Wal-Mart to enter Gujarat via Anand

[ejazr]

^^^^ Walmart is just one company and we are talking about countries like India, Indonesia, Brazil were farming costs are dirt cheap. The US is just no longer competitive in the farming sector and its only govt. subsidies that is allowing them to run these. And keep in mind that even after 10+ years of 100% FDI, they still have a share of between 10-30% of the retail sector with the rest being local retailers. Why would India be any different

Just look at the performance of the Cash and Carry Walmart stores. How many farmers are complaining about that? Farmers prefer to sell these stores because they get a better price and are paid on time. On the other hand, we have farmers KILLING themselves in govt. provided debt and are forced to sell to the middlemen or sell to the govt. under an inefficient flat price and quota system messing the entire market fundamentals.

Here are some success stories in India in the Cash and Carry business.

How Wal-Mart's wooing Indian farmers
Why India Should Stop Fearing Walmart | Global Spin | TIME.com
In India, Wal-Mart Goes to the Farm
Walmart looks to source more farm items from India


Once the retailers started giving better prices to the farmers, the middlemen had to compete and match the price set by Walmart improving the overall income of farmers. This is what anyone who cares about farmers would love to see happen. This is what a market economy and healthy competition is about.
The alternative is the govt. overstocking on produce it doesn't know what to do with and the middlemen gouging prices from the farmers and selling it at exorbitant prices to the consumers with no competition to worry about. And of course farmers committing suicide with the debts they already have WITHOUT Walmart even in the picture.

If you have a better alternative to competition and open market, lets hear about it.

 

[utubekhiladi]

would care to explain how?

remember, walmarts mission is to make huge profits for their investors and share holders. they are not god sent angels and saints who really give shyt to your farmers. they just don't care about your farmers. their mission is to make huge profits at any costs.

in america every single farmers have debt from 700,000 to 20,000,000 billion usd dollars. yes every single one of them. and these farmers make only 18,000 to 35,000 usd dollars per year. when are they going to pay their debt? this fact is very well explained in "Food INC" documentary. so much for brands like walmarts helping local farmers would like me to explain how brands like walmarts honey traps local farmers in to mountain of debts

watch the below mentioned documentary when you have spare time. if you are NRI, specially living in USA then my 50 dollars says that you will hate your very next meal.

 

[amoy]

you have just provided one more ammo in my magazine to fire. although i agree to disagree with your comments.

names like Carrefour, Metro, Tesco and Auchan have massive amount of capital in billions unlike our local competitor who can barely put together couple of billions. all the mega retailers like you mentioned are foreign companies and have mammoth capitals to go in for a cut throat competition.. but the problem is local competitors will not be able to handle the heat and will slowly die out. i know each of names like walmart, Carrefour, Metro, Tesco and Auchan will bring in their own brands against our local brands,

plus, walmart alone can sink any competition. be it a carrefour or metro or tesco. you can look at other countries where walmart operates.

now. you have point where walmart will be located outside of the city. but have you heard about ? "neighborhood Walmart"? neighborhood walmarts are only 1/10 size of the regular super sized walmarts. neighborhood walmarts may or maynot even have proper parking space. neighborhood walmarts sells FMCG only. they do not sell TV for example. neighborhood walmart is like a small mom-n-pop store. it can opened any where in a city. i am writing this post from a country which is dominated by walmart. so i know all about how walmarts operates.

Your points simply go against my experience. In cities I live there're all such big names plus indigenous lesser competitors, plus numerous mom-n-pop stores. They're running fine (at least seemingly) side by side.

Okay, just experience and practice in China, subj to in-depth studies

1) Sam's Club, which Walmart runs mainly outside city centres, like Metro, requires membership with 'loyalty fee', meaning they're not open for non-members. By so doing Sam's Club (differnt from your mentioned neighborhood Walmart) and Metro target only a certain segment of consumers.

2) After Chinas opening for FDI in multibrand retailing, instead of being suffocated in competition more indigenous retailers emerge and grow stronger. They get financed through going public and thus are enabled to compete in their particular region if not nationwide, with their edge in local know-how. Compared to them neighborhood 'regular-sized' Walmart or Carrefour don't always have a pricing advantage. Instead they compete with the variety of products and promotions or optimal location etc. .

