Walmart has virtually been edged out of business by powerful domestic chains in the German market, but India's engagement with the US multi-brand retailer can be mutually beneficial.
Gero Winkler of the Hamburg Chamber of Commerce elaborates on his assumption, “Approximately 40% of agricultural produce in India is lost post-harvest. Retail brands such as Walmart can help address such issues by setting up infrastructure including the setting up of cold storage chains.”
After two decades of slugging it out in the competitive German retail market, the Walmart has lost the race to powerful domestic brands such as the Aldie and Lidl.
"Majority of Walmart outlets have shut and those that remain are on the verge of closure," Winkler said in an interview.
Responding to anti-Walmart protests in India, Winkler recalled similar developments two decades ago when Walmart entered German market. "But no great harm came to Germany. Instead, more jobs were created; farmers got better remuneration for products while consumers started to be offered cheaper prices," he said.
The Indian government can go step-by-step (permitting FDI in multi-brand retail) and can work on effective regulations to prevent cartelisation of food retail chains, said Winkler, who heads the India desk at the chamber.
Walmart developments are being keenly watched for the huge potential perceived for the German retail industry in India — a country that has largely withstood the storm of the Eurozone.
Already India's biggest trading partner within the European Union with the goal of increasing bilateral trade volumes to 20 billion Euros by 2015 having already been achieved, Germany now wants the entry of middle-size family businesses in the pharmaceutical, cosmetics and food industries.
Middle-sized German pharmaceutical firms that want to enter Indian market include Hamburg-based firms Fristam and Envotec.
Approximately 1,500 German companies have already set up offices in India including Bosch Seimens, Mercedes, Volkswagon and Airbus Industries. Indian investments in Germany have also grown.