India – A Key Growth Market for Walmart?

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BENGALURU: India is going to be key growth market for Walmart along with China, and the focus will be on allocating capital to these markets in a bid to expand business, grow profitably.

"In order to grow our business profitably, we-'re making strategic choices to simplify our portfolio and be more focused," said chief executive Doug McMillon in Walmart's annual report for 2017.

Walmart entered the market, by forming a Joint venture (JV) with Bharti Group, known as Bharti Walmart Private Limited as Wholesale Cash & Carry business. The JV of Walmart India and Bharti Retail didn’t work and was called off in October, 2013. Bharti divested their stake in the JV and Walmart India took complete control of the company. As of March, 2015, a total of 20 Best Price stores were operating with pan-India presence.Walmart India posted sales of Rs 3,996.8 crore for fifteen months ended March 2016 compared to Rs 2,991 crore during twelve months ended December 2014. While sales grew 34%, the company grew 7% on annualized basis.

With at least four players, Walmart, Metro, Bookers and Reliance —operating 92 cash and carry stores, nearly 2.6% of traditional trade in all consumer product goods (CPG) moves through organised wholesale. The Rs 6,800 crore market has been growing at 13%, faster than modern trade, albeit on a lower base.
"We were founded on an everyday low-cost mentality but we think we have opportunities to work in new ways and find a path to a lower cost base. This is vital for our future," the CEO wrote in the report. The retailer will look to strengthen its store presence along with technological capabilities outside of the US.

“For example, we’ve sold non-core assets like shopping malls in Chile and Suburbia clothing chain in Mexico. Our emphasis for capital allocation is on our core North American markets (Mexico and Canada) and key growth markets (China and India). We are intentionally focused on investing in markets, channels and formats that position us to win.”

"We'll continue to build our ecommerce and digital capabilities and we'll put them together in a way that saves customers time and money," said McMillon.

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