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FDI in multi-brand retail no threat to kirana stores in Delhi, Mumbai?


Smriti Advani, Kajal Iyer, CNN-IBN
Oct 02, 2012 at 09:51am IST

New Delhi/Mumbai: Foreign Direct Investment (FDI) in multi-brand retail has been the most contentious of UPA-II's big ticket reforms. CNN-IBN travels to suburban Mumbai and outer Delhi and meet the traditional kirane wala who has competed for years with Indian owned multi-brand retailers.

Some kirana store owners say they won't be affected by FDI in retail. From a tiny garage store 20 years ago, Ravi Singhal now owns Home Buddy, which is well stocked, well laid out and just round the corner for his loyal local customers. Singhal knows he isn't in the same league as Walmart, but FDI in Indian retail isn't worrying him. He is confident of surviving. "Our shop is supermarket styled but we provide services like a shop next door, meeting every small requirement in the neighbouring households. We have a day to day interaction with them," Singhal says.

Just two kilometres away from Singhal's kirana store is retail giant Big Bazaar. Greater variety, big discounts and better infrastructure may not worry mid-range shops like Home Buddy, but the traditional "kirana" shops with their monthly 'udhaar' facility and 'kacha' bills feel threatened.

Situated on the Delhi-Noida border, it's the smaller unorganised shops who are worried that once big retail brands set up shops in the national capital region, goods will be directly sourced from the producer, eliminating profit margins of the small stores.

Malad, one of Mumbai's booming northern suburbs, has seen several malls mushroom in the area. Sawai Singh, who runs his kirana shop not far from Malad's D-Mart and Infinity Mall, says he has lost most of his customers, who now to do their monthly bulk buying at malls. Singh plans to sell his shop soon. Another shopkeeper Ramjibhai Banushali has been running his kirana store near Malad's Hypercity, much before the mall emerged. Located closer to the slums, Ram says his business has barely been affected. He remains hopeful that loyal customers won't ditch him. "We sell products on credit, malls demand cash payment, so people will continue to come to us," Ramjibhai says. For every high rise in the city whose residents buy from malls, there is a slum pocket nearby whose customers have remained loyal to the kiranawala.

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