"About 35-40 percent of fruits and vegetables rot in transit in India
due to transport delays and inadequate cold storage. That also means
lost money for farmers," said Harsh Bahadur, CEO of Metro India.
Reading this article on the troubles and travails that German retailer Metro is facing in Bangalore very naturally made me think about Wal-Mart, that bane of Indian retail. So, remembering my visit to Sawai Madhopur, in the northern Indian state of Rajasthan, I thought to throw out an idea that just might possibly work and conceivably create a win win solution to the retailer’s dilemma.
Listen up, Wal-Mart: Go back to where you came from – not in terms of leaving India, but in terms of your company’s heritage and roots. Look to your history and your biggest successes in the United States, your home market for your cues for a strategy to enter the Indian market.
What made you strong? Offering everyday low prices on everything under the sun under vast roofs in remote towns like Clearfield, PA or Boondocks, NA.
Where did you go wrong? Look to other’s failures and troubles in India for your clues. The cities are overcrowded, mish mash of over population, pollution, politicking, publicity and clogged roads. Why fight for a piece of a rapidly shrinking pie with Metro and Tesco and whoever it is? Bake your own pie. Own it all. There is no organized retail in 97% of India’s bazaars. And everyone wants a share of 3%?
Go to the hinterlands where they really need you. With your vast wealth, your technological expertise, your HBR case studied supply chain innovations and change the landscape of my country’s most backwards districts. People will come from miles to buy what you have to offer them – everyday low prices, no cheating, no scam, no adulterated milk or kerosene. Just like you do for farmers back home in Nebraska or Arkansas.
Go to district Sawai Madhopur for your prototype store. Hire the menfolk displaced from their traditional farm lands by the tiger reserve. Teach the local small farmers how to grow fine herbs, broccoli and high margin items – organic, just the way we like them in the United States. We’re willing to pay a 20% premium for a sustainable business model that creates value and generates wealth throughout the supply chain.
In return, open a huge warehouse – stock it what you’re good at sourcing – kerosene lamps, barbed wire fencing, mini lawnmowers replaced by small tractors, bicycles and umbrellas, soap and cooking oil. At a fair price for a reliable product of consistent quality.
Then they will come. The hungry ones, who see all that can be seen on their flickering television sets, in their little pukka homes in villages like Kilchipur and dream dreams of the wealth that is offered for sale in the big cities. They don’t want to leave and move to a big city. But they know what is available to them in their local shanty stores and they know the advertisements they see for the latest Nokia smartphone or for Levi’s iPod jeans.
Build the entire infrastructure – you planned to anyway – and you can inject life back into those parts of India where it is truly needed. If your prototype works, it will not only be easy to replicate across the nation, in key rural areas where employers such as you are needed, but you’ll be welcomed with open arms.
Is there a billion dollar market out there? Yes. Go on, turn your expected business model on its head and truly invest those millions where it will make a discernable difference in 5 years if not less. It will take some time to build and shape and create and put into place. No quick quarterly figures in India. Now there’s a brand building exercise for you, and you know you need it badly right now. A genuine corporate strategic opportunity. Make it so.