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?Wal-Mart saved $2,329 in 2004?

The company employs 1.7 million people worldwide through more than 3,850 stores in the US and more than 2,250 units outside the United States.
None | By Sabarinath M
UPDATED ON MAR 22, 2006 04:44 PM IST
Wal-Mart has recently applied for a license to start a liaison office in India. This signals the entry of Wal-Mart into India’s $250 billion retail industry shortly. What does it mean for the Indian consumer?
We have a vision to improve the standard of living for the consumers. Global Insight, one of the global economic research compa nies, recently released a study which found that Wal-Mart saved each American household on average $2329 in 2004. The report reveals how Wal-Mart’s entry into a market creates independent opportunities for suppliers. Indian consumers will benefit when Wal-Mart opens stores in India. We will offer better quality food and vegetable products at the lowest possible prices. Our entry can also lead to major employment opportunities. For ex ample, every store in China is managed by someone in China.

How do you manage to live up to your motto of offering everyday low prices?
This is mainly by removing the inefficiencies in the system. We work closely with suppliers to bring about efficient supply chain management. This will result in passing on the savings to the customers. What is the business model that you have in mind for India?

We are exploring all options. We would like to look at each and every format. We will look at India as a unique business model. If FDI is allowed in direct retail, we will open exclusive retail stores. We will also source products from India for our stores in India. We will outsource products from Indian suppliers for our stores in India. We can mainly provide food and general merchandise. We will initially undertake a study to understand the behaviour of Indian consumer. Wal-Mart is already outsourcing $1.5 billion worth of garments, T-shirts to supply to its stores around the world.

Do you plan to substantially scale up outsourcing?
India is our fastest growing sourcing base. Wal-Mart’s office in Bangalore serves as global procurement hub for the sourcing of merchandise from India. This office was set up in 2001, and since then has grown from 33 associates to 123 in 2006. In 2005, Wal-Mart directly sourced $420 million worth of goods from Indian factories. Wal-Mart expects to source approximately $630 million from India in 2006. Major categories sourced from India include home textiles, apparel, fine jewellery and housewares.

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