World’s biggest retailer Wal-Mart is all set to enter into Indian market by the end of 2007 in a equal joint venture with Bharti Enterprises for wholesale cash-and-carry business. The wait is finally over and the retail giant Wal-Mart Stores Inc has approved its entry into Indian retail market by signing a deal with Sunil Mittal’s Bharti Enterprises.
Both the companies have consented on the models for their retail joint venture in the Indian wholesale cash-and-carry business. The new venture will be named as Bharti Wal Mart Private Ltd. Bharti Enterprises Managing Director Rajan Mittal said that the new venture has a wide plan to bring the whole eco-system together.
The wholesale cash-and-carry business would accommodate the organised retailers and the small kirana stores, fruit and vegetable resellers, restaurants and other business owners as well in a single network.
The business model of Bharti Wal Mart Private Ltd comes in the category of the 100 per cent FDI so there is no need to get the approval from the Foreign Investment Promotion Board (FIPB).
According to company officials, Wal-Mart already sources $600 million worth of products from India and the 90 per cent of the products on offer in the Bharti-Wal-Mart stores will be sourced directly from local farmers.
The report says that the Bharti and Wal-Mart would have equal stakes in this business-to-business venture. The venture would concentrate on establishing supply chain and back-end logistics infrastructure.
For this, both, Bharti and Wal-Mart, have accepted the two agreements related to the joint venture, technology sharing and training of human resource. The Wal-Mart would be responsible to provide technical support to Bharti Retail and the Bharti retail would own and manage the retail store operations across the country.
The new Bharti Wal Mart Private Ltd would give employment opportunities to more than 5000 people in it’s initial stage. It would sell fruits and vegetables, groceries and staples, footwear, clothing, consumer durables and other general merchandise items.
On the issue of branding the products, Mittal said that the company has gone through a study and now ready to take the decision soon. The opening of first store is expected by the end of 2007.