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Wal-Mart to adopt new plans in India
By siliconindia
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Tuesday, 13 February 2007, 18:30 IST
New Delhi: Domestic retail players are trying to anticipate Wal-Mart's moves in the country. Wal-Mart, better known for its large stores like hypermarkets and supermarkets spread over thousands of square feet, is likely to adopt the neighborhood store format in its new model.
"We expect Wal-Mart and Bharti to explore the neighborhood market concept because groceries are one of the largest retail categories with the least organized retail competition in India," said a former Wal-Mart adviser and US-based global retail investment firm Growth Ventures Group's Chairman and CEO Love Goel, reported the PTI.
However, the Left parties believe that the 13 million mom and pop stores will be killed if multinationals retailers enter the country. The going might be tough for the company in India, where a number of retailers like Big Baazar and Vishal Megamart are expanding their presence with large-format neighborhood stores and domestic conglomerate Reliance Group, which has also purchased land in the vicinity of residential areas in various cities for its retail stores.
Wal-Mart, which has revenue of 320 billion dollars, is the largest retailer of groceries in the US. So, it could be anybody's guess what format it would choose for India. Wal-Mart has often adapted itself to the local needs, like in Brazil where there is a greater emphasis on neighbourhood stores inside cities, Goel said.
The US giant might also try out membership schemes to gain the customers' loyalty in wake of intensifying competition in the retail market sector, the experts believe. "With more than nine groups from Birla and Tata and Ambani investing over one billion dollars in next few years in retail, it will be important for retailers to create loyalty with customers rather than drive profit margins down by competing on price," added Goel.
Membership clubs like Sam's Club (being operated by Wal-Mart in US) are a great way for retailers to offer lower prices while creating loyalty among its customers as well, he added.