Retail Retail Everywhere!
First Reliance goes retail. Then, Walmart comes in. Now the Birla group is getting into retail. Pantaloon retail is here too. Great times for the Indian market. Not so great times for the small time retail stores. Walmart has the history of wiping away the small players when they enter a market. Not so great times for suppliers too. The bargaining power of the retail stores as big as these ones will become extremly high. Supplier profit margins will drop. It will be interesting to observe what happens over the next 5 years in the retail sector in India. I can imagine the kind of goodies that will now enter India, if the Indian version of the Walmart is anywhere close to the American version. Chinese imports will flood the stores from now on. Buying power of the people will increase now.
I wonder how the positioning of each store will be. Walmart will be the lowest on price undoubtedly. They have to maintain their world-wide image. Will Reliance and Birla retail stores position themselves like Target (higher priced, more stylish stores)? I would also be interested in seeing how Walmart will tackle the problems associated with having the lowest prices. In India typically there is a mentality of the elite/middle class to avoid shopping at the same place where the so called lower masses shop. Then again, I don't think Walmart would be too bothered as long as it gets its required volumes. The lowest prices would definitely leave out certain sections of the population which might become a concern in the coming years when the middle class is growing and the lower masses are reducing.
I wonder how the positioning of each store will be. Walmart will be the lowest on price undoubtedly. They have to maintain their world-wide image. Will Reliance and Birla retail stores position themselves like Target (higher priced, more stylish stores)? I would also be interested in seeing how Walmart will tackle the problems associated with having the lowest prices. In India typically there is a mentality of the elite/middle class to avoid shopping at the same place where the so called lower masses shop. Then again, I don't think Walmart would be too bothered as long as it gets its required volumes. The lowest prices would definitely leave out certain sections of the population which might become a concern in the coming years when the middle class is growing and the lower masses are reducing.
posted by Rhapsoder at 6:23 PM
3 Comments:
Hmm Ananth. I understand what you mean. But you'd be surprised at the economies of scale that Walmart enjoys just because of its sheer size!
Walmart needs to price things only a little lower than the others to see big volumes. And most of its buyers are likely to be from our middle classes -- not the poor ones who need things in small chunks.
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