Wal-Mart to enter Gujarat via Anand

[ejazr]

Wal-Mart to enter Gujarat via Anand - The Times of India

VADODARA: World's largest retailer Wal-Mart plans to enter Gujarat through the NRG-rich belt of Gujarat - Anand, also India's milk capital.

Wal-Mart, through its Indian joint venture Bharti Wal-Mart Pvt Ltd, has kicked off work on the project on Anand-Sojitra Road. This will be its first mall in Gujarat in the wholesale format. Like in other states, the mall in Anand will operate under the 'Best Price Modern Wholesale' name.

The 50,000 sq feet mall is coming up on three acres of land, which as per present jantri rates costs Rs 4.37 crore. Construction at the site for the single floor mall started since March-end and is likely to get over by July-end , sources said.

A Bharti Wal-Mart spokesperson told TOI that as a policy, the company does not comment on specific real estate properties.

"We plan to open 12-15 new Best Price Modern Wholesale stores in 2012, mainly in south and west India," the spokesperson said in response to an emailed query. Wal-Mart's next venture in Gujarat is likely to be in Ahmedabad, probably on Ahmedabad-Bagodara highway

The firm has already begun recruitments for its scheduled launch. The campus interviews where management graduates from a couple of Anand-Vallabh Vidyanagar based MBA colleges were invited were held a fortnight ago.

"A total of 20 students from our college had appeared for the interviews before a fortnight . We are yet to get any offers though," K S Prasad, associate professor and placement officer at the G H Patel P G Institute of Business Management, affiliated to Sardar Patel University , told TOI.

Last year, amid the row over foreign direct investment ( FDI) in retail in the country, Bharti Wal-Mart had started scouting for land in Vadodara and was close to sealing a deal for a huge piece of land in Manjalpur.

The company was also in talks with an Ahmedabad based realtor for a 20,000 square yard land along SG Road. But, for some reasons, the deals were not struck.

 

[pmaitra]

Have the central government and the state government made legislation(s) to prevent WalMart from flooding India with products from PRC?

There is a serious problem in the US with unregulated cheap imports.

 

[Avenger]

Have the central government and the state government made legislation(s) to prevent WalMart from flooding India with products from PRC?

There is a serious problem in the US with unregulated cheap imports.

You need your unregulated cheap imported "Made in China" computer to reply.

 

[pmaitra]

You need your unregulated cheap imported "Made in China" computer to reply.

If you are not going to answer my question, why do you have to quote me?

 

[Armand2REP]

burn that China Inc. depot to the ground!

 

[SPIEZ]

Here is a thought, how about an organised micro-retailing,like micro financing ???

We all know there are loads of small retailers spread throughout India.

Wouldn't a proper structure and organisation in retailing prove to be a huge benefit to both the customer and sales person.

 

[utubekhiladi]

what is walmart trying to do when we are not allowing any FDI?

 

[utubekhiladi]

i think they are trying to do like a Costco.

although costco is whole sale retailer, you can still buy a single product or item without buying it in whole sale term.

 

[utubekhiladi]

Walmart does only one thing. Export products from China cheaply and put local's out of business. I know that the profit margin of the retailers and middleman are ridiculous in India. But there are lot of ways govt can act to eliminate. FDI is not a solution.

entry of wal-mart means supporting American and Chinese economy at the expense of our own economy.

I see a similarities in how east-india company came to India for the same purpose. now walmart will kill all local competition and then they will buy our local goods at very cheap ass price and sell it back to us at high price. we will have no where to go then.

 

[Oracle]

what is walmart trying to do when we are not allowing any FDI?

FDI in multiple brand retail is allowed in India. If I'm not wrong, I think it's 26%.

FDI in single brand retail is 49%, iirc.

 

[pmaitra]

I think there is a law that any FDI remains in India and the investors are only allowed to take away the profits they make.

W.r.t. WalMart, I am not sure what the arrangement is like.

As long as they don't chuck our local industries out of business, I have less concern. The last thing I want to see is trivia, like safety pins, and electric fuses being imported from PRC.

 

[utubekhiladi]

these are the walmarts very own brand.

Major Brands
Sam's Choice
Great Value
Equate
Mainstays
Ol' Roy
Special Kitty
Parent's Choice
White Stag
George
Dr Thunder
Additional brands
Apparel
Homelines
Others

now in barati walmart you will see only the above mentioned brands and chinese brands..

 

[pmaitra]

WalMart's own brands are also made in PRC anyway, well, at least most of them. Even if it does not say 'Made in China,' if it is made in China, money is flowing out of India into PRC. I do not see how this is helping India. Maybe it is helping those up the ladder?

 

[Oracle]

@utube - Fresh produces would be sourced locally. E.g. Meat, eggs, rice, pulses, if they do sell those items. Makes sense at a cost - profit ratio.

Pmaitra, this is a connected globalized world we live in. If we don't want cheap products from China, our local industries should build them. Now, the Government needs to create sound manufacturing policies and announce special packages for that to happen. If businesses get those items at a comparable rate from a factory in India, they would not run to China. Quality wise, Indian goods are a 100 times better than China.

 

[warriorextreme]

I have heard that wallmart sells indian medicines in it's stores...if we can produce products at lower rate in india then will they still buy cheap chinese products?

