspaper article online].The Economic Times, Saturday, 10 December. Accessed on 30 March 2012 athttp://articles.economictimes.indiatimes.com/2011-1210/news/30502124_1_retail-chains-small-stores-small-suppliers PTI. 2012. Government notifies 100% FDI in single brand retail [newspaper article online]. The Economic Times, Tuesday, 10 January. Accessed on 1 March 2012 at http://articles.economictimes.indiatimes.com/2012-01-10/news/30611620_1_single-brand-singlebrand-global-chains. PTI. 2011. FDI in retail to help control inflation: Columbia University study. [newspaper article online]. The Economic Times, Tuesday, 6 December. Accessed on 2 March 2012 at http://articles.economictimes.indiatimes.com/2011-12-06/news/30481866_1_multi-brand-fdi-inretail-sector-small-retailers Rao, Sujata. 2011. Retail volte face confirms India as BRIC that disappoints. [blog online]. Global Investing. Accessed on 23 March 2012 at http://blogs.reuters.com/globalinvesting/2011/12/06/retail-volte-face-confirms-india-as-bric-thatdisappoints/ S Ghosh, Gaurav. 2011. Retail lessons from China. [newspaper article online]. The Economic Times, Monday, 19 December. Accessed on 8 April 2012 at http://blogs.economictimes.indiatimes.com/choicerules/entry/retail-lessons-from-china Sharma, Kamal and Mohanty, Jeevan Prakash. 2005. FDI in retail – A question of jobs, not ownership. [newspaper article online]. The Hindu: Business Line, Thursday, 29 September. Accessed on 17 March 2012 at http://www.thehindubusinessline.in/2005/09/29/stories/2005092900181000.htm Sikarwar, Deepshikha. 2011. Multi-Brand FDI to Face Stiff Riders: Draft proposal sets conditions on investment, sourcing and no. of outlets in big cities. [newspaper article online]. The Economic Times, Thursday, 2 June. Accessed on 10 March 2012 at 21 | Researching Reality Internship Centre for Civil Society FDI in Multi-brand Retailing: Lessons from China 2012 http://epaper.timesofindia.com/Repository/ml.asp?Ref=RVRNLzIwMTEvMDYvMDIjQXIwMDEwNQ% 3D%3D Singh, Sukhpal. 2011. FDI in Retail: Misplaced Expectations and Half-truths.Economic and Political Weekly. Vol. XLVI, no.51: 13-16. Singh, Sukhpal. 2011a. Controlling Food Inflation: Do Supermarkets Have a Role?Economic and Political Weekly. Vol. Xlvi, no. 18: 19-22. Singh, Sukhpal. 2010. Implications of FDI in Food Supermarkets. Economic and Political Weekly. Vol. xlv, no. 34: 17-20. Thomas White. 2011. Retail Sector in China: The Next Big Thing? [BRIC Spotlight Report online]. Illinois: Thomas White International, Ltd. Accessed on 22 March 2012 at http://www.thomaswhite.com/pdf/bric-spotlight-report-china-retail-june-11.pdf TNN. 2011. Who is afraid of FDI in retail? [newspaper article online]. The Times of India, Tuesday, 29 November. Accessed on 29 February 2012 at http://articles.timesofindia.indiatimes.com/2011-1129/india/30453728_1_retail-sector-small-retailers-global-retail-giants Wang, Wuxia and Jha, Isha. 2011. Walmart and Carrefour in China. [case online]. Florida: David F. Miller Center For Retailing Education and Research, University of Florida, International Retailing Education and Training (IRET). Accessed on 7 April 2012 at http://bear.warrington.ufl.edu/oh/IRET/Cases/Wal-mart%20and%20Carrefour%20CaseEdits.pdf Woke, Li. 2011. Robust domestic market is teeming with competitors. [blog online]. China Daily. Accessed on March 25 2012 at http://www.chinadaily.com.cn/business/201108/25/content_13188303.htm 22 | Researching Reality Internship Centre for Civil Society
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