Walmart hit the headlines in Chennai, Tamil Nadu last week when the site under construction for its wholesale business 'Best Price Modern Wholesale' by an independent developer was sealed by the Chennai Metropolitan Development Authority (CMDA). The action was taken by CMDA following agitations by those who oppose FDI in retail - a section of traders and others belonging to some political parties. The reason cited for such a drastic step taken by CMDA was lack of permission for carrying out construction activities in the premises.
One wonders why Chennai's political parties have this 'kolaveri' - murderous rage - against any of Walmart's activities in the state, even though the proposed wholesale format is allowed by the Foreign Investment Promotion Board through the automatic route! The seal on the premises is said to be for want of permissions though, everyone knows that the rage is against Walmart! Metro Cash & Carry of Germany, the pioneering foreign wholesale format to enter India is present in more than 15 locations in India. It is worthy to note that Metro Cash & Carry is present with multiple number of stores in the states of Karnataka, Andhra Pradesh, Maharashtra among other Northern and Eastern states. However the company has carefully stayed away from Tamil Nadu till now, even after almost 10 years of the company's operations in India (the first store opened in Bangalore in 2003).
Rumor mills work overtime in Chennai with the news that the opposing parties are planning to engage a whole train exclusively to travel from Chennai to Delhi and back soon to voice their opposition to the Union Government further vociferously. The issue has been politicized to assume alarming proportions now! One is urged to ask oneself the question of how these traders - if they are the real ones who agitate at all - have the time or the capability to sustain consequent business losses as they spare all their energies and time to participate in such activities tirelessly!
A wholesale format of Bharti Walmart means that the Best Price Modern Wholesale offers products and services to its member retailers at wholesale prices which render clear retail margins that are said to be more than what the wholesale markets and distributors offer. This benefits those small retailers who currently buy from unorganized and semi-organized wholesale markets and distributors of Fast Moving Consumer Goods (FMCG). These wholesale markets and distributors operate with a differential pricing strategy, charging more for those who avail unsecured credit and charging less for those who pay cash for their purchases. Often credit customers may not be able to avail of FMCG company initiated quantity purchase schemes and they are usually offset by the wholesalers for the interest costs they would incur on credit supplies/sales. The B2B model of Bharti Walmart is a distributing wholesale format that comes with a mock-store in the premises for training small retailers on stocking, shelving, planograms, etc. Walmart has also enabled credit purchases via a tie-up with a bank to offer credit and the retailer can use the authorized credit card. It has a 3PL (3rd party logistics) arrangement which helps the small retailers to avail of door deliveries at less than the standard transportation costs.
The organized B2B wholesale model may soon become commonplace across India with even domestic retailers from India, getting into it. The format is being set up by a dynamic retailer in Tamil Nadu, Shri Kannan Departmental Stores (www.shrikannan.com) with the first large wholesale format already established in Singanallur, Coimbatore in Tamil Nadu. The extended format of Big Bazaar, the Big Bazaar Wholesale Club offers customers bulk deals at wholesale prices operating in a membership model. The bulk of the wholesalers in the Indian towns yet deal with small retail buyers in an unorganized manner that often results in higher landed costs and the resultant squeezed margins. If small and medium retailers have to grow in India, a modernized wholesale set up could support it undoubtedly.
Small retailers can focus their energies to get cost advantages through alliances, collaborations and obtain the needed scale in purchasing power by forming retailer cooperatives. The Government can support small retailers by providing exclusive infrastructure support like building strip malls and organized municipal markets in small towns. The creation of special bazaars in Hyderabad by the State's tourism department to promote arts and handicrafts through a 'night bazaar' is a typical example of what a state government can do in terms of infrastructure support for small artisans, traders and retailers. In large cities the need of the hour is exclusive parking facilities to enable customers to walk the high streets peacefully when they shop!
Each State in India can have its own say with regard to allowing foreign retailers to operate and in that scenario it should prevail on the minds of those intending companies like Walmart to focus first on the favourable ones, which is a no-brainer. Why the heck does one have to invite trouble even with a wholesale format, when one has enough ground to cover and operate peacefully?
