Can Surrogate Bharti Succeed Where Wal-Mart Failed?

This article highlights the aggressiveness of Wal-Mart’s international expansion, as its sales stagnate domestically. Legally and culturally, Wal-Mart continues to struggle to find its place in the rapidly-growing Indian retail market. So instead of promoting its own brand, it is using the partnership with Bharti to establish a foothold.

Bharti Wal-Mart locations expected in India by early 2008 [Blogging Stocks]

Wal-Mart’s focus on China and India as leading international prosperity markets is pretty well-known by now. While Wal-Mart’s growth is stagnating here in the U.S., the world’s largest retailer is looking to immediate gratification in international markets as it tries to grow that enormous $344 billion full-year revenue stream even higher.

Wal-Mart’s partnership with India’s Bharti is going to take some time since there are brand management and legal issues to get past, but Wal-Mart expects to begin opening the first of six stores in less than a year. While that may sound small, Bharti Enterprises group chairman and CEO Sunil Mittal indicated that these initial openings will just be the start, as Wal-Mart/Bharti may “put up several hundred stores over four to five years”.

Unlike Wal-Mart’s purchased interest in China’s Trust-Mart retailer (which gave the company instant access to the Chinese market), India is a little different. Wal-Mart and Bharti are operating as a joint venture, which provides a few details that must be shored up before complete retail operations can commence. Wal-Mart’s interest in India, though, goes beyond a possible revenue stream. The world’s largest retailer has stated that it intends to source more products from within India as well as develop a supply chain in that country.

So, as same-store sales slow in the U.S. (unlike some of the competition), Wal-Mart’s progressive international strategy is starting to take some serious roots here.

Posted by Alex Goldschmidt on Tuesday, June 12, 2007

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