What on Earth are Single and Multi Brand Retail?

After a long and very hard fought intellectual, political and very personal battle, the Government of India has finally decided to permit international retailers to invest directly in the country. It has taken close on 10 years for this decision to come through, and sadly, despite this momentous event, it has still left the retail industry in utter confusion. I have always wondered why Retail in India had become the unfortunate victim of a completely unjustified political focus, for, what ought to have been a simple technical decision based on sound economics has unfortunately become an unexpected high decibel all-stakes-on-the-table battleground. The notifications over the past few months – Single Brand Retail earlier and the current one (please see link below) has laid out some very rudimentary guidelines permitting investments under two broad sub-divisions – Single Brand Retail and Multi Brand Retail, but the absence of clarity is quite disconcerting, due to which, no major retailer can be expected to be queuing up at the Ministry’s doors begging to be allowed in – not presently, anyway.

Single Brand Retailing is totally stuck due to a rule that mandates 30% local sourcing from launch of business, and even a cursory internet search on this subject throws up an equal number of stories that speculate that the rule will be diluted and an equal number that disdainfully insist that it will never happen. One is appalled that we as a nation have the gall to invite investment in this cloak and dagger manner and one is equally amazed that the world’s finest retailers are still taking us seriously! In my view, ‘Single Brand Retail’ is not even a genuine and cogent classification, and if it were to exist, this rule that defines the quantum of local sourcing must be introduced in a phased manner over a 5-year period in the least. While the silly season on this rule is not in a hurry to end anytime soon, some sense needs to prevail and the Government must not insist that the sourcing should be made only from SME’s, and should be extended to cover any Indian manufacturer. As the rule currently reads, an SME who is trained and developed to supply quality merchandise by a global retailer has to be dropped as soon as his turnover crosses USD 1.0 Million. The retailer, who spends a lot of time and effort in developing a reliable resource and enriched him in the bargain by sourcing from him, has to dump this supplier and search for a new one. So we are penalizing success now? Come On! Really?! What are we, some banana republic?

Multi Brand Retailing is in an even worse bind if that were possible. Apparently, this Government has been accused of policy paralysis for too long, and decided that it is best to promulgate a ‘paralyzed policy’ with a view to possibly taking some heat off its rear end! I am amazed as to how a national Government can make a rule that is not applicable by law all over the country automatically. This policy, which leaves the adoption of the rule or of dropping it to the States, is a very confusing and spineless one. Perhaps, a new retail entrant into the country will have a somewhat lesser cloud of confusion, as they can pick and choose to enter only those States that have adopted the new rules. While this is possible in theory, it is highly unlikely for a major retailer to invest in the country if he is not sure of how many states he can operate in and how many stores he can ultimately build. If one is not sure of one’s operational scale in the medium term, one is sure of nothing, and when one is unsure, how will the investment come in? On the other hand, for an international Multi Brand Retailer who is interested in buying into an existing Indian chain the situation is simply hilarious. For instance, Future Retail* will have to perhaps split into multiple business entities each registered in various State Capitals and the investor can own 51% of only those entities that are registered in States that have adopted the new rules. Even if this is done, what happens to the Brand name of the retail chains in question? You cannot have a 100% Future Group entity and a 49% Future Group entity both owning the same Brand Name, so something will have to give. Also, without the ownership of the Brand Name and the goodwill it carries, what would be the use of investing in that chain? This is an unmitigated disaster in the making, and the mess is largely due to unnecessary politics.

So, why has Indian Retail become so embroiled in politics? I really do not have the answer to that. It will take a more diligent student of Indian Politics and apparently even of Indian Retail than I to answer that one. I can say only this. Retail is a very ordinary, low-tech, basic but capital intensive (both fiscal and human) industry and it is only an implementation of globally tested best practices, intelligently adapted to the Indian market, together with the investment of virtually unlimited resources and promoters equity that will make retail work in India. Retail really is undeserving of the shrillness of the political debate it has attracted. The NDA Government, in 2004 had the opening up of this sector in their Manifesto, but chose to 'U turn' on it in 2009. The UPA Opposition in 2004, who was the shrillest opponent of FDI in Retail, is now the one who is saying it is the best panacea for the nation in 2012 and neither position is entirely true. Also now, the NDA opposition is willing to verily bring down the Government for this rule, despite it being promulgated at least 10 years too late, by their own reckoning. It is evident that both political alliances have been working only for their own short-term benefit than to formulate policy for the good of the industry for the long term. I think that Politicians are the Worlds’ small people with even smaller minds, but are those that possess the Worlds’ biggest egos. This has been proved true in the case of Retail in India. Will they ever change and see the big picture? Will the UPA Government ever have the sagacity to seek the NDA’s support for a slightly modified bill and pass it through Parliament and end this atrocious debate once and for all? Will the NDA show the required bipartisanship that would be required? Can they agree to share the credit (or the blame), as the case may be? My expectations from the current crop of political leadership are unfortunately abysmal.

