US giant Walmart quits India after venture ends

[neehar]

quits india??surely op has got some comprehension problems.bharati and walmart is a joint venture between two companies and they both split up to make two seperate entities.

Walmart, Bharti part ways - The Hindu
Bharti Enterprises and U.S. retail giant Walmart, on Wednesday, announced the termination of their joint venture, ending a six-year relationship that was marked by troubled times in the last few months. The immediate fallout of the termination was the appointment of former Walmart India Country Head Raj Jain as an advisor to Bharti group.

In a joint statement, the two companies said they have reached an agreement to independently own and operate separate business formats in India, and discontinue their franchise agreement in the retail business. The agreement is subject to finalisation of definitive agreements and requisite regulatory approvals. The U.S. retail major will now buy out its Indian partner in their 50:50 cash-and-carry joint venture, Bharti Walmart, which runs 20 wholesale stores under the ‘Best Price Modern Wholesale’ brand in India.

The financial details of this transaction were not disclosed. Bharti will acquire $100 million worth of compulsory convertible debentures (CCDs) held by Walmart in Cedar Support Services, a company owned and controlled by the Indian firm. It will also continue to run the ‘EasyDay’ retail stores on its own. In a statement, Bharti Enterprises Managing Director Rajan Bharti Mittal said Bharti would continue to invest in Bharti Retail across all formats. “We have a strong platform to significantly grow the business,” he added. Similarly, Walmart said it planned to continue to grow its business while working with the government and interested stakeholders to create conditions that enabled foreign direct investment in multi-brand retail.

“Given the circumstances, our decision to operate independently will be beneficial to both parties,” Walmart Asia President and CEO Scott Price said. The two had joined hands in 2007, and launched their first cash-and-carry store in Amritsar in May 2009. A Walmart India spokesperson said: “We are working with Bharti to finalise the terms of the agreement, and transition arrangement. We will provide further financial information as appropriate.”

Inevitable move

Experts in the retail industry were of the view that this move was inevitable as both parties had not been having the best of relationships during the last few months, especially after the Enforcement Directorate launched a probe into the monetary transactions of $100 million to Cedar Support Services

 

[Fattyacids]

We have Adidas and Nike opening retail stores in even small towns, and Chinese sports gears are expensive for us? The question was, what quality Chinese products can an average Indian buy from Walmart? The emphasis was on FMCG, consumer electronics and stuffs.

I haven't seen any average Indian or American buying Huawei or ZTE server rack from Walmart, so lets put those out of perspective. And Made in China, Indian mobile brands like Micromax or Karbonn aren't considered quality product as per se.

Bdw, there were couple of phones that interests me, some being Lenovo K900, Huawei Ascend P6 and OPPO Find 5. I'm a HTC One user, so build quality, looks, touch and feel, and bundled processing power is my priority.

Walmart in China and other parts of Asia carry many Lining products. If you're into badminton, Lining makes some of the best rackets. I guess badminton is not big in the US.

You probably won't find many Huawei products in Walmart in the US. But Huawei equipment are of very high standard for sure. Just check out the list of businesses and corporations using their products. If my memory serves me right, Huawei built and operated the first 4G network in India.

There's also Xiaomi mobile phone that is gaining a small cult following in China.

 

[noname1]

It's good walmart is going away. Walmart is not good for small shop keepers. These small shop keepers are self employed people who feed their family because of their shops. Plus, Walmart would have imported cheap chinese products killing the local manufacturers.

Have heard that in every town in the USA where they built a Walmart. There is truth to it, but do you keep doing things inefficiently is also the question. The bottom line is India and its government is controlled by just a few rich and powerful families and it they don't get their cut you don't do business in India. If Walmart cant or wont do business in India any one else is out of their minds to even try.

 

[Jade]

Walmart is going nowhere. India is a trillion dollar retail markets. The new FDI rules don't allow the partnership go forward. Hence Walmart is looking for a new partner.

Typical Pakistani reporting

 

[sovcomflot]

Have heard that in every town in the USA where they built a Walmart. There is truth to it, but do you keep doing things inefficiently is also the question. The bottom line is India and its government is controlled by just a few rich and powerful families and it they don't get their cut you don't do business in India. If Walmart cant or wont do business in India any one else is out of their minds to even try.

How much are you paid by the NSA to create sock puppet accounts?

I would like to send my resume to them .I could do a better job on Cointelpro which you are miserable in ...

 

[Destro]

Just proves Indians are extremely anti-business people. No wonder the entire Indian economy is reliant on QE from the Fed. India will never catch up with us. They are just too corrupt and too nationalistic to ever be able to surpass us. I'm glad, hope they remain this way.

