Walmart: What Happened In India?

Dissolution of Partnership

• Partnership Formed: Walmart and Bharti Enterprises formed a joint venture in 2007 to operate cash and carry superstores under the name Best Price Modern Wholesale.
• Superstores Built: The partnership resulted in 20 superstores in major Indian cities including Amritsar, Zirakpur, Jalandhar, and others.
• End of Partnership: The partnership has been dissolved, with Bharti acquiring Walmart's Compulsory Convertible Debentures in Cedar Support Services.

Bharti's Plans

• Independent Growth: Bharti plans to grow independently, operating 212 stores and investing in the Easyday retail concept.
• Commitment to Quality: Bharti aims to build a world-class operation.

Walmart's Strategy

• Continued Operations: Walmart will continue operating the 20 superstores independently.
• Focus on Infrastructure: It emphasizes its supply chain, direct farm program, and supplier development to serve India and provide shareholder returns.

Challenges in India

• Sourcing Regulations: The Indian government requires 30% sourcing from small suppliers, a challenge for Walmart.
• Fraud Investigations: Ongoing US investigations into alleged fraud in multiple countries, including India. The Indian government is investigating a potential foreign investment rule breach by Walmart.

Reasons for the Breakup

• National Differences: Differences and challenges in collaboration could have led to the breakup.
• Liberalization Hopes Unfulfilled: Walmart aimed for a more liberalized Indian market which didn't materialize, making the partnership less desirable.

Historical Context

• Comparison to Germany: Similar challenges faced in Germany where local competition and regulatory restrictions limited success.

Global Expansion Challenges

• Learning Curve: Walmart's international expansion showcases both rapid growth and challenges due to inexperience.
• Local Adaptation: Success requires adapting to local markets, as Walmart's dominance in the U.S. doesn't guarantee international success.
• Retail as a Local Business: Despite being a global giant, retail success is contingent on local conditions.