Anyway things vary from place to place the same is true of consumers behavioral patterns... In China indeed Walmart isn't dominant at all after probably 10++ years, nor are Tesco or Carrefour.

 

[utubekhiladi]

Your points simply go against my experience. In cities I live there're all such big names plus indigenous lesser competitors, plus numerous mom-n-pop stores. They're running fine (at least seemingly) side by side.

Okay, just experience and practice in China, subj to in-depth studies

1) Sam's Club, which Walmart runs mainly outside city centres, like Metro, requires membership with 'loyalty fee', meaning they're not open for non-members. By so doing Sam's Club (differnt from your mentioned neighborhood Walmart) and Metro target only a certain segment of consumers.

2) After Chinas opening for FDI in multibrand retailing, instead of being suffocated in competition more indigenous retailers emerge and grow stronger. They get financed through going public and thus are enabled to compete in their particular region if not nationwide, with their edge in local know-how. Compared to them neighborhood 'regular-sized' Walmart or Carrefour don't always have a pricing advantage. Instead they compete with the variety of products and promotions or optimal location etc. .

Anyway things vary from place to place the same is true of consumers behavioral patterns... In China indeed Walmart isn't dominant at all after probably 10++ years, nor are Tesco or Carrefour.

just curious, what part of china do you hail from?

 

[ejazr]

@utubekhiladi

Just because the lobby groups have messed up politics in the US doesn't mean the same is being repeated in India. I have already explained why US is different from other developing economies like Indonesia, Brazil, China as well as India.In none of these countries have international retailers been able to dominate retail sector after 100% retail like they have done in the US. We should learn from the failed policy making in the US and prevent that from happening rather than closing up our economy soviet style to any foreign competition. Its not about just Walmart. Its about any foreign company who wants to invest in the retail sector in India and YES also make a profit and make money. That is not a bad thing and that is what companies expect to do.

Policies are made on the basis of what rules and regulations are in INDIA and what the experience has been in INDIA. Not on some feel good(or feel bad) movie in the US.

And no, I don't live in the US fortunately.

 

[amoy]

just curious, what part of china do you hail from?

I'm living in a medium city in SE China where most brands operate, as a regular shopper and FYI an indigenous retailer which is based in my hometown went public recently and started nationwide expansion. And Walmart acquired outlets on Mainland China of a Taiwan based retailer TrustMart, thus it's visible with the most stores here.

and have been many parts of China, west , east, south....

 

[utubekhiladi]

^^^^ Walmart is just one company and we are talking about countries like India, Indonesia, Brazil were farming costs are dirt cheap. The US is just no longer competitive in the farming sector and its only govt. subsidies that is allowing them to run these. And keep in mind that even after 10+ years of 100% FDI, they still have a share of between 10-30% of the retail sector with the rest being local retailers. Why would India be any different

Just look at the performance of the Cash and Carry Walmart stores. How many farmers are complaining about that? Farmers prefer to sell these stores because they get a better price and are paid on time. On the other hand, we have farmers KILLING themselves in govt. provided debt and are forced to sell to the middlemen or sell to the govt. under an inefficient flat price and quota system messing the entire market fundamentals.

Here are some success stories in India in the Cash and Carry business.

How Wal-Mart's wooing Indian farmers
Why India Should Stop Fearing Walmart | Global Spin | TIME.com
In India, Wal-Mart Goes to the Farm
Walmart looks to source more farm items from India

are you serious? do you really want us to believe what ever is published by congress media like ndtv and times of india? i may agree that middleman needs to be taken out. but walmart is not the only solution.

look at walmarts balance sheet for last year. they have said "11 billion dollars approx spent on lobbying Indian Government". they have clear entry for this in their record books.

