Wal-Mart to Launch E-Commerce & Open Wholesale Stores in India
- "Wal-Mart Stores Inc. is launching e-commerce and adding wholesale stores in India to sell to small businesses after shelving its hopes last year to open retail stores in the country. The world's largest retailer by sales plans in the next four years to open 40 to 50 additional wholesale stores in India, adding to its current 20, said Scott Price, chief executive of Wal-Mart's Asia division, in an interview Tuesday."
- "Mr. Price said the Bentonville, Ark., retailer's India-based cash-and-carry wholesale business will also roll out online sales this summer. He said the model will start small, with only one wholesale store posting its products for sale online. Mr. Price added that the store's staff will deliver the goods to the mom-and-pop stores that order them as much as 40 kilometers (about 25 miles) away, he said."
Takeaway From McGough:
The move to open wholesale stores is brilliant. The reality is that India is a massive marketplace made up of hundreds of thousands of mom-and-pop retailers. The biggest risk for Wal-Mart is that it went in with a substantial retail business, and faced massive revolt from the masses who don't want to be put out of business by the big American price cutter. But becoming a buying agent for the moms-and-pops? That makes a boatload of sense.
Editor's Note: This is a complimentary research excerpt from Hedgeye Retail Sector Head Brian McGough. Follow McGough on Twitter @HedgeyeRetail.