Wal-Mart India has been very busy these past few months, working hard to stake the company’s claim and place within the country. Wal-Mart India Private Limited is wholly owned by Wal-Mart, operating “20 Best Price Modern Wholesale stores in 8 states across India,” with the first store opening back in 2009. Since January 2013, there have been many recent events and developments that have taken place that have affected Wal-Mart India in a variety of different ways.
In October of last year, as a result of the FDI policy changes that allow foreign companies to sell directly to consumers, Wal-Mart opted to dissolve their partnership with Bharti Enterprises, a partnership that was created to allow the company to operate within the confines of the country prior to the 2012 changes to the law. The dissolution of the partnership cost Wal-Mart approximately $334 million USD to terminate, resulting in a net loss of $151 million USD for the retail giant, a loss that the company was easily able to eat, and one which is not anticipated to hurt Wal-Mart India in any way, but rather will allow the company to flourish in the manner it desires. The two companies have parted in an amicable fashion, dividing up their shared interests, and both are planning for high levels of future growth, anticipating that their past partnerships will assist them in continued future successes within the country.
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As a result of the new FDI Indian Policy, the company has planned to open 30 more wholesale outlets in India along with an e-commerce website, allowing those in India with an internet connection to be able to shop online for their locally distributed goods and services; the company plans to open all 50 of these stores and the website within the next 4-5 years. The retailer’s e-commerce site is anticipated to utilize a business model not dissimilar from that used by Amazon and by eBay, a situation that will surely make the site into a successful one, given the large scale successes of those two companies in utilizing the same business model. The beta version of the site is anticipated to go live within the next few months, being released in almost half the time that was initially anticipated for the completion of the project.
Though it is clear that Wal-Mart has a long way to go, and the recent plans are far more modest than their highly ambitious plans of last year, it is possible to see that the continued success of the company within India is almost assured, given the successes the company has experienced thus far.
- Bailay, R. and Chakravarty, C. (2014). Walmart to expand in e-retailing in India, planning marketplace model akin to Amazon, eBay – The Economic Times. [online] The Economic Times. Available at: http://economictimes.indiatimes.com/
- Bailay, R. and Malviya, S. (2014). Walmart Stores spent $334 mn to end its deal with Bharti Enterprises, resulting in a net loss of $151 mn – The Economic Times. [online] The Economic Times. Available at: http://economictimes.indiatimes.com/
- Bose, N. (2014). Wal-Mart plans 50 more India wholesale outlets, e-commerce launch. [online] Reuters. Available at: http://www.reuters.com/
- Corporate.walmart.com, (2014). Walmart Locations Around the World – India. [online] Available at: http://corporate.walmart.com/
- Loeb, W. (2013). Walmart: What Happened In India?. [online] Forbes. Available at: http://www.forbes.com/
