The Bharti Wal-Mart JV has been in news ever since the partnership took effect in late 2006. The reasons are many – from its seemingly cautious approach in store expansion to its business strategy to its community building initiatives in India, the retailer has been the subject of discussion among Indian and international retailer keenly studying the Indian marketplace. In an exclusive interview ImagesFood.com, Arti Singh, VP, Corporate Affairs of Bharti Wal-Mart shares the experiences, learnings and future plans of Best Price Modern Wholesale, the JV`s cash and carry format in India.
ImagesFood (IF): How has the existing cash and carry format in Amritsar fared so far? What are the key learnings from the experience?
Arti Singh (AS):The response has been very good. We have over 35,000 primary members at our first store in Amritsar. Best Price Modern Wholesale offers a one-stop shop to commercial customers like kirana stores, thus saving them time and money and offering them a wide array of quality products at best prices. The assortment, service and store layout of our cash-and-carry store is customised to the specific needs of commercial customers so that they can benefit from high quality products to help them enhance their businesses and profitability.
As we`ve studied the Indian market, we`ve been impressed by how much we have learned from the existing system. It`s a system that works -- quite often against the odds.
However, there is a need for increased efficiencies that can help minimise wastage, particularly of fresh fruits and vegetables. Although India is the second largest producer of fruits and vegetables in the world, it is estimated that huge quantities of fresh fruits and vegetables -- as much as 40 per cent -- are lost due to the lack of a cold chain infrastructure.
This is where the global experience, expertise and best practices of Wal-Mart can help in making a difference by working with the existing supply chain infrastructure and make it more efficient. The objective is to cut the waste, not the middlemen who can play a very important part in the entire supply chain.
We are looking at saving in every aspect of that supply chain. It`s not just about negotiating better prices with the suppliers; it is actually about working with suppliers to remove any inefficiency in the supply chain. We are working with suppliers on packaging, on stock control, better management and inventory, and so on. All those savings which come out of that effective management of supply chain will be passed on to the kirana stores and other business owners, who are our customers.
IF: Are you intending to open more cash & carry outlets anytime soon? Any locations shortlisted?
AS: Bharti Walmart is expected to open 10 to 15 wholesale cash-and-carry facilities and employ approximately 5,000 people over the next three years. We are initially targeting tier II and III cities. For the next couple of years, the focus will largely be Punjab and then moving to the states of Haryana, Uttar Pradesh, Rajasthan, Delhi and Madhya Pradesh.
IF: What criteria have determined choice of these locations?
AS: Punjab is a great market and full of unexplored opportunities, besides acting as a hub for various other cities in north India. Moreover, as the focus of our supply chain is Punjab, Amritsar was the natural choice. While there are an estimated 12 million kirana stores in India, the largest FMCG companies in India are able to serve less than 10 percent of these outlets directly. As a result, 90 per cent of kirana stores are not directly serviced. Our B2B wholesale cash-and-carry stores offer a one-stop-shop way for kirana stores to get access to quality products and at the prices they need. In turn, they can pass on these benefits to their customers. This is particularly true for tier II and III towns like Amritsar in Punjab.
IF: Going forward, as the scale of operation increases, how would your private label products impact the fortunes of manufacturer brands?
AS: Private label is a very intrinsic and important part of good retailing and wholesaling. While supplying to Bharti Retail stores, we have been running a private label programme. It, of course, requires a deep understanding of supply chain, and developing suppliers so that they are ethically and quality right. We have the relevant expertise and we have brought this to India.
We also have a lot of international private label suppliers who are interested in setting up shops in India to create private labels, not only for Bharti and Walmart stores but also for the entire industry. We are working on getting them to India. So, there is a lot of work happening in that area, and this will benefit the entire industry.
IF: Besides supply chain inefficiencies, if you were to name one top-of-mind challenge of operating in India, what would it be?
