Wal-Mart in India

Charles Fishman writes on the Guardian online that Wal-Mart goes to India: the largest retailer in history has finally found a way to start opening stores in the second largest country in the world. Fishman is ebullient about the impact of the Indian consumers?

Wal-Mart will be a sensation in India - as it has been in China and in Mexico. At the moment, there is just a single hypermart in the whole country, in Mumbai. Small individual US cities have more than that - Topeka, Kansas, has two Wal-Mart supercentres; Huntsville, Alabama has four.

India's rapidly growing middle class has more money to spend than any previous generation - but no place to spend it. Just 3% of retail spending in the country is in what westerners would consider "organised" retail stores. Even in China, that number is 20%.

So Wal-Mart's acres of low-cost merchandise from around the world, gathered under a single roof, will be like a carnival for a slice of Indian consumers. Wal-Mart store openings in developing nations are frequently huge events - tens of thousands of Chinese show up when new stores open there - and with good reason.

In that way, Wal-Mart's arrival in Indian cities is not unlike its arrival in small American towns like Topeka and Tulsa in the 1960s and 1970s. People everywhere are grateful to have the products of the world delivered to their doorstep at affordable prices.

Of course, not everyone is pleased by the news. The New York Times story, Wal-Mart’s Superstores Gain Entry Into India, reports:

Local critics of Wal-Mart’s large-scale operations were unhappy about the announcement. They say that the ranks of the jobless will rise and that pollution will increase as shoppers drive to stores instead of receiving home-delivered produce. Small shops here typically extend credit and make home deliveries. “The entry of Wal-Mart will be like an economic tsunami in terms of its destructive impact,” said Vandana Shiva, an environmental campaigner who runs an organic food business.

Although India has gradually opened to foreign companies since 1991, Ms. Shiva said the latest move was the most radical. “The other reforms touch on one sphere — opening up banking touches only finance,” she said. “But because of the nature of what Wal-Mart does, it will affect the people who grow food, the people who eat it and the people who sell it.”

Retail reform is not easy in India:

Small retailers have resisted government-led attempts to organize the sector and make way for bigger chains. Recently, violent protests erupted after a court-ordered shutdown of more than 30,000 small shops that operated illegally in New Delhi’s residential neighborhoods.

Then in January, the government allowed international companies to set up single-brand retail chains and own up to a 51 percent stake.

Last month, the largest private-sector Indian company, the petrochemicals giant Reliance Industries, opened the first of 5,500 planned retail stores, in the southern Indian city of Hyderabad.

The Indian retail industry is expected to grow from $300 billion a year today to $637 billion by 2015. The share of the overall retail market in India held by large retail stores is expected to grow in the next five years to 18 percent, from 3 percent.

Industry experts argue that the eventual leaders in Indian retail could each build up to $10 billion to $50 billion in annual revenue within a decade. That’s significant even to big players like Wal-Mart, which reported $312 billion in revenue last year. Wal-Mart already purchases $1.6 billion worth of leather goods, textiles and other wares in India and sells them around the world. But it has long argued to Indian officials that if it were allowed to sell as well as buy here, it would use its advanced inventory control and logistics expertise to help spread prosperity by creating new markets for local businesses.

UPDATE: Andy Mukherjee has a Bloomberg column on the topic: Wal-Mart, You've Got India Now; Don't Bungle It:

After abandoning disastrous forays in South Korea and Germany, Wal-Mart Stores Inc. is coming to India. The opportunity is no doubt sizzling, though if Wal-Mart is not careful, it might end up making a hash of it...

Comments

[S B SELVAN]

THIS IS A GOOD SIGN OF GROWTH OF INDIAN ECONOMY. RETAIL GIANTS LIKE WALMART WILL BOOST THE SUPPLIERS OF TEXTILE AND GROCERIES IN A LARGE WAY FOR THEIR COMPOSITE UNIT OF PRODUCTION TO CUT DOWN THE COST.
QUALITY STANDARDS WILL IMPROVE AND THOSE WHO PRODUCE WITH A CONTINUAL QUALITY CAN SERVIVE IN THIS COMPETITIVE MARKET. THIS HAS TO BE A WELCOME GIFT TO THE CONSUMERS.

