Wal-Mart to open Indian arm

29 May 2009

AMRITSAR: Wal-Mart, the US retail giant, is set to launch its first outlets in India, operating in partnership with Bharti Enterprises to open a cash-and-carry chain, Best Price Modern Wholesale, which is targeted at the $350 billion (€252bn; £220bn) small retail sector in the country.

The Indian retail market is comprised of a mixture of "traditional" outlets, and a growing number of "organised" chains, and also houses a diverse range of national and regional brands.

Wal-Mart first announced the venture with Bharti in 2006, but under the regulations relating to foreign investment in the country, it is not permitted to sell directly to consumers, and must operate alongside a domestic partner organisation.

As such, its new cash-and-carry stores, which will carry around 10,000 products, will target small retailers, hotels and public sector organisations, as well as supplying the 25 Easy Day outlets Bharti Enterprises opened last year.

Raj Jain, president of Wal-Mart India, predicts it will open between ten and 15 stores nationwide over the next three years.

He also argued that the company will adapt its strategy to fit in with the unique demands of the country, as "India is not a homogenous market, so ours is not a cookie-cutter approach from the US.”

Rather, Wal-Mart is seeking to build on the fact that “people are beginning to understand that there is a place for modern retailing and a place for traditional stores.”

Tesco, the UK-based retail giant, has also joined forces with the Tata Corporation to open a range of retail stores in India, while Carrefour is said to be in negotiations with Reliance over a similar deal.

However, according to Jain, such a strategy is not without risks, as "the easiest thing is to roll out stores, but the most difficult is to sustain and feed them."

Data sourced from Wall Street Journal/Time; additional content by WARC staff