Wal-Mart Stores, Inc. (NYSE: WMT), which recently had to delay its first India store opening due to local violence, has announced it will be opening 15 wholesale locations in India with partner Bharti within the next three years. Along with each location will come a $7 million investment from the world's largest retailer.In a move that will no doubt attempt the quell concerns by India's small businesses that Wal-Mart will steal all its business, the Wal-Mart/Bharti partnership has already lined up 30,000 clients for the wholesale business it will feature in these initial 15 locations.
In addition, 800 local Indian suppliers will be tapped to supply those locations. Managing Director Rajan Mittal said that actual multi-brand retailing would happen as long as there are no FDI concerns with India's government.
So far, Wal-Mart is only allowed to support other Indian retailers with support, such as IT operations and wholesale ordering. Direct consumer retailing isn't allowed just yet. Why would Wal-Mart want to spend so lavishly to provide wholesale operations to Indian retailers? To make them more efficient and on par with industrialized nations, or as an entry point into direct retailing in the near future? How about both.
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