Wednesday, December 13, 2006

Wal-Mart’s Indianization

The Economic Times reports that even though it is the world’s largest retailer, it is not infallible and has had to withdraw from Germany and South Korea this year itself. For India, the company has to keep its Indian consumers firmly in mind when deciding everything from location, to pricing, to packaging and package size. According to Nirmalya Kumar, professor of marketing at London Business School, “Wal-Mart’s challenge in India will be to customise products and formats for local customers and to work around the infrastructure clearly not equipped to handle a world-class supply chain”.

Another key issue will be to understand the country’s tax system and its variations according to state. According to Andrew Levermore, CEO of Hypercity, “One of the biggest challenges for Wal-Mart in India would be the lack of sophisticated infrastructure that it has not dealt with in other countries yet. The Indian market is extremely diverse and distribution system highly complex. Wal-Mart will clearly have to tweak a whole lot of their processes to ‘Indianise’ systems and work around the country’s peculiarities.”

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