KSRTC, FDI and Multiplex

Wait! Are these even remotely related?  I don’t think so; you must be thinking right now.

I present you a collage of current affairs which unfortunately correlate all the three and more.

Multiplex

Recently released Hindi movie “Ek Tha Tiger” was in news for a strange reason.

It read “Ek Tha Tiger raises anticipation and sadly prices. Tickets may cost 80% more!”

It’s evident that if you like Salman or Katrina or both!! You would have to pay 500 – 800 per ticket!

Have you ever wondered what happened to those theaters where you could watch a movie for 200 – 300 rupees?

Those are shut down long back!! At least most of them.

Why do you think those theaters went bankrupt?

Multiplex Monopoly!

Those small theaters could not face competition from these high capital investors!

And what did government do to save those theaters?

Nothing!

And this brings up one more question. Is there any governing body at all to authorize the prices in multiplex?

KSRTC – BMTC

Recently KSRTC and BMTC went on a protest which uprooted the transportation system in Karnataka.

People still had to go to office, had to visit hometowns.

Most of them took leaves, most of them cancelled plans and the rest dusted off their own vehicles.

A transport service provider goes on a protest and system stops? What made it happen?

Again Monopoly!

Karnataka is so dependent on KSRTC – BMTC that even in the case of increased cost or protest.

Unfortunately you are left with no option but to abide.

FDI

In a rather bizarre move to help economy (they say) cabinet has approved Foreign Direct Investment (FDI) in Indian retail market.

This would allow foreign MNCs like Wal-Mart, Tesco etc to invest in the retail market of India.

 “Indian retail market” when I asked Google about it I was rather surprised and happy to learn about its contribution to India’s growth.

Here are some pieces of it.

Indian retail market is divided into organized and unorganized sectors.

Big bazaar and Reliance markets fall in the category of organized markets, employ about 1 million people.

Whereas local shops, general stores are categorized as unorganized markets, employ about 70 – 80 million people and contributes about 40% to nation’s GDP.

Why is there so much fuss about Indian retail market, why are Tesco, Wal-Mart and other MNCs so eager to enter India?

According to a recent study, Indian retail market has a potential of about $300 billion per year.

 Yes, that answers almost everything.

An MNC like Wal-Mart whose average turnover is about $250+ billion, if given an opportunity to enter India.

It would set up its shops in about 50 – 60 cities of India and would sell almost everything(There is  joke about an US president and Wal-Mart, where president asked for an elephant and retailer asked whether president would see a white elephant or black!)

Nevertheless, initially let’s say X-mart’s strategy is to concentrate on billions of turnover, improving customer base and not the profit.

Yes, X-mart can manage to survive about a year or so without any profit.

Now X-mart starts selling everything at significantly reduced price compared to market.

X-mart will buy goods from farmers at a very good price.

Farmers happy :) X-mart happy :)Small retailers - not happy :(

They are not able to pay the farmers huge price and hence are not able to acquire the goods.

Since X-mart is now selling almost everything at low cost, customer doesn’t bother to visit local stores since he can get the same in X-mart for very less price.

Customer happy :) X-mart happy :) small retailers – not happy :(

A lot of foreign investment flowing into India, and Indian economy is growing.

Government happy :) X-mart happy :) People employed in Indian retail – not happy :(

After a year or so…..

Due to lack of goods availability and minimal customer base, most of the small retail shoppers have gone bankrupt and have closed the business.

Now there are about 30 million unemployed people perplexed what to do.

Unemployed not happy :( Government not happy :( X-mart still happy :)

Since there are no other buyers for their goods, farmers solely depend on X-mart for business.

Now X-mart offers only half the value.

With no other go, farmers agree.

Farmers sad :( Government sad :( X-mart still happy :)

As part of strategy cost in X-mart increases rapidly!

Consumer is confused! But with no other option left! Might reduce the quantity but still has to buy!

Customer sad :( Government sad :( X-mart still happy :)

On face book I said - Dependency is directly proportional to drama :)

Now X-mart has its own way of handling government!

Things so screwed up!

Government sad :( Everything Everyone sad :( X-mart still happy :)

  

And by the way X-mart turnover now is $500 billion per year.

MONOPOLY!

Take a look around, and you will be surrounded by monopoly in one form or other.

And wherever monopoly is present – everything else goes for a toss!

Monopoly of cricket – other sports at loss.

Monopoly fight of Apple – Android – Customer at loss.

Monopoly of corrupt elections – India at loss.

Monopoly of biased media – Aam admi at loss.

 Monopoly of multiplex – Movie fans at loss.

Monopoly of KSRTC – customer at loss.

In near future…

Monopoly of foreign MNC in retail market – Everyone at loss.

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-          Supreeth

P.S: Yes, there are advantages of FDI. That’s the topic for next article. 
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