Wal-Mart the $340 billion retail giant is looking forward at its long time partner P&G to learn the tricks of the Indian market as the company is set to get a foothold in India. Wal-Mart's fabled "efficiencies of scale" and modern distribution methods would be a breath of fresh air in India. So the deal with Wal-Mart is obviously going to lead to an inflow of management and technical know how, which will be extremely beneficial across the Indian economy as and when the practices to be introduced spread. It uses its strength to drive down costs internally and gets hard bargains from suppliers; to live up to its promise of keeping prices low everyday, becoming a formidable inflation-buster. While the joint venture will focus on B2B business, the Bharati group plans to launch small format retail stores shortly.
The Wal-Mart first cash and carry format retail store is expected to open by 2009. This will allow large buyers setting quality standards and demanding new products and would also prompt farmers to form co-operatives or work as employees of agribusinesses . It will also provide small retailers and business owners a wide range of quality products at competitive wholesale prices that will help them enhance their businesses and profitability. Right from SKU’s to product design, packaging and distribution, P&G is collaborating with retailers with the insight in point of sales data for supply chain, merchandising and category performance inside the store. However in India, the bazaar is an institution, a way of life. And, in the view of a growing number of people in India, it is endangered by Wal-Mart. There are 12 million people working in retail in India and all their jobs will be at stake with the advent of Wal-Mart in India. It would cause large scale displacement of small retailers and squeezing of domestic manufacturers and farmers. Expansion of the Wal-Mart chains has caused massive closure of small stores and pauperization of poor communities even in the United States. In the context of huge unemployment existing within the country, such employment displacing FDI is the last thing that the Indian economy needs at the moment.
3 comments:
US and Indian societies are quite different.We prefer relation over ambience and price.Even some people feel proud of being a patron of small shop.In my home town, I buy all grocery from a single small shop only .He gives me best price deal.His name is "Dharam" he shares suggestions and jokes with me.Professional format like Wal Mart won't be able to build such a relationship.I will willingly pay 1 Rs more to Dharam.I will prefer that he buy from walmart and sell me at 1 Rs higher price. Small shop's in india are not endangered!!
India’s middle class sees the arrival of the world’s biggest retailer as another sign of the country’s growing economic clout. Now anti-globalization activists are weighing in, saying Wal-Mart will force out India’s poverty-stricken farmers. While the Indian agriculture sector is huge — India produces more milk, grains, and vegetables than any other country — its distribution network is awful, with tons of food rotting in state-run warehouses, if not consumed by rodents, or spoiling before it reaches markets. The Confederation of Indian Industry argues that India can be the world’s breadbasket. It’s failing to do so because most of its farms are small, inefficiently run, and don’t use modern technology. Large players like Wal-Mart can change that. Once allowed to invest, they will have more incentives to buy domestically and to build infrastructure that enhances productivity. That’s great for ambitious Indian farmers. Many farmers today sell their crops to the state at prices set by the state. With many global players likely to enter the market, following the lead of India’s corporate giant Reliance, farmers won’t be obliged to only one buyer. The certainty of a large buyer setting quality standards and demanding new products would prompt farmers to form co-operatives — and India knows how to run good ones — or work as employees of agribusinesses, increasing their wages. Wal-Mart should be viewed as part of the solution. And academic research has suggested that once a supermarket enters a developing country, its farming sector modernizes rapidly, ending stagnation.
very useful and informative post!!!
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