WALMART Bharti says supply chain is main hurdle for growth in India

Planet Retail 29 Jul 2010

Raj Jain, Managing Director and Chief Executive of Bharti Walmart in India has said he sees the supply chain as a major obstacle inhibiting growth for western retailers. Earlier this month the government took a tentative step towards opening the organised retail sector to foreign investors with the issue of a discussion paper on the issue. However, according to Jain the larger issue in the country is the fragmented supply chain.

He said: "[The] supplier base including the farmers, the local suppliers, even the big companies are not ready to supply to a large format of organised retail in an efficient way." Asked how that would affect Walmart's pace of expansion Jain replied: "I think significantly. My own view is for the first five years it's going to be very, very difficult to rapidly expand in the country. I see this as at least a decade before a supply chain of any international quality and standard will be set up in India."

Walmart's India joint venture currently operates two Best Price Modern Wholesale cash & carry outlets in India and expects to open as many as 15 stores over the next three years. Around 90% of goods are sourced locally, direct from farmers and manufacturers.

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