Download - Bharti Walmart
INDIA - Most attractive retail destination $ 320 billion now -- $637 billion by 2015 CAGR – 5% Highly Fragmented – “A nation of
shopkeepers” 14% to India’s national GDP Jobs for 7% of workforce
Organized sector – officially licensed retailers Eg. Large privately owned retail company, retail chains etc.
Unorganized sector – hand cart vendors, convenience stores, paan/beedi shops, local kirana stores
•Large number of working youth (median age 24)•Growing number of working women•Nuclear families living in urban areas•Boom in services sector
•Large number of working youth (median age 24)•Growing number of working women•Nuclear families living in urban areas•Boom in services sector
Huge investment in retail infrastructure Traditional markets replaced by new
formats Development of mall culture, supermarket,
hypermarket, and departmental stores. Food entertainment shopping under one
roof
SPENCERSRPGRelianceTATAFuture group
Lack of efficient supply chain Inefficient Third part logistics services Absence of proactive channels
Cold chains Logistics infrastructure warehousing
Lack of skilled employees Inadequate quality control Variation in policy regimes across different states Stringent labour laws Lack of status as an industry therefore difficult to raise capital for expansion Violent protests by small retailers for closure over illegal shops
Established in 1969. Top of Fortune 500 list in 2007 3 subsidiaries :
Wal-Mart International Sam’s Club Wal-Mart Stores Division US
9 Different retail formats Pricing Strategy
Low Pricing Strategy – ‘ Always low Prices’ General merchandise prices – set after price checks of K-Mart
and Target stores Food Prices – set on basis of zones corresponding to food
distribution centres
IT in Supply Chain Management Bar codes for inventory tracking Satellite communication for co-ordination Electronically order placing to suppliers Use of RFID tags
Think Global Act Local Wal-Mart international : international operations 3000 stores in 13 countries Succesful in North and South America but not in
Germany and South Korea Restricted International approach :
discriminatory in entering international markets
Why Bharti ? Market leader in Indian telecom market Thorough understanding of distribution in
Indian markets Fully aware and capable to succeed in complex
environment of Indian market Capability to attract FDI
Joint Venture 2 different formats : franchised retail company
& wholesale cash and carry joint venture
50-50 venture for back end SC management and wholesale cash and carry operations
Also different contract – Walmart sharing technology & expertise to support retail stores built by Bharti
Aim to link farmers directly to retailers Strong back end infrastructure – Cold
chain logistics
Protests by small & medium local businesses Criticised for not being socially responsible
company Widely criticised for practises such as :
predatory pricing, discrimination against women, squeezing suppliers
Dealing with India’s unique cultural factors Supply Chain Management challenges
Underdeveloped physical infrastructure Poor quality of roads, trucking, reluctance to adopt
modern technology Cutting out middleman would create more
opposition
Emergence of organised retail sector Wal-Mart’s joint venture with Bharti aimed at
capitalizing growing middle class Bharti ideal partner for Wal-Mart Many unique challenges in India to overcome If challenges tackled , this partnership could
transform Indian retail