Wal-Mart debuts in Punjab

This past weekend Wal-Mart opened its first* Indian-based store in Amritsar, spreading its global brand to one of the fastest-growing markets in the world. As part of a larger strategy to develop a presence in India, this is the first of fifteen new stores that will open over the next few years. [source]

However, instead of targetting low-income consumers and discount shoppers, Wal-Mart India’s business model focuses on wholesales to small shop stand owners. This decision seems largely based in regional market dynamics. Wal-Mart does not think it can crowd out a market share against small dhabas and the like, and instead opts for wholesaling:

Mr. Singh and the more than 10 million other tiny retailers in India are Wal-Mart’s greatest challenge and greatest opportunity. If it can win them over, they are likely to become its biggest customers. Anger them and they could use their political power to block expansion.

Wal-Mart entered with nary a whisper or protest, despite years of vocal opposition to big-box stores in the past. The WSJ cites the slowing economy, but I wonder to what extent choosing Amritsar, as opposed to metro Mumbai or Delhi, indicates Wal-Mart’s desire to build a presence in transitional, recessionary regional economies.

It’s no secret that Punjab’s economy and unemployment rates have been sluggish for years. In choosing to locate its store near one of the most bustling commerce corridors in that state, it almost seems like Wal-Mart is experimenting with a variation of the formula that allows them to crowd out local business in favor of their contemptible labor practices and heavily marked down prices (I would argue that Chandigarh is not a great locale for this kind of attempt for other reasons). Could it also be that situating itself at an international hub for diasporic travel will help its name/brand trade more easily than in cities that are perhaps bigger and more internationally diverse?

Why Punjab, and why no protest (after years of heated debate in the past)? It may be that Wal-Mart has carved out an inoffensive niche in a country with different social welfare controls than the United States. The article goes on and on about how Wal-Mart hired locally to develop culturally relevant services, but I can’t help but wonder what they hope to accomplish. It may be a very different vision than the more critiqued reputation Wal-Mart enjoys here in the United States:

“I’ve never seen a store so big, never even heard of Wal-Mart,” he said. “I hope it will bring those high-society people here.”

Perhaps the goal is greater: a complete re-branding for a new market. Either way, it will be interesting to see if the new stores reproduce inequalities similar to their domestic practices, or whether they will serve a truly different function than their American counterparts.

* While this store previously existed under a different name as a division of Wal-Mart, it is now formally branded as part of the mega-chain.


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22 Responses to “Wal-Mart debuts in Punjab”

  1. psidhu says:

    WAY TO GO WALMART !!!!!!!!!!!!!!

  2. psidhu says:

    WAY TO GO WALMART !!!!!!!!!!!!!!

  3. Camille says:

    Gurmustuk Singh — agreed! Thanks so much for the link/reference. I apologize if I was unclear; because this is speculative, I was trying to figure out how they are shifting their model to use their replicative (and exploitative) American business model abroad. It's not clear that it will roll out the same way it has in the U.S., but I am curious to see what their next move is (e.g., will they leverage their Punjab sales in a way that allows them to put locals out of business, or perhaps as added fodder against American workers?). I err strongly on the side of skepticism and give them no benefit of the doubt.

    justasikh, I don't say this to undermine our strength as a community, but it's not entirely factually correct to say Punjabis are the "most successful immigrants anywhere, as well as in India" (not that, as an aggregate, we are scraping the barrel, but still). What metrics of "success" are you using?

  4. Jodha says:

    Much agreed Gurumustuk. Thanks for the link!

  5. Walmart is a terrible company that exploits and it’s sole aim is profit at the expense of the community. Every place it sets up a store puts out HUGE numbers of businesses and changes the community.

    It’s sad to see walmart show up in Amritsar and hope that Sikhs in Punjab see the light before it is too late.

    If you can, watch the documentarly: “Wal-Mart – The High cost of Low Price”

    http://www.walmartmovie.com/

  6. Walmart is a terrible company that exploits and it’s sole aim is profit at the expense of the community. Every place it sets up a store puts out HUGE numbers of businesses and changes the community.

    It’s sad to see walmart show up in Amritsar and hope that Sikhs in Punjab see the light before it is too late.

    If you can, watch the documentarly: “Wal-Mart – The High cost of Low Price”

    http://www.walmartmovie.com/

  7. Jodha says:

    Much agreed Gurumustuk. Thanks for the link!

  8. justasikh says:

    Given the Punjab Punjabi’s longing to emigrate for money and consumerism in the west, me thinks its going to take a strong cup of cha to wake anyone up to Wal-Mart in Punjab. They were awfully smart in picking Punjab with Punjabis being among the most successful immigrants anywhere, as well as india.

  9. justasikh says:

    Given the Punjab Punjabi’s longing to emigrate for money and consumerism in the west, me thinks its going to take a strong cup of cha to wake anyone up to Wal-Mart in Punjab. They were awfully smart in picking Punjab with Punjabis being among the most successful immigrants anywhere, as well as india.