 

[noname1]

How much are you paid by the NSA to create sock puppet accounts?

I would like to send my resume to them .I could do a better job on Cointelpro which you are miserable in ...

Theres nothing I said above that not true. I don't think you have to work for NSA to tell the truth.

 

[sovcomflot]

Theres nothing I said above that not true. I don't think you have to work for NSA to tell the truth.

Tell the truth!!!

Yes and pigs fly!!!

 

[[Bregs]]

Totally misleading title, they have not quit, they have parted ways with bharti. Now on wards wal mart will run "Best price wholesale stores" while bharti will independently run retail chains they were running together in joint venture

 

[Aka123]

One word for Chinese brands.... Lolzz!!

 

[noname1]

By ELAINE KURTENBACH and KAY JOHNSON

The Associated Press


MUMBAI, India -- Wal-Mart Stores said Wednesday that it is splitting from its Indian business partner and cannot move forward with plans for its own retail stores in India because strict government regulations on sourcing from local small businesses make it impossible.

The move by the world's largest retailer is a blow to Wal-Mart's expansion plans in India as well as the country's attempts to attract foreign investment in the huge but underdeveloped retail sector. Wal-Mart already runs a wholesaling joint venture in India and will continue that business, buying out partner Bharti Enterprises.

Wal-Mart did not name any other Indian partner — which would be necessary to open its own retail outlets — and comments from its top Asia executive indicated that plans to open its consumer superstores are indefinitely on hold because of government regulations.

Despite a potential market of 1.2 billion people, no large foreign chains have formally applied to open supermarkets and other multibrand stores in India since the government changed the law last year to allow them to invest more in the $400 billion sector previously reserved mostly for Indian companies. The new law allows international companies to open multibrand retail stores with 51 percent ownership and an Indian minority partner. Foreign companies can operation 100 percent-owned wholesale chains.

Opening the door to foreign retailers like Carrefour, Tesco and IKEA was hugely controversial in India, with opponents saying it could ruin millions of small traders and family-run shops where most Indians now buy their goods. To soften the blow, the new law requires foreign retailers to source 30 percent of the products they sell from small and medium-sized Indian businesses.

Wal-Mart Asia CEO Scott Price said this week that the rule of sourcing from local small and medium businesses is the "critical stumbling block" to its plans to open retail stores in India.

"I don't understand how this 30 percent small and medium enterprise can be executed," Price said in an interview Monday at the Asia-Pacific Economic Cooperation summit in Bali, Indonesia. He added that "on the front end, we cannot build a store unless we are able to comply" with the sourcing rules, a task he deemed unworkable under the current interpretation.

He said Indian retailers are not forced to follow the same rule — which makes it too difficult to make money because no enterprise small enough to meet the government's requirements has the capability to produce on the quality and scale that a large retailer requires.

"So it's a bit of a level playing field issue here," he said.

Bentonville, Arkansas-based Wal-Mart has long had trouble with its joint venture with Bharti Enterprises, and rumors of an impending split have been rife for months.

In June, Bharti-Walmart's CEO left and was replaced. In November, the company suspended several workers as part of an internal corruption investigation.

In a joint statement Wednesday, Wal-Mart and Bharti Enterprises confirmed they would dissolve the partnership.

Wal-Mart will buy Bharti's stake in the Best Price Modern Wholesale cash and carry business that has at least 20 stores across India and continue to operate it in India. Bharti will take 100 percent ownership of the retailing joint venture Easyday.

"Bharti is committed to building a world-class retail venture and will continue to invest in Bharti Retail across all formats," said Rajan Bharti Mittal, Bharti's managing director. "We believe that with our current footprint of 212 stores, we have a strong platform."

Wal-Mart's stock was up 16 cents at $73.06 in early trading Wednesday on Wall Street.

Price insisted Wal-Mart has not given up on India, noting that he is still meeting with Indian officials in hopes of finding a way to meet the sourcing conditions.

"We want to serve India and its people, and continue to make important social and environmental contributions to the country," he said. "We will continue to advocate for investment conditions that allow FDI multibrand retail in India."

Read more here: MUMBAI, India: Wal-Mart splits from India partner; stores on hold - Business Breaking News - MiamiHerald.com

 

[JanjaWeed]

Quit India? I thought they only split from Bharti & are intending to go solo! Looks like the excitement got to the media & hence this sensational headline!!

 

[Fattyacids]

One word for Chinese brands.... Lolzz!!

And Indian brand? Don't make me laugh.

 

[Sugarcane]

And Indian brand? Don't make me laugh.

Kamasutra

 

[Jade]

Kamasutra

Where is the ever famous 'bollywood' that Pakistanis cannot live without.