Another aspect of the debate that has befuddled me no end is the seemingly senseless and unnatural segregation of Retail into ‘Single Brand’ and ‘Multi Brand Retail’. My reading is that this classification was conjured up by the UPA Government, to perhaps try and get some Retail investment into the country by the back door. Obviously, the ploy has not worked, and one has heard of only 3 so-called 'Single Brand Retailers' of repute having made a formal application at the time that this was written. Looking at the minefield that the rules of Multi Brand Retail will be, I do not expect any serious Retailer to put his money where his mouth is. Investment will come only when there is complete clarity. Even with a very restrictive 26% regime but a very clearly framed rule structure, investors would be tempted to go all the way, considering the innate attractiveness of the Indian market. With all the confusion hanging over our 51% and 100% regimes, I do not expect the investment flood gates to open anytime soon.

A more logical and sensible categorization of Retail would be one divided along the lines of ‘Food Retailing’ and ‘Non Food Retailing’ which would be more appropriate for the Indian scenario. State Governments must look at the Retail industry from this paradigm and formulate the rules as required of them by the Central Government. One can understand the political sensitivity of food retailing, but why are we having the Government clubbing all retail together? What are the risks in permitting retail of let us say, Books, Consumer Durables, Cosmetics, Jewelry and a host of other lifestyle goods and services by Multi-national Retailers? This artificial Clubbing together of all Retail is ham-handed and ill-conceived as it would surely be counterproductive - both to the politics of the issue and for the retail industry, and the nation as a whole. While one can understand the social context of Food Retail needing to be restricted to ensure that the political agenda is addressed, one firmly believes that Non-Food Retail should be simply removed from all unnecessary controls and allowed to propagate freely.

This kind of rational categorization will perhaps prevent State Governments from viewing retail with a jaundiced eye and ascribing the motives of the Devil himself to all the international Retailers. It is hilarious to hear some of the comments made on Walmart and Tesco during all the media sound-bites that our politicians love so much. Makes one believe that they are invading Huns or Vikings coming here to pillage and loot!


Perhaps when provided with this new perspective, even State Governments that are politically adversarial to the Central Government, but of otherwise progressive states like Karnataka and Tamil Nadu, where modern retail struck its first roots, will be more inclined to notify their own versions of the Retail rules and perhaps choose to restrict Food Retail while permitting Non Food Retail to proliferate as that has no political minefields to be negotiated. For most International Retailers, the markets of these two States and Andhra Pradesh are seen to be the most attractive as modern Retail has been in practice here since 1996, due to which the customers are quite sophisticated and pre-accustomed to the USP of Modern Retail. Also, as they are progressive States, their denizens have higher purchasing power, and also enjoy a relatively politically stable and generally peaceful business oriented atmosphere. I wouldn’t be very surprised if many International Brands choose to postpone their entry into India until these crucial States notify their version of the rules. This would be particularly true for Karnataka, and it needs to look at this very closely and very seriously as many international retailers would be keen to be headquartered in Bangalore, considering the fact that it is the most preferred city for expat managers. Thus, if Karnataka chooses political exigency over sound policy and economics, they will stand to lose a huge opportunity in the form of being the repository for all the investment and being the beneficiary of the tax revenues accruing out of such business entities.

Business and politics aside, I for one, truly believe from the bottom of my heart that modern retail will genuinely and substantially benefit India, especially with the rules mandating a 50% quantum of investment in the setting up of Retail Backend Infrastructure. I draw attention to another article of mine, where I have written about the need for the betterment of the agricultural infrastructure, which I feel large retailers will be most willing to undertake. I do hope that someone out there is listening….


Note.

* The Retail Entity has been named only for illustration purposes and not with any other intent. The scenarios mentioned above would be true for all other Indian promoted retail chains too, many of which are on the edge of financial ruin and quite a few of them may be open to welcome an equity infusion at this point in time.

Additional reading.

http://sharmahemanth.blogspot.com/2012/02/grain-elevators-are-needed-in-india.html

http://dipp.nic.in/English/acts_rules/Press_Notes/pn1_2012.pdf

http://economictimes.indiatimes.com/news/economy/policy/fdi-in-multi-brand-retail-full-text-of-goverment-policy-approval/opinions/16398474.cms

http://articles.timesofindia.indiatimes.com/2011-11-29/india/30454303_1_multi-brand-retail-trade-retail-sector

In and around Nanjangud - A brief travelogue

I am a great admirer of the history, culture and architecture of Karnataka. Particularly when it came to Temple Architecture, the people of historical Karnataka were apparently as hospitable and were ready to embrace influences from their neighbors and other cultures as they are today. Thus, in the North of Karnataka one sees the influences and the architectural styles of the Deccan and the Andhra’s, temples in the South East is so much like North Tamil Nadu that it becomes difficult to tell them apart and Dakshina Kannada looks like an extension of Kerala.