[alok singh]

28th January 2007,New Delhi

What i feel about the whol hoglight being thrown about the arrival of giants like Wal mart & the others preceeding, is just a temporary phase of discomfort to the smaller players,specially the so called discount stores and category killers.They have to learn & understand that one day it'll be all the game for the survival of the fittest.
what the indian players need to do at this hour is to define their category & retail structure,very specifically,and then move on with their plans for each city,town and suburbs with their stores.If not, then they'll die slowly on their own.
We have to remember again that only the proactive will survive in this race.
So the message goes for the Indian players that"shape up or ship out." before you are killed in every category.

Response will be welcomed.....

[Saahil Goel]

There is no doubt about the fact that the entry of a Wal-Mart "type" store in the Indian retail segment will upset the economic environment. However, if they don't do it, someone else will - with all the factors described above - this kind of organized retail shopping is inevitable.

Its not a matter of who - just when.

[Rajat Gupta (Glasgow)]

There has been a significant pressure on indian government it seems to allow these type of FDI's. However one should not forget that india is country still consists of maximum number of unorganised retailers. This for some lower middle class is the only source of earning so as for some educated unemployed. The govt. needs to cautious that there should be a growth but india cannot afford a jobless growth for its giant population which will only bring social unrest in the society.

[madmilker]

I think Charles Fishman needs to red...oops! read...
http://retailnu.wordpress.com/2008/06/17/reliance-indias-wal-mart/

[Donovan Roddy]

I'm a US citizen leaving here in India with my wife until her visa is approved, I can't explain how much I miss shopping at stores like Walmart that have everything under one roof. The store mentioned above "HyperMart" is actually called Hypercity and is the closest thing you'll find to a Walmart in India but still lacks variety of food/items that Walmart has.

As for local Indian business being concerned with losing jobs, I'm sure that is the case but it's basic economics "new businesses create new jobs". Alok Singh's description fits best "indian players need to do at this hour is to define their category & retail structure,very specifically,and then move on with their plans for each city,town and suburbs with their stores.If not, then they'll die slowly on their own.
We have to remember again that only the proactive will survive in this race." and this is true for any business today, you need to think from a global perspective, the doors wide open these days.

[Ravinder kumar verma]

I am really happy to listen the news about the opening the walmart store in indian market. it will make the difference in the choice of the people and provide them better thing and save their money and give tham all the things of make happy life.
but it should give the phase wise permmision to them because it is very dangours for retailers of small sector and the compition of the market will destroy the indian local or small market and the farmer will be able to get boundation of the business,
i am agree but the governmnet should secure the small sector Firstly then give them permission.
it will sure increase the jobs in this sector but increase unemployment also through the small sector business man will be no more in 5-10 year period. like thailand the wal-mart close the market of local. and make the king of the market.

[travesti video]

istanbul hotel conrad
This article is very beautiful, I really get very beyendım text files manually to your health as you travesti very beautiful and I wish you continued success with all respect ..

Thanks for helpful information travesti siteleri you catch up us with your sagol instructional çok explanation.
en iyi travestiler en guzel travesti

travesti
istanbul travestileri
ankara travestileri
izmir travestileri
travestiler
trv
travesti siteleri
travesti video
travesti sex
travesti porno
travesti
travesti
travestiler
travesti
travestiler
sohbet
chat
organik
güncel blog

[Air Jordan Shoes]

Left for the future in mind is zero screen, but you never forget it

[mbt shoes]

I normally only post puppy photos once a week. But each day is a blessing with these little pups. I had taken them off of Giddeon and they started to really do well, but I had changed a few things at the same time so I wasn't really sure if Giddeon's milk was bad.