Walmart and Reliance Retail - big marriage on the cards?

protrade

Well-Known Member
#1
In a month's time, it will be 3 years since Walmart ended its ill-fated alliance with Bharti. At that time, Walmart clearly indicated that they would not rush into another tie-up in India, and would talk to the Indian government to explore ways of changing regulations, so that they can have a direct presence in India.

Its been 3 years, and 2.5 of those have been under the new government, and Walmart has gone nowhere. And it is now becoming clear that no government in India will have the wherewithal to push through a policy of 100% FDI in multi-brand retail.

Over these 3 years, Reliance Retail has grown by leaps and bounds, and even started declaring profits on an operational basis. And clearly, the Reliance group is a formidable competitor, with deep pockets, and ready to invest serious capital into its business.

Today, Walmart will find it tough to start off from scratch. And India is far too important a market for them to stay away from. Tying up with Reliance Retail could be the best way for Walmart to get into a pole position with India.

But there is another reason why Walmart should consider tying up with Reliance Retail. The commodity retail space is getting heavy competition from e-commerce, whereas high end retail is still holding fort. Walmart needs to look at increasing its presence in high end retail. Reliance Retail is the only company in the world that has a successful strategy of tying up with high end retail stores under Reliance Brands.

The other risk for Walmart is that if they don't tie up with Reliance Retail, some other big player could tie up with Reliance Retail - and make the situation so much tougher for Walmart.

Clearly, Reliance Retail has reached the point where it will be one of the players in the future, and as things stand today, it is the biggest player, with strong backing.
 

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