Wal-Mart tries a new way to reach online shoppers in India
April 8, 2014 12:00 PM
Wal-Mart Stores Inc. will expand its e-commerce operation into India as the U.S.-based retail chain invests in more wholesale stores in the world’s second-most populous country. The moves come after Wal-Mart, No. 4 in the Internet Retailer 2013 Top 500 Guide, shelved plans to open its own retail stores in India.
Wal-Mart says it will open 50 cash-and-carry wholesale stores within the next five years. Wal-Mart’s India-based subsidiary already operates 20 Best Price Modern Wholesale stores in India, with the first having opened in 2009, the chain says. Wal-Mart also says it will enable wholesale store members in India to make purchases from its B2B e-commerce site.
Once the B2B e-commerce site is live—and Wal-Mart declines to say when that will be—the retailer will be selling online in 11 countries. Wal-Mart already sells in United States, United Kingdom, China, Brazil, Canada, Japan, Mexico, Argentina, Chile and South Africa.
Those moves, while focused on wholesale, represent a way for Wal-Mart to get a toehold in India despite the country’s restrictions against foreign retailers selling there, offline or online. India requires that retailers based outside the country source 30% of their products and services locally.
“Wal-Mart is committed to India and we are excited about our growth plans. We will continue to focus on the cash-and-carry format as we are very happy with the way it has shaped up in the last few years,” says Scott Price, president and CEO, Walmart Asia. “The format is also poised to grow in India and we would like to serve the growing customer base by opening 50 new cash-and-carry stores over the next four-five years and extend the e-commerce platform to our cash-and-carry members with a virtual shopping opportunity. Along with our growth, we are taking a number of important steps to strengthen compliance so that we do the right thing every day. We are evaluating and reinforcing procedures and programs relating to all compliance areas, including licensing and permits, food safety, and responsible sourcing among others.”
Wal-Mart is under investigation over whether it has violated the U.S. Foreign Corrupt Practices Act in India, along with in China and Mexico. In general, the federal law is designed to prevent U.S. companies from bribing officials in other countries. Wal-Mart had no comment on the investigation.
Wal-Mart says it operates bricks-and-mortar retail in 27 countries:
• Costa Rica
• El Salvador
• South Africa
• United Kingdom
• United States