Musings on Retailing Industry

I was just wondering when we will have an Indian Wal-Mart that becomes the largest company-bigger than the Oil Companies and the Car companies. Maybe in 50-60 years?

What seems to be stopping the retailers is that our controls have given them too much protection for too long. And the great manpower crunch. There simply aren't enough qualified people in India to run large, organised retail stores- from the frontline staff to the managers. MBAs don't think it's a respectable thing to work for Retail Stores, because of "dignity of labour" issues. But though it is hard work which is mostly hands-on, it is exciting because growth potential is unlimited if you have the right model, as Wal-Mart showed.

In a supposedly saturated market like the US which already had a lot of entrenched retailers with a long history, Wal-Mart was the upstart which redefined the landscape, and put in place a strategy that used vast suburban spaces for cheap large stores and distribution centres, dedicated infotech solutions in the age before the internet, and Everyday Low Prices as opposed to an occasional "sale". We seem to have none of these in place yet. The food and grocery stores have the challenge of competing with the low overhead vegetable vendors, and low investment-better service kirana stores.

Maybe more local/regional models need to develop for the grocery retailer, but a national model is possible, for the apparel and other products, and at low prices, according to me. So far, only Big Bazaar seems to have addressed the price concerns.

2 comments:

Diamond Head said...

In many ways Indians as a culture are not used to PROCESS of any kind and PROCESS is at the heart of getting prices to come down...if nothing else to contain the number of variables in an equation.
The whole 'mom and pop' idea is diametrically opposite to a defined predictable operating model.
Ideally you want a good mix of both - then again I remember reading the maxim - People Get what they Deserve.

Rajendra said...

Agree with you, Diamond Head. But being an optimist, I hope we will eventually GET IT. By then, hopefully we'll deserve it too.

Aliah, thanks. I will try!

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