Wednesday, August 18, 2010

Wal-Mart, Tesco May Be Welcomed by India Consumers, Survey Says

Left: People taking pictures of the inauguration function of the first Wal-Mart store in Amritsar

India’s consumers will probably welcome the entry of overseas retailers such as Wal-Mart Stores Inc. and Tesco Plc, according to a survey conducted by a management school.

Eighty four percent of respondents in a survey conducted in New Delhi by the Birla Institute of Management Technology said they supported allowing foreign direct investment in India’s retail industry. The Noida, Uttar Pradesh-based institute said it surveyed 660 people. It didn’t provide a margin of error.
The findings were submitted to the trade ministry, which had invited views. Bentonville, Arkansas-based Wal-Mart is urging India’s government to lift curbs on the retail industry’s operations in the world’s second-most populous country. Total retail sales in India will grow from 16.3 trillion rupees ($350 billion) this year to 25 trillion rupees in 2014, Business Monitor International estimates.

“Customers are definitely going to benefit on price, and better quality of service,” said Kartik Dave, an associate professor at the management school.

Overseas companies are restricted to 51 percent ownership in single-brand outlets or 100 percent ownership in wholesale stores in India.

Wal-Mart may open “hundreds of stores” in India once the government allows foreign direct investment in the South Asian country’s retail industry, Raj Jain, managing director of the Bharti Group’s wholesale venture with Wal-Mart, said last month. The world’s biggest company has also said India’s inflation would slow by at least two percentage points should the government permit increased foreign investment in retail.

Carrefour SA has said it may opt for a franchise model in India.

To contact the reporter on this story: Malavika Sharma in New Delhi at

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