Sie sind auf Seite 1von 7

Mumbai: The Enforcement Directorate (ED) is set to investigate Flipkart Online Services Pvt.

Ltd and Bharti Walmart Pvt. Ltd for alleged violations of Indias foreign direct investment (FDI) rules, on a reference from the central bank. The Reserve Bank of India has informed that matters related to Bharti Wal-Mart/Cedar Support Services Ltd and M/s Flipkart Online Services Pvt. Ltd, respectively, have been referred to the Directorate of Enforcement for further investigation, the government said in a statement on Monday. The department of industrial policy and promotion had in October asked RBI to investigate if US retailer Wal-Mart Stores Inc. had allegedly violated Indian FDI norms by investing in a retail company of the Bharti Group. Bharti Walmart is an equal joint venture between Bharti Enterprises and Wal-Mart Stores and operates wholesale stores in India under the Best Price Modern Wholesale brand. Cedar Support Services is a part of Bharti Retail. We are in compliance with Indias FDI laws. All procedures and processes have been duly followed and details filed with relevant Indian government authorities, including the Reserve Bank of India, a spokesperson for Bharti Walmart said on Tuesday. The central government has sought certain information and clarification which has been provided by us. Wal-Mart Stores is conducting an internal probe into allegations that its executives bribed officials in Mexico, China and India to be able to open local stores faster. Bharti Walmart last week suspended some employees as part of the investigation, media reports have said. In September, the government cleared a proposal to allow up to 51% FDI in supermarkets, allowing global retailers to set shop in the country. But it decided to not allow companies with FDI to sell their products through online in India, effectively shutting the door on Amazon.com Inc. and other foreign ecommerce firms and preventing foreign retailers entering India from selling online. Flipkart is in complete compliance with the laws of the land. We will also work with any authority to assure them of the same, a Flipkart spokesperson said in an emailed response. Flipkart is one of the most funded e-commerce retailers in the country and has raised more than $180 million from various global investors.

New Delhi: Raj Jain, managing director and chief executive of Bharti Walmart Pvt. Ltd, has resumed work amidst an ongoing bribery probe in the company, according to a spokesperson. Jain was absent while the company suspended its chief financial officer as well as four other members of the legal team over violation of the Foreign Corrupt Practices Act, a US law that seeks to prevent bribery of officials in other countries. Wal-Mart had started a worldwide review of its policies, practices and internal controls for FCPA compliance in March 2011. In November, the company announced that it had started investigations regarding allegations of potential FCPA violations in a number of markets, including India, Brazil and China. The retailer has spent more than $35 million on its global FCPA compliance review efforts over the past 18 months. We take compliance with the FCPA very seriously and are committed to having a strong and effective global compliance program in every country in which we operate. We are working diligently to strengthen our compliance programs and dedicating considerable resources to this effort, a Bharti Walmart spokeperson said in an email response. Bharti Walmart, an equal joint venture between Bharti Enterprises and Wal-Mart, operates wholesale stores under the Best Price Modern Wholesale brand.

Evolution of Indian retail

Walmart's Dilemma- Challenges

For retailing industry it's a long way to travel. India has all the right compositions for retail growth; it had been treated as a protected industry. The government did not allow FDI in retail sector, the Protectionism nature of Indian government is very visible through the control of FDI. In case of companies who dealt in single brand, the government in February 2006 allowed 51% of equity partnership through a joint venture with a domestic player.

Various controls that are imposed by government have reserved the rights of well organized multinational retailers. Infrastructure has been one of the key concerns and also various levels of taxation by the government have created barriers of entry for the retail industry. Government of India is trying their best to remove such kind of obstacles, but some of the key issues still remain open.

Experts opined that the developed and developing countries' experiences had proved that performance of organized retail was strongly linked to the performance of the economy as a whole. This was mainly on account of the reach and penetration of this business and its scientific approach in dealing with customers and their needs.

The R&D division of Walmart had good Global commerce knowledge about different markets. This could be one of the reason why Walmart one of the largest retailer opted India, which is the second largest populous country and the fourth largest retail market in the world.

Legal and political Challenges

Despite India being an attractive market, the predicament Walmart faced was India's complex Foreign Direct Investment regulations which is currently the biggest obstacle for global retailers from inflowing into the Indian market. Many international retailers had set up their shops in India either through franchising deals with local partners or joint-venture partnerships with Indian companies. Experts had opined that Walmart would attempt to bypass the rules on FDI by opening a cash-and-carry outlet either in Bangalore or Haryana state as foreign-owned such stores are permitted in India.

In August 2005, Walmart had requested permission from the Indian government to open two experimental stores in Kolkata. Under the proposals, Walmart would buy locally produced food and general merchandise and transport it for sale in its outlets. But Walmart was not allowed to go ahead as the Indian government did not open the retail sector.

Certain political parties in India believe that entry of Walmart would "destroy rather than create employment. This was against what Walmart has projected. They believe that FDI in Indian retail sector would lead to job losses as big retailers like Walmart, backed by huge finances, would pursue a predatory strategy and eliminate their immediate competition, eventually increasing unemployment. Another reason of opposition against Walmart includes the abandonment of trade unions by the giant retailer. It is opined that Walmart's business strategy entails a trade union free company and dismissing employees who try to form trade unions. Besides, cutting costs to offer products to consumers with lowest prices is believed to be a part of strategy. However, Walmart is alleged of pursuing cost cuts in the form of employee wages and therefore is estimated to harm the interests of the workers.

