A blog about the latest developments in the food technology sector.
Wednesday, August 11, 2010
WALMART ENTERS INDIA-EYING THE RETAIL MARKET?
Entry of the global retail giant Walmart into India was eagerly anticipated by many consumers in the country who are aware of the reputation of this company to arm-twist manufacturers to get incredibly low prices for their customers. It speaks well of the enterprising spirit of the Bharti Group to think about forking into a business totally different from the IT area and one can expect that they would apply same entrepreneurial talent in achieving success along with their famed collaborator across the Atlantic Ocean.
Mittal said the retail market is currently around $400 billion and it is growing at 22-24 per cent. "Consumption is continuously increasing and in the same manner as needs of young population is increasing; so retail business will continue getting good response." Bharti Walmart Wednesday opened its third "Best Price Modern Wholesale cash-and-carry store" here. This was the third cash-and-carry store of Bharti Walmart in Punjab and the country. The first store was opened in Amritsar in May 2009 and second was started in Zirakpur near Chandigarh in April 2010. The company is concentrating on Punjab as a base before moving to other states. "There were three reasons behind choosing Punjab," said Mittal. "First, we understand the consumer base and consumption power in Punjab are far ahead, if we compare them with other parts of the country. You look at other big brands of cars, and even McDonald's, they all have maximum sales in Punjab." "Second, Punjab is my home state, I belonged to Ludhiana city, therefore I always wanted to start my new venture from here. Third, we got full support from the Punjab government so there was no reason to think of states other than Punjab," he added. Mittal, who is also chairman and managing director of Bharti Enterprises, said he wanted to replicate the model in other states.
"We are starting small, keeping all parameters in mind. We strongly believe in this model and all our stores here are getting an encouraging response. It will also help us to move to other places. If there is success in one state, then other states will follow the footsteps." Bharti Walmart Chief Executive Raj Jain told IANS: "We have invested close to $25 million in Punjab. Presently three-five more cash-and-carry stores are in various stages of construction in different parts of the country. But right now we cannot disclose the exact locations." Each cash-and-carry store stock about 6,000 items, including a wide range of fresh and frozen foods, fruits and vegetables, dry groceries, personal and home care, hotel and restaurant supplies, clothing, office supplies and other general merchandise items. "Besides cash-and-carry stores, presently we have 83 easyday stores in India, out of which 55 are in Punjab. We target to increase this number to 150 stores by the end of this year," said Mittal.
It is understandable that the new joint venture is cagey about revealing too much about its pan-India plans because of the long queue of competitors waiting to join them for a slice of the pie, that is Indian retail market. The new Cash & Carry "avatar" should be able to streamline the supply chain logistics as Walmart has fabulous experience in this area. If such whole sale stores are built in any major cities across the country, they can be a reliable source of supply of materials, mostly groceries and other house hold items for thousands of small scale traders who subsist and survive on their small scale retail business.