Effects of Wal-Mart and Big Box in India

Topics: Retailing, Department store, Wal-Mart Pages: 6 (1407 words) Published: December 20, 2012
Effect of Wal-mart and other Big Box in India

Abstract :

In this paper, try to provide an opinion on one central problem of the effects of wal-mart and other big box in India.We believe that our evidence improves substantially on existing studies of these and related questions, most importantly by implementing an identification strategy that accounts for the endogeneity of store location and timing and how these may be correlated with future changes in earnings or employment. The other main purpose of this paper is to explore the challenges that Wal-Mart may face as it expands into the Indian retail market. Wal-Mart's failures in Germany and South Korea are analyzed to identify lessons that could be utilized in the Indian expansion. 


Wal- Mart is the world’s largest corporation and it is one among the biggest private employer of America. Wal- Mart retail store was established in the year 1962 by Sam Walton  Wal-Mart also has doing international operation in United Kingdom, Mexico, Canada and many countries throughout the world. In 1970, a Wal-Mart has listed in New York stock exchange. The first Sam club membership warehouse opened in 1983. Wal-Mart has different types super stores, super markets, and Wal-Mart discount stores. In the year, 2009 the sale of Wal-Mart employs is $401 billion. The Wal-Mart is world first retail store in the world.

Walmart has 8,500 stores in 15 countries, under 55 different names. The company operates under its own name in the United States, including the 50 states and Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful.

Effects of the Wal-Mart Entry: 
Negative effect on the Indian small scale industry :
Since many of the small scale department stores in India are the major contributors to the Indian economy, the entry of Wal- Mart into Indian market creates a lot of negative effect on the Indian small scale industry. This may lead to loose the business to many of the middle and small scale people. 

Local traders: 
Local traders from the major of the cities were opposed the entry of retail giant Wal-Mart especially in Delhi because it will affect the local traders or business man and also for small retail shop. They have the issue of domestic traders will be totally neglected.

Low price products 
Wal- Mart in order to capture the Indian market is trying to introduce low price strategy on their products which inturn affect the other local businesses. Local traders later also should implement this pricing strategy which may affect their profit margin. But in return the consumers may benefit a lot from this. 

Creates excess competition 
Due to the entry of Wal –Mart into the Indian market the competition may increase between local retailing businesses like Pantaloon, Reliance etc. we can see a tough competition between these business units in future . 

Improving the lives of farmers

Sixty percent of India’s population works in agriculture, and farmers stand to make significant gains from foreign investment according to Aiyar. There are two primary ways farmers could benefit — higher prices and improved yields.

Indian farmers are often required by law to sell their crops to wholesale traders at a set price.

“By the time it reaches the consumer, the produce will have been marked up by three to four times, but nearly all of that goes to the middlemen, not the farmer,” said Jyoti Thottam, an Indian correspondent for Time Magazine. Since Walmart’s model is to buy directly from farmers, they can afford to pay higher prices. By doing so they...
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