Once the retailers started giving better prices to the farmers, the middlemen had to compete and match the price set by Walmart improving the overall income of farmers. This is what anyone who cares about farmers would love to see happen. This is what a market economy and healthy competition is about.
The alternative is the govt. overstocking on produce it doesn't know what to do with and the middlemen gouging prices from the farmers and selling it at exorbitant prices to the consumers with no competition to worry about. And of course farmers committing suicide with the debts they already have WITHOUT Walmart even in the picture.

are you trying to say that farmers will sells their good directly to retailers like walmart? instead of selling to some middleman?

If you have a better alternative to competition and open market, lets hear about it.

like i said, walmart is not the only solution. but again, i am no economist.

 

[utubekhiladi]

I'm living in a medium city in SE China where most brands operate, as a regular shopper and FYI an indigenous retailer which is based in my hometown went public recently and started nationwide expansion. And Walmart acquired outlets on Mainland China of a Taiwan based retailer TrustMart, thus it's visible with the most stores here.

and have been many parts of China, west , east, south....

what's trustMart? is it another brand of walmart, it sure sounds like one

 

[utubekhiladi]

@utubekhiladi

Just because the lobby groups have messed up politics in the US doesn't mean the same is being repeated in India. I have already explained why US is different from other developing economies like Indonesia, Brazil, China as well as India.In none of these countries have international retailers been able to dominate retail sector after 100% retail like they have done in the US.

that's because in countries like Brazil and china, local competitors have enough capitals to stay in the game. while indian local competitors can barely put together couple of billions dollars for competition.

 

[utubekhiladi]

I'm living in a medium city in SE China where most brands operate, as a regular shopper and FYI an indigenous retailer which is based in my hometown went public recently and started nationwide expansion. And Walmart acquired outlets on Mainland China of a Taiwan based retailer TrustMart, thus it's visible with the most stores here.

and have been many parts of China, west , east, south....

very clever, u still didn't mentioned the name of your city don't worry man, i am not going to send a hit man to your house

 

[amoy]

what's trustMart? is it another brand of walmart, it sure sounds like one

Trust Mart was Taiwanese thus having pretty good know-how about Chinese consumers.

Walmart acquired Trust-Mart in 2007 Walmart to End Trust-Mart Deal, Two Top Executives Resigned

Believe me, unlike US, foreign retailers like Walmart doesn't always have a cut-edge pricing. They win over customers often becoz they have spacious parking lots and tidy / sensible arrangement of goods, maybe plus some imported goodies that provide better consuming experience

 

[ejazr]

@utk
Can you give me a credible link for the 11 billion dollar lobbying charge. All I could find were some blogs quoting articles by some BJP member or another article in the Organiser which is an RSS mouthpiece. So they would definitely be partisan and very likely inaccurate. So a link to the Walmart annual reports or similar would be helpful.

AFAIK, lobbying by itself is not a problem as many companies both local and foreign do that by arranging meetings with ministers and policy makers. But you don't need billions of dollars to do so. If such large amounts are in their books, then there could be possible illegal cases and if that is the case, Walmart should be charged in court of law for doing this. But that doesn't mean you still don't' allow other retailers to enter India just like we have allowed foreign telecom companies to invest in India.

And the articles that I gave are local reports from farmers. Some are NYT (including the NDTV one btw), Time magazine, ET and so on. Instead of talking about conspiracy theories regarding Congress paid media, at least read the articles before commenting on them.


If you had read the articles you would have realised that yes, the farmers DO sell directly to Walmart. They are ALREADY doing so in the Cash and Carry stores that were given 100% retail access under the same BJP led NDA govt. that is now opposing the retail version of these stores. And Walmart alone has a plan of linking upto 1 million farmers by 2015. The benefit for the farmers is that the Walmart trucks come directly to them to collect their produce and they get paid good money for what they sell instead of being shortchanged by the middle men.

Walmart is not the only solution ofcourse. No one is saying that. We are only adding one more tool in the toolbox of improving the retail sector. You have your historical Kirana stores, the cash and carry wholesale stores, single brand retail store and now a new addition of a multibrand retail store. Its one more tool that we can use to increase compeition with is always healthy and because of the gradual way it is being introduced (only 51% and only in large cities AFTER the state gives approval) it will have enough time to see what the impacts are and take care of any monopolization worries if they do turn out to be true.

that's because in countries like Brazil and china, local competitors have enough capitals to stay in the game. while indian local competitors can barely put together couple of billions dollars for competition.

