On BrandWatch, I referred several times to the new strategy of some U.S. retailers (like Safeway), which consists of building a private label in the U.S. and then selling it abroad at other retailers' outlets - making it into a true national brand. IndiaRetailBiz now tells us that Walmart is implementing a similar strategy in India. Walmart, in November 2006, signed a joint venture with Bharti Retail - a subsidiary of Bharti Enterprises, a company of the Mittal Group, which specializes in distribution. It turns out that India does not (yet) authorize foreign investment in multi-brand retail so Walmart stepped in, in two different ways:
- Walmart provides back-office consultancy in technology, logistics, supply chains ...
- Walmart formed a 50/50 JV, the ultimate purpose of which is to build a chain of Wholesale Cash & Carry stores (where foreign investment is allowed): fifteen of these wholesale stores named "Best Price Modern Wholesale" will be opening in India in the next 3 years - the first was opened in Amritsar on the 30th of May.
The question of retail and direct access to consumers then comes up. The answer was simple. Bharti Retail opened stores under the "Easyday" ensign (there are thirty in the Punjab and Haryana - and now in Delhi). These stores have two distinct features:
- Their graphic identity is a replica of that of Walmart: we are at a Walmart without being there, formally speaking.
- Their assortment of private labels (which today represents 15% of sales, and is expected to increase to 30% within 3 years), includes 8 Walmart private labels - including Great Value, George, Equate ...
We find ourselves, for all practical purposes, at one of Walmart's partners, but the American retailer establishes itself in the Indian distribution landscape without doing so officially, by means of its products and its graphic identity: when the Indian regulations change, only the sign will have to be modified and the name Walmart attached.
