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Wal-Mart, like being owner for 'cash and carry operation' in the JV with Bharti, can also have strategic alliances with the kiranas, given Wal-Mart's ability to source a variety of products from across the globe at extremely competitive prices. Wal-Mart's volume play has been its strength in pricing for non-food categories. Others, like Germany's Metro and South America's Shoprite are already in India with a cash-and-carry business that supplies to retailers, restaurants and business houses, where FDI is already permitted.

Addressing the bottom of pyramid - half of 1.2 million Indian population - where lies the maximum action, as per C. K. Prahalad, the Management Guru, calls for re-packaging products to suit the pockets of Indian masses - or micro-selling in mega economy. Sachet may be done away with, in organsied retails, particularly in urban pockets. This may be largely to avoid pilferage and inconvenience in ‘display & billing’. But it provides immense value for the bottom of pyramid market. With the sachet or low unit price format, price point marketing touched a variety of categories like shampoo, biscuits, chips, oils, toothpastes, creams, pickles, and even liquor. Sachet sales in the shampoo category accounts to 70% of the revenue. It also provides value for the middle class in terms of convenience and product trial options.

As regards to food categories, it is reported that about 35% of the produce are getting perished in the absence of cold-storages and other infrastructures. Wal-Mart can help the farmers with their know-how to salvage the situation to great extent. Multiple layers of intermediaries eating away the large portion of the profit will certainly be at loss, good for the Indian farmers, who have been made to suffer through ages. The larger players can develop infrastructure in Tier II cities and smaller towns with active collaboration with kiranas opening value retail.

Sustainable business model for the organized players must include collaboration instead of competition with these kiranas, as they are the last mile store connection with the consuming class. Age-old strategy of the kiranas for short-term credits is well-received by the large chunk of buyers, in the value retail segment. A blended model is all set to emerge in the fast-changing business environment.

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* Contributed by: -
Rakesh R. Panday, is an independent Brand Consultant at Jamshedpur and also enrolled in Ph.D. Programme at www.bitmesra.ac.in with subject, "Managing Brand in Retail - Study of Major Initiatives in India".