Essay on Why Walmart May Fail in India?

1106 Words Oct 16th, 2012 5 Pages
Why Walmart may fail in India?
Harshika Soni
University of Redlands INTB 694W
Individual Article Analysis

Wal-Mart coming to India is been a big issue lately. For several years, the Government of India did not allow international retailing giants to make foreign direct investment (FDI) in its retailing industry-for the fear that they would hurt small Indian retailers and cause unemployment and displacement of millions of people and their families. The large percent of Indian population depends upon small businesses for their livelihood. Indian government is facing the protest from Indian public for permitting foreign supermarkets to open in India for the first time for e.g.
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The owner of the Kirana store generally knows every customer and goes a step ahead to please the customer. Though Wal-Mart has its own way of customer service, it cannot beat the personal touch of the Indian small shop owners. Not only is that but the biggest advantage of the Kirana Store that they provide home delivery of all the goods that you had ordered a day before. Moreover you generally enjoy a good credit period with the Kirana store with out interest; sometimes the period is 3-4 months. On the other hand in bigger stores you have to pay up front or via credit card where interest rates can be as high as 3% per month. Which not every Indian can afford or would like to pay. Even though India’s economy is growing stronger day by day, majority of the population still pay by cash and do not have credit cards specially the middle class or lower level than that.

The whole idea behind Wal-Mart business model in India is to buy the goods which you may require over a period of month from the wholesale, without needing to go to Kirana stores every third day. Americans and westerners use lot of canned food hence they buy vegetable or even meat, store it for a period of time whereas Indians mostly avoid eating canned food and believe in making fresh food with fresh vegetables and groceries. India has different class levels depending on their income and spending power.

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