Momentous day for Indian retail industry

sunil_mittalToday’s announcement of the joint venture between telecom giant Bharati Enterprises and the world’s biggest retailer Wal-Mart, which was in the making for several months, can be marked as one of the momentous days for the retailing industry of India.

Not only, Bharati and Wal-Mart have found a smart way to get around the existing statutory policy provisions, it has also paved the way for other retailing majors, like Carrefour of France and Tesco of the UK,  to enter the world’s second most populous as well as the world’s fastest growing retail market.

While, most retail players have wecomed the alliance, some have greeted it with cautious optimism.

Initial details of the joint venture agreement, though, sketchy, kept trickling in throughout the day.The key take aways emerging from various media briefings, reports and interviews, include:

  • MoU has been signed to understand Indian market.
  • Joint venture is looking at large Indian retail opportunity.
  • This is a partnership of equals.
  • Although, Brand Name of the front store is yet to be finalised, perhaps, it would carry names of both the partners.
  • JV will be a part of the Bharati Enterprises.
  • JV will be funded from Bharati’s internal resources.
  • Roll out will begin from August, 2006.
  • Discussions are going on for legal and financial details.
  • Front stores will be operated by 100% Indian arm of Bharati to satisfy existing Indian laws.
  • Front stores will be set up on the lines of Wal-Mart.
  • Back end operations like cash and carry, logistics, cold chain and supply chain will be managed by joint venture companies.
  • Plan for total roll out, which will eventually be in hundreds of stores across the country, will be decided in January, 2007.
  • 20 persons are presently employed, however, few persons from Wal-Mart will join soon, which will be followed by a massive recruitment drive.
  • Real Estate and infrastructure, depending on requirements, will be owned, rented or leased.
  • JV wihave pan-India presence.
  • Another of Bharati’s 50:50 joint venture ‘FieldFresh’ with Rothschild family, which aims to link Indian fields to the world, will not be impacted by this agreement.

2 responses to “Momentous day for Indian retail industry

  1. I think it will provide better quality products to indian consumer.

  2. Is this the first joint venture for Walmart due to government restrictions? Or, walmart has joint ventures going in other countries? How does walmart operate in China?

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