Who (Wal)Farted?

Cowtstsetung, I stand in awe of your creative presence. Keep the posts rolling my fellow comrade.

Cleverly creative, Cowtsetung! Wal Farted and said India Shining...

Will this be run by the Agarwal brothers?

Yikes! As one who is quite familiar with Wal-Mart and its effects on small businesses here in the U.S. (including but not limited to the death of small-town "Main Street" merchants), I greet this development with horror.

- Deepti, thank you - too much credit there for 'ol me :-). Must say, I'm not a communist, just anti-monopolistic.
- CarpeDiem, thank you+lol.
- Aaman, if you mean baniyas being in control, it might just be the case. They have the "retail genes", after all.
- Jumper Bailey, I really hope more Indians realize that a corporation cannot possibly be good for India's economic progress.

Once again, thank you all for your kind comments. Much appreciated.

The funny part is that if Wal-mart in India will be a middle class haunt like MC Donald. It will be the 'in thing' for a long time.

JB: **that a corporation "like Wal-Mart"

Deepti - besides the obsession with all things firangi, that seems to be the whole problem - the herd mentality. And this focus on ostentation, rather than thrift.

But what beats me is how your status in Indian society is enhanced by chomping on an unhealthy, more-than-reasonably priced burger.

Maybe not your status, but your waistline is definitely enhanced.

I dunno, I think Walmart coming to India is a good thing, but probably not Walmart in India itself. Err - do I sound confusing? I think that if Walmart comes in, there will definitely be more companies following them around, which in turn is good for economy. However given Walmart's disastrous and often controversial work policies, I am sure we can expect even more third class work conditions there!

Great write up though hehehe - walfart - LOL!!

Suyog

Walmart critics - all fart and no shit!

http://www.arthshastra.com/archive/walmart-critics-all-fart-and-no-shit/

Thanks Suyog/good insight.

Vikas, I appreciate the fact that you dedicated valuable blogspace to me. Anyway, a few pointers:
1) The lure of supposedly easy money makes kids pursue Wal-mart-like careers instead of educating themselves. "Oh, why do I need to go to uni when I could be a department manager in 2 years, making as much as a uni grad, driving a cool new car?"
2) I've spoken of "efficiencies" and "cost-cutting" already, so you're merely agreeing with me. You'd do better to refute claims of labor malpractices.
3) If you shop around, you will find cheaper bargains than Wal-Mart and the like. I have yet to meet someone who believes a company like Wal-mart has your best interest in mind.
4) What is so wrong about someone Down Under, or even in Africa commenting on an economic/corporate model? Just because you reside in Chicago, you're supposed to be someone totally cued in on Wal-Mart, eh? Wake up. Former Wal-Mart executives regularly consult for Australian supermarket giants.
5) When you force your competition to sell out, establishing a monopolistic reign on your sector, forcing vendors to supply to you at lower margins than ever, selling products for higher prices every year citing inflation as a driving factor even when your costs are continually dropping, you are indulging in anti-competitive practices. Of course, these customers could go to "other stores" - but the "other" stores are forced to shut shop.

I do not understand economics too well to understand the effect of walmart on Indian customer but I do have some questions for the critics.

1. How can an Indian talk about minimum wages? How much do you pay the "bais" that work at your place or how much does that kiranawala pay "chottu"?

2. Infact, I believe when there is consolidation (read superstores) in the industry thats when we will start hearing about "minimum wage" and "workplace safety", which by the way are very much in the laws but just cannot be imposed because there are millions of kiranawalas. Now that you have few targets (walmart, big bazzar etc) it would be much easier to upheld those laws.

3. Would the kiranawalas and vegetable vendors loose their daily bread? Apparently yes. Only time will tell how much they reskill themseleves. Everybody was complaining the same thing when mechanization was introduced in industries but they have been proved wrong.

There's more going on in my mind but for starters this should be enough....

