So in operations class we came across the word that gives all of us shivers down our spine. A company that has not just become an institution but a cult and a religion in so many markets down the line.
WAL-MART!
For starters, Discount Retailing and Hypermarkets are two concepts that have originated in two different countries. Hypermarket is a European concept and refers to chains where price matters, and brand displays work. The other end of the spectrum is the Save Money Live Better Religion that Wal-Mart follows. I never thought that I could buy clothes from Wal-Mart and wear them as they sounded tacky and rather pretty discount retail'ish'. However I was pleasantly surprised by the SAVE MONEY LIVE BETTER tag line of Wal-Mart as it did make sense to spend 10USD for a jeans and live a recession-proof life . The jeans are not bad and the clothes hold a life-long appeal.
Wal-Mart's Discount Retailing began in the US and spread like a disease across cities and chains. A lot of private label stores today sell goods at a discount and give a person the reason to use a private un-branded label. So in case you need a hair care product, you don't need to buy Lux, or Pantene, as the local discount retailers really help in generating the business for a local company in Minnesota that can give the ''haircare effect of Pantene'' at half the price. The business model of Wal-Mart has worked so well that if we look at Wal-Mart's income statement and balance sheet, every 5 years, Wal-Mart has not only clocked high revenue, but positive net income despite of high long-term debt.
Some unbelievable Stats to prove the discount retailing craze that can be followed in other markets as well: Sam Walton managed Wal-mart by walking around and flying around. His trust in people helped create the success story that few discount retailers could imitate.
1. In 1994 Walmart's NEt Revenue was 67,977 $ millions ; Net Income was 2,333$ millions and Dividend Payments were 299$ million. Their Long Term Debt was 6156 million $.
2. In 2003 Walmart's Net Revenue is 246,525 $ million and net income has grown 4 times.
Moral of the story- Success leaves a sweet taste behind. Today Unilever, and P&G has created such a firm dominance in the personal care market that many organic skincare and haircare products never get to any market thanks to our love for names that keeps us chained to the well-known brands.
In the Chinese Year of OX, my rabbit says that:
For every branded hypermarket that Melbourne, Mumbai, Delhi, Hong Kong, London have, it would be great to have a discount retailing store that can sell private labels that our grandmother created off-lab and off-research. The neem shikakai for coloring hair is so much better than the L'Oreal Hair Color at $$$$ price. It would be about time to make way for Wal-Marts Knock-offs to enable 'Save Money and Live Better' religion to spread in countries that are stuck in deep recession.
Infuse Discount Retailing for Recessionary Times. We don't need no education...and hypermarkets of course!.
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