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Walmart to gobble up Indian supply chains
Business

Walmart to gobble up Indian supply chains

Pennews

According to the CEO of Walmart this giant chain store is now rolling out a plan to more than double its wholesale chain in India and supplying the local store holders

Our one agenda is: ‘How can they become more loyal to us?’ the CEO of its operations in India, Mr. Krish Iyer, said.

We are making friends in the country with the kind of competitors that we had spent decades putting them out of business in the US, the  mom and pop stores.

The behemoth's unlikely  to crack the country’s giant consumer market, taking on e-commerce arch-rival Amazon.com Inc. will be the  richest man, Mr. Mukesh Ambani.

Hard lobbying by global retailers for years have failed to persuade the Indian government to open its market to foreign competition, because of fears that it may put out of business many of the 12 million neighborhood stores that account for almost 90 percent of the retail sales. New regulations had also hampered Walmart’s attempt to build an e-commerce business to reach out to consumers.

The American company is now rolling out a plan to more than double its wholesale chain in India in the next four years -- supplying the local store holders instead of competing with them. The move will intensify the three-way wrestling with Amazon and Ambani. Each has a different game plan strategy, but they all need to woo the owners of the neighborhood and corner shops.

Mr. Iyer said, 'Our single biggest agenda is: ‘How can they become more loyal to us?'  He said at an interview in their newest outlet in Karimnagar in AP that the expansion phase will continue because the tremendous opportunity here.'

A copybook terrain for Walmart, which built its empire with warehouse-sized retail outlets on the edges of second-tier American cities, Karimnagar is  known for its massive quarries of red and brown granite slabs, and the fastest-growing urban center in the new  landlocked Telangana state. .

Prevented from opening retail stores, Walmart began in India in 2009, but continued to try to find a way to sell direct to the public but its most recent attempt,  the 16 billion dollar purchase of homegrown e-commerce leader Flipkart last year, received a dealt a blow when the government came out with new rules designed to protect the 12 million small shopkeepers from online competition as well.

Walmart’s biggest challenger is Ambani, who isn’t subject to the restrictions on foreign companies and already controls India’s largest brick and mortar retail chain, as well as a network of wholesale stores that is twice Walmart’s size. Now, the  richest man plans to use his 290 million-subscriber mobile phone network to create an e-commerce giant. and the country's  small shopkeepers are key to that.

Little more than a month after the government’s new e-commerce policy was released, on a stage he shared with Prime Minister Narendra Modi, Ambani announced his first move online would be a marketplace exclusively for the owners of the small stores, called kiranas.

Meanwhile, Amazon is working to recruit shopkeepers in small towns and villages, arming them with smartphones to place orders for local residents and relying on them to deliver goods in communities that often have no street names or house numbers.

Mr. Rajat Wahi of the Deloitte consumer services says they are trying to take on kiranas.  'All the volumes go through that channel, though in  small lots. So their objective is: how do I get more active selling to these mom-and-pop-stores.'

Mr. Iyer wouldn’t say how much they are investing to win over shopkeepers, but he said 26 more of its Best Price wholesale stores were planned by 2023, with each location costing between 8 million and 10 million dollars. . And another 8 to 10 new sites were being identified each year.