To me, I felt the 'GM' was right!! Except when he called us stupid customers. There you succeeded in what you wanted cowtsetung.. I don't go behind American just because it's American... but nowadays I can't help it, because whatever they produce are of good quality which creates blind faith in customers. And what's wrong in that... because that trust is EARNED by the MNCs, it wasn't there since its birth. If you find something floating in your coke, you can complain. They will put their heads down and listen, or else the news spreads. Can you do all this with a kiranawala?

In response to cow tse tung
1) The lure of supposedly easy money makes kids pursue Wal-mart-like careers instead of educating themselves. "Oh, why do I need to go to uni when I could be a department manager in 2 years, making as much as a uni grad, driving a cool new car?"

-Maybe. But that is the decision of of kids and their parents to make ain't it? Wal-mart did not force them to come work for them and moreover there is an inherent contradiction in your argument. If Wal-mart is so labor unfriendly and has bad employee practices then why are all those kids lining up to work at Wal-mart? Or if the kids are lining up to get a job at Wal-mart to get good money instead of going to college then Wal-mart's labor practices are not so bad after all. So which one is it?

2) I've spoken of "efficiencies" and "cost-cutting" already, so you're merely agreeing with me. You'd do better to refute claims of labor malpractices.

-Wal-mart is a corporation and right now no corporation is perfect and cannot be. Heck even Google which claims to "Do no evil" agreed to China's ban on free speech. What you're gonna do? Stop using Google in protest? In fact, like some of the other people have pointed out entry of Wal-mart might actually improve labor standards because instead of people who run their businesses like personal fiefdoms we might have someone who is actually answerable to share holders and consumers. In a country where a holy man claiming to spread ancient knowledge can exploit workers at his factory paying 1200 Rs/month (Baba Ramdev) entry of an organized retailed like Wal-mart can only make conditions better.

3) If you shop around, you will find cheaper bargains than Wal-Mart and the like. I have yet to meet someone who believes a company like Wal-mart has your best interest in mind.

-I don't think Wal-mart exists to have your best interest in mind. It has a business philospohy (to sell everything at the lowest cost possible) and it follows that philosphy to the hilt and that's all it does. If their philosophy meets yours (buying stuff at the lowest price possible) then they have your best interest in mind. If you think that corporations exist to change the world then it does not.

4) What is so wrong about someone Down Under, or even in Africa commenting on an economic/corporate model? Just because you reside in Chicago, you're supposed to be someone totally cued in on Wal-Mart, eh? Wake up. Former Wal-Mart executives regularly consult for Australian supermarket giants.
5) When you force your competition to sell out, establishing a monopolistic reign on your sector, forcing vendors to supply to you at lower margins than ever, selling products for higher prices every year citing inflation as a driving factor even when your costs are continually dropping, you are indulging in anti-competitive practices. Of course, these customers could go to "other stores" - but the "other" stores are forced to shut shop.

-For #4 and #5. I've not seen Wal-mart raise their prices for most things. Even if they did due to inflation (which seems like a valid reason) they are still the cheapest. Wal-mart does not force anyone to sell out, they just out sell the competition. And if the competition is smart enough they will strike back. Target was getting beaten squarely by Wal-mart's prices so they changed their strategy and they are now a little bit more upscale and for people who don't mind paying a few extra dollars for the same stuff in exchange for more upscale shopping experience go to Target and Target is now doing well again. Wal-mart's membership shopping alternative, Sam's Club has been beaten fair and square by Costco.
So there is competition and there are areas in which Wal-mart has been beaten, which you were probably not aware of because of lack of proximity to the market.

Bottom line is that Indian retailing market has been taken for a grand ride until now by MNCs, local producers and retailers with huge markups and Wal-mart can only help increase the buying parity of Indian consumers.

3rd class work condition is better than no wor condition eh!

Vikas, that was a good, logical rebuttal for some of the mindless arguments that have been put forward. I spent three years in Minneapolis and have been in the retail sector (admittedly, the IT side of it) and I can vouch for the Target and Costco examples. Some of the issues that the anti-globalisation crusaders (make no mistake, that's what this is about) crib about are not really issues for India (at least now). As Tony said, "3rd class work condition is better than no work condition". I have news for you, cowtsetung - currently no one in our daily wage sector gets the 'offiical' minimum wage, which btw is way lower than what you're talking about.

