Retail India Business - News, Views and Much More

Ministers Start to Buck Under Pressure

In true Indian style, Indian Commerce and Industry Minister, Kamal Nath, said the government will examine the JV of Bharti and Wal-Mart. This is after CAIT and CPI and others have voiced out against the same and in light with the undecisiveness and extended delays with the Government framing a clear cut policy for FDI in Retailing. Using the Cash and Carry model is being disputed as a back door policy now.

Whatever the government may decide may have much huge implications as this is not the first such entry of an International Retail Chain. Germany's Metro, South Africa's Shoprite have already set shop here along with Australia's Woolworth with Tata in a similar agreement that Bharti and Wal-Mart are adopting. Any adverse change in policy can turn the tables for existing entrants. Something to watch out over the next few weeks while the government is going to buck under industry pressure.

Traders at Delhi are already fed up with the government with its sealing drive and now with Wal-Marts entry, the unorganized trade is definitely feeling the pressure and let down from the government by offering no real protection.

CPI Opposes Wal-Mart Entry in India

The Communist Party of India has opposed the entry of Wal-Mart stating that such large international retailers along with large Indian business groups are monopolising the retail trade, depriving millions of thier livelihood and exploiting cheap labour of the poorer section. Strong words on the very first day.

Wal-Mart Bharti Angers Confediration of the All India Traders

As expected the Confederation of all India Traders Association have opposed the entry of Wal-Mart into India through the Joint Venture with Bharti. CAIT feels that this will leave the local traders unprotected and unsustainable.

Wal-Mart India: Lead to Margin Pressures

With Wal-Marts entry into India, the retail landscape is definitely going to change. There is going to be an increased demand for prime properties and manpower. The retail industry is already seeing intense pressure in both property prices and an acute shortage of talented manpower. Now with Wal-Marts entry, the next thing to take a beating would be the miniscule margins retailers make. Wal-Mart has always been low priced and if the same philosphy is adopted in India it can gives its competitors like Pantaloons Big Bazaar,  Reliance Fresh, FoodWorld and others a run for thier money. Local players like Margin Free Market in Kerela and Shubiksha in Tamilnadu have used the low price stategy and have maintained good market share. In a price concious market like India, a Low Price Strategy in a modern retail format will be the ideal recipe for success.

Shares of Pantaloons has already taken a beating of about 1.8% yesterday when Wal-Mart and Bharti's announcement was made.

Wal-Mart Enters India with Bharti

Its finally official after months of speculation. Bharti has finally shortlisted its JV partnership with Wal-Mart. Although it was Tesco in the lead, finally differences had set them apart and Wal-Mart had taken over as the best fit option. Carrefour was also suppousedly to be in talks.

Wal-Marts interests and excitement in the Indian Retail Landscape is no secret. This is one company openly lobbying with the government for couple of years now and had recently been granted permission to setup its office here for doing the necessary groundwork before anything can open up.

Although Bharti has been a little tight lipped on the details of the roll out strategy, for the moment its only known that an initial infusion of about US$100 will be made to start with and will officially roll out by the middle of next year (August 2007)

The JV partnership will be the same model as with Tata and Woolworth for its consumer durable foray with the Croma stores. Will this be the strategy for all the others to come is something to be seen. How Tesco chooses to enter India is another thing to watch out for.

This is definitely a major setback for Tesco which should have been on the verge of entering India. Tesco will now have to see a suitable JV partner or decide to go solo with a Cash and Carry route like how Germany's Metro has set shop for sometime now.

Reliance Pharma

After Reliances aggresive Retail Foray, it is all set to foray into the global Pharma space with Reliance Life Sciences.