Still the policy was 51% FDI. And we already have 100% Cash and Carry FDI, how many local wholesalers have gone out of business the last decade? And we have Indian companies investing billions of dollars outside India, I don't believe for a second that local Indian companies don't have enough capital to invest within India. Particularly when only 51% is allowed, these foreign retailers will HAVE to partner with a local retailer. There is no other way around it.

What I was saying with that example is that despite 100% FDI in retail countries like Indonesia where I am sure has less dollar billionaires and millionaires than India, Walmart and other retailers still have a market share of between 10-30%. Local retailers are still thriving and competing. The point is to shake up the market, make it free and allow healthy competition. Particularly in the farm sourcing sectors and the consumer retail sector where both are suffering.

 

[amoy]

Walmart is not the only solution ofcourse. No one is saying that. We are only adding one more tool in the toolbox of improving the retail sector. You have your historical Kirana stores, the cash and carry wholesale stores, single brand retail store and now a new addition of a multibrand retail store. Its one more tool that we can use to increase compeition with is always healthy and because of the gradual way it is being introduced (only 51% and only in large cities AFTER the state gives approval) it will have enough time to see what the impacts are and take care of any monopolization worries if they do turn out to be true.

If monopoly is a genuine concern it may be started with regulated locations, like what s done in Shanghai or Shenzhen. I recall they once only granted Carrefour or Walmart to open new stores on outskirts.

And my personal experience tells a prospering neighborhood grows up around Metro and Sam's Club which used to be on the 'outskirts" (not any longer).

And in China FDI in multibrand retailing is 100% foreign stake, at least for the mentioned names.

In order to have a cost advantage they try to source directly as much as possible and even created their brands like "Member's Mark" for Walmart.

 

[Bangalorean]

Can I have Wal-mart's balance sheet which has a "record of 11 billion dollars for lobbying in India"?

Lobbying by itself is not bad, bribing is. But even worse than either, is making allegations about a Fortune 5 company's "balance sheet" without credible evidence or sources.

 

[utubekhiladi]

^^^ Can you give me a credible link for the 11 billion dollar lobbying charge. All I could find were some blogs quoting articles by some BJP member or another article in the Organiser which is an RSS mouthpiece. So they would definitely be partisan and very likely inaccurate. So a link to the Walmart annual reports or similar would be helpful.

AFAIK, lobbying by itself is not a problem as many companies both local and foreign do that by arranging meetings with ministers and policy makers. But you don't need billions of dollars to do so. If such large amounts are in their books, then there could be possible illegal cases and if that is the case, Walmart should be charged in court of law for doing this. But that doesn't mean you still don't' allow other retailers to enter India just like we have allowed foreign telecom companies to invest in India.

And the articles that I gave are local reports from farmers. Some are NYT (including the NDTV one btw), Time magazine, ET and so on. Instead of talking about conspiracy theories regarding Congress paid media, at least read the articles before commenting on them.


If you had read the articles you would have realised that yes, the farmers DO sell directly to Walmart. They are ALREADY doing so in the Cash and Carry stores that were given 100% retail access under the same BJP led NDA govt. that is now opposing the retail version of these stores. And Walmart alone has a plan of linking upto 1 million farmers by 2015. The benefit for the farmers is that the Walmart trucks come directly to them to collect their produce and they get paid good money for what they sell instead of being shortchanged by the middle men.

Walmart is not the only solution ofcourse. No one is saying that. We are only adding one more tool in the toolbox of improving the retail sector. You have your historical Kirana stores, the cash and carry wholesale stores, single brand retail store and now a new addition of a multibrand retail store. Its one more tool that we can use to increase compeition with is always healthy and because of the gradual way it is being introduced (only 51% and only in large cities AFTER the state gives approval) it will have enough time to see what the impacts are and take care of any monopolization worries if they do turn out to be true.

i do not have have walmarts balace sheet handy with me as i do not have their stocks anymore. but you can hear about it during their next quarterly report conference. anyone with access to scottrade, tdameritrade etc can pull their balance sheet. they only say how much has been spent. they do not say where and how they have been spent. we will never know who are all the people in delhi who took money from walmart to bend laws favoring walmart. lobbying is not about arranging meetings. election is near and raul baba and his chamchas will need money to win elections or buy MLA/MPs.

even osama bin laden can start a website and put some "happy stories". does that make him a saint?

