Can Wal-Mart Make It In India?

Posted by: Bruce Nussbaum on November 28, 2006

Fresh from news that its November sales were disappointing in the US, Wal-Mart has announced that it will enter the India market in partnership with cell-phone provider Bharti Enterprises. If Wal-Mart wants to make a success of its Indian adventure and avoid the kind of mistakes it made in Germany and Korea, where it was forced to pull out, it should send its top managers to next week’s Design With India conference in New Delhi to learn about local culture, branding, design and products. Organized by the Confederation of Indian Industry and the National Institute of Design, the summit will bring together hundreds of business people, scholars, designers, and government bureaucrats to discuss innovation and design in India. Entire sections of the conference will be focussed on European, American and other foreign companies seeking to strike partnerships with Indian corporations and enter India. This is one must-go conference.

Wal-Mart needs help in understanding customer culture. In the US, its foray out of it’s low-cost business model into high fashion has been a failure. It’s push into more sophisticated urban marketplaces, where opposition to Wal-Mart’s low-wage model is strong, has been problematic as well. It’s efforts to sell to German and Korean consumers failed. Wal-Mart is doing much better in Latin America but India and China are the big bets for the future and it’s not clear whether the low-cost model will work for the growing Asian middle class smitten by the lure of luxury brand names and used to very personal service.


“Culture” is a growing theme in the innovation space, surpassing “experience.” Nowhere is that going to be more important than in India. One of the smartest people I know who writes about Indian culture and doing business in India is Niti Bhan. She’s going to be speaking at the Design With India conference next week. Check out her blog for her insights on Indian culture, marketing and innovation.

Reader Comments

Premal

December 26, 2006 4:55 PM

Yes, it is very important for Wal-mart to understand the customer culture..but whats more important is to understand the Indian mindset for changing their shopping habits.

Gita

January 4, 2007 7:16 PM

I think Walmart's should set its sight on organizing the whole sale market in India...Build a Costco-ish environment (somewhere away from the traffic and craziness, like Costco) they can create "value" in the minds of Indian consumers :

- By saving them time in buying basic stuff in bulk like oil, soaps, washing powder etc....
- By providing everyday discounts and deals since they will be cutting down on retail handling costs like other retailers do
-Enhance grocery shopping experience by creating cafe spaces (for ppl to eat while they shop) and gaming areas (kids can play while their parents shop)

No one has ever branded the wholesale shopping in India... there is no organized Costco...Indians have always bought things in small quantities and if they need to buy wholesale stuff, they have to go to crowded markets and bargain...not much fun there...especially when you are shopping for a festival or a function....

I think Walmart can position very well in that area...

sankit

August 18, 2007 6:36 AM

sir we want to know about walmart and its functions

hennry

September 10, 2008 2:01 PM

Walmart is known for a lot of things - from everyday low prices, destroying local communities to creating imbalance in US-China trade. However, for the past year or so it has been creating ripples in the Sustainability field. The ripples were for two reasons. One, should Walmart be believed? and two, if what Walmart is saying is true then it can effect the whole business world due to the size and influence of the organization.

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About

Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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