| Govt of India has decided to allow 51 percent FDI in | | | | Large scale introduction of Cash-and-Carry outlets will |
| retail chains. This will certainly make the sector more | | | | definitely affect and influence various players in Indian |
| attractive to foreign retailers who want a controlling | | | | b2b supply chain. While it may prove to be a boon |
| stake in their Indian ventures. Retailers who are | | | | for business buyers, manufacturers and producers |
| comfortable with ownership rather than franchises | | | | such as small-scale units and agricultural producers' |
| may look at the Indian market with greater interest. | | | | cooperatives which are not big or savvy enough to |
| Entry of large foreign retail chains like Wal-Mart will | | | | be able to dictate terms to established supply chains |
| have profound effect not just on small retailers and | | | | - it may adversely affect wholesalers and other |
| Indian retail chains but also on business to business | | | | middlemen. |
| (b2b) trade. Introduction of b2b cash-and-carry | | | | De-layering of Indian distribution system may pose |
| outlets by Wal-Mart, Metro and possibly other | | | | threat to middlemen, many of whom may be |
| retailers will bring significant changes in large and | | | | rendered redundant in the supply chain. Increase in |
| fragmented Indian supply chain. Middlemen like | | | | competition and cost cutting will bring more efficiency |
| wholesalers and stockiest will increasingly be under | | | | in the market place - benefiting businesses. |
| pressure. Where does small and medium | | | | Where does Small Scale Manufacturers and Exporters |
| manufacturers/exporters stand in this changing | | | | Stand ? |
| scenario ? | | | | Though its too early to predict possible changes - |
| What is Cash-and-Carry Scheme ? | | | | large retail chains may bring new opportunities for |
| Targeted at and open only to business customers - | | | | Indian manufacturers and exporters. While small scale |
| cash and carry scheme focuses on small-wholesale | | | | manufacturers may enter into collaboration with |
| customers who buy in bulk and pay in cash. Unlike | | | | retails chains - allowing them the chance to join a |
| hypermarkets where any consumer can walk-in and | | | | modern procurement chain that thrives on efficient |
| buy goods, cash-and-carry outlets allow only | | | | suppliers, it may have interesting influence on Indian |
| authenticated bulk buyers to transact business. | | | | exporters. |
| Medium-sized businesses such as retail stores, hotels, | | | | Fragmented and largely un-organized sourcing |
| restaurants, caterers, exporters etc can buy from | | | | channels pose a formidable challenge to small and |
| cash-and-carry outlets at prices much cheaper than | | | | medium exporters in Indian sub continent. Some of |
| market rate. | | | | the major hurdles in any export transaction are - lack |
| In its original form, owners of cash and carry outlets | | | | of assured and uniform quality standard, uncertainty |
| (i.e. large retail chains) buy from producers directly at | | | | about round the year availability and wide fluctuation |
| very high volume, dispensing with middlemen like | | | | in market price. Exporters lose lucrative overseas |
| wholesalers and stockiest. They also establish their | | | | orders because of deficiency in supply chains - |
| own brands - asking producers to manufacture as | | | | factors completely out of their control. Organized |
| per their product and packaging specifications. | | | | supply chains such as Cash-and-Carry outlets may |
| Volume purchase and removal of middlemen result in | | | | bring new opportunities for small business owners. |
| substantial cost reduction - a part of which is passed | | | | Conclusion |
| on to b2b customers. So, b2b customers get | | | | Exporters sourcing from organized channels such as |
| products of assured quality throughout the year at | | | | Cash-and-Carry outlets will benefit from more |
| less than market price. | | | | predictability in business, reducing inventory levels and |
| How Does Cash-and-Carry Outlets Affect your | | | | competitive price. |
| Business ? | | | | |