Friday, June 27, 2008

It’s gonna be cash-and-carry for Wal-Mart in India

In one of the most eagerly awaited announcements in the industry circuit, Wal-Mart Stores Inc. & India’s Bharti Enterprises said, that the duo had signed on the dotted line for a 50:50 joint venture for cash-andcarry – or wholesale – operations, to be called Bharti Wal-Mart Pvt. Ltd.. Over the next seven years (it is being estimated that the venture will employ about 5,000 persons in these seven years), the JV will open anything between 10 to 15 cashand- carry outlets that will sell vegetables, groceries, fruits, staples, footwear, stationery, clothing, consumer durables etc. These will be spread over an area of 50,000- 100,000 square feet. The first of the cash-and-carry facilities is going to be opened by the end of 2008. India’s retail industry is valued at around $350 billion; according to experts, this figure is all set to almost double by 2015; significantly, organised retail accounts for only 3% of the sector, but come 2010, it will grabbed at least 10% of the retail pie. Wal-Mart Country President (India) Raj Jain, said, “If retailing (in multi-brands by foreign companies) is ever permitted in India (by the government), we would like to come to the front-end.” What he meant was that if ever the sector were to be opened up, Wal-Mart will obviously consider entering the front-end retailing segment in India. Currently, foreign multiple brand retailers are limited to cash-andcarry and franchise or licence operations. Wal-Mart has a cash-and -carry business in Brazil as well; India is the second country where the world’s biggest retailer will be following the model.

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Source :
IIPM Editorial, 2008

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