Walmart (NYSE:WMT) has opened a B2B e-commerce portal in India, making good on its promise to serve small businesses there.
The website is exclusively for members of Walmart's cash-and-carry stores and serves small businesses within 12 miles of physical outlets that aren't serviced by sales representatives.
"The mandate from Walmart for me is to focus on the cash-and-carry business," Walmart India President and CEO Krish Iyer told Bloomberg. "We are into cash-and-carry for the long-haul and the prize is big."
The online ordering platform is being being tested in two cities – Hyderabad in southern India and Lucknow in the north. The retailer hopes to expand the program to all stores by January 2015 with the goal of getting 10 percent of sales at each location from online orders.
Cash-and-carry sales representatives are training small-business owners to use the site. "The small mom-and-pop shops is where the challenge lies in terms of converting them into e-shoppers," said Iyey. "A deliberate effort is required to educate them in the whole process."
Retailers have long tried to expand into India, but legislative and logistical problems have thwarted efforts. India does not allow foreign-controlled companies to sell products online, forcing the proliferation of online marketplaces rather than direct consumer sales. Small-business customers and B2B sales are another matter.
In October 2013, Walmart called off its six-year-old partnership with Bharti Enterprises to operate wholesale stores there independently. The Sam's Club business is growing in India with plans to add 50 more stores over the next four to five years. Most of the new locations will be in the nine states where the company already has a presence, and the first of those will be opened next year, Iyer said. Rival Metro AG said last month that it plans to have 50 outlets by 2020, up from the 16 now.
In April, Walmart announced it would open 50 cash-and-carry stores in India over the next five years. Walmart has 20 wholesale stores in 15 cities in India under the Best Price Modern Wholesale nameplate.
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