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Wal-Mart’s Failure to Convert India: The Numbers Tell the Story

by Brandi Moore on December 2, 2010

wal-mart global map

Map from WSJ

Wal-Mart is making all kinds of press in recent weeks with its partial acquisition of South African Massmart.  What no one is reporting on is that Wal-Mart continues to fail in India because India takes the same complaints voiced in South Africa seriously.

In South Africa two business groups in particular are citing concerns about how Wal-Mart will treat union members and local businesses (suppliers and manufacturers)

This is the problem that India is trying to avoid: taking the mom and pop stores out of business by overrunning them with Wal-Mart’s well known efficiency and bargin pricing.  In the US, where Wal-Mart has over 4,400 stores, Wal-Mart is a model for anyone running a distributed retail chain with multiple suppliers.  During the crisis of Hurrican Katrina who could get water to New Orleans?  Not the US government. It was Wal-Mart.

Wal-Mart demands a lot from its suppliers from just in time delivery to environmental standards to deeply discounted prices.  These restrictions are almost impossible to meet as a small business.  While these are not rolled out in every country, its clear that in a place like India, mom and pop’s that are allowed to buy from Wal-Mart(Wal-Mart is classified as a distributor in India) would likely never be able to effectively sell to it.  For an indepth look at what the differences are between India and China take a look at this article.

Is your company thinking about India?  Wal-Mart’s India experiences are examples of a strategy that works in the US but not in India.  Don’t let this happen to your career or your company.  Contact us today to discuss your India plans at info@indiathink.com.

This map is from the WSJ: http://online.wsj.com/article/SB10001424052748704700204575643903598869416.html

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