SOIL Report 2008 - ACCESS Development Services

Chapter VIIforeign investors majority shareholding but only in single brand outlets (i.e. no department stores orhypermarkets are permitted). This restriction is relaxed only for the food wholesale subsector [hailingthe entry of names such as Metro (Germany) and Shoprite (South Africa) into the sector]. But suchwholesalers find their sourcing practices still restricted by APMA, only partially amended in some states(Kumar, Patwari et al. 17 May 2008).The three case studies below provide a spectrum of trajectories (also see Table 7.2):• Fabindia started with small format retail on a small-scale, and direct and informal relations withsuppliers; it is now re-gearing the supply chain as retail grows rapidly.• Pantaloons Retail started with the manufacture of fabric and garments and came late into directretail. Recently, this has exploded, especially in its hypermarket and food business for which it stilldepends on the conventional supply chain, arguing that it is much less crowded and inefficient thansome analysts make out.• Reliance Fresh started with small format retail on a huge scale, cutting back in the face of protestsfrom ‘unorganised’ traders, and then focused on re-gearing the supply chain to offer wholesale toany buyers.5.2. FabindiaFabindia originally specialised in handloom fabrics for home furnishings, moving later into garments,which were 70 per cent of sales in 2006. While the requirement that fabric should be handloom-wovenis no longer binding, the company continues to insist that a product should have at least one hand-madeelement (if not in its weave, then in the way it’s printed or embroidered, for example), in order to beincluded in the Fabindia mix (Khaire and Kothandaraman 2008, 6).Block prints are sourced from the western states, kalamkari prints and distinctive cotton weaves fromthe South, and embroidered products from the North. Apparel products include men’s and women’s,Indian and western, newborns, children’s and maternity. Home products now go way beyond upholstery,curtains and bed linen, to floor covers, furniture, lighting and home accessories (Khaire and Kothandaraman2008). There is a new line in organic foods (staples, jams, pickles, teas) and personal-care products.The firm launched the organics line after perceiving a synergy with its supplier base, since suppliers werelargely located in regions where the Green Revolution hadn’t reached.5.2.1. Conventional supply chainUntil lastyear, Fabindiadepended ondirect andlong-standinglinks to artisansuppliers. Thesupply chainwas the outcomeof many years’work buildingrelationshipswith weavers,printers andembroiderers.Until last year, Fabindia depended on direct and long-standing links to artisan suppliers. The supply chainwas the outcome of many years’ work building relationships with weavers, printers and embroiderers,many of whom had few other routes to elite urban stores. New suppliers would show up at the warehouse,usually with a referral from an existing supplier. Most suppliers were de facto dedicated, sinceFabindia used up their capacity.If goods arrived late, they were not returned but the firm would try to make use of them somehow inits effort to promote sustainable livelihoods. For thaans (rolls) of fabric delivered, the weaver’s wordwas normally accepted as to the length of the thaan (varying from 20-50 metre), with only a few randomchecks carried out. The number of thaans each weaver would send and when hard to predict, would beaccommodated in the central warehouse. After being coded for colour, print, weave and length, fabricwas issued to stitching units according to design and quantity.Each store, to which goods needed distribution, would have a bin in the central warehouse and goodswere placed in the bin as they came in, according to sales trends, growth forecasts and requests made bythe store, with no two stores ordering alike.160