Friday, March 25, 2011

Bhat Bhateni and Big Mart helping or hurting Nepali Janta ????


Organized retail stores like ( Bhat Bhateni,Big mart) are sprouting all over the big cities of the country ............ the key drivers being changing consumer profile and demographics, increase in the number of international brands available in the Nepali market, economic implications of urbanization, credit availability, improvement in the infrastructure, increasing investments in technology and real estate building a world class shopping environment for the consumers.

I recently read about Big Mart opening a new store in Kathmandu ...here is the synopsis of the article

  • Big Mart will contain 11,000 sq ft on three floors and expects to provide employment to 70 to 80 people. According to Prince Khetan, managing director of Mega Mart, the company is investing around Rs 50 million in the project.
  • Inventory consists of 34,000 kinds of products and counting.
  • Mega Mart is also planning to open two new outlets at Jawalakhel, Lalitpur and Battisputali, Kathmandu within this year.

After reading this article few questions crossed my mind.....................

1) Out of 34,000 kinds of product in the inventory, how many are domestically produced ? .... So is the raise of organized retail stores helping or hurting Nepal’s current account balance? (Last time before leaving Nepal,I did my thithaura,aachar,bhujiya,chau chau shopping in one of these store....... saw lots of Indians & Expats shopping around..considered export ?)

2) Are these stores supporting local manufactures and farmers by procuring more goods from them??.......

3) Critics of western style "one stop shop " experience claim that its kills local kirana shops .......So are these "hyper shops" destroying existing "Daal Bhaat" winning sources or creating new jobs ?

4) President of The World Bank said in a recent interview "over time, what many economies have found, not only developed economies like the United States, but I have seen this in Mexico, Brazil and China, that some of those large distributors can capture the benefits of their supply chains with better, effective logistics. So I think that would obviously create additional opportunities to benefit the consumer"

5) WalMart ( daddy of all retail chains ) claims "Encouraging modern retail helps arresting the current inflationary trend, directly impacting the consumers at large.".................. Basically,Wal Mart is saying big retail store ( Bhat Bhateni ,big mart types) can achieve economies of scale,dent supply side bottle necks, increase margin of the kisans by weaning off middle men, engaging in both up stream and down stream supply chain.......fancy consultant calls it a " Farm to Fork model".........................................

Are these organized retail store chains in Nepal directly "for real " engaging with local manufactures and farm cooperatives or taking the "wholesale" route ???......Are they even selling fruits, veggies,dairy products , chau chau ( Nepali items) at discount price compare to kirana pasal or "aallu gobi bhantaa" street/cycle vendors ??


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