Wal-Mart makes its India entry
The world's largest corporation by revenue and America's biggest private employer has marched into India despite the general economic gloom, but without all the banners flying.
Wal-Mart opened its cash-and-carry joint venture with telecom giant Bharti Enterprises here today amid triumphal cries of 'Bharti-Wal-Mart is King'. But it is still a few steps away from rolling out its complete act — India does not allow foreign direct investment in retailing. But the high-pitched launch once again brought to the fore the demand for allowing FDI into retailing. Rajan Bharti Mittal, vice chairman and MD of Bharti Enterprises, said FDI in retailing must be allowed given the vast potential in the sector in India.
India allows FDI in cash-and-carry wholesale stores which cater to retail store owners, offices and institutions instead of retail customers.
The store — a giant, air-conditioned, swanky affair sprawling in 50,000 sq feet bang in the middle of newly harvested brown agriculture fields — is just a beginning. Fifteen more such merchandise stores in north India were in the pipeline for the next 2-3 years, said Raj Jain, MD and CEO of Bharti-Wal-Mart Private Limited. Called Best Price Modern Wholesale, the store would offer more than 6,000 items of grocery, food, vegetables, kitchenware, toiletries and garments at competitive wholesale prices. The target clients are general retailers, hotels, restaurants, institutions such as the army and, of course, small kirana stores.
The store sells everything from bed-sheets to ear buds. It has come up at an initial cost of $7 million (nearly Rs 350 crore) and provides 500 direct jobs. It has tie-ups with 30,000 retailers and 8,000 suppliers across the country.
"The focus is on the quality and brand. We are looking ahead at helping the local retailers to increase their volume of trade by focusing on timely supply and quality maintenance," said Jain. He said their next such stores would come up in other cities of Punjab, Haryana, UP, MP and the National Capital Region. "About 80 per cent of our suppliers are from Punjab, so we will set up our second store also in Punjab,'' said Mittal, adding that Amritsar was chosen due to its strategic location. "Amritsar has dozens of small towns and villages dotting its vicinity, providing us ample retailers as prospective buyers of our goods,'' he said. Mittal also said they were expecting competition as other such stores were also coming up at Kolkata and Bangalore. When asked about some Wal-Mart stores closing down in Germany and other European countries because of losses, Jain said, "Do not compare India with Germany. India is a much bigger market."