Challiye aap maan to gaye. That itself is a great thing to have happened.
To continue, what I posted had very little to do with accounting. It had everything to do with the written word. More like law.
There are off course accounting aspect involved too, which reveals the path to handling such decision making points.
With your workings you wanted to show that 50 Billion USD worth of imports cannot be done by Walmart from China into India. This implies two further points of decision:
1) BW has to achieve 72 Billion USD as you said to which I agree in principle (see no problem with #30
) but I do doubt if a reasonable business structuring cannot be done to circumvent it; and2) Walmart has to decide between Imports and Domestic Purchases and decision has to come out in favour of Imports. This remains the only item for contest from Theo ji’s side and now mine.
Problem 1 (nothing to do with accounting) –
The market size considerations for India are different then for the rest of the Walmart markets. I would be surprised if they cannot capture 10% on their own steam. Agreed in a few years and not immediately but this can easily be before we are ready for it. Kindly observe the pace, depth of ingress and tick sizes being quoted for a 2 year period by BW CEO, attached below.
Problem 2 (Proper accounting problem) -
For such a decision you will have to focus on only the differential costs/savings. Considering all the items the way you are doing will put you into a new challenge that of reconciling the differentials (of which there will be several) with the wholes. Wholes like Grand Totals and reportable categories. I am absolutely certain I am incapable of doing that reconciliation on Walmart and I doubt if anybody else can either (I doubt if even the Walmart CFO has to capability to do that). Now I really honestly fail to understand which item of cost will be affected between the two of these alternatives in any substantial manner. I request other members to help if I am missing something. I would be grateful for the education. The only item I could see moving was the trucking chaap line items. Specifically between the Chinese factory and the nearest WB stocking point. Now since Bombay, Calcutta, Chennai have their own ports and Banglore, Hydrabad are not very far off from these ports I basically ignored the trucking costs. Only the trucking to NCR would be big. Plus off course the ocean transport. Which I, may be wrong but can be more than made up by the Exchange rate game the Chinese play. Thus we see why at present the landed costs of Chinese goods are actually lesser then those of Indian manufacturers.
All this is assuming and which I think is justifiable that an entirely new supply chain will be established now that BW and group will get into both Wholesale and Retail.
Please notice the opex has nothing to do with this approach. Hence even if Theo ji said – “We are not in the position to suffer another $50 Billion deficit to Panda” he was not really off by a very big margin in terms of analysis.
However there is one place you could have confronted Theo ji. When he said “It would mean an outflow of $500 Billion over the next 10 years”, he could have been challenged on the start date of this 10 year period. But I guess Theo ji was wise he tied up that duration with a few relative references by alluding to “drain our Forex reserves” and “our $500 Billion retail trade”. So he can say that this Ten year period starts say in 2015.
In an off case I do admit Bharti Walmart will not be able to do what I fear they can. But then my view is the reason will not be the incapability of BW. Here I am ready to doubt (but without depending on it) the capability of the Management.
Bharti Walmart Pvt Ltd, a joint venture between Bharti Enterprises and Walmart Stores Inc, today opened a wholesale cash-and-carry store at Raipur, in Chhattisgarh, taking the total number of outlets it operates in India to seven.
"We have invested $7 million in Chhattisgarh and created over 200 jobs, of which about 40 are from the tribal community... We have already received a very good response to this store with over 25,000 registered members," Bharti Walmart Managing Director and CEO Raj Jain said in a statement.
The new 'Best Price Modern Wholesale' in Raipur is spread over 53,000 square feet and stocks over 5,500 items, including foods, fruits and vegetables, groceries, personal and home care items, hotel and restaurant supplies, apparel and other general merchandise items.
"The JV is expected to open 12 new wholesale cash-and- carry facilities and employ approximately 4,000 people by December, 2011," the statement said.
The company launched its first store in Amritsar in May, 2009. The other stores are located in Zirakpur, Jalandhar, Kota, Bhopal and Ludhiana
Also amit ji, while you believe it is so, I am definitely not and I am rather sure neither is Theo ji fixated onto to Walmart. Walmart is only a murti as I explained earlier. An aide in meditation on the supreme god, in our case manifested in a ‘to do or not to do’ situation.
Aside –
Aditya_V ji, all the black economy and the white economy depends on the skill set of these three professions for showing and hiding things. Al Capone went down because of these guys.
In Hindi we have a saying ‘Dekhan mein chota lage ghav kare gambhir’.
Learnt that from an accountant during my days in hardcore accounting. Till these professions do not come into the fight to save the country from the loot-khasot everything remains only an opinion.
you can guess by who, and can see the methodology to get some idea)