AS: The easiest thing to do in cash-and-carry or retail is scalability, to roll out stores. However, the real challenge is to keep feeding these stores consistently with good quality products at the right price. We are here for the long term and we recognise the importance of having the back-end infrastructure and merchandising plans in place so that we can provide the optimum assortment mix that will appeal to our members. Readiness must first be put in place at the back-end, and not the other way round.
— as told to Bhavya Misra
Source: ImagesFood
ImagesFood (IF): How has the existing cash and carry format in Amritsar fared so far? What are the key learnings from the experience?
Arti Singh (AS):The response has been very good. We have over 35,000 primary members at our first store in Amritsar. Best Price Modern Wholesale offers a one-stop shop to commercial customers like kirana stores, thus saving them time and money and offering them a wide array of quality products at best prices. The assortment, service and store layout of our cash-and-carry store is customised to the specific needs of commercial customers so that they can benefit from high quality products to help them enhance their businesses and profitability.
As we`ve studied the Indian market, we`ve been impressed by how much we have learned from the existing system. It`s a system that works -- quite often against the odds.
However, there is a need for increased efficiencies that can help minimise wastage, particularly of fresh fruits and vegetables. Although India is the second largest producer of fruits and vegetables in the world, it is estimated that huge quantities of fresh fruits and vegetables -- as much as 40 per cent -- are lost due to the lack of a cold chain infrastructure.
This is where the global experience, expertise and best practices of Wal-Mart can help in making a difference by working with the existing supply chain infrastructure and make it more efficient. The objective is to cut the waste, not the middlemen who can play a very important part in the entire supply chain.
We are looking at saving in every aspect of that supply chain. It`s not just about negotiating better prices with the suppliers; it is actually about working with suppliers to remove any inefficiency in the supply chain. We are working with suppliers on packaging, on stock control, better management and inventory, and so on. All those savings which come out of that effective management of supply chain will be passed on to the kirana stores and other business owners, who are our customers.
IF: Are you intending to open more cash & carry outlets anytime soon? Any locations shortlisted?
AS: Bharti Walmart is expected to open 10 to 15 wholesale cash-and-carry facilities and employ approximately 5,000 people over the next three years. We are initially targeting tier II and III cities. For the next couple of years, the focus will largely be Punjab and then moving to the states of Haryana, Uttar Pradesh, Rajasthan, Delhi and Madhya Pradesh.
IF: What criteria have determined choice of these locations?
AS: Punjab is a great market and full of unexplored opportunities, besides acting as a hub for various other cities in north India. Moreover, as the focus of our supply chain is Punjab, Amritsar was the natural choice. While there are an estimated 12 million kirana stores in India, the largest FMCG companies in India are able to serve less than 10 percent of these outlets directly. As a result, 90 per cent of kirana stores are not directly serviced. Our B2B wholesale cash-and-carry stores offer a one-stop-shop way for kirana stores to get access to quality products and at the prices they need. In turn, they can pass on these benefits to their customers. This is particularly true for tier II and III towns like Amritsar in Punjab.
IF: Going forward, as the scale of operation increases, how would your private label products impact the fortunes of manufacturer brands?
AS: Private label is a very intrinsic and important part of good retailing and wholesaling. While supplying to Bharti Retail stores, we have been running a private label programme. It, of course, requires a deep understanding of supply chain, and developing suppliers so that they are ethically and quality right. We have the relevant expertise and we have brought this to India.
We also have a lot of international private label suppliers who are interested in setting up shops in India to create private labels, not only for Bharti and Walmart stores but also for the entire industry. We are working on getting them to India. So, there is a lot of work happening in that area, and this will benefit the entire industry.
IF: Besides supply chain inefficiencies, if you were to name one top-of-mind challenge of operating in India, what would it be?
AS: The easiest thing to do in cash-and-carry or retail is scalability, to roll out stores. However, the real challenge is to keep feeding these stores consistently with good quality products at the right price. We are here for the long term and we recognise the importance of having the back-end infrastructure and merchandising plans in place so that we can provide the optimum assortment mix that will appeal to our members. Readiness must first be put in place at the back-end, and not the other way round.
— as told to Bhavya Misra
Source: ImagesFood
