Bharti will run the shops and Wal-Mart will manage the backend in the 50:50 JV
NEW DELHI: By Independence Day next year, you may be able to shop at a Wal-Mart right here in India. Well, not quite, for it may be called something else, but there will be a Wal-Mart engine powering the operation.
After months of waiting for a policy change that would allow foreign companies to enter multi-product retailing, Wal-Mart, a company with annual sales of $312 billion (Rs14,00,000 crore), threw in the towel and tied up with telecom bigwig Sunil Mittal for a 50:50 joint venture.
Wal-Mart would, ideally, have preferred to come to India on its own, but the current policy allows foreign companies entry only into single-brand retailing or wholesale trading.
The Bharti-Wal-Mart agreement, announced on Monday, will thus have Bharti running the shops and Wal-Mart managing the backend sourcing, supply logistics, and wholesale cash-and-carry businesses. But contrary to what people believe, the real power of Wal-Mart, the company that pioneered everyday-low-prices for shoppers to become the world’s biggest retailer, lies in its backend process.
Over the next few years, Wal-Mart will be making investments to the tune of $1 billion to make its presence felt across the length and breadth of the country.
Wal-Mart offers very competitive pricing on most of the products it retails across the world. Its product range includes food and groceries, electronics, home furnishings, jewellery and other accessories, and even pharmaceutical products. In short, anything you need for personal and household consumption can be bought at a Wal-Mart. In India, though, the Wal-Mart you see may have the name Bharti also on it.
