Sunday, November 8, 2009
Wal-Mart's New India Push
Wal-Mart is looking to take advantage of opportunities in growing economies. India is the second-fastest growing economy after China. The company's influence in America is substantial, but the opportunities for growth here may be exhausted. Their future strategy is focused on international expansion. The company has over 8,000 retail units under 53 different banners in 15 countries and sees emerging markets as a significant source for growth. Currently though, " Indian laws don't allow foreign retailers to open multi-brand stores. Foreign investment is allowed only in single-brand retail to the extent of 51%." Wal-Mart is making the case for job creation in India's economy and how it will aid farmers and small and medium size enterprises.
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5 comments:
It seems like the Indian Prime Minister has a big decision to make. I feel like India can use the foreign investment and apparently by allowing Wal-Mart to open in India some of the concerns regarding the agricultural sector and employment will be answered. However, since the retail market has yet to develop in India, there is a strong chance that Wal-Mart can instantly monopolize the market.
I don't quite believe that Wal-Mart would be able to monopolize the Indian market, since Wal-Marts main criteria is to have its customers 'pay less', and the Indian domestic market is quite inexpensive in its self. I am from India myself and I don't see Wal-Mart really making an impact within the Indian market. As far as foreign investment is concerned, this move by the Indian Prime Minister could be a vital one in order to further grow the already impressive Indian economy, however Wal-Marts growth within India could be a total bust!
It will certainly be interesting to see if Wal-mart can grab the market it in India. I think that it has a lot of potential as a large and efficient entity, and could be exactly what is needed in India as the economy continues to grow and the lowest classes are rising from poverty. If any large grocery/retail superstore can do it, Wal-mart can. Whether that is good or not I'm not sure, but their past international success leads me to believe that they will find a spot in the booming Indian economy.
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