Sunday, May 31, 2009

Walmart opens its first store in India

Walmart | Wal-Mart | Bharti Wal-Mart | Walmart opens first store in India

Bharti Wal-Mart, the joint venture between Bharti Enterprises and US-based Wal-Mart Stores Inc, is likely to invest about 100 million dollars in the next 3-4 years to open 15 cash-and-carry stores in India.

During September 2008: Wal-Mart Store Inc was set to open its first cash-and-carry centre in India in 2009, the head of its India operations said on Wednesday.

Wal-Mart, which has a venture with India's Bharti Enterprises for cash-and-carry wholesale operations, had earlier said it aimed to open the first of its centres by year-end and open 10-15 centres over seven years.

"Certainly that was the initial plan," Raj Jain said at the sidelines of a business conference.

"We still stick with that. It could be faster, it could be slower." The first centre will be in northern India, he said.

“We have several facilities coming up in Punjab, Haryana, Delhi, Madhya Pradesh and Uttar Pradesh,” Bharti Enterprises Vice-Chairman and MD Rajan Mittal told reporters.

Bharti Wal-Mart opened its first store here today and would invest about 6-7 million dollars in opening of each store. The next store is likely by the end of this year.

“…Investment in each store will be about 6-7 million dollars without land and building…I am only talking about the insight of the store,” Mittal said.

He said that each store would come up on about 50,000-1 lakh square feet and would provide employment to about 5,000.

The joint venture between Bharti Enterprises and Wal-Mart Stores Inc was inked in 2007.

The company had last year announced that its cash-and-carry stores would be opened under the brand name of ‘BestPrice Modern Wholesale’.



The world's number one retailer Wal-Mart opened its first sales venture in India on Saturday as part of an ambitious plan to establish a foothold in the country's vast consumer market.

The US discount chain has teamed up with Bharti Enterprises, parent of India's biggest mobile firm Bharti Airtel, in a wholesale joint venture to be called Best Price Modern Wholesale.

"We have put in a lot of planning and preparation over the past 12 months and are delighted all the hard work will now bear fruit as we open the doors of our first cash-and-carry store in India," said Wal-Mart India head Raj Jain.

The opening of Wal-Mart's first "big box" outlet in Amritsar city in the wheat-bowl northern state of Punjab, is a high-stakes one for the US retailer, which has been expanding internationally to grow its revenues.

"India is first of all a country with close to 1.2 billion people and a strongly growing economy which is driven by personal consumption," said Jain.

"There's a need to start out on a learning curve with the Indian consumer and this is the first significant step in that direction," he said.

The Best Price Modern Wholesale will offer 6,000 food and non-food items at "competitive wholesale prices," a Wal-Mart statement said.

Best Price will not be open to retail shoppers but will serve small stores, fruit and vegetable sellers, restaurants, hotels and other business outlets.

Under India's tight foreign investment rules, no overseas chains are permitted in the retail sector -- except for single-brand outlets such as Nokia or Reebok -- to protect local retail players.

Foreign groups such as Wal-Mart can only be wholesalers and must partner with domestic companies to enter the retail market, valued at 400 billion dollars and forecast to grow rapidly in the coming years.

U.S. retail giant Wal-Mart is all set to gain its foothold in India, ending years of opposition from Indian retailers, the company said.

Wal-Mart's India entry next week will be a joint venture wholesale store but Financial Times reported such modern retail ventures have not made much of an impact in a country where most customers are used to small independent shopkeepers.

Calcutta's Telegraph reported the new store, to be called Best Price Modern Wholesale, will open in Amritsar in the northern Punjab state.

"It will open early next week," Wal-Mart's India spokesman Arun Mowar was quoted as saying.

The world's largest retailer plans to open 10 more outlets in India in the next two years. The Telegraph said Indian consumers will not be able to shop at the Amritsar outlet. As a wholesale unit, it will cater mainly to vegetable vendors, hospitals, hotels and restaurants.

India's retail market is forecast to double in another six years from the current $375 billion, the report said.

Earlier, Wal-Mart had faced tough opposition in India from small traders and the Left parties. The debacle of the Left parties in the latest elections is expected to make the company's entry smoother, the report said.

"The new government should look at opening up retail by bringing in foreign direct investment," said Rajan Bharti Mittal, vice chairman of Bharti Enterprises, which is the Indian company in the joint venture.

Britain's Marks and Spencer and Tesco also have concluded alliances with local Indian partners, Financial Times said.

Source: Yahoo and UPI.

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