The Hindu Business Line : “All formats can co-exist harmoniously.”

India has a lot of small and medium entrepreneurs who make excellent products but don’t know how to market them. It is here that players like us could play a key role.

Bindu D. Menon

Raj Jain, Managing Director and CEO, Bharti-Wal-Mart Pvt Ltd, tells BrandLine about the logic behind the name of the cash-and-carry venture, and how it plans to overcome supply chain issues.

Not using the Wal Mart name - was it a choice to avert political opposition?

When we started out, we did an intense branding survey and realised that the venture should carry a name which should convey its model upfront to the consumer. As ours will be a business-to-business brand, having a name like Best Price Modern Wholesale clearly spells that a consumer can get the best price at our outlets.

What is the road map over the next three years on the business - how do you see various format plays from your company side?

India is a very interesting market. Our belief is that all formats can co-exist harmoniously over here. We have clearly identified cash-and-carry as the model to be replicated in India for the time being. Punjab has been our first foray and we will continue to open our next two stores also in Punjab as the back end has already been established here. Neighbouring Haryana, Uttar Pradesh, NCR and Madhya Pradesh will also be on our radar as soon as the supply chain is established in those parts.

How do you see differences in the Indian market compared to markets elsewhere? How are you tweaking to cope?

We have made mistakes and learnt from them. India is very different from developed markets where supply chain constraints are far less. In India you have to start from scratch - establish cold storage, deal with vendors and also prevent shrinkage. Our strategy is to source a chunk (about 90 per cent) from the local market as it will be cost-effective.

Wal-Mart already sources $1 billon worth of goods from India to export to stores elsewhere - you have also stated that this could go up severalfold. In the current context of a worldwide slowdown, do you see sourcing from India going up this year? How much will it be this year?

Yes. It could go up manifold. India has a lot of small and medium entrepreneurs who make excellent products but don’t know how to market them. It is here that players like us could play a key role.

Would non-food be a bigger opportunity for Wal-Mart in India?

It could be an opportunity, especially in apparels, textiles and leather. However, it is still too early to say.

Several retailers have gone on record saying that it’s not proving economical to source from farmers and are depending on the wholesale market. How do corporates help improve efficiencies of the supply chain if they are depending on the wholesale chain?

Yes. It is an issue. We realise that we have to work backwards. We will not shy away from investing in the various chains. Currently, we have established a vendor chain. However, it needs to be worked upon. In some belts, we are also mulling contract farming.

What about FDI in multi-brand retailing?

FDI is a must in multi-brand retailing. It will make India competitive when more players enter the retail scenario. It will infuse funds which will be necessary to scale up operations. The apprehension that opening up the retail sector will kill small retailers is a misnomer.