In countries like India, the presence of major players on the cash and carry circuit is evidenced by numerous large and established companies opening their doors. Even with existing players like Bharti Wal-Mart and Metro Cash & Carry already increasing the viability of their operations, other newer contenders such as Carrefour and Tesco are implementing their own plans for rollouts and store openings.
Over the next couple of years, the expansion of Wal-Mart, through Bharti Group, will take place, leading those in the wholesale and retail industries to ask where the direction takes them as these expansion projects are underway.
For those in the wholesale industry, cash and carry represents an entire type of operation within the vast wholesale sector. While the emphasis of traditional cash and carry is upon goods that are sold from a wholesale warehouse operated either on a self-service basis (or through a system of samples) some other indirect advantages, particularly on the international market, may be worth investigating.
With rapid urbanization and booming middle-class populations making their presence felt in countries like India and China, the opportunities are huge. This is especially true during a time when countries experiencing recessionary economies are looking to bolster profits in creative ways that also foster international relationships.
While these are attractive options for the cash and carry giants, it’s not pushing some to convert to retail outlets any time soon, though. Metro Cash & Carry has no intention to get into retail, and the company, which currently runs dozens of stores around the world, sees a tremendous opportunity in wholesale.
In some of the less developed countries, the supply chain, which is based upon local relationships with small to medium-sized businesses, makes the opportunities even more paramount.
Even focusing on regions only within India, these growth opportunities are evident to many experts. Wal-Mart’s largest and most prominent international rivals; French retailer Carrefour, and British firm Tesco, are also making moves to kick off their strategies in India.
Carrefour is reported to not only have locations determined, but has secured properties for cash-an-carry outlets in New Delhi, Bangalore, Chennai, Hyderabad and Mumbai as well. The company is expected to open its first store at Seelampur, New Delhi this month. Tesco, which has partnered with Tata Group’s retail firm Trent, plans to invest several millions in the country.
Although impressive and explosive growth of the market and enormous opportunities exist, these international retailers are kept aloft by governments in their respective countries reexamining the sometimes touchy debate on allowing foreign investment in multi-brand retailing. Some countries allow 100% foreign investment in wholesale and up to 51% in single-brand retailing, but few allow the same stakes in multi-brand retail.
At present, experts conclude that organized retail is only extracting a share of $25-billion market from the $450 billion Indian retail market alone. This leads most to believe that Wal-Mart, Metro, and other major industry players have only begun their projects.
