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Wal-Mart Enters Indian Market with Local Partner

After the British retailing giant Tesco failed to reach agreement with Indian Bharti Enterprises, Wal-Mart ceased the opportunity to enter the promising Indian market. Wal-Mart signed an agreement with Bharti Monday stating the two companies will develop business opportunities in the world`s second most populous nation.

Bharti is controlled by Sunil Mittal, India`s sixth riches person, and is one of the country`s leading corporations with investments in telecom, agriculture and insurance. The French Carrefour, the world`s second biggest retailer, tried to reach an agreement with Bharti as well, in an attempt to grab a hold of the Indian retail market which is expected to reach $637 billion annually by 2015. Mukesh Ambani, Reliance Industries chief, believes that 10-15 million jobs would be generated in the next 3-5 years due to the fast growth in retail. Ambani added: "There is enough human talent available and with 3-6 months training, we can give world-class services to our customers."

Experts estimate that 97% of the Indian retail market is controlled by small shops. Only 3% of the market is held by large brand retailers, an extremely low figure when compared with China`s 20% and Thailand`s 40%. The agreement between the two companies is set to start opening stores in 2007, and Mittal expects hundreds of stores in areas were the Indian government allows foreign investments. The stores themselves will be owned Bharti under lease and brand of Wal-Mart. The deals parties are not exposing the financial details of the deal at this point but sources report that Wal-Mart will initially invest $100 million that will later grow to up to $1.46 billion.