Ease of doing business may get further boost after Modi government’s return: Walmart India chief Krish Iyer
New Delhi: Walmart India, the wholly owned subsidiary of US-based retail behemoth Walmart Inc., has expressed optimism over the regulatory progress in India’s retail market, highlighting that the re-election of Prime Minister Narendra Modi-led National Democratic Alliance (NDA) government at the Centre with a massive mandate could speed up ease of doing business further.
“With the government getting the second mandate, our (ease of doing business) rankings will improve significantly further,” Krish Iyer, president, and chief executive of Walmart India, told the Economic Times. He further mentioned that undoubtedly cash-and-carry entities and even businesses as a whole, retail firms and foreign investors will find it easier to set up shops in India.
At present, the US-based retail titan doesn’t deal directly with consumers in India and is an organised wholesaler or cash-and-carry operator that sells items to local kirana stores, hotels and catering companies. India permits 51 per cent foreign direct investment (FDI) in multi-brand retail, while 100 per cent FDI is allowed in cash-and-carry wholesale market.
However, Walmart believes the cash-and-carry segment is not profitable because of poor margin and high real estate cost in the county that has 3 per cent the world’s overall land but 17 per cent of the population, the report mentioned. Walmart currently operates 24 Best Price wholesale stores in nine states and has no immediate plan of expansion across the country.
The financial daily quoted Iyer as saying, “The next 10 years will be the period of exponential growth. And if I look at the opportunities India presents, it will still remain important to stay focused and not start thinking about going national.”
The retailer is looking to venture into tier 2 and tier 3 cities and double its existing stores in the next 3-4 years. The company is poised to open six new shops in Andhra Pradesh and Telangana this year. Also, it generates nearly 50 per cent its sales from outside its cash-and-carry shops either via members directly ordering online or the sales force visiting business-to-business (B2B) members for orders, as per the report.
It is worth mentioning here that the company unveiled its online platform five years ago for members of Best Price Modern Wholesale stores. However, that was confined to cities with the stores. In 2017, it opened an online platform without a physical store.
“Growing the existing stores is one stream. The second stream would be from what we call our fulfilment centres and e-commerce business. As far as our e-commerce platform is concerned, we will see the acceleration of ecommerce and omnichannel in our stores as we progress further in the implementation of this new platform,” the daily quoted Iyer as saying.
