In a change to its strategy in India, Wal-Mart (WMT) announced it will add wholesale stores catering to small businesses. It will also launch e-commerce business in the country. Over the next four to five years, Wal-Mart will add an additional 40 to 50 wholesale stores to the 20 that are already in India. The e-commerce business will start slowly, with one wholesale store offering online sales this summer.
The wholesale business will be cash-and-carry, meaning customers must take goods from the stores themselves, but Wal-Mart said it will offer merchandise delivery for destinations as far away as 40 kilometers.
It’s a departure from Wal-Mart’s previous plan to open retail stores in India. Indian regulations require foreign retailers to have 30% of its inventory come from local small businesses. Restrictions on wholesale businesses are looser.
Yahoo Finance Senior Columnist Michael Santoli spoke with Lauren Lyster about the change in Wal-Mart’s strategy in India. Santoli said the wholesale business is a smart move for Wal-Mart, especially since the company had its retail ambitions thwarted. He doesn’t think the wholesale business will be a huge profit-mover for the company, but said “it does show maybe a model for how they can penetrate parts of the world where they're not yet.”