Sunday, February 25, 2007

Cash and carry

I heard this term almost an year back for the first time when Walmart declared its motives to break into Indian retail market.(Please don't scoff at my ignorance.I opened my eyes into business news only now). I did some homework to understand what it actually meant.
Cash and carry represents a wholesale selling model where the customers (retailers, professional users, caterers, institutional buyers, etc) settle the invoice on the spot and carry the goods away themselves. The difference between the classical wholesale concept and cash and carry is, that in the latter, the customer himself has to arrange the transport of the goods themselves and pay the goods in cash and not on credit.
On my third day in Bangalore, while i was whiling away at MG Road, my eyes caught a nondescript signboard displaying "METRO AG" with an arrow showing the at intended direction. The reason it caught my attention was the familiarity of the name METRO AG. It didn't take me long to recollect that METRO AG was the German based cash and carry operator that is next in size only to Carrefour in Europe. It was in my mind for sometime to visit the place to get a first hand feel of how such a thing operates. And now that I bumped into it, I instinctively followed the shown direction and kept going. Almost everyone whom I asked about Metro on the way knew it, which made me realise that they had their brand built successfully here. But the leading road was unending. Finally having ridden around 20 kms, was I greeted to huge neon lights displaying "METRO". A little further and I was exposed to a huge expanse of open space with hundreds of cars jostling for space in the huge parking arena. I parked my bike and headed to the building. But i wasn't granted permission because I did not carry the necessary cards that you need to procure to buy goods here. My request to get into the vicinity turned futile, when the executive at the gate explained that they entertain only B2B ventures. Well I having a remote chance of ever getting into a retail initiative in near by future, would have to look for other ways to get into their store. So, I need to come prepared next time with a plan and yes, at a decent hour. It was already 9:30 pm and I felt it wise to leave.
Walmart's foray into the Indian market with Bharati is going to be majorly into the cash and carry format. Bharati has stressed onto the fact that Walmart would only be involved in the back office operations looking after the supply chain etc.


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