India’s retail market has the potential to bring in some $500 billion, if Walmart can crack the retail code in India
Anticipated cultural and legal issue
India’s retail market has the potential to bring in some $500 billion, if Walmart can crack the retail code in India. This amount of potential revenue presents a unique opportunity for Walmart. Currently, the legal and cultural challenges that the retail giant faces are significant. Legally, the Indian government has laws that do not allow outside retailers to come in and dominate the market. In India, some 90% of the retailer in the country is supplied by mom-and-pop stores spread throughout the country. The Mega retailer is being framed as the enemy of every mom-and-pop retail store in the country. North of 90% of the retail market (projected at $500 billion) is supplied by Mom-and-Pop stores and open marketplaces…, these are huge employers of labour (Worstall, 2017). The cultural issues are significant, but not a show stopper. Many of the retailers and their customers build relationships, and that relationship is based on trust and reliability. There are Indian traditionalist that have made it their sole mission to lobby against a Indian retail market dominated by Walmart. Many of the small retailers have a significant amount of repeat customers that only shop with them. Walmart’s business model isn’t the type that builds personal relationship with its shoppers.
Cultural and legal issues plan
Culturally, Walmart will continue to have a difficult time in the Indian retail market. Once established, only time and a solid reputation will help Walmart’s success in India. Walmart currently operates 24 cash and carry wholesale warehouses in the country. This will go a long way to build Walmart reputation when they are finally approved to operate as a retailer. This, among other cultural issues must be circumvented if Walmart is to have success. This requires, an understanding of culture and cultural differences, that involves more than awareness of variations in language, customs, and appearance; core cultural differences like values, assumptions, and beliefs are often invisible but cause the most problems—and are frequently overlooked (Menzies, n.d.).
Legally, one significant rule that hinder Walmart’s progress in India is that it must source 30% of all its good from local sources. This is a significant blow to the retail giant’s logistical strategy and how it supplies its stores with the cheapest goods from around the world. But, if Walmart is to succeed in India, it will have to adopt this type of strategy. Sourcing good from within India, just might earn them the trust of the Indian Government and its people.
References:
Keegan, W. J., & Green, M. C. (2020). Global marketing (10th ed.). https://www.vitalsource.com (Links to an external site.)
Menzies, F. (n.d.). The top ten cultural risks for global business (Links to an external site.). Retrieved from https://cultureplusconsulting.com/2015/06/23/top-ten-cultural-risks-global-business/
Worstall, T. (2017). Walmart Expands Again In India – But Still Not Able To Open Consumer Stores To Consumer Detriment https://www.forbes.com/sites/timworstall/2017/04/30/walmart-expands-again-in-india-but-still-not-able-to-open-consumer-stores-to-consumer-detriment/?sh=439ba29c1173 (Links to an external site.)
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