Wal-Mart ready to launch Indian variant

26 May 2009

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Wal-Mart is all set to launch its cash-and-carry store in India. But don't expect to find a Wal-Mart store because its Indian avatar is a best-price modern wholesale. After a slow start, Wal-Mart India is confident of accelerating its India plans.

In an exclusive interview to CNBC-TV18, Wal-Mart India President Raj Jain said Wal-Mart would offer much cheaper products. ''In commodities, it could be 2-3 per cent lower, in branded goods it could be as much as 10 per cent  lower,'' he said. He, however, added that these prices were benchmarked with wholesale prices and not retail prices. ''Retailers who will buy from us would probably have anywhere between 8-20 per cent margin opportunity if they were to buy from best price.''

In 2007, he said, the company talked about opening 10-15 stores in the next seven years. However, Jain felt that the target could be achieved over the next three years itself.

How much cheaper the products will be?
It depends from category to category. So, in commodities, it could be 2-3 per cent lower, in branded goods it could be as much as 10 per cent lower. These are benchmark with wholesale prices not with retail prices. So retailers who will buy from us would probably have anywhere between 8-20 per cent  margin opportunity if they were to buy from best price.

Speaking of real estate and the fact that we have actually seen prices come off very sharply now, have you managed to tie up all the real estate that you need at least for your expansion over the next 12 months or so?
Absolutely. In fact there is good news on that front. In 2007, we talked about opening 10-15 stores in next seven years. I think we can open 10-15 over the next three years.

That is all on account of the fact that you have actually seen real estate prices coming off so sharply or is there any other reasons or factors behind this aggressive expansion plan?
No, I think real estate is one element of it. Obviously it helps to have good real estate available at reasonable prices. However, there are lots of other things and it is just our experience, our confidence at this point in time that we can make this work and the fact that whatever we plan, we can probably accelerate that based on the learnings we have had over the last eighteen months.

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