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Lack of Investment is no Surprise: Technopak

Samar Srivastava
Published: Sep 6, 2013 07:09:45 AM IST
Updated: Sep 6, 2013 02:51:17 PM IST
Lack of Investment is no Surprise: Technopak
Image: Getty Images

The latest round of discounts for shoppers was longer than usual. Forbes India asked Arvind Singhal, chairman, Technopak Advisors, what this trend means:   

Q. Retailers were forced to extend the recent round of sales. Is that a sign of weak consumer sentiment?
Consumer sentiment is still very subdued. On the one hand, the sales season has given a top line boost, so one could argue that consumers are spending money. On the other hand, it was extended by 15 days. We will know in three months (during the festive season) whether the consumer has stocked the products or will spend then.  

Q. Foreign investment in multi-brand retail was notified about a year ago. Yet no one has committed money…
The political environment and economic indicators are on a steep decline. Also, there is ambiguity and uncertainty in the policy. For example, a new entrant must make $100 million investment in the backend. If you are a consumer electronics retailer, it makes no sense. As far as the cold chain is concerned, it is operated by third parties. Then you have to take state-wise permission and the BJP says there will be a rollback if they come to power. Is it a surprise why no investments have been made?

Q. Which retailers are doing well in the present environment?
Metro shoes, Fabindia and Madura Garments come to mind. Tanishq has also done well and is worth watching in the years to come.  

(This story appears in the 20 September, 2013 issue of Forbes India. To visit our Archives, click here.)

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  • Vijay Rai

    I completely endorse the views expressed by you , Arvind. It\'s a wait and watch for lot of potential investors right now. Currently we have a VUCA ( volatality, uncertainty, complexity and ambiguity)like situation prevailing in the economic and political arena. Overall sentiments are quite dull.

    on Sep 8, 2013