- Dr. Gibson G. Vedamani
One wonders why Chennai's political parties have this 'kolaveri' - murderous rage - against any of Walmart's activities in the state, even though the proposed wholesale format is allowed by the Foreign Investment Promotion Board through the automatic route! The seal on the premises is said to be for want of permissions though, everyone knows that the rage is against Walmart! Metro Cash & Carry of Germany, the pioneering foreign wholesale format to enter India is present in more than 15 locations in India. It is worthy to note that Metro Cash & Carry is present with multiple number of stores in the states of Karnataka, Andhra Pradesh, Maharashtra among other Northern and Eastern states. However the company has carefully stayed away from Tamil Nadu till now, even after almost 10 years of the company's operations in India (the first store opened in Bangalore in 2003).
Rumor mills work overtime in Chennai with the news that the opposing parties are planning to engage a whole train exclusively to travel from Chennai to Delhi and back soon to voice their opposition to the Union Government further vociferously. The issue has been politicized to assume alarming proportions now! One is urged to ask oneself the question of how these traders - if they are the real ones who agitate at all - have the time or the capability to sustain consequent business losses as they spare all their energies and time to participate in such activities tirelessly!
A wholesale format of Bharti Walmart means that the Best Price Modern Wholesale offers products and services to its member retailers at wholesale prices which render clear retail margins that are said to be more than what the wholesale markets and distributors offer. This benefits those small retailers who currently buy from unorganized and semi-organized wholesale markets and distributors of Fast Moving Consumer Goods (FMCG). These wholesale markets and distributors operate with a differential pricing strategy, charging more for those who avail unsecured credit and charging less for those who pay cash for their purchases. Often credit customers may not be able to avail of FMCG company initiated quantity purchase schemes and they are usually offset by the wholesalers for the interest costs they would incur on credit supplies/sales. The B2B model of Bharti Walmart is a distributing wholesale format that comes with a mock-store in the premises for training small retailers on stocking, shelving, planograms, etc. Walmart has also enabled credit purchases via a tie-up with a bank to offer credit and the retailer can use the authorized credit card. It has a 3PL (3rd party logistics) arrangement which helps the small retailers to avail of door deliveries at less than the standard transportation costs.
The organized B2B wholesale model may soon become commonplace across India with even domestic retailers from India, getting into it. The format is being set up by a dynamic retailer in Tamil Nadu, Shri Kannan Departmental Stores (www.shrikannan.com) with the first large wholesale format already established in Singanallur, Coimbatore in Tamil Nadu. The extended format of Big Bazaar, the Big Bazaar Wholesale Club offers customers bulk deals at wholesale prices operating in a membership model. The bulk of the wholesalers in the Indian towns yet deal with small retail buyers in an unorganized manner that often results in higher landed costs and the resultant squeezed margins. If small and medium retailers have to grow in India, a modernized wholesale set up could support it undoubtedly.
Small retailers can focus their energies to get cost advantages through alliances, collaborations and obtain the needed scale in purchasing power by forming retailer cooperatives. The Government can support small retailers by providing exclusive infrastructure support like building strip malls and organized municipal markets in small towns. The creation of special bazaars in Hyderabad by the State's tourism department to promote arts and handicrafts through a 'night bazaar' is a typical example of what a state government can do in terms of infrastructure support for small artisans, traders and retailers. In large cities the need of the hour is exclusive parking facilities to enable customers to walk the high streets peacefully when they shop!
Each State in India can have its own say with regard to allowing foreign retailers to operate and in that scenario it should prevail on the minds of those intending companies like Walmart to focus first on the favourable ones, which is a no-brainer. Why the heck does one have to invite trouble even with a wholesale format, when one has enough ground to cover and operate peacefully?
- Dr. Gibson G. Vedamani
Athan, as you said, when it comes to MNC retailers operating in India it would only mean Walmart to the protesting traders and political parties as they turn a blind eye to cos like Metro, Carrefour, Tesco and desi companies like Reliance and Future group. In the case of Chennai, Metro and Reliance market are going ahead with the construction of their b2b site as well as membership drive and they are facing no protest whatsoever for their operations. Then, like u said why this Kolaveri against Walmart??? I guess it's high time the concerned would represent their side of the story emphatically to the government and protesting parties rather resting on their laurels and going down with out a fight.
ReplyDeleteWalmart being the largest corporation has attracted a lot of attention for various reasons - right and wrong - across the world for years and FDI in Retail in India is a political issue currently. Therefore it has become the sole target for everyone angling for his share of mileage!
DeleteWhy to fight now and waste precious energies and money? Instead Walmart can fast spread over those favourable States like Maharashtra, Karnataka, AP, Punjab, etc. and become an aspiration for many while proving every antagonist wrong about their alleged unethical competitive practices!!