One other question, cowtsetung. Would it be alright if our kirana stores lose out to our own retailing giants like Pantaloons or Westside or RPG? If you haven't been in touch with the Indian retailing scene, these companies are growing pretty well and are looking to scale up rapidly. Some of the noise in India has been created by these companies lobbying hard to keep Walmart out - which is how it is in business. It almost seems like you oppose Walmart because it is some sort of symbol to you, not because the economics don't make sense.

Another question, what are the chances that Walmart (or Pantaloons, for that matter) will move into the semi-urban and rural market? As far as I can see, that is still the heart of the market. The US smalltown example is NOT relevant for India. People in the rural areas won't (can't) drive 5-10 miles just so that they can buy cheap goods from Walmart (this is for those of you that think evil Walmart will destroy smalltown India!).

Lastly, it is YOU who's jumping on a bandwagon here. And you're overdoing it, if you can't see it.

Nihar, its not like Walmart will pioneer a labor revolution in India. They're anti-unionist, and efficiency-focused.

Vikass, please mate, give yourself a break. If Monopoly X has eliminated all its competition [by gunpoint or whatever, as you say], and you needed work, you would accept employment wherever it was [easily]available. Point is, its an easy place to get a job [labor turnover in the retail industry is quite high, besides there being ample oppurtinities thanks to the consumerist ideal], and kids get lazy. If Walmart's labor practices aren't so bad, maybe you should find a job there, eh?

Shareholders is one word, really. Also, as I said, its a company which doesn't allow unionism. As such, legislation is required prior to their entry in India, which ensures Indians aren't exploited (any further).

Don't know what you're on about. As I said, they don't offer the cheapest prices, and you agreed. How does that relate to organized retail? Point is, acts like MRTP and labour legislation need to be radically overhauled before we open up the retail sector in India. As for the Baba Ramdev example, cost-focused Walmart is not going to pay a worker Rs5000 if they can get away with paying them 1200 bucks. I don't need to explain the logic there - you seem to have ample understanding of it. Which is why I said, point out logical fallacies, and stop agreeing with me.

Walmart will improve the buying parity of Indian consumers? How?

Target, upscale? LMAO. I think I've had enough of armchair economists for a day.

Finally, nowhere do I claim to be an expert on Wal-Mart, whatever my qualifications or experience might be. Thanks for the kicks. I'm out of the discussion - feel free to beat the issue to death.

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Nanda, I see you troll around pretty often, but that's beyond the point - congrats on your back-office job in the retail sector. When you can spell, I can respect.

The economics make perfect sense, the ethics do not. Try and see beyond your obsession with establishing yourself as an expert on free markets. Sycophancy, my friend, won't help.

Cow - you might have tuned out but here's the last word on your reasoning. You might LMAO at Target being upscale, but you missed the point. Target is positioning itself upscale relative to Wal-mart. That is what happens when you don't experience the market for yourself.

As for Walmart improving the buying parity of consumers, numerous reports have cited that over the last decade, Wal-mart has been instrumental in keeping the prices down in the US helping consumers. In fact, only recently Economist opined that despite rapid economic growth in the US, the main reason why inflation has been down is because of the effects of globalization and Wal-mart lead the charge for that.

Not surprisingly, you choose not to answer any questions. Not everyone who doesn't agree with is 'trolling'. Keep ranting.

Gentlemen, let's keep to a healthy discussion - no personal attacks, attack the opinions, not the person.

IMHO, If I need to buy product X, I'd go for convenience and price - that's why I do most of my shopping at Amazon:) The Amazon Prime membership totally rocks - 2-day free shipping, etc.

We already have little clones of Wal-mart/Target in India - Shopperstop, Westend etc.

It will be quite interesting to see what would happen to these mini malls once the big Wal steps in.