Cash and Carry - Wholesaling in India

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“THE RISE OF “CASH AND CARRY” WHOLESALING IN INDIA Sameer Mathur, Ph.D. & CASH CARRY

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Sameer Mathur smathur.com Asst. Professor (Marketing) 2009 – 2013 Ph.D. and M.S. (Marketing) 2003 – 2009

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Agenda

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… a wholesale format aimed specifically at trade customers, generally large-scale big-box stores providing a wide range of goods. Goods are paid for immediately and taken away by the customer… “ ” Source: Euromonitor International What is Cash and Carry Wholesaling?

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It involves paying at the time of the transaction. It does not involve delivery. CASH & CARRY “Cash and Carry” vs. Conventional Wholesaling?

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Global retail giants like Wal-Mart are unable to enter the Indian market by conventional means because the Indian government restricts Foreign Direct Investments (FDI) in single-brand retail to a maximum of 51%. However, these crippling FDI restrictions do not apply to wholesalers. Global retailers are therefore using “Cash and Carry” wholesaling as an indirect way of entering this vast, high-growth market. Global Retail and Cash & Carry

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The Indian government has strict legislations that limit the amount of foreign direct investments, putting a 51% cap on the amount of foreign single brand retail G lobal r etailers are indirectly entering the market by opening Cash & Carry stores Cash & Carry is a way for Global Retailers to Enter India

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Metro Wal-Mart / Bharti Was first to enter the market, now has 6 stores. Best Price Modern Wholesale (joint venture between Wal-Mart and India’s Bharti Enterprises) . Entered without a joint venture, but plans to expand by franchising. Booker Group Current State of Cash and Carry in India

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India is a growing economy , GDP is rising Population 1,155,347,678 (Source: www.google.com/publicdata ) The 2006 Global Retail Development Index named India as the most appealing country worldwide for companies who wish to enter the trade and retail market. Source: http://www.marketresearchanalyst.com/wp-content/uploads/2008/01/india_gdp.jpg Why India?

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Cash and Carry could… Help kiranas lower their wholesale prices Give them economies of scale KIRANAS – “mom and pop” type stores which occupy close to 98% of the Indian retail industry . What is the Retail Market like Now?

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Hotels, Restaurants, Caterers Small trade consumers Services, Companies, Offices Mostly small “Mom & Pop” shops, NOT end consumers Who do Cash & Carry Stores Sell to?

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Benefits of Cash and Carry?

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The influx of Cash and Carry operations has minimized the middlemen in the supply chain, reducing wholesale prices for Mom & Pop kirana retailers. In Summary…

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Summary

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Recommended Reading

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Over 500,000 views from more than 95 countries http://www.slideshare.net/ProfessorMathur/ Sameer Mathur smathur.com http://www.facebook.com/ProfessorSameerMathur/

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