Punjab – The Final Testing Ground

SINGH IS KING

Cash and Carry retail outfits have chosen Punjab as their final testing ground.

The largest cash and carry experiment in India will take place over the next 5 years in a state that offers no concessions in the form of land and electricity.

For cash-&-carry firms, Punjab offers a stable political climate, good infrastructure and a huge NRI driven consumer base.

The Punjab government wants to create a level playing field in the business of agri-sourcing by amending the APMC act (Agricultural Produce Marketing Committee); which will allow private companies to work directly with farmers for 10 years instead of present 30 months.

Punjab’s fecundity makes available high quality produce at local wholesale prices. Thus the produce could be sold abroad by the retail companies under their private label, which might be traded at higher marks-ups.

Punjab is a market ready for malls. Except few small malls in Ludhiana & Jalandhar, there are no large malls in the state. The state has a large population, including a huge number of non-resident returnees with the exposure to retailing in western countries which understands the dynamics of large malls & offers a receptive clientele.

Punjab has 6 Metros & 6 Walmart stores in the next 5 years. Both companies say that, if their operations fail in Punjab, they will not build business in India. It seems the survival of the cash and carry put to a test. Will this model crash or carry..??