Sensing political hurdles for foreign direct investment (FDI) in multi-brand retail in India, world's top retailer Wal-Mart is focusing on cash and carry (C&C) format of retailing.
Wal-Mart India, the wholly owned local subsidiary of Bentonville, US-based firm, will add 50 wholesale outlets in India over the next four to five years, taking the total to 70 by 2019.
Scott Price, president and CEO, Walmart Asia, said the company is committed and excited about its growth plans in India.
"We will continue to focus on cash and carry format as we are very happy with the way it has shaped up in the last few years. The format is also poised to grow in India and we would like to serve the growing customer base," said Price, adding that its e-commerce platform will be extended to C&C members with a virtual shopping opportunity.
The cash and carry stores serve the bulk buyers like hotels, caterers, traders and other business professionals which are registered with the outlets.
While refraining from divulging financials, the company said it will continue making significant investment towards supply chain infrastructure and supplier development.
Wal-Mart India currently operates 20 wholesale stores under the 'Best Price Modern Wholesale' brand with presence across the country except North East.
With competition getting intense in the wholesale format of retailing in India, Reliance Retail, part of Mukesh Ambani's Reliance Industries Ltd, is also expanding its footprint under Reliance Market brand. The company has more than 20 Reliance Market stores in over 15 cities across the country and a registered membership base of over 1 million. It recently entered the Mumbai market by opening its first C&C store at Thane.
Not sharing specific details on its new store openings in the coming years, a Reliance Retail official said that Reliance Market follows the inclusive growth approach and is aimed at sharing benefits of its strong sourcing capabilities and supplier relationships with a large network of kirana owners. "Extending the benefits of our cash and carry business to this segment of consumers across the country is integral to the retail business," the official said.
The Wal-Mart India's existing 20 stores were part of the equal joint venture, Bharti Walmart, the US retail giant had set up with Indian partner Sunil Bharti Mittal's Bharti Enterprises. Wal-Mart India bought out Bharti's stake in the JV in October last year for an undisclosed sum and has been independently operating the business thereafter.
While focusing on growth since going solo, Wal-Mart India is taking several steps to strengthen compliance to ensure everything is done in the right way.
"We are evaluating and reinforcing procedures and programmes relating to all compliance areas, including licensing and permits, food safety and responsible sourcing, among others," said Price.