May 25, 2011
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Wal-Mart plans more megastores in India

May 25, 2011

May 25 - Retail giant Wal-Mart said on Tuesday it aims to open up to 20 more megastore wholesale outlets in India by the end of 2012 as it increases its operations in the country.

A view of India's Bharti Wal-Mart "Best Price" Modern Wholesale cash and carry store (Photo: AFP)

The joint venture between US retailer Wal-Mart Stores Inc and India's Bharti Enterprises Ltd, parent of India's top mobile firm Bharti Airtel, now has four stores in Punjab state and one each in Rajasthan and Madhya Pradesh.

"We plan to open eight to 10 stores this year" and around the same number next year, Bharti Wal-Mart chief executive Raj Jain told reporters in New Delhi.

Wal-Mart's Best Price wholesale operation in India sells to small stores, fruit and vegetable sellers, restaurants, hotels and other business outlets.

The company is seeking to build a partnership with the 15 million family-run stores making up 95 percent of India's retail landscape that might ease strong opposition to foreign retailers.

Wal-Mart has been finding its feet in India where entry of multinational retailers along with the growth of domestic mass merchandisers has been steeped in controversy amid fears they will drive family stores out of business.

The big prize that Wal-Mart and other foreign retailers such as British retail group Tesco are after is full liberalisation of India's retail market.

Wal-Mart wants to sell directly to Indian customers as it develops new sales outlets in the face of saturated Western markets and India, with its 1.2-billion population, looms large in its aspirations.

Under India's strict foreign investment rules, no overseas chains are allowed in the retail sector -- except for single-brand outlets such as Nokia or Reebok -- to protect local players.

Foreign groups such as Wal-Mart can only be wholesalers and must partner with domestic firms.

Asked when the company expects to be profitable from its operations in India, Jain said: "In discount retail, you need to build massive scale before becoming profitable.

"It can take several years. Our focus in India right now is to build scale. Profitability will not come in a short term, but in medium to long term."

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