Walmart

Franchise In India, Franchise News India , Wal-Mart is expanding in China while still in a frustrating holding pattern in India.

The company said Tuesday that it plans to build 30 new retail stores and warehouses later this year as part of a growth plan announced in Beijing last October. Wal-Mart is looking to develop a larger presence in the country’s chief urban centers while building Supercenters in third- and fourth-tier cities. Meanwhile, in that other highly populated, but much lower income nation to China’s south India Wal-Mart is still waiting for the government to allow for foreign direct investment in retail.

Wal-Mart’s China CEO Sean Clarke told China Daily today that the retail giant will also invest 580 million yuan (about $94 million) to upgrade about 55 older stores. And in October, Wal-Mart’s global CEO Mike Duke said that they will “accelerate development in China” by opening around 110 new facilities nationwide.

“China is a key strategic market for Walmart,” Duke said.Wal-Mart’s growth trajectory in China stands as a direct contrast to India’s.

India would be just as attractive for the multi-brand retailer, with its 1.2 billion people, a young demographic, and like China an urbanization trend firmly in place. But while some in Delhi’s government led by economist and Prime Minister Manmohan Singh have tried to convince Parliament and local state governments that big-box retail was good for business, politics prevailed. In third and fourth tier cities, most Indians shop at local markets. The concept of one-stop shopping has not yet hit cities like Hyderabad, where informal street vendors sell everything from mangoes to fresh lamb meat.

Wal-Mart has no retail presence at all in India, but it does operate a wholesale cash-and-carry business in partnership with Bharti Enterprises. The store is not what global Wal-Mart shoppers are accustomed to, however. Unlike Wal-Mart China, which Americans would recognize, India’s Wal-Mart is nothing more than one big and cumbersome warehouse.

Meanwhile, back in October, as Wal-Mart U.S. and Wal-Mart China were discussing expansion, the retailer was cutting ties with Bharti.

The two announced on Oct. 9 that they were discontinuing their franchise agreement in the retail business. In the deal, Wal-Mart gets Bharti’s stake in Bharti Wal-Mart Private Limited, a joint venture between Bharti and Wal-Mart, giving Wal-Mart full ownership of the Best Price Modern Wholesale business. Wal-Mart said in a statement that it plans to continue to grow this business while working with the government and interested stakeholders to create conditions that enable foreign direct investment in retail, something the company hopes becomes plausible under the newly elected government of Narendra Modi.



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