Friday, July 06, 2007

Who's afraid of Wal-Mart?

http://timesofindia.indiatimes.com/Opinion/Columnists/Swaminathan_A_Aiyar/Swaminomics/Whos_afraid_of_Wal-Mart/articleshow/2164180.cms
Some good ideas by Swami Aiyer on Wal Mart and other giant retailers in India. Nice to know that Swami reached a conclusion I pointed to some time ago about the {huge store-big parking lot} model failing in India. In addition to these, I also feel that the average car-size (Maruti, Hyundai etc.) is a potential barrier. It's hard to fit in huge bulk-purchases in these vehicles - unlike the bigger cars in America. Swami has not pointed out a potential opportunity I saw (and still see) - that of the 'last mile' distributor.

In America - Wal-Mart succeeds by efficient procurement -->distribution to store front cycle. (that and near-starvation wages for workers). In India, to win the cycle will have to be modified as follows procurement -->warehousing --> door to door distribution.

Wal-Mart will need to spawn a new industry of distributors who will deliver all that you buy- right to your doorstep. This is what I called "Last Mile Distribution" - to borrow a phrase from the Telecom world.

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