US-based billion dollar retail giant Walmart is planning to invest around $500 million (INR 3,200 crores) in India. The company aims to add 47 new B2B cash and carry stores across different cities in India. Walmart already has 23 stories which it plans to increase to 70 till 2020. Walmart is actively looking to expand its brand presence in the Indian sub-continent.
Walmart announced the development after launching its 23rd store in Vishakapatnam and is looking to launch another store in the city. The store in Vishakapatnam is built on an area of 56,000 square feet and creates direct and indirect jobs for more than 2,000 people.
19 out of 23 stores that Walmart operates has achieved break even with more than a million members, Krish Iyer, President and CEO, Walmart India claims. Earlier Walmart India exited from the failed joint venture with Bharti Enterprises in 2014 and became a wholly owned and operated subsidiary of Walmart Inc.
“Cash & Carry business in India has a big potential. Over the next 10 years, it is estimated that the overall retail trade will be around $1.8 trillion, out of which $1.2 trillion will be traditional trade and around $600 billion will be a modern trade,” said Iyer.
Clarifying if Walmart’s latest acquisition of Flipkart will come into play regarding its offline business, Iyer said, “The two businesses – the marketplace business of Flipkart and the Best Price stores of Walmart India – will run independently. Flipkart continues to be a board-managed company,”
He added, “Walmart has made an investment in Flipkart to the extent of 77% shareholding but the entire management continues to be the same and they continue to operate completely independently. There is no plan for integration.”
Walmart is actively looking to increase the number of fulfilment centres across India and has recently opened two fulfilment centres and plans to open a third centre in Hyderabad. The retailer is also working towards the introduction of private label products which currently contributes to around 3-4% of company’s revenue and is expected to grow at a rate of 20 per cent per year for the next three to four years.