 

[pmaitra]

Can India make million of domestic electrical fuses at a lower cost than PRC? I don't think so. We don't have slave labour here. PRC can easily make much cheaper products, so that, even after shipping costs, they will beat local products, and still afford a good profit to WalMart.

 

[Oracle]

Can India make million of domestic electrical fuses at a lower cost than PRC? I don't think so. We don't have slave labour here. PRC can easily make much cheaper products, so that, even after shipping costs, they will beat local products, and still afford a good profit to WalMart.

That is where Govt. soaps would come in handy. Much like SEZs and STPI. Tax breaks for boosting the manufacturing sector. If Tamilnadu can be the Detriot of the east, everything is possible. It just needs sound policies.

One more point, there needs to be massive investments in infrastructure. Roads, connectivity, power, water. If there is no infrastructure, there would be no development in the manufacturing sector.

 

[utubekhiladi]

I think there is a law that any FDI remains in India and the investors are only allowed to take away the profits they make.

W.r.t. WalMart, I am not sure what the arrangement is like.

As long as they don't chuck our local industries out of business, I have less concern. The last thing I want to see is trivia, like safety pins, and electric fuses being imported from PRC.

profit is the biggest amount my friend. lets say if xyz company invests 100 crore in FDI and they make 10 crore as profit each year.. now lets say they do business in india for 20 years. they we have lost 100 crore from our economy to foreign country while company xyz made profits and still recovered the investments.

and yes, with amount of money walmart have, they will sink local business in no time. that's what walmart has done in all countries.

lets take an example, this is the common play book of walmart.

company abc vs walmart

company abc is indian company and doing very good business. they have only 10 billion dollars in capital
walmart is a foreign company and very new to indian market but they have massive mammoth 300 billion dollars in capital
lets' assume there is a indian product called "pro-x" and whole sell price is 18 rs. MRP price is 20 rs. there is a 2 rs profit margin here.

company abc sells product "pro-x" for 20 rs which is also the labelled MRP price.
now, walmart joins the game and offers pro-x for 19 rs.

after few days,

abc sells pro-x for 18rs (no profit, no loss) just to maintain the customer stream and stay in competition with walmart.
now, walmart sells pro-x for 16rs (yes, walmart takes 2rs loss on each item)

here is the catch now, all customers will now have orgasm that walmarts sells pro-x at only 16rs. all customers will now flood walmart day and night. company abc loses heavy stream of customers. walmart can go-on for years by taking loss of 2rs on pro-x because they have 300 billion in capital. walmart can afford to run business in heavy loss for a decade by the above mentioned tactics. even if walmart loses 100 billion in such cut throat competition, they still have another 200 billions to play around.

but company abc cannot afford to sell pro-x below whole sell price(18 rs) as they have only 10 billion in capital. after 6 months company abc files for bankruptcy. mission has been accomplished by walmart. company abc is not a competitor any more. walmart is now the only king in the market.

now after 3 months, walmart slowly rices the price of pro-x to 21rs. now customers are forced to buy pro-x by paying 21 rs because there are no other stores left where they can go and buy pro-x.

after couple of months, walmart now raises price of pro-x to 25rs. customers are not happy but they have no other option other then shell out 25rs for pro-x.

after a month, now walmart introduces a similar product by one of his brand name "great value" and the product name is "Great Value - Pro-x". you can now buy "Great Value - Pro-x" for only 20Rs while old pro-x is still 25rs.

very simple, customer will eventually buy "Great Value - Pro-x" because it's cheaper than old pro-x. although old pro-x is superior in quality.

now manufactures of old pro-x reduces their wholesale price to 17rs to stay in competition,. now walmart has reduced price for old pro-x to 20rs and "Great Value - Pro-x" to 16 rs. walmart is taking loss here by selling "Great Value - Pro-x" at 16rs. but walmart can sustain any loss because they have huge capital.

again, customers will buy "Great Value - Pro-x" because it is cheaper. but manufactures of old pro-x can't reduce their whole sale price any further. after few months manufactures of old pro-x files for bankruptcy.

after a months, walmarts sells "Great Value - Pro-x" for 25rs. because now there are no other pro-x products left in the market for competition.

Mission Accomplished. walmart has killed all local competitors and local products while dominating itself and it's brand names. from now customer has only one choice. go to walmart and buy a product that is made and branded by walmart itself or some cheap ass Chinese products. we lost all our local business, competitors and all our local products.

with in few years, walmarts recovers all its initial losses by selling over priced products of their brand names. there is a now huge inflation in the country.

our people just get orgasm when they hear FDI and names like walmarts. they do not understand or try to find out consequences of it.

remember, mission of walmart is to make huge profits for their shareholders and investors, they don't care about you or your farmers or your local business or your local products or your country.

 

[pmaitra]

I agree UTK. You have made all valid points.

I really fail to see what safeguard they have put in place. It'll probably fatten some of our major politicians and well fed media houses, or perhaps we are total fools?

Moreover, when is FDI the sole indicator of economic progress? Unless India is exporting, there is no benefit in FDI where ultimately money flows out of the country.

 

[utubekhiladi]

WalMart's own brands are also made in PRC anyway, well, at least most of them. Even if it does not say 'Made in China,' if it is made in China, money is flowing out of India into PRC. I do not see how this is helping India. Maybe it is helping those up the ladder?

allowing foreign companies means shooting yourself on foot. what do we get in return by allowing walmart? american senators passing laws to ban outsourcing to india? or hike in visa prices?