About Bharti Walmart Private Limited

Bharti Walmart Private Limited is a business-to-business (B2B) joint venture between

Bharti Enterprises and Walmart for wholesale cash-and-carry and back-end supply chain
management operations in India to serve small retailers, manufacturers and farmers. The
joint venture (JV) has already set up a Distribution Centre in Punjab which will partly
service the merchandise needs of the JV’s cash-and-carry stores as well as retail stores
around the area, including Bharti Retail’s wholly owned Easy Day stores. The JV is
scheduled to launch its first B2B wholesale cash-and-carry store in northern India in
2009. A typical cash-and-carry store will stand between 50,000 and 100,000 square feet
and sell a wide range of fruits and vegetables, groceries, footwear, clothing and other
general merchandise items. The JV is expected to open 10 to 15 wholesale cash-and-carry
facilities and employ approximately 5,000 people over the next seven years.

Advantages of BHARTI – WALMART Retail

• offering great quality of products at the best prices
• Through our unique initiatives such as the 'Mera Kirana' program, we are also
helping small retailers in managing their inventory and capital better and learn
from some of our best practices, thus creating a win-win partnership.
• create employment opportunities
• kirana stores, institutions and business owners will take advantage of this new
best price modern wholesale store backed by our sturdy and efficient supply chain
which provides products at competitive wholesale rates, thereby bringing down
retail prices that enable people to save money to help them live better
• goods and services are sourced locally, thereby helping keep costs to a minimum,
adding to the growth of the local economy and creating job opportunities.
• The ‘Mera Kirana’ program shares best practices with members, who are small
and medium retailers, on various aspects of using low cost modern techniques and
processes such as assortment planning, layout and fixtures, displays, backroom,
licenses, safe food handling, customer retention and value added services.
• To bring great value on the one hand to farmers, artisans and small & big
manufacturers and on the other hand to retailers, kirana stores, and big & small
businesses that will have access to better quality products at favourable prices.
• The assortment, service and store layout of “BestPrice Modern Wholesale” store
will be customised to the specific needs of commercial customers who can walk
in to the store and source high quality products in the quantities they need and at
the time they require, all under one roof.
• With our Cash & Carry stores, many businesses from across the country will
benefit from our efficiencies to add value to their business
• a kirana store, otherwise hard pressed for space, can take advantage of the
“BestPrice Modern Wholesale” store by using it as their warehouse, thus freeing
up their capital for their businesses rather than lock it up in inventory.
• Hotel and restaurant owners will get the opportunity to buy the best quality fresh
produce on a daily basis including a wide assortment of fresh fruits and
vegetables, dairy products as well as hygienically cleaned fish and meat. By
ensuring they receive a regular supply of fresh produce, hotel and restaurant
 owners can focus on their core business of providing exciting menus that please
their customers.
• Special attention is being focused on hygiene and sanitation conditions both at the
stores as well as by suppliers so that customers are assured about the quality and
hygiene standards.

Disadvantages
• Cold Chains
• Warehousing abilities
• Lack of Infrastructure.
• Bargaining Power with suppliers
 Squeezing out higher margins
 Initially scale advantages wont be available
• Innovative Inventory Management
 Cross docking may not be possible
 Frequent replenishment may not be possible Bharti Walmart Business
Model

Business Strategy
• Through continuous supply chain cost control, Wal-Mart is able to maintain
low prices for customers.
 • Asset utilization is another goal for Wal-Mart, but facility, private fleet, and
information technology utilization are again primarily focused on lowering
costs.
• Information technology investments are directed towards improving
efficiencies across the extended supply chain from vendors to stores, and thus
the use of information technology supports the EDLP business strategy
Vendor Collaboration
Level of collaboration depends upon
• Investment Capabilities
• Product Volume
• Value to Wal-Mart

IT Capabilities
• BarCode
• Satellite Communication System
• RFID
• Point of Sale Scanning System
• Retail Link
• Information available to vendors on time
• Vendors can thus improve supply chain and lower costs

Process Differentiation
Two types of products (Fisher, 1997)
• Functional:

 Predictable Demand
 Low Margin
 Supply Chain is efficient and low cost

• Innovative

 Unpredictable Demand
 High Margin
 Cost and probability of stocking out are higher
 Supply chain should be flexible and responsive

Sources of Cost advantages

Own transportation system:

 Resulted in cost savings and ability to deliver products in to various stores within
48 hours

Usage of IT in Supply Chain management

  Inventory tracking using information available in barcode.
 POS scanning: Which helped in managing the products at supplier’s end.
 RFID tags: Enabled to keep track of the inventory throughout the supply chain.

Strength
 2 giants coming together
 SCM/ technology
 Partnership with Bharti ² Brand name, localfo c u s
 One- stop- shop
 Global approach ² global(Walmart)+Local (Bharti

Weakness
 WalMart lacks proven cultural adaptability
 Low level of internationalisation
 Only16 % revenues comes from International operations
 PoorC SR reputation

Opportunity

 Organized retail ²2% of tot. retail

 Opening up of FDI
 High future demand- AC Nielsen

Threat

 Govt. regulation in retail

 NGO, social pressures
 Poor infrastructure
 Lack of skilled manpower+ poaching
 Other Indian conglomerates Strategic convergence

Bharti-Walmart eagerly awaits FDI policy decision,

Wal-Mart looking to open over 100 stores in India
Wal-Mart Thursday announced that it will open more than one hundred stores in India if
the FDI regulations policy under discussions permits FDI in multi-brand retail. Wal-Mart,
the biggest retail chain in the world, said it is mulling the establishment of as many stores
in the country to tap into its large retail market, estimated to be worth $450 billion.

Currently, FDI is not permitted in multi-brand retail and foreign companies have been up
in arms to get the Indian government to revise the Policy. As it is, the Indian FDI retail
regulatory regime favors small mom-and-pop stores that the government believes are a
source of livelihoods for a majority of Indians.

Managing director and Chief executive of the Indian joint venture, Bharti-Wal-Mart, Mr.
Raj Jain said Thursday that if the country revises the FDI laws to permit foreign direct
investments in the retail sector, the company would establish hundreds of stores soon.
There have been positive signs recently with the Indian government taking measures
aimed at opening up FDI in multi-brand in the retail sector in early July through
publication of a discussion paper over the same.

However, there have been no indications from the government that it is definitely going
to make the changes that will allow foreign retail giants such as Wal-Mart to foray in the
Indian retail market.

India’s existing FDI retail regulations place a 51% cap on foreign direct investments in
single brand retail outlets but retailers with multiple brands are limited only to cash-and-
carry business or wholesale stores such as what Wal-Mart currently runs in the country.
However, pundits have maintained that allowing foreign direct investments in multi-
brand retail is one way to bridge India’s high fiscal deficit, bring down prices of food
through waste reduction and employ thousands of people.

Previous attempts to open up FDI in multi-brands retail have been met with vehement
opposition amid fears that it might considerably harm small family run retail businesses.
India’s domestic retail giants such as Bharti have even come under strong opposition too
in attempts to expand their operations into some Indian states over the same fears. But
according to Jain, the head of the Indian Joint venture Bharti-Wal-Mart, the fears are
unfounded and if considered from the available statistics, China, Mexico and Brazil
allowed multi brand retail over two decades ago and their impact on small retail
businesses is yet to be felt, he said.

Reference:
http://www.scribd.com/doc/36047153/walmart#