Walmart Targets India's Business Owners With New 'Best Price' Warehouse Club Site
The retailer is launching an e-commerce website designed to supply goods to mom-and-pop stores, a sector it estimates will be worth $50 billion by 2020, Bloomberg Bloomberg reported.
The business-to-business website is exclusively available to members of its expanding, 20-store Best Price Modern Wholesale cash-and-carry chain, a model similar to its Sam’s Club warehouse format in the states.
Walmart India is piloting the site in its Best Price stores in cities Hyderabad and Lucknow.
Targeting Business Owners
Unlike Sam’s Club, everyday shoppers can’t buy a membership to Best Price stores or the e-commerce platform.
However, “Members can belong to different business categories, such as resellers, mom and pop stores locally known better as ‘Kirana stores;’ offices and institutions (O&I); and hotels, restaurants and caterers, ‘HoReCa,’” Rajneesh Kumar, vice president of corporate affairs for Walmart India, told Forbes.
Best Price stores, with its stated mission to “enable small businesses to prosper,” plans to open 50 more stores in the country in the next four to five years.
“As an exclusive virtual store for its members, the e-commerce platform will provide a similar assortment of products as well as special items,” he said.
Walmart is hoping to generate 10% of orders for each cash-and-carry store within two years, Krish Iyer, Walmart’s chief executive for India, told Bloomberg.
India’s Expanding Consumer Culture
India’s burgeoning middle class and changing cultural attitudes continue to make it an attractive market for retail investment.
While the nation’s retail sector generates $350 billion in sales, retail penetration in the country is only 8%, but that growth is accelerating, according to a report by PwC India, “Winning in India’s retail sector: factors for success.”
India’s huge market size, GDP growth, rising personal incomes and expanding population of “inspirational consumers” — middle class, young Indians and residents of rural areas — are driving retail growth in the market, the report said.
At the same time, consumer spending in the country is poised to more than double by 2025, according to the India Brand Equity Foundation in its report on the Indian consumer market.
“Previously, shopping was viewed as a functional activity. It meant buying only the essentials. In fact, unnecessary shopping or self indulgence was frowned upon,” the PwC report said.
“However, liberalization in the ’90s, increasing incomes and foreign trips, exposure to the Internet, growing confidence in one’s personal success, etc., are making it acceptable to not only buy non-essential products, but also to splurge on luxury goods.”