DIFFICULT ROAD AHEAD

APPEARED IN INDIA FORBES MAGAZINE - 06 NOV 09 ISSUE UNDER THE CAPTION - RETAIL THERAPY.


The story of world’s biggest retailer Walmart is very interesting. ( India Forbes -Walmart passage to India Oct 23 -09). However, Walmart has had very little or no success out side the US. The regulatory support that exists in US is non-existent out side the US for various political and economical reasons. The infrastructure, the efficient supply chain management, the logistic support that it has built over the decades in US and most importantly the mad consumerism in US has largely contributed to the success story. Again these are non-existent in our country. The back bone of Indian retail business is credit. Being a poor cum developing economy, the poor and the middle class contributes significantly to the retail business volume. The purchasing power of consumers in this segment is very low and limited. Hence, credit plays a major role in volume business. The local kirana stores have advantage over the big players as they offer credit to selected customers. And similarly the kirana stores enjoy credit facilities from wholesalers and distributors. The easy accessibility to kirana stores is another plus point compared to the players like Walmart which are normally located in out skirts of the cities where in the people residing in that particular area can access such sores making it difficult to reach more consumers. Walmart is a volume player. The kind of regulation, the infrastructure, the logistics and the purchasing power the urban poor and middle class have in India makes the road ahead for Walmart a difficult one.