If you talk about retail in India these days, those people too who don’t know ABC of retail can claim its booming. You can’t find all colorful news papers with ads of big retail chains. Entering of Walmart and Reliance into Indian Retail definately makes big news story.

We all know by now, about the Walmart-Bharti tie up. Mr. Sunil Mittal will own the company running the front-end retail operations, while both Bharti and Walmart will invest jointly in another company, which will engage in ‘cash-n-carry’, logistics, supply chain and sourcing.

We all understand about front-end retail. It is a shop from where the end consumer can shop around, buy goods and services and pay for them then and there either in cash or through his credit card.

But what is ‘cash-n-carry’?

“Cash and carry” is a form of trade in which goods are sold from a wholesale warehouse operated either on a self-service basis, or on the basis of samples or a combination of the two. Customers (retailers, professional users, caterers, institutional buyers, etc.) settle the invoice on the spot and in cash, and carry the goods away themselves.

There are significant differences between “classical” sales at the wholesale stage and the cash and carry wholesaler: These differences are based in particular on the fact that customers of the cash and carry wholesaler arrange the transport of the goods themselves and pay the goods in cash and not on credit.

The most important fact in it is - 100% FDI in retail is allowed only in cash and carry segment.

At present there are two foreign players in the cash and carry segment operating in India. They are: Metro and Shoprite.

Now the anti-retail forces have targeted them. Their argument is that by definition, a wholesaler should sell in bulk to a retailer, who can then sell to consumers. But these cash and carry giants are selling to B2B customers like hotels, restaurants and canteens, who are end consumers. They should not be allowed to sell to such customers.

[Source: Indian Current Affiars ]