Wal-Mart India Set To Begin Its E-Commerce Business Operations In July

 @SnehaShankar30
on June 14 2014 10:42 AM
Wal-Mart India
A customer shops at a Best Price Modern Wholesale store, a joint venture of Wal-Mart Stores Inc and Bharti Enterprises, at Zirakpur in the northern Indian state of Punjab on Dec. 6, 2012. Reuters/Ajay Verma

Wal-Mart Stores Inc. (NYSE:WMT), the world’s biggest retailer, will launch its B2B e-commerce operations in India in July.

The Arkansas-based company will focus on two Indian cities -- Lucknow, in the northern state of Uttar Pradesh and Hyderabad, a southern city Andhra Pradesh -- after opening 20 cash-and-carry stores so far, under the brand Best Price. The announcement follows the company’s statement in April, which confirmed that it will expand its operations in India. Wal-Mart is allowed to retail in the country only as cash-and-carry, not as a multibrand retailer.

"We will not start rolling out to the other 18 stores for the next six months, because we will learn from any teething problems and feedback from members," Krish Iyer, Wal-Mart India’s CEO, said according to Reuters.

Wal-Mart’s website would allow its customers with 40 kilometers (24.85 miles) to order online and getting the products delievered, news reports said, citing Iyer, who believes that the retailer can address a $50 billion market out of the total $300 billion worth Indian wholesale market, Mint, a local business newspaper reported.

“Foreign direct investment in (business-to-consumer) e-commerce is currently not allowed and we would continue to study the regulatory environment. We will not jump the gun ... primarily because our hands are full at this point in time and there is a lot to be done in cash-and-carry,” Iyer said according to Mint, adding: “We will continue to follow on our course of establishing B2B e-commerce in all the stores.”

Wal-Mart said in its April statement that it is happy with the India operations, despite the losses that the division is incurring for the parent company, and plans to open about 50 stores in the next five years across the country.

The latest venture by Wal-Mart comes at a time when India’s online retail is expected to grow at a rapid pace -- more than 15 percent for organized retail in five years. The market's estimated worth is $3.1 billion and contributes nearly 10 percent to the country’s vast organized retail industry, Mint reported, citing a study by a brokerage firm CLSA.

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