Costly to miss the ‘tech’ business in organised retail – The Editor

Deep slumber will kill anybody in times of competition. Indian retailers and technology companies better wake up soon because I observe that Wal-Mart, in India, is picking up the pace in netting all their potential Small and Medium businesses or ‘suppliers’- as we call them in retail parlance- in to adapting their retail supply chain technology called ‘Retail Link’.

This not only builds Wal-Mart’s supply chain, but Indian SMEs get a foothold in to becoming global suppliers to the largest retailer in the world.

Wake up Indian retailers

Personally, I feel this was the way to build any retail business, which our home grown retailers ignored. There was too much money spent in building the front end brand, without really offering quality to customers. What consumers got was the experience of modern retail discounting, but they were denied of the experience of low price plus quality.

So the argument about middleman being the scourge of organised retail- often cited by big Indian retailers- is doused by Wal-Mart, which is creating a silent revolution among its Indian suppliers. It is the technology stupid! Nobody wants to miss out on the organised retail business which is going to be at least $ 60 billion by 2015 and the total retail market’s size is estimated to be $ 600 billion in the same period.

Believe in sharing

We at Viedea know of several technology companies, even with their small size, who understand that the retail business is of technology integration which facilitates the ability of the warehouse and the supplier to deliver in to the store on time.

It is time that Indian retailers worked with retail technology providers constructively, may be even forge a partnership or engage them to build proprietary software that can be integrated with vendors for best practices.

What is unfathomable in my mind is the pace at which Wal-Mart is building the supplier base; it will certainly gobble Indian retailers if FDI opens up in this country in organised retail. This is impressive on Wal-Mart’s part because it realises that if India needs to be big on the balance sheet at Bentonville- USA then Indian suppliers have to comply with their processes completely or be dumped.

They are eager to teach some other aspiring Indian about compliance issues. Indian SMEs are averse to change, but when forced upon- they will innovate. By following such action Wal-Mart has been able to maintain strict control over purchase orders, inventory keeping and logistics management.

They have passed this value to consumers. These processes flow like a river between the suppliers, warehouses and the cash and carries – all thanks to technology.

Taking the fight to Wal-Mart

TCS, Oracle and SAP have been coaxing Indian retailers to implement their software or partner with them, but Indian retailers do not want to let data flow through such technology because it allows an insight in to cash management, which is a dark secret that is only in the diaries of promoters.

Now you do not want vendors to create a furore for untimely payment if everything is on record, do you? This is where Wal-Mart wins, while the others loose. Will Indian retailers wake up to the need of technology integration? Do call us if you want to be awakened.

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About Deepak
Venture Capital and M&A advisor, Entrepreneur, Startup enthusiast..

2 Responses to Costly to miss the ‘tech’ business in organised retail – The Editor

  1. Ravi says:

    Thanks for exposing the ‘Mall’ practices. Sounds like Mandi 2.0

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