Mumbai: Wal-Mart India is evaluating policy guidelines to come up with a “food-only” retail model, after the government has allowed 100% foreign direct investment in food retail, a top company official said on Wednesday.
“We are currently evaluating all the policy guidelines and we do not have an ‘only food model’ anywhere. So, we need to conceptualise, evaluate and come up with a model, which takes time,” Wal-Mart India CEO Krish Iyer told reporters on the sidelines of India Retail Forum Mumbai. “It is not something we will jump into very quickly,” he added.
On government’s move to open up food retail to investment, he said all the stakeholders including retailers, consumers, and farmers will benefit from it, and it will also increase access to capital, which will promote retail enterprise.
For Wal-Mart India, food retail in the cash and carry business accounts for more than 65% of business, he said.
“Particularly looking at the importance of food, we do believe that we will continue to focus a lot more on food in our cash and carry stores,” Iyer said.
He also noted that resellers, particularly mom-and-pop stores are the most important channel for Wal-Mart.
“Our e-commerce (B2B) experience has been good, and while we do not speak about the e-commerce sales, more than 50% of buying is digitally influenced,” he said.
Iyer further said that Wal-Mart India is focusing on private labels, however, customer buying proposition is more crucial. Wal-Mart India has two private labels – Member’s Mark and Right Buy. “The idea of private labels is to support make in India programme,” he said.
Wal-Mart India operates stores in nine states across the country. In the next five years, it is planning to add 50 more stores, taking the total number to 70. “We continue to focus on Tier II and Tier III cities, and the opportunities here are as good as metro towns,” Iyer said, adding that availability of land is a challenge in metros but the company continues to look for good options.