INDIA – Walmart India said it will evaluate entering into food retail business if the government allows such ventures to stock about 25-30% non-food items as well, a top company official said this Tuesday.
Speaking on the sidelines of the launch of second edition of Women Entrepreneurship Development Program 2.0 (WEDP) in Delhi, Krish Iyer, president and CEO of Walmart India said, allowing 25-30% non-food items will make them think evaluate entering into food retail business in India.
Non-food items like toiletries, detergent and general household items are generally high-margin earners comparing to foodstuff.
Thus such high margin earner products help retailers to bring down prices of less profitable items like food products and create balance toward profitability.
Therefore, 25-30% FDI in non-food items will make such ventures viable and the company may think about food retail business in India, Iyer said.
India notified the 2016 budget announcement in June, creating the food-only retailing segment and allowing 100% FDI for companies selling locally sourced and produced food items through both brick-and-mortar stores and their online portals.
Amazon was one of the big retailers that applied through the food-only retailing route. The government has so far approved 100% FDI in food retail from Amazon along with online grocery players Grofers and BigBasket.
As per FDI policy in India, no global retailer can sell directly to consumers. The wholesale cash-and-carry channel is the only multi-brand retailing segment in which India allows fully-owned overseas ownership.
Walmart currently operates 21 wholesale outlets in India. The company said it has been successfully running its Cash & Carry business. Beyond that, presently there is no plan of exploring other business models or forming alliance, said Iyer.
However, Walmart plans to open 50 Best Price stores by 2021. And going by the plan, tentatively, by 2018 it will launch 7 stores, by 2019 9 and by 2020 12-15 stores.