Senior officials at P&G told ET that its India unit has shipped its first consignment of personal-care products to Bharti-Wal Mart, a joint venture for the cash-and-carry and logistics initiatives.Our take:
While the joint venture will focus on B2B business, the Bharti group plans to launch small-format retail stores shortly. The officials said P&G India is helping Wal-Mart understand the nuances of doing business in India. Wal-Mart’s India exposure has been so far restricted to sourcing from the country for its global operations.
The Wal-Mart official said the first cash-and-carry store is expected to open by 2009. “It is too early for us to comment on the details of our cash-and-carry format,” said the official.
Sources close to Bharti-Wal Mart said the collaboration between P&G and Wal-Mart comes as the US retailer wants to ride P&G’s experience in retail trade in India. They said even before Bharti-Wal-Mart announced the joint venture, a P&G research team was helping Wal-Mart understand the Indian market better in terms of consumer behaviour and buying patterns.
Wal-Mart may be the world's largest retailer, but India is the world's fastest growing nation, with a population already well in excess of a billion. With less than 5% of retail trade falling under what Westerners would call "organized retailing" there is an enormous and growing amount of money up-for-grabs for savvy retailers looking to enter the market. By parntering with P&G, a company known for its market research savvy, Wal-Mart is taking a more cautious approach in hopes that a successful introduction to the country could lead to a future where India contributes a significant portion to their bottom line.