Wal-Mart makes India debut, in Amritsar
The world’s largest retail chain, Wal-Mart, has come to India. But you won’t be shopping there anytime soon. That’s because the first store of the joint venture with Bharti Enterprises, which opened in Amritsar on Saturday, is a cash-and-carry outlet.business Updated: May 31, 2009 01:23 IST
The world’s largest retail chain, Wal-Mart, has come to India. But you won’t be shopping there anytime soon.
That’s because the first store of the joint venture with Bharti Enterprises, which opened in Amritsar on Saturday, is a cash-and-carry outlet. Such stores don’t sell to end-users, but to retailers and middlemen. This is the only format under which foreign retail chains are allowed in India.
However, you could benefit too because retailers typically get their goods cheaper from such stores and pass on the savings to consumers.
For the mom-and-pop store owners — there are an estimated 1.5 crore in India —flocking to the new 50,000 sq ft building, the magnet wasn’t the mega retail chain founded by Sam Walton in 1962 in the town of Rogers in Arkansas, US. It was Bharti’s owners, the Mittal family, which hails from Ludhiana. Bharti owns Airtel, India’s largest cellphone network, and Sunil Mittal — who heads Bharti — is considered a hero in these parts.
Its website claims Wal-Mart has over 7,800 units under 55 banners in 15 countries.
Employing over 21 lakh associates, it serves 20 crore customers per week and clocked $401 billion (Rs 20 lakh crore) in sales the last fiscal.
Shishir Kumar, a bakery owner, dropped by at ‘Best Price Modern Wholesale’, as the store is called. “I drove 25 km to see what it offers,” he said. “I have to check the prices, after which I’ll bargain with my wholesalers. [Only after comparing prices] will I know if it makes sense to buy here.”
Like Kumar, each of the firm’s 30,000 members is looking for a better, cheaper, hassle-free experience. The store stocks over 6,000 items, over 90 per cent of them sourced locally. Not all of them offer kirana store owners the same margins.
For instance, a 10 kg bag of flour would get the retailer a 36 per cent margin, but a dozen eggs would yield a margin of just 7 per cent.
Bharti-Wal-Mart said price isn’t the only attraction, so are convenience and quality. Also, retailers don’t have to pay to become members and there is no discrimination in prices between large and small buyers.
“There is a crying need for a cash-and-carry business in India,” said Rajan Bharti Mittal, vice-chairman and MD, Bharti Enterprises. “The share of organised retail — 5 per cent — in India is very low and is going to rise. With this venture, we hope to reduce wastages and inefficiencies in the wholesale business, passing the benefits to customers.”
Fourteen more stores are planned across India over three-four years with an investment of Rs 500 crore.