Walmart (NYSE: WMT) will open 50 cash-and-carry stores in India over the next five years in order to strengthen its presence in the wholesale segment there. Walmart also said it will launch a B2B e-commerce platform for members of its cash-and-carry unit, Best Price Modern Wholesale Stores.
Walmart has 20 wholesale stores in 15 cities in India under the Best Price Modern Wholesale nameplate. These stores are not open to consumers, but restricted to other retailers. The website will be an exclusive virtual store for its members with a similar assortment of products, as well as special items. Best Price Modern Wholesale has roughly one million registered members.
India allows 100 percent foreign direct investment (FDI) in B2B or wholesale retail operations, both off-line and online, but not in consumer-facing businesses. These are typically large stores that allow bulk purchases at discounts for small traders or stores. Walmart expects this store format to grow in India and plans to expand its footprint to take advantage of the expanding market.
Walmart has been trying to rebuild its India operations after buying out local partner Bharti Enterprises in the wholesale retail business. After the partnership with Bharti Enterprises was dissolved in October 2013, Walmart said that the Indian government's regulations requiring foreign retailers to buy 30 percent of products from local small and midsize businesses were the "critical stumbling block" to opening Walmart stores there.
Walmart suffered another setback in its quest to enter India when its CEO there, Raj Jain, abruptly departed last June after the retailer suspended some executives at the Bharti joint venture. During the suspensions, Walmart launched an investigation of potential violations of U.S anti-bribery laws. At the time, Walmart was also facing a probe in India for allegedly violating the country's foreign exchange norms and had been accused of illegally investing in its partnership with Bharti Enterprises.
Following Jain's departure, Walmart appointed Krish Iyer as the president and CEO of its India unit in January.
-See this Wall Street Journal article
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