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   KAYTEK Retail Consulting Insights |
Consulting
Retail
When will WALMART come to India ?
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KAYTEK Retail Consulting Insights |
WALMART has tied up with Sunil Mittal's Bharti Group to enter India.  Earlier Article (written when there was a lot of speculation as to whether WALMART was entering the fast growing Indian organized retail market). When will WALMART Open their Retail Stores in India ? Hopefully, not too far away in the future. WALMART has been lobbying with the Indian government to open up the Retail sector to Foreign Direct Investment (FDI). Just recently, the Indian government has allowed Single Brand Foreign Owned Companies to have upto 51% stake in their operations in India. China has over 39 WALMART stores in operation today with many more to come in the next few years ! India has none as on today. Only when WALMART comes to India (even though they are sourcing from local suppliers here in a very big way); would India's organized retail sector have truly arrived ! Incidentally, a group of India's Retail Players are already resisting Government of India's moves to allow FDI (Read WALMART) to come here. They want restrictions to be imposed on FDI players like WALMART in terms of the geographic scope of operations (outside the municipal limits of metro cities), number of outlets that they can open and also the scope of products that can be offered by them. |
Ostensibly to protect the interests of India's millions of traditionally unorganized retail sector small players. In our humble opinion, that would be a big mistake. The arrival of WALMART (with their Every Day Low Prices Strategy) powered by their global sophisticated Supply Chain Management Information Systems usually transforms the Retail Landscape of a country. While Driving Prices downwards continously and relentlessly. And keeping inflation well under control as has been the experience in the US. Naturally, the governments both at the Centre and State levels should be keen to encourage any move that will help keep prices under control at the retail level. But as earlier WALMART experiences in Brazil and Germany have shown, they have to adapt their strategies for the local country markets to be truly successful. Which naturally, takes some time to happen. Also, as per reports in UK, their ASDA chain of retail outlets is struggling against TESCO, the established British Retail giant So, the local Indian retail players still have a chance ! While Indian customers willingly wait to welcome WALMART with their wallets ! But the local Organized (and also unorganized) Indian companies need not worry. As India's IT Industry has demonstrated successfully on a global scale, if we can overcome competition on foreign grounds in such a young industry such as software services, successfully battling it out in India against WALMART should also be a strategic possibility in Retail which is one of the world's oldest sectors. Retail is an extremely important sector not only in the traditional Mortar Bricks economy but more so in the Internet enabled Global Economy. Seasoned Venture Capitalists advise that if a small Retail Outlet can compete successfully when it is next door to a giant like WALMART in any area, it is capable of selling it's products globally over the Internet. Look at Acer (now Benq) founder - Mr. Stan Shih's Theory of The Smiling Curve. It explains how WALMART has become the US-End Retail Value Add between China is a giant production machine of low cost products at one end with the US as a giant consumption engine of these products at the other. Value Add gets created both at the Chinese Production end and at the other US Retail (WALMART) consumption end. India is fast emerging as a low cost leader of global IT and other services. |
India also has a huge domestic market whose one billion plus population would benefit from WALMART's global level best practices in supply chain management and cost conscious operations. Hence, India looks forward to a WALMART driven low prices Retail future ! When an organization's name becomes a Verb globally, it can truly claim to have changed the world. Think of XEROX, GOOGLE and now WALMART. All these organizations have successfully made their names as verbs because of their impact on all of us. We Xerox (when we make copies) & we Google (when we search). Perhaps we can learn how to walmartize our Businesses and work (when we try to make them super efficient like Walmart). Such has become it's impact. Some Learnings from WALMART's Information Technology (IT) Software Experiences. Their Super-Smart Software Strategy.
" Willing, Waiting, In-The-Wings Walmarts ? "
"May the Force Be With You"
A Periodic (Random) Snapshot of India's Retail Markets ! |
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