India next on Wal-Mart's expansion agenda

The country's increasing Internet and smartphone penetration is attracting big retailers.

By Trefis Apr 24, 2012 8:32AM
Wal-Mart (WMT) seems keen to grab a share of the growing e-commerce market in India, the world's second most populous nation. It is in talks with leading e-commerce companies for a potential strategic partnership.

With increasing penetration of Internet and smart phones, the e-commerce market in India has gained momentum, and big e-commerce companies such as Amazon (AMZN) have shown interest in it. For instance, in February of this year, Amazon launched junglee.com, which offers 12 million products across 25 categories.

Walmart Stock-Break
Wal-Mart's online revenues represent about a 2% share of its total sales, which is very small given the reach and scale of its operations. It has undertaken several technological initiatives to boost its online operations and has made a series of acquisitions, including Yihaodian, Grabble and Kosmix, among others, to build its presence in this space.


In India, the retail giant operates through a joint venture with Bharti Enterprises and has 17 stores, to date. Increasing mobile and Internet penetration would likely lead to impressive growth in the Indian retail market in the coming years.


According to Business Monitor International, the Indian retail market is expected to double to $785 billion by 2015 from $396 billion in 2011, and we think Wal-Mart could gain handsomely from this growth by aggressively expanding its online presence in the country.


We have a price estimate of $72.53 for Wal-Mart, implying a premium to the current market price.

Tags: AMZNWMT
10Comments
Apr 24, 2012 11:55AM
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indias retail market should double.they are one of walmarts biggest suppliers.think of how much walmart will save in transporting goods made in country and their other supplier china.altho china cancelled its free trade agreement with india when jobs started leaving china for india.china cares about its people.thats why our government makes more free trade agreements.our government cares only for the rich
Apr 24, 2012 12:26PM
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Since our govment gives huge tax breaks for companies to out source yea they wont be happy til we all work for minimum wage. WAKE UP AMERICA do a little homework and you will see a clear course of destruction to the middle class.
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Why not India, the techniques that Wal Mart implemented and applied in Mexico should work well in "penetrating" the Indain market as it would in any third world country.  Of course with the exception of Germany who booted Wal-Marts butts otta there, it applies as well to the first world countries.  The only significant difference in the plan does not involve bribes to governments instead hiring a few extra people to help their workers file food stamp and state subsidized health care.  Of course they do donate to the local youth leagues to soothe the feathers a bit.  Bottom line, same filth, same stench. 
Apr 24, 2012 11:49AM
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OMG.........DOES WALMART WANT ALL OF THE BUSINESS IN WORLD???

WHAT NEXT?? WILL EVERYONE END UP WORKING FOR WALMART? WILL THE NEW GOVERNMENT LEADERS REALLY BE WALMART EXECS?

Apr 24, 2012 1:30PM
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dont buy @ walmart 

 

corrupt company

Apr 24, 2012 2:53PM
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As the government of India has already publicly announced no Wal-Mart here/never. I am thinking if their are serious about protecting small family run businesses which comprise 80% of their economy then Wal Mart will never open in India. The Indian prime minister made the comment that they will not let Wal Mart Americanise their country!Baring teeth
Apr 24, 2012 2:58PM
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lots of poor people store and income will go away if walmart go to india. more poor people you will see.
Apr 24, 2012 3:38PM
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They should do well there since their so use to underhanded permits.Payoff city is what alot of contractors call India.
Apr 24, 2012 3:38PM
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OMG.........DOES WALMART WANT ALL OF THE BUSINESS IN WORLD???WHAT NEXT?? WILL EVERYONE END UP WORKING FOR WALMART? WILL THE NEW GOVERNMENT LEADERS REALLY BE WALMART EXECS?

Pretty much. 

Apr 24, 2012 2:58PM
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american companies have difficulty breaking into certain regions.  took bribes to work in mexico, failed in germany, and will be difficult in india.  dealing with corrupt and foreign govts always requires extra resources and effort.  you have to provide a good reason why you should come into their country and siphon profits to another.  do you do something they need or are you just trying to butt in?

walmarts been trying to get into that market for a while, nothing specifically newsworthy about it.  seems like a neutral story intended to distract from the mexican one (which was outdated and not worth the hype...but hey, walmart news gets the clicks so they keep doing it)
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