Wal-Mart Stores Inc. (NYSE:WMT) is expected to open its first retail operation in India this month. As this
Time.com article notes, that doesn't mean the discount chain's logo or low prices will be on display. Instead Wal-Mart will operate as a wholesale retailer, providing back-end support to its
joint venture partner Bharti Enterprises, operator of 25 grocery stores in the country. Working with a local partner is a requirement in India, one that will allow Wal-Mart to get to know local markets and tastes, while sharing its distribution and inventory expertise wtih Bharti.
It's a slow, steady approach to growth that reflects the one Wal-Mart is taking in China, where
relationship building is priority number one, according to Wal-Mart's senior director of M&A, Luis Castellanos-Torres. Speaking at The Deal's Corporate Dealmaker Forum last fall, Castellanos-Torres said:
"In China it takes patience, focus and discipline. ... Selecting the right partner is going to be critical. What you find in China are long-term marriages, so you have to play the dating game. It's important to have people living there, on the ground, if you want to do deals. You must have deep relationships there. Deals in China are often sealed over the dinner table, not in a boardroom. There is a high premium put on legacy. Many businesses are family owned, and they want to know that the business is going to be nurtured."Don't be surprised by further investment by the discount king in China and other emerging markets. The company's
international expansion strategy has shifted recently from developed to developing economies, including South America, where in January Wal-Mart acquired 58.2% of
Chile's largest food retailer Distribucion y Servicio D&S SA, and later launched a
tender offer for the remaining shares.
- Suzanne Stevens
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