By referring to the above points, it is not sure whether Walmart has studied properly the Political and Legal Environment aspects of India. It's been quite obvious that the government policy and political parties are not in favor of multinational retail giants entering to India. To avoid such kind of protest and consequence the company should have taken a more friendly approach towards entry into Indian market. May be by projecting more social and economical benefit to the country by way of supply chain retailing would have made the entry much more peaceful. On the other side, it was a good publicity for the people of India to know about Walmart giant and their entry into India.

Religious and Language Barriers

Even though the Walmart hasn't had an impact on the religious sentiments of India compared to the food service corporations of the world Like McDonalds. For Example; before setting up the first restaurant in India McDonald's has spend eight years in studying Indian culture and adaptation strategies. The theory of Degree of Adaptation has been taken care of by Walmart R&D Division. India being a multi religious country religious sentiment should be kept in mind while designing and promoting the Company. We had enough and more studies related to religious sentiments and barriers in India and the same has been very well utilized to make sure such barriers of entry are mitigated.

After starting the Operation in India Bharti and Walmart venture, so far has not faced any religious barrier in their operation, which means it should not be taken lightly or ignored because hurting religious sentiments can completely dismantle the operations of the company.

There was no Language barrier faced by Wal-Mart, but the interesting fact to note is that, the entry of the Multinational giant is opposed by people of different language and religion. It was a mix of culture and emotion that fought against the entry of Walmart to India. If we separate language and Religion out of this mixture then there is hardly any significance about their resistance. It looks like Walmart has taken care of Ethical and Social Responsibility in a much more serious way, due to which I believe there was no stand alone fight from a religious or linguistic section of the society.

Recommendations and Conclusions

Despite India being an attractive market, the dilemma faced is India's complex FDI and retail regulations which is currently stopping international retail companies from directly entering the Indian market. Many international retailers had set up their operations in India through franchising deals with local partners or entered in as a joint-venture partnerships with Indian companies

Walmart sourcing strategies encompass building direct relationship with farmers and manufacturers and encouraging them to develop products of international standards, plan production schedules and predict their demands with the help of high-end technology that would be provided by Wal-Mart. Whether the Bharti-Walmart venture would be successful in India and whether Walmart would be able to bring a second revolution of retail in India remain to be seen. Walmart India President and Bharti Walmart managing director & CEO Raj Jain say it is still early days to discuss performance. But a clear strategy of the company has started emerging; and Walmart is ready to take the early advantage of the market segment related to prices, supply chain, real estate and human resource.

HYDERABAD: Bharti Walmart, the joint venture between Bharti Enterprises and Walmart Stores Inc, views limited availability of real estate space coupled with high real estate costs as one of the major challenges before its Indian retail foray, said a top official.

This is in the backdrop of government's restrictions on foreign direct investment (FDI) into multi-brand retail sector wherein the MNC retailers are allowed to open stores only in those cities with a minimum of 10 lakh of population.

Bharti Walmart also sees bad supply chain environment in big cities as another key challenge before its retail foray in view of restrictions on inter-state movement of goods, which could be addressed only through early introduction of goods and service tax (GST).

Talking reporters in Hyderabad on Wednesday after launching Bharti Walmart's wholesale store, 3rd in AP and 18th in India, Raj Jain, Walmart India president and Bharti Walmart MD & CEO, said the joint venture partners hope to firm up their strategy for retail foray in 4-6 weeks.

Jain said the strategy includes working out equity structure for the retail joint venture among the partners who currently hold equal stakes in the wholesale venture. The partners hope to roll out their first Indian retail store in 12-18 months, he said, adding that it was little early for them to announce the retail investments as the policy was very new.

"The largest challenge has to do with real estate in large cities where FDI has been opened up. Unfortunately, the availability and cost of real estate in India is very high and we are a low price retailer. If we pay too much of rentals, we cannot offer great prices to our customers," said Jain.

Jain has urged the government to look at urgently implementing and ensuring consensus on goods and services tax (GST), which would allow free inter-state movement of goods. The third key challenge before the MNC retailers was to train and provide meaningful employment to local population, he said.

While saying that restricting the MNC retailers to cities with 10 lakh of population coupled with few states would affect their business prospects, Jain said there is still a huge market available in India for the global retailers in the states that welcomed FDI. He said the government wanted Bharti Walmart to make a fresh application with the FIPB for a separate company for their retail foray.

On the government's move to allow FDI in retail sector only in those states that had welcomed it, Jain said it was a calibrated and cautious approach in the backdrop of concerns expressed by certain political parties and other constituents. "The government is asking us modern retailers, both foreign and Indian, to demonstrate that we can make a meaningful difference to the life of consumers, farmers and small manufacturers. That is good challenge and we are ready to accept the challenge. Once we demonstrate that it has positive impact on everybody and no negative impact on the small shop owners, I think the governments in other states will open up."

Citing the example of Andhra Pradesh where Bharti Walmart claims to have brought in a lot of benefit through three wholesale stores and commitment for huge investments in retail stores as well, he hoped the adjourning states would also embrace the FDI investments into multi-brand retail sector.

On the wholesale stores, Jain said Bharti Walmart plans to open two more stores in AP and five in the country this year and 10 stores a year over the next two years across the country. Upbeat over the business prospects in AP, Bharti Walmart has launched its private label products for about 400 items, expecting a healthy revenue contribution from private label business

Das könnte Ihnen auch gefallen