02-10-2006, 06:19 AM
http://www.businessweek.com/investor/conte...0209_587939.htm
Wal-Mart's Ambitions in India
While the retail giant continues to explore market opportunities, government restrictions may keep it out
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Wal-Mart's experience in emerging markets is the crux of its battle plan. Bentonville has been down this path of limited investment in retail before. Not too long ago, it battled anti-FDI sentiment in Mexico. In S&P's view, Wal-Mart won that battle. It is now the biggest private employer in Mexico and operates more than 780 stores in that country. And even in communist China, Wal-Mart operates 56 joint-venture stores as of Jan. 31.<!--QuoteEnd--><!--QuoteEEnd-->
We need to research how Walmart fought the battle in Mexico and how it eventually got what it wanted and what effect it has had on the mom and pop stores..
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Ajit Dayal, CEO and chief investment officer at Quantum Advisors, an asset management company based in Bombay, says that foreign big-box retailers would have to surmount many operational challenges in India if they were to enter India directly or through an investment partner.
"We're not sure that what is considered a prime location for a retailer today is going to be defined as a central business district tomorrow. There is so much growth that centers of gravity within the time frames of available financing shift too quickly," he says.
Dayal believes that in addition to the pace of change that redefines business districts at an exponential pace, logistics on the size and scale that Wal-Mart is accustomed to would not be plausible to implement. He thinks that the current environment does not bode well for Wal-Mart or other big-box operations, based on the stark difference between the current benchmark for a typical retail store in India and Wal-Mart's traditional footprint. So while Bentonville remains positive on the subcontinent, its passage to India may be a difficult one. <!--QuoteEnd--><!--QuoteEEnd-->
I tend to agree with Shri Dayal. Interesting times ahead..
Wal-Mart's Ambitions in India
While the retail giant continues to explore market opportunities, government restrictions may keep it out
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Wal-Mart's experience in emerging markets is the crux of its battle plan. Bentonville has been down this path of limited investment in retail before. Not too long ago, it battled anti-FDI sentiment in Mexico. In S&P's view, Wal-Mart won that battle. It is now the biggest private employer in Mexico and operates more than 780 stores in that country. And even in communist China, Wal-Mart operates 56 joint-venture stores as of Jan. 31.<!--QuoteEnd--><!--QuoteEEnd-->
We need to research how Walmart fought the battle in Mexico and how it eventually got what it wanted and what effect it has had on the mom and pop stores..
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Ajit Dayal, CEO and chief investment officer at Quantum Advisors, an asset management company based in Bombay, says that foreign big-box retailers would have to surmount many operational challenges in India if they were to enter India directly or through an investment partner.
"We're not sure that what is considered a prime location for a retailer today is going to be defined as a central business district tomorrow. There is so much growth that centers of gravity within the time frames of available financing shift too quickly," he says.
Dayal believes that in addition to the pace of change that redefines business districts at an exponential pace, logistics on the size and scale that Wal-Mart is accustomed to would not be plausible to implement. He thinks that the current environment does not bode well for Wal-Mart or other big-box operations, based on the stark difference between the current benchmark for a typical retail store in India and Wal-Mart's traditional footprint. So while Bentonville remains positive on the subcontinent, its passage to India may be a difficult one. <!--QuoteEnd--><!--QuoteEEnd-->
I tend to agree with Shri Dayal. Interesting times ahead..