Walmart in India

3136 Words Oct 5th, 2008 13 Pages
Market Selection

Cultural Analysis

There are several cultural factors that will be affected by Wal-Mart’s entrance into India. If a giant corporate retail company, such as Wal-Mart, enters India it will have a direct impact on millions of farmers and people employed in small businesses. India is a land of retail democracy with hundreds of thousands of bazaars located across the country. In India, main streets are called bazaars as they are lively, vibrant and a source of livelihood for millions of people. Many citizens believe it is part of Indian culture to have crowded lanes with people selling shoes, toys, clothes, and much more. There are cafe owners making coffee and frying potatoes for people on the road sides. Moreover,
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Wal-Mart will have to wait for some time before the Indian government is able to change the law that does not allow foreign, multi-brand retail stores to set up shop. These large retailers are seen as a threat to the small retailers dispersed amongst the country 's retail scene. These small retailers provide employment to tens of thousands of people which may become unemployed in the case that India allowed the entrance of large multi-brand companies. These rules don 't apply to the wholesale sector creating a loophole through which Wal-Mart may set up a joint venture with local companies such as Bharti Enterprises. The government allows 100 percent FDI in cash-and-carry operations and 51 percent in single brand operations. Wal-Mart would therefore have the opportunity to enter a cash-and-carry operation with a 50 percent stake.

Financial and Economic

There are several key reasons why India is a prime market for Wal-Mart to pursue at this time. Several financial and economic opportunities will allow Wal-Mart to be successful in this market.

India is the second most populated country in the world with an approximate 1.3 billion people, and boasts an exponentially growing middle income consumer. Currently, the middle class numbers are around 50 million people, but by the year 2025 this is expected to expand dramatically to around 583 million people, 41% of the Indian population (“Next Big

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