I do not agree with the author only in one factor. He mentioned "training" of the staff. Please note, I have lived as NRI for last more than fifteen years in more than four different countries. If the author is worried from competition from Walmart or ANY other international retailer, he is unnecessarily undermining indian talents for such a small thing like retail marketing sales person. Indians are MILLION TIMES BETTER than a Walmart USA employee who is mostly a high school drop out, and who go to walmart only because he/she can not get any other job in USA. Please do not abuse indians in india.Our culture, ploiteness and professional manners and many other real life aspects are million times superior to those of ALL OTHER FOREIGN CORPORATE CULTURES
Why not increase the Supply side? When Pepsi came in the 80s it was thought the supply side wouldn't keep up and Pepsi's sugar water soda's would eat all the sugar India could produce. Instead Pepsi invested heavily in farming contracts and tied with policy changes, India is a net exporter of Sugar. (Though personally I think sugar water drinks are bad for you and should pay a health tax). WalMart and Carrefore want to do this for retail. But Reliance and others have effectively blocked their entry to give themselves time to capture this market. While I applaud local companies winning, I also know this stops foreign investment and technology - and more critically stops access to foreign markets. In 2004 China got more in FDI in a month than India did in 5 years. Walmart invested heavily in China building out retail and supply chains. Unlike Reliance, WalMart also had a large chains around the World. Their Chinese chains not only supplied their stores in China, but around the World. Chinese made shoes, clothes, electronics, toys, CDs, TVs - at every WalMart. Walmart became China's largest single exporter selling $80 BILLION of Chinese goods to the USA per year by 2004.
I definately agree...... sourcing will be a major activity and also training the front runners (Guys & Gals on the shop floors)....... would be very very critical...... and finally to train, motivate and retain them........ is also a big task.........
Big Guys Come on........ Lets go "RETAIL" we are waiting..........
I guess the author brings out very serious concrens about the retail boom which India is going to witness in the coming few years. Not having enough supplies and not having enough number of suppliers with large capacities are surely going to create huge bottlenecks for the retail industry.
One thing the big retailers need to understand that if they are planning to open the hypermarkets nationwide and also go with the dual model of opening supermarkets, is to have a standardized quality of service and products throughout the chain.
Just look at McDonalds, it's burgers and fries in Delhi tastes the same as in mumbai or say in banglore. Which means a lot of consideration has been given in terms of the sourcing of fresh produce which is used to make any of their products throughout the country.
Is it possible for these retailers to do the same and bring in the international standards for their customer service to the quality of their products. There is a certain level of expectations of customers and the industry when you want to duplicate what is successful in the west.
Factors such as the return policy of any product you buy at these hypermarkets in the west, and what l
Though i appreciate your sound reasoning and pragmatism, my support is entirely with the dreamers who are thinking big and challenging existing ground realities. I guess this must have been the general thought process even at the time when Azim Premji, Narayan Murthy, Shiv Nadar etc set out to build IT related companies in a country with no connectivity, power and hundred other issues. Or what the Ambanis would have heard when they set out to create one of the largest Petrochemical complex in the world . People must have thought Sunil Mittal and his peers crazy when they were peddling rs 40k chunky mobiles that cost rs 16 per minute to use. We have to think big and face the obstacles as they come .There never will be an ideal time!!
Nice article with tempered views. But why cant these retail giants or aspiring behemoths set up captive supply units to source products in areas where supply lags demand?
Excellent analysis of the ground realities that today's retail manager is facing. A retail business usually gets bogged down with high costs (like rental), inconsistent supply (therefore stockouts), and poor customer service (thanks to lowly-paid high-attrition front-end staff who need to be taught to smile and say thank you). Behind all the hype the layman sees in the dailies, the retail manager is struggling with these problems and for the sake of the common good, let's hope he/she succeeds.
Though some of the concerns are valid, The authors concerns seem true only for retailers looking at metropolitan areas. And the basic issue in India is that supply lags demand in every aspect. Once the cpacities are built it would force the policies to be changed to allow for the supply side to catch up. Look at telecom, when compnies got in at ridiculous license proces and started to build capacity, the investments forced the rules to change and become more business friendly and the sector thrives today with the struggle of the initial 5 years now having faded and a heady boom being seen. Also on real estate, for "low price" hypermarts- as is the case abroad- the volumes are not in downtown upmarket areas, but in middle and lower middle class areas. People will drive out of town to marts to get low deals. Most large Walmarts are in the suburbs and not in downtown, and the hypermart retail will grow in the small towns more than in the metro's where land and FSI are not as much of an issue.
