Wednesday, March 28, 2007

Walmart entry can disrupt India

This one is from rediff, click the link above. The author makes a few pertinent points, but he misses out on a few others.

Granted that Walmart will surely disrupt some of the current mechanics in the retail set up. Why only Walmart, any and all big box retail will. But it will also bring in more efficiencies, which both farmers at the producer end and consumers at the other end have been deprived of.

The other thing is that, Walmart and big box retail will bring jobs. Today there are jobs for the highly educated engineers. BPOs provide jobs to graduates, more or less. But that leaves a significant gap which today is filled by Telecom salesmen, Credit card salesmen and the like. Hopefully working in a supermarket aisle will give people money and time, both of which they dont get when they sell either water or coconut water on the street or in the bazaar. The pay here will take them away from the sustenance and poverty mode that they are in currently. Like BPO jobs (or typist jobs), we need to look at a job for more than what it makes the person do at that point. These jobs have a cascading effect down the generations. A retail job will spur more people to look for better opportunities.

Will that sound the death knell for the kirana retailers? I think not. They will adapt and survive.
Yes, some of them will have to shut shop, but many more will adapt, survive and give organized retail more than a few sleepless nights. Should we worry more about the kirana or about getting access for farmers for their produce or Walmart cutting commissions to entire chains of middlemen? Theres a lot to weep about, theres also a lot worth trying for.

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