Walmart Finds Other Channels On Path To India
By Hannah Ash, contributing writer
After Indian Regulations Thwart Walmart’s Expansion Plans, The World’s Leading Retailer Rebounds
The world’s largest retailer doesn’t take no for an answer; it is the world’s leading experts when it comes to breaking down barriers to sales. In October 2013, Indian regulations that foreign retailers sell at least 30 percent of goods manufactured in India stopped Walmart’s plans to open up general discount stores in the country. Walmart had previously established a relationship with Bharti Enterprises in the hopes of procuring government approval for the proposed project. As a result of the regulations and having abandoned efforts to proceed with opening a general purchasing center in the highly regulated country, Walmart rebounded this month with new channels it plans to take as it paddles its way toward its share of the Indian market.
The retail giant won’t be opening stores of its own in India. It will be exclusively selling to retailers, instead. Indian regulations allow for full ownership in wholesale stores, and Walmart is taking advantage of this already. With 20 stores currently in operation, Walmart plans to open as many as 50 different wholesale outlets while rolling out a B2B e-commerce channel to sell to Indian vendors as a way to open up channels for sales in the highly regulated country. Walmart plans to start small as it expands into Indian soil. Within the next four years, Scott Price (CEO of Walmart, Asia Division) states the retailer plans to open 40 to 50 wholesale stores in addition to the 20 it currently operates. A move into the Indian online-channel will be small-scale at first, with Price commenting that there would only be one wholesale store posting its products for sales online.
Through the creative use of retail commerce strategies and rolling out different kinds of sales channels (Neighborhood Markets and Sam’s Club) to meet different markets, Walmart has always known how to get its foot in the door, and India is no different. “Walmart is committed to India, and we are excited about our growth plans,” Walmart Asia President and Chief Executive Scott Price comments. On focusing on a strong e-commerce channel in India, Price states, “We are launching a trial for B2B e-commerce this summer, and we would expect to extend to all stores after we have successfully launched the trial. But at this time, we have no plans for marketplace.”