  10. Camille says:

    Gurmustuk Singh — agreed! Thanks so much for the link/reference. I apologize if I was unclear; because this is speculative, I was trying to figure out how they are shifting their model to use their replicative (and exploitative) American business model abroad. It’s not clear that it will roll out the same way it has in the U.S., but I am curious to see what their next move is (e.g., will they leverage their Punjab sales in a way that allows them to put locals out of business, or perhaps as added fodder against American workers?). I err strongly on the side of skepticism and give them no benefit of the doubt.

    justasikh, I don’t say this to undermine our strength as a community, but it’s not entirely factually correct to say Punjabis are the “most successful immigrants anywhere, as well as in India” (not that, as an aggregate, we are scraping the barrel, but still). What metrics of “success” are you using?

  11. WALMART IS A FILTHY DIRTY IMMIGRANT ABUSING LABOR CLASS MONGERING CAPITALIST FREE MASON ORGANIZATION THAT WILL RUIN LOCAL ECONOMIES AND CONTINUE THE VICIOUS CYCLE OF CAPITALISM.

    burnitdown.

  12. WALMART IS A FILTHY DIRTY IMMIGRANT ABUSING LABOR CLASS MONGERING CAPITALIST FREE MASON ORGANIZATION THAT WILL RUIN LOCAL ECONOMIES AND CONTINUE THE VICIOUS CYCLE OF CAPITALISM.

    burnitdown.

  13. KDS says:

    In the present system, there is lot of Exploitation of farmers,

    small manufactorers and to some extent retailers by the wholesalers and middlemen.These people indulge in black marketing

    evade taxes and make lot of black money.So I don't understand How could Walmart exploit them further

    Also Many Indian Retail Giants like Reliance, Pantaloon etc are opening various retail outlets in many cities.Small scale retail shop owners are finding it hard to compete with them.Reliance already has one outlet in Amritsar .

    I think Walmart's entry is ok if it give good price to farmers for their products and sell them to retailers.It could bring transparency in the system.Reliance is already directly paying Rs.27 kg for good quality of wheat to Farmers of Madhya pradesh.

    It is twice the market price which they were getting from wholesalers

  14. KDS says:

    In the present system, there is lot of Exploitation of farmers,
    small manufactorers and to some extent retailers by the wholesalers and middlemen.These people indulge in black marketing
    evade taxes and make lot of black money.So I don’t understand How could Walmart exploit them further

    Also Many Indian Retail Giants like Reliance, Pantaloon etc are opening various retail outlets in many cities.Small scale retail shop owners are finding it hard to compete with them.Reliance already has one outlet in Amritsar .

    I think Walmart’s entry is ok if it give good price to farmers for their products and sell them to retailers.It could bring transparency in the system.Reliance is already directly paying Rs.27 kg for good quality of wheat to Farmers of Madhya pradesh.
    It is twice the market price which they were getting from wholesalers

  15. Rab Rakha says:

    Small stores make the cultural fabric of the millions of bazaars all over Punjab and India. Though entities like Wal Mart will lower price, make transactions more efficient, and help the economy in many ways, who knows how they might change the culture of Punjab?

  16. Rab Rakha says:

    Small stores make the cultural fabric of the millions of bazaars all over Punjab and India. Though entities like Wal Mart will lower price, make transactions more efficient, and help the economy in many ways, who knows how they might change the culture of Punjab?

  17. Rajinder Singh says:

    No way to go, but Up.

    As it is local stores are “convenience stores”, and might end up buying from Walmart at cheaper wholesale rates and distributing further, especially good for rural areas. Breadth of products they distribute will go up. On the other hand, Walmart will not be able to compete in local specialized services like for example – coloring turbans, custom stitching clothes,etc.

    Local manufacturing already faces stiff competition internally, as well as from chinese imports. They might be even able to sell goods to Walmart for distribution worldwide.

  18. Rajinder Singh says:

    No way to go, but Up.

    As it is local stores are “convenience stores”, and might end up buying from Walmart at cheaper wholesale rates and distributing further, especially good for rural areas. Breadth of products they distribute will go up. On the other hand, Walmart will not be able to compete in local specialized services like for example – coloring turbans, custom stitching clothes,etc.

    Local manufacturing already faces stiff competition internally, as well as from chinese imports. They might be even able to sell goods to Walmart for distribution worldwide.

  19. Venki says:

    This store in Amritsar along with the rest that are opening up are more like Sam's Club rather than Walmart. For the present they are only wholesale, buying directly from the source and cutting out the middle man, because they are the middle man for the retailers. We will have to wait to see how they evolve in India. Walmart has not been universally successful (they had to withdraw from Germany and South Korea, where they didn't do well), so their success in India is not assured and if they succeed, it is not clear if it will be a net negative for society.

  20. Venki says:

    This store in Amritsar along with the rest that are opening up are more like Sam’s Club rather than Walmart. For the present they are only wholesale, buying directly from the source and cutting out the middle man, because they are the middle man for the retailers. We will have to wait to see how they evolve in India. Walmart has not been universally successful (they had to withdraw from Germany and South Korea, where they didn’t do well), so their success in India is not assured and if they succeed, it is not clear if it will be a net negative for society.

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