Tuesday, November 28, 2006

Wal-Mart entering India

Wal-Mart and Bharti Airtel have formed a partnership to create a retail chain in India that will apparently bear both companies' names, according to Forbes.

India may soon have stores displaying the Wal-Mart brand despite government rules that prevent foreign companies from operating multi-product retail chains here.

The U.S. retail giant has tied up with India's top telecommunications company Bharti Airtel Ltd. in a joint venture that will set up hundreds of stores across the country, Sunil Bharti Mittal, chairman and CEO of the Indian company, said Monday.

It isn't clear how this will work within Indian law: "India does not allow foreign companies to open multi-product retail stores, [but] they can still make wholesale purchases to support their global supply chains." However, the companies say they will be in compliance.

However, this item from India's Economic Times indicates that Pantaloon, one of the biggest players in the Indian market, isn't frightened.
"The market dynamics will change but we are prepared and plan to scale up our number of Big Bazaar stores to 100 by December 2007, before any international retailer opens up its store here," Kishore Biyani, managing director, Pantaloon Retail India Ltd (PRIL), said here.

He, however, said it needs to be seen how the partnership of Bharti Enterprises with the international player unfolds.

"Wal-Mart will have an effect which will be a challenge for us. However, since the international counterparts have a different mindset, the partnership and strategy needs to be understood," he noted.

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