I vowed to steer away from controversy this week – the plan was to write about puppies and kittens, rainbows or something like that. Then I found myself casually perusing LinkedIn on Wednesday afternoon and came across a post from a small Indian toy manufacturer, who was complaining about ace turtle – one of the joint venture partners that license the Toys R Us brand from WHP Global for the Indian market – not paying their bills.
The next thing I knew, numerous other Indian companies were posting similar tales of woe about ace turtle not settling its debts, and as the story escalated, the worse it felt. For anyone who didn’t read the posts, this wasn’t a retailer extending payment terms to from 90 days to 120 days end of month from invoice or anything so mundane. The retailer has been accused of not paying its bills for over a year in some cases.
It is appalling for local vendors to have to wait that long to be paid, especially as many of them are small companies whose cashflow would be massively affected by such behaviour. The stench of economic bullying hangs in the air. In addition, I am sure this will deter some international companies from expanding in the Indian market. We have had some payment challenges ourselves in the past, but nothing as dramatic as this. If the Indian market wants to be taken seriously as a potential alternative to China – both from a manufacturing perspective and as a potential retail sales opportunity – it really does need to address this payment situation. It can’t allow one retailer to tarnish the reputation of an entire continent. For all of the political challenges and potential tariff issues, China doesn’t seem to have these payment issues.
And of course, all of this really isn’t doing the Toys R Us brand and its owner WHP Global any favours.
Read the rest here.
