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| Should Walmart be allowed to setup shop in India? |
| Yes |
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66% |
[ 4 ] |
| No |
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33% |
[ 2 ] |
| Don't know |
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0% |
[ 0 ] |
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| Total Votes : 6 |
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kcmandava
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 Posted: Wed Jan 18, 2006 11:05 am Post subject: Wal-Mart gets ready to enter India |
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Wal-Mart Stores Inc,the world's largest retailer, is hopeful that soon it would be allowed to set shop in India.
Prime Minister Manmohan Singh recently said that India is mulling over the issue of foreign direct investment in retail and a positive outcome is expected in the next 5-6 months. Finance Minister P Chidambaram and Commerce Minister Kamal Nath had also said that the first steps to open India's retail market to FDI could be taken during the first quarter of 2006.
Even though 100 per cent FDI in retail looks far-fetched, the governmnet is likely to open a portion of the lucrative market with certain riders attached. India, which boasts of a billion-plus population is largely untouched by modern retailing.
Buoyed by its success in China, Wal-Mart is now hot on India. Last month its international CEO John Menzer came lobbying for foreign direct investment in retail in India and sought government approval to open its first liaison office in India. Last July, Wal-Mart chief executive Lee Scott traveled to Washington, DC to talk to the prime minister who was visiting the United States at the time.
While the Left parties that support the Congress-led coalition government at the Centre are concerned that foreign retailers will hurt millions of small shopowners, Wal-Mart argues that global players are the key to streamlining national distribution systems to cut waste and stabilise prices.
The world's largest company has 3,000 stores across the United States, Britain, China, Japan and Mexico. Its revenue ($285 billion) is more than India's total retail market. But strict entry barriers have kept companies like Wal-Mart and J C Penny off Indian soil.
With its burgeoning economy and mushrooming hypermarkets and malls, India would soon be the shopper's paradise. A McKinsey report states that India's $250 billion retail business is the eighth largest in the world and has the potential to grow 7 per cent by 2011.
India is becoming an increasingly bright prospect as retail giants depend on international operations to shore up their profits. A recent report in The Wall Street Journal said that in the first nine months of Wal-Mart's current fiscal year, the retailer's international operations -- which account for 20 per cent of its sales -- saw operating income climb more than 10 per cent while its US stores notched gains of less than 7 per cent.
Besides Canada, Brazil and Mexico, the company has fared well in many Asian countries too.
Other giant retailers like Carrefour SA of France and Metro AG of Germany, already have teams in India. One of Britain's leading retailers and a Fortune 500 company with sales in excess of £37 billion, Tesco, is planning to ramp up its sourcing from India to £95 million this year. Tesco sourced goods worth £65 million in 2005.
Tesco's sourcing from India was focused on apparel with 90 per cent of Tesco's offering in the segment being outsourced from India. Currently, South Indian apparel hubs, Bangalore and Tirupur account for a large proportion of the sourcing. Even without stores in India, Wal-Mart is already a bigger consumer of Indian products than many countries.
If Wal-Mart manages to enter India, it could face competion on two fronts. One, it will have to compete with local giants like Shoppers' Stop, Pantaloon and Westside; and second, given India's poor infrastructure the company will have to build distribution systems from scratch while grappling with bad roads and power outages at the same time.
A recent WSJ article said, that Wal-Mart is aiming for slow and steady growth in the subcontinent.
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andrew247
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| Posted: Wed Jan 18, 2006 11:49 am Post subject: |
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Why shouldn't they be allowed to set up in India? They should bring a couple of shops to Britain too 
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kcmandava
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| Posted: Wed Jan 18, 2006 11:56 am Post subject: |
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| andrew247 wrote: | | Why shouldn't they be allowed to set up in India? They should bring a couple of shops to Britain too |
Readup about walmart, and you'll hardly find any good news. Its a monster in other words.
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Aírmanareiks Þiudareiks
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| Posted: Wed Jan 18, 2006 8:21 pm Post subject: |
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Walmart sucks. Biggest corporation in the world though.  |
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amitpatel_3001
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geekerati
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| Posted: Thu Jan 19, 2006 4:33 am Post subject: |
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It will be a double-edged sword. The buying power is good, so expect great value. They are currently breaking ground for a Super Store in my hometown. I'm not happy about at all. Too much traffic and lots of people in the neighborhood that do not live here. Crime, trash and extra police patrols.
If you let them in your town , state or country, they will slowly takeover. I would like to see more competition.
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andrew247
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| Posted: Thu Jan 19, 2006 10:23 am Post subject: |
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| geekerati wrote: | It will be a double-edged sword. The buying power is good, so expect great value. They are currently breaking ground for a Super Store in my hometown. I'm not happy about at all. Too much traffic and lots of people in the neighborhood that do not live here. Crime, trash and extra police patrols.
If you let them in your town , state or country, they will slowly takeover. I would like to see more competition. |
No Tescos in America? They made £2 billion profit last year.
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Aírmanareiks Þiudareiks
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| Posted: Thu Jan 19, 2006 8:28 pm Post subject: |
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| No, there aren't any Tescos in the US or Canada. For that matter, there aren't even any Tescos in South America or the rest of North America. |
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andrew247
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| Posted: Fri Jan 20, 2006 3:13 pm Post subject: |
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| Aírmanareiks Þiudareiks wrote: | | No, there aren't any Tescos in the US or Canada. For that matter, there aren't even any Tescos in South America or the rest of North America. |
That sucks. Tesco is good!
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cvrk3
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| Posted: Tue Jan 24, 2006 5:56 am Post subject: |
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Could not resist the temptation to contribute to a controversial topic. While liberalized in my approach, I share my views with the leftists, that retail is not the sector wherein the foreign investments are to be sought for. I am not blind to the fact that the services form more than 45% of India's exports. For a stronger economy, the base is to be manufacturing and agriculture. These should be the priorities than opening up the retail sector.
The liberalization, while having brought competence and competition, it has also affected the fibre of the nation. I am one of those who are pained to observe that our engineering graduates are made into money making labour machines, by offering employment in the service industry, so called back office processing and software development.
It is sheer waste of knowledgeable manpower, who instead of designing chips, are answering calls of call centres and data centres.
Though an advocate of free and market economy, I am also aware of the perils. I would certainly welcome
Walmart, if they bring in their expertise of retail economy and contribute to the growth of industries that are produced in India. I am afraid that what we will see, is deluge of foreign manufactured items, to cater to the the large middle class in India. I am underlining the word middle class because that is seen as the potential to drive the sales. It is not only in India, but throughout the world, the foreign craze is more amongst of middle class and hence they would be looking at " foreign" products from walmart and not local products.
Take tirupur, the manufacturing base of apparels in down south, a small town. What you would observe therein, a brand names that are popular in US being labeled on the apparels that are manufactured in India. In other words, we have lost an opportunity, Of get ourselves branded. The gullible populace of the west, are not aware that the products have been manufactured in India, but carry the brands of US. So also the leather industry. Even simple wallets are manufactured as US brands and European brands.
While the walmart will not replace the next door retailer, we can not but avoid flooding of "phoren goods". Dear Doctor,( Dr. Manmohan Singh), left has a reason in their argument. Try wooing foreign investments, in agriculture and manufacturing industries contributing to the growth. Even though we were ruled by British for more than two centuries, I can not but make a remark that they brought industry to the nation. Even though they had left, the industries are here to stay. Can I say the same thing to foreign investments in the back office processing and call centres and traders such as walmart. We would be left with delusion-ed generations! |
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kcmandava
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