Wal-Mart deals with Bharti Enterprises to enter Indian market
07 Dec '06
2 min read
Verdict informed the venture between Wal-Mart and Bharti will begin with a focus on food & grocery, but could lead to a host of non-food products in the future .
The scale of the opportunities means Wal-Mart cannot afford to fail in India. It needs to ensure that it is totally in touch with India's highly diverse and fickle consumers if it is to succeed.
This agreement is a real coup for Wal-Mart, which has been targeting entry into the Indian market for some time and has been at the forefront of lobbying the Indian government to relax the FDI rules that currently prevent multi-brand retailers from unfettered access into India.
This deal has enabled Wal-Mart to steal a march over rivals Tesco and Carrefour - both of which are eager to capitalize on the burgeoning growth that India offers.
At face value, it is intriguing to find that the world's leading grocers are battling to secure a tie-up with a telecoms conglomerate that has no real retail experience - bar the purveying of mobile phones - since Bharti is India's largest mobile telecoms operator.
However, Bharti co-runs Farm Fresh Foods (alongside the Rothschild Group), which currently occupies over 5000 acres of farmland across the country, exporting fresh produce to Europe and the USA. It plans to double the amount of acreage it holds by March 2007.
For food & grocery operators, securing a reliable, quality supply of products will be one of the largest hurdles they face as they expand their operations.
marketing@alchempro.com
