Walmart rolls and coasts into India

In 2006, economic speculations poured in as the Guardian Online declared 'Walmart goes to India'. This was two years ago. Now, armed with Bharti and an enterprising Sunil Mittal, the retail giant from Bentonville, Arkansas, looks poised to enter India's consumer paradise.

On first glance, things look rosy. Walmart has a home advantage with Mittal by its side, Carrefour, the other international player, just opened a second store in neighboring China, and Network Magazine values the Indian retail industry at about $300 billion, expecting it to grow to $427 billion in 2010 and $637 billion in 2015. For the value-conscious Indian, Walmart promises cheap prices, clean produce, a shopping experience (I forget where I read this... but 32% of India's population apparently shops for entertainment- ah well!), an international brand, and employment opportunities. The question is- Is it that simple??

Walmart's entry into India, as Forbes put it, is not going to hurt little Munna selling coconut juice on Mumbai's streets. The Pani Puri stalls are in no danger either. However, the ones who will feel the brunt are the '.co' and 'Sons and Sons' stores. The bazaar culture has kept the spirit of entrepreneurship and consumerism alive in India. These stores thrive on competition and are handed from generation to generation. These are the investments that set the stage for today's 'shining' India. History points to the United States where super retail stores have all but wiped out home-owned stores from the country's map. So, what India stands to lose is a whole generation of would-be entrepreneurs. In their place, what she will have is an army of servicemen, people who are trained to read international entrepreneur records or those who will mop Walmart aisles and live in fear of being fired. So much for legacy!

And things don't look hunky dory for Walmart on the business front either. Walmart's reputation for paying lower than minimal wages and overworking its employees are now infamous. And Reliance is no small home competitor in a country that is still reeling from the memories of colonialism and foreign overtures. Reliance knows its strengths and any business daily will bet an arm that the company has a competing strategy lined up. Carrefour and Tesco are also waiting in the wings to break into India.

Also, with agrarian woes and the farmer suicide scenario in India, critics argue that Walmart could import agricultural goods from other countries for lower subsidies and sell them at cheaper prices in India, worsening an already bleak situation. With elections around the corner, no political party will risk constituent votