The case discusses the cash-and-carry stores of the world's largest retailer, Wal-Mart, in India. Wal-Mart entered India through a joint venture with Bharti Enterprises and started operating cash-and-carry stores apart from providing back-end support to Bharti's retail stores. The cash-and-carry venture was highly successful with several small stores stocking their products, due to their low prices and high margins. The case concludes with a discussion on the challenges Wal-Mart is likely to face due to the Indian government’s policy on FDI in retail.
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Issues:
The retail business in India.
Foreign Direct Investment in Indian retail.
Wal-Mart's cash–and-carry operations.
Joint ventures in retail.
Introduction
Wal-Mart Stores, Inc (Wal-Mart), one of the largest retailers in the world, entered India in 2007 with an equal joint venture with Bharti Enterprises (Bharti), a leading India-based business group. The Bharti-Walmart venture operated wholesale cash-and-carry stores and also provided back-end supply chain support to the Bharti's retail stores. It opened its first cash-and-carry wholesale store named 'Best Price' in India in 2009. Analysts said that the joint venture operating wholesale cash-and-carry stores had proved a good deal for Indian retailers, who could get products at low costs.
Questions for Discussion:
1. What are the main reasons for the success of Wal-Mart's cash-and-carry stores in India?
2. Is Wal-Mart's stance about operating only fully-owned stores in India right? Do you think it is missing a huge opportunity by not lending its name to the stores that are being operated under the joint venture?
Keywords
Wal-Mart; Bharti Enterprises; Sunil Mittal; cash-and-carry; FDI in retail; Easy Day; Best Price"
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