The Heartland of Karnataka however was the modern districts of Hassan and Mysore, where either the influences were somehow limited or imbibed into the local ethos without smothering the culture. Karnataka’s most unique architectural spots are here – Belur, halebeedu, Somnathapura, and others. Inside this heartland of Karnataka is my personal favorite, Nanjangud – if not illogical, one would refer to it as the ‘heart of the heart of Karnataka’!

Mysore and Nanjangud have been blessed with incredible natural beauty, fertile soils, abundant water and benevolent rulers. Apparently, when a race of people have their stomachs full and live in tranquil and peaceable surroundings the mind tends to seek out the higher ideals and hence this place has become the repository of all that is essentially Karnataka – art, literature, drama, harikathe and architecture. This has resulted in Mysore District and particularly Nanjangud Taluk being filled to the brim with places of Historical / Archeological interest and several scenic spots. Most of these spots are just a short drive away (from 10 minutes to within an Hour) and every one of them is well worth the effort. Listed below are some of the important must-see locations.

Nanjangud, has its most famous place of worship called the Sreekanteshwara Devasthana. This is a somewhat rare Shaivaite temple, dedicated to Shiva in a region that seems to abound in Vaishnavaite or Vishnu Temples. This temple is located at the center of Nanjangud town, and a short walk from the Railway Station. The main entry has been recently made from the Bathing Ghats on the banks of the River Kapila, where one is expected to bathe and purify one’s soul before entering the temple.

The Sreekanteshwara Devasthana is about 1,000 years old and is believed to have been built by the Cholas. The entire structure is a very large and elaborately built temple complex with a large central courtyard in which the main temple is located. Small temples dedicated to Ganesha, Shardaamba, Satyanarayana and Anjaneya are located all along the route of a pilgrim visiting the main deity and that of his consort Parvathi. A temple visit is rounded of by visiting the ancient Navagraha temple, where each of the planetary positions are represented by beautifully and intricately carved statuettes. On the outside, temples dedicated to Nataraja and Nandi can be seen. This temple is believed to have one of the largest monolith Nandi statues in the state. No visit to this temple is complete without visiting the spot where Chandikeshwara (the ‘Stenographer’ to the Gods) is seated and making sure he knows that you have visited this temple and hence ‘eligible’ for your due brownie points. One is expected to clap or snap one’s fingers to catch the attention of Chandikeshwara, as he is apparently hard of hearing, so that he notices you and marks your attendance!

Nanjangud, is also famous for its Parashurama Skeshtra. This believed to be the spot where Parashurama is said to have rested after his battle with the Asuras. An ancient temple marks the spot and is held in much reverence by the local people.

Nanjangud, has another must-see for believers of the Hindu persuasion. An old Raghavendraswamy Matha, which is very popular amongst the Madhwas and said to be built around a swayambhu moorthi or a statue that was found to pre-exist in the likeness of Sri Raghavendraswamy. A window to the ancient way of life for the pious Brahmin can be seen here, as all the sacred rituals and traditions are zealously followed and maintained over the years.

Nanjangud, also has another ancient but not very famous temple, which is believed to be between 1,500 and 2,000 years old! Easily the oldest monument in the vicinity, and is dedicated to Lord Prasanna Nanjundeshwara and gives the town of Nanjangud its name. The locals say that this was the original site for the deity in the now famous Sreekanteshwara temple, and had to be abandoned over 1,000 years ago due to constant flooding of the site. Archeological excavations are being carried out at this site and recently, an ancient temple tank has been found and cleared of accumulated silt. Surely, this is a site that one cannot miss!

Hedatale, which is about 10km from Nanjangud and boasts of an incredibly beautiful temple, believed to be about 800 years old, built by the Hoyasalas. The Temple is called as Trikootachala Devasthana and has an unusual specialty of having three sanctums sanctorum in a single layout, dedicated to Venugopalaswamy, Lakshmikantaswamy, and Lakshminarashimaswamy.

The Main temple is very beautifully done with impeccable carvings. The idols are also carved with much love and dedication and abound in special effects like the eyes of the Lakshmi idol seem to follow the priest’s aarati flame and other such wonders. The Temple has a covered courtyard that is believed to have been added on more recently by a local Palegara (Chieftain) which seats each of his 16 daughters and their spouses in such a manner that the Palegara could see all the 16 couples, while his wife sitting beside him could see only her daughters as it was considered inappropriate for the Mother in Law to see her Sons in Law. The marked difference in the quality and the finish of the Temple and the Courtyard is very evident.

 Hemmaragala, a really ancient temple which is believed to be about 1,500 years old, and located at about 14Km from Nanjangud. This temple is built in the Chola style and most of the original structure and design has remained undisturbed to this day. The locals believe that this temple has the power to grant one their wishes. An interesting story is told about a Chola King who came here and prayed for a male heir and in due course, this King had a daughter. Apparently peeved at being ‘cheated’ by the Lord, he is believed to have brought the daughter to the temple and demanded justice - and in a miraculous move, the Lord changed the gender of the child. Thus, the King called the temple the Hucchu (insane) Venugopalaswamy in place of Santaana (heirs) Venugopalaswamy!

People from all over come and ask for favors and tie a lemon to the temple pillars, and come back for thanksgiving when their wish has been granted. It is interesting to note that this temple offers a Kondaya Rishi Danda Seve (prayer using the staff of Sage Kondaya) only on Saturday and Sunday, when the priest places the staff on your head and prays that your wishes be granted. Everyone I spoke to swear that this definitely works, and is a must for every believer. However, if one wants to enjoy the Temple for its historical treasures, the weekend can be avoided as very long queues of people seeking favors would be encountered.

Kalale, another ancient temple believed to be about 1,000 years old, again built by the Cholas. The temple is dedicated to Lakshmikantaswamy. The temple is at a distance of about 7Km from Nanjangud. Though the original temple must have been built in the style typical of the Cholas – flat roofs, Square plan columns, somewhat rough hewn and minimalist treatment in terms of carvings and architecture, it has suffered a series of renovations using poor quality modern materials and shoddy workmanship, which has resulted in most of the original look and feel being lost. The temple however is a repository of the Tamil Brahminical faith and consists of many small statues and carvings recording the contributions of this community.

Himavatha, this is a hill station temple, about 50Km from Nanjangud on the way to Bandipur and is famed for being located on a hill that is always misty or covered in Hima, hence the name. The temple is called Himavat Gopalaswamy and is believed to be over a thousand years old.

T Narasipura, or the town of Narasipura located at a distance of about 36Km boasts of a Sangama of three rivers and hence believed to be a very sacred place. The river Kapila, Kaveri and Gupta Gamini meet at the Spatika Sarovara. One can see the dark, still waters of the Kapila meeting with the white choppy waters of the Kaveri and becoming crystal clear at a point where even the rocks at the bottom of the river bed become visible. This is believed to be the point at which the mythical underground river Gupta Gamini joins the Sangama. As this is considered to be both a spiritual as well as a geographical wonder, a visit to this Sangama is an effort that is definitely rewarding.

On the banks of this Sangama, two famous temples, the Narashimaswamy Devastana and Agasteshwara Devastana each believed to be over 1500 years old can be visited.

Upon traveling a further 20Km from T Narasipura, one can visit the famous archeological site of Somnathapura. Here, ruins of temples built during the Hoysala reign can be found, equaling in beauty and execution the ruins at Beluru and Halebeedu.

Parvathi Betta, another hill temple located at about 30Km from Nanjangud, dedicated to Lord Sreenivasa can be found. This Sreenivasa temple is believed to be a close by alternative to the more famous one at Tirupathi. The temple is about 800 years old and like most temples boats of a miracle story. It is believed that a pious man who in advanced age wanted to get a darshana of the Tirupathi lord, but was unable to do so due to his infirm condition. He apparently prayed to the lord Sreenivasa and asked him for a solution, and the lord responded saying “Just turn left and look, I’m there”. The devotee is said to be turned left and walked, soon to discover this temple.

Finally, no visit to Nanjangud will be complete without learning a little about one of the most famous son of this land, the founder patriarch of Sadvaidashala, B. V. Pandit. His historical factory is located right in the middle of the town, and was established almost a hundred years ago, where all the Ayurvedic preparations are made exactly the way they are recommended to be made in the medical texts themselves.

The story of the founder reads like a veritable fairy tale – a man of incredible vision, clarity of thought, battling against poverty to start a small unit making medicines and cycling to Mysore every day to sell them, until one day, he had the brainwave to formulate and manufacture the famous and iconic product Nanjangud Hallina Pudi (tooth powder), which brought him much fame and renown. Do visit the Sadvaidashala factory and ask to have a guided tour of their facility. It is advised to ascertain before hand when would be the best time to visit.

Right next to the factory is the old and beautifully built house in which B. V. Pandit lived and ruled over a large family and vast business interests. The house is now abandoned and slowly falling to ruin, and surely it will be most appropriate if the same can be converted into a museum showcasing the life and times of this visionary. One hopes to be able to see portraits, photographs, films and the personal effects of this great personage located in the place where he lived a major portion of his life.