Cash and Carry Wholesaling in India

CASH
&
CARRY
THE RISE OF “CASH AND CARRY”
W H O L E S A L I N G I N I N D I A
Sameer Mathur+ Cara Martow

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Outline
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

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

What is Cash and Carry Wholesaling?
“
… 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

Cash & Carry is a way for global retailers to enter India.
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
Global retailers are indirectlyentering the market by opening Cash & Carry stores

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

Why India?
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

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

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

Benefits of Cash and Carry?

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

FREE TEACHING
RESOURCES
ON MARKETING
MANAGEMENTATWWW.SMATHUR.COM
OVER 130,000 VIEWS
FROM 96DIFFERENT COUNTRIES
These presentations are part of Sameer Mathur's teaching portfolio.
They are free to view or download for non-profit, academic use.
Disclaimer: These teaching materials have been compiled from multiple, non-creditedsources for non-profit, academic use. Copyright is retained by the original content creators.
SameerMathur, Ph.D.
Facebook:Click Here

READ THE
COMPLETE
ARTICLE AT:WWW.BUDDINGMARKETS.COM
SameerMathur, Ph.D.
Facebook:Click Here

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Cash and Carry Wholesaling in India

by Sameer Mathur on May 26, 2011

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