 

[utubekhiladi]

Can I have Wal-mart's balance sheet which has a "record of 11 billion dollars for lobbying in India"?

Lobbying by itself is not bad, bribing is. But even worse than either, is making allegations about a Fortune 5 company's "balance sheet" without credible evidence or sources.

@utk
Can you give me a credible link for the 11 billion dollar lobbying charge.

although, i do not have balance sheet with me handy right now but atleast i can prove that cat is out if the bag and i am barking at the right tree.
@banglorean.. lobbying means bribing

Dilli Chaat | Did Wal-Mart spend a fortune lobbying for India entry?
Probe into Rs 60 cr spent on lobbying by Walmart: Shanta - Indian Express
Wal-Mart seeks US govt help in getting into Indian retail market - Economic Times
From Wal-Mart to Starbucks: All lobbying hard to enter India - Corporate News - livemint.com

 

[utubekhiladi]

although, i do not have balance sheet with me handy right now but atleast i can prove that cat is out if the bag and i am barking at the right tree.
@banglorean.. lobbying means bribing

Dilli Chaat | Did Wal-Mart spend a fortune lobbying for India entry?
Probe into Rs 60 cr spent on lobbying by Walmart: Shanta - Indian Express
Wal-Mart seeks US govt help in getting into Indian retail market - Economic Times
From Wal-Mart to Starbucks: All lobbying hard to enter India - Corporate News - livemint.com

give me a day or two. i have a friend who is also my financial adviser and a stock broker. he can definitively provide me the balance sheet.

 

[Bangalorean]

I am for FDI in retail.

It is not going to kill local traders, neither is it going to harm the nation's economy. The traders already stock Chinese goods, so what difference is wal-mart going to make? The same Chinese goods that these local traders stock today, and sell us for 100, wal-mart will stock the same goods and sell it for 95.

As long as we don't have a good manufacturing base, we will have to import from China, whether the corner Bania sells it, or whether wal-mart does.

Building manufacturing in India is a separate issue, which needs to happen irrespective of whether we allow FDI or not.

If people are so scared, let us have it on a limited basis. Let us get them into the big 3 - Delhi, Mumbai and Bangalore. Then we shall see.

 

[ejazr]

Ok first of 60 Cr INR is around 11 million dollars.

That is about 1000 times smaller than the amount you previously mentioned saying 11 billion dollars in lobbying. HUGE difference. And apparently over 2-3 years. So about 5 million dollars per year on average. The rant of the BJP MLA sounds very simlar to what we would hear Marxists and Communists parties say about MNCs investing in India. Again a prime example of the left/right divide within the BJP that it has to resolve if it wants to become a cohesive centre-right party.

Walmart has been lobbying for years. Like I mentioned earlier, it was under the NDA govt. that Walmart got 100% FDI in cash and carry. I am sure that they would have lobbied with the then NDA govt. as well. But lobbying is not the same as bribing although it can blur the line at times. They could have spent money on research studies and reports on FDI in retail which is legitamte including adverts supporting these findings to create a favorable climate and public opinion to more dodgy items like funding a holiday or getaway to important politicians. And yes there should be a probe if that happens.


But like I said, I am talking about the concept of allowing foreign MNCs to come in an invest in India. Just like how Indian companies are going an investing all around the world. Why are we still stuck in the old days of the East India company? And comparing happy stories about OBL with news reports from NYT, Time magazine Economic Times e.t.c? What type of a debating point is that?

 

[The Messiah]

Can I have Wal-mart's balance sheet which has a "record of 11 billion dollars for lobbying in India"?

Lobbying by itself is not bad, bribing is. But even worse than either, is making allegations about a Fortune 5 company's "balance sheet" without credible evidence or sources.

Lobbying is bribing only...its just a fancy term to deceive the ignorant.