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Wal-Mart (NYSE:WMT) Ends India Sojourn, Restructures Its Chinese Outlets

Posted in Markets2 years ago • Written by Ryder JessicaNo Comments

Dallas, Texas, 10/28/2013 (ustrademedia) – Wal-Mart (NYSE:WMT) has had it tough in the past quarter. It’s smartest move to begin operations in India in 2010, resulted in a tame withdrawl from a joint venture with Indian retail major Bharati Enterprises.

The withdrawl was in itself a logical end to series of controversies. Indian retail segment does not allow Direct Foreign Investment and overseas vendors can operate only through a joint venture through an Indian company. However, the main hurdle for Wal-Mart were the government investigations into the ‘deal-making process’ and referral to the central bank of India to know if any illegal transactions were adopted. Though, Wal-Mart was eventually cleared of all charges, it had already chosen to withdraw from the joint venture.

Elsewhere, in China, Wal-Mart continued its restructuring process. Preferring to call it the Rationalization process, the company has suggest that it would complete operations of its existing stores and open new stores. This would not only allow the retail chain to consolidate its presence in the ‘land of the dragons,’ but also provide greater strategic presence, the company said.

It is expected that Walmart would operate over 110 new facilities, while it would close down operations of almost 15 to 30 stores in China.

It is believed that current operations in China are no where near the strategic and ambitious goals the retail giant has for its Chinese footprint. Currently, as a ecommerce provider, the company has considerably higher presence than its retail foot print.

China is one of the largest markets for the US marketer and since the misses it has had so far in India, Wal-Mart proposes to follow stricter compliance with local Chinese policies and practices. The new stores are expected to build Wal-Mart user-friendly and cost-friendly presence in most Tier I and Tier II cities in the next quarters.

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