Mukesh Ambani’s Reliance is opening up fruits-vegetables-grocery outlet storescalled Reliance Fresh , all over in India, in Punjab, Rajasthan, Gujarat, Jharkhand, and several others. So far, West Bengal has opposed Reliance Fresh expanding into that state, but that opposition, too, will slowly fade.
So what if some big billionnaire wants to sell us vegetables and fruits? The shops promise to be fresher, cleaner, and cheaper. Reliance, like Walmart, will probably buy directly from the farmers, cutting a lot of middlemen and that kind of organized retailing should be able to pass on a lot of benefits and discounts to the consumers. After all, doesn’t or shouldn’t competition bring about the best in everyone? What’s wrong if the local vegetable vendors bring down the prices, wash their fruits and vegetables, and clean up their act?
Here’s the issue. In Ranchi yesterday, vegetable vendors attacked the Reliance Fresh outlet, protesting the retail juggernaut’s new business foray into retail business. “…if Reliance sells vegetables, then what we will do? Sell mobile phones and petrol…”, remarked one vegetable vendor.
One of the reasons Reliance is rushing into this, is that Walmart has been knocking at India’s doors for a while, now, threatening to crush the rest of the retail businesses with its mighty giant force. By entering into this arena a little earlier, Reliance is setting itself up either as an established takeover candidate, or a palatable desi alternative that cannot be overlooked in the wake of a foreign tidal wave.
India’s retail grocery stores will somehow find a way to fit into the Reliance model, but for the smaller vendors, it is time to pack their bags and go home. Or, they can do what they did in Ranchi yesterday - attack the Reliance Fresh stores and get beaten by the cops.
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