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Review 2007 / Retail Ahoy : Wal-Mart is here, finally

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Rajan Bharti Mittal

After keeping the organised retail market on prolonged will-or-will-not suspense for nearly a year, it finally happened. The largest retailer in the globe, Wal-Mart finally entered the country piggyriding the domestic telecom giant Bharti group in August. But there is a big catch—the world’s largest company will be sailing into the desi shores with out its brand name and also will not be doing what is good at,retail, but rather as a cash and carry retailer.  The Bharti group was also in talks with the British Tesco, but finally announced deal with and Wal-Mart. The first of the outlet is likely to be opened by the third quarter of current year.

Notwithstanding the pressure from the Left parties, the Prime Minister Manmohan Singh called the shots to allow Wal-Mart to come to the country in line with the foreign direct investment norms, but stayed short of permitting a direct jump into the consumer retail segment. And Bharti and Wal-Mart signed on the dotted line to establish wholesale joint venture company. The 50:50-venture will set up cash-and-carry and back-end supply chain operations. Bharti first announced its entry into the retail space in November 2006.

Bharti Enterprises managing director Rajan Bharti Mittal and Wal-Mart India country president Raj Jain inked the deal. Now the search for space is on and there are also reports that it would take over some existing chains. The first wholesale facility is likely to be opened by the end of 2008. In the next seven years, 10-15 wholesale facilities will be followed. Each such facility would be spread over a large area of 50,000-100,000 square feet. These would sell vegetables, groceries, fruits, staples, footwear, stationary, clothing, consumer durables and other products. They would serve not just neighbourhood kirana stores, but restaurants, caterers and sellers too.

Analysts feel that the formal entry of Wal-Mart is sure to change the retail business fabric of the country.

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Neeta Nair

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