Wednesday, March 28, 2007

forbes: Why Wal-Mart entry can disrupt India

mar 27th, 2007

a dissenting opinion on retail giant wal-mart's entry into india.

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From: s

Click the following to access the sent link: http://www.rediff.com/money/2007/mar/28forbes.htm

3 comments:

bly243001 said...

I too am worried about effect of Walmart and other super market chains. Not only it will have a serious impact on our bazaars and self-employed persons but my concern is also about the loss of freedom...especially political freedom.

If you own a business such as a small shop, you not only are self-employed but you also enjoy a degree of freedom in terms of your social and political beliefs which usually is not available to salary-classed people. That's why most politically active and influential people in democratic countries are businessmen, lawyers and doctors (with varying degrees of self-employment) and bottom of the list are engineers, scientists and other white collar workers (not counting unions etc.).

That’s why author is right about having a parchun shop and cleaning up aisle 9 analogy. Though the youth may earn similar amount of money and total employment numbers for the economists may remain unchanged, but he loses far more important and intangible thing….Freedom.

But Walmart may be in for a tough fight, because small shops in India already provide very cheap prices as compared to big stores, which is contrary to situation in West where small stores charge much higher prices than big stores.

I may be wrong about this, but didn’t Walmart fail in South Korea and Germany?

san said...

Oh come on. For every shopkeeper hurt there are a hundred more consumers who will benefit. Sorry, but the net benefit is too great. The supply chain will improve, the consumer will save.

AND GOVTS WON'T CONSTANTLY BE KICKED OUT BY VOTER BACKLASH AGAINST PRICE RISES.

The more efficient supply chain will buffer against the inflationary pressures that have dogged India in the past.

nizhal yoddha said...

walmart did fail in a couple of their overseas expansion efforts. but in india, they are going with bharti, which has solid local connections, so they are likely to succeed.

but walmart is a bit on the defensive these days on home turf. for instance, they just decided to pull back from new york city, as they figured they'd never get the permits. the scandals about their sweatshop behavior, healthcare problems etc. have hurt their image quite a bit and the competition eg. target is catching up.

my concern is that the idea of localized consumption (esp of vegetables and fruit) will be out the window, and there will be lots of transportation of goods from all over the country and all over the world once these big retail chains come in. this adds cost, adds to oil consumption, and in the long run is bad as it will kill off genetic variation (one of india's strong points) in favor of monoculture. in fact india's organic localized small-time farming can pay rich dividends if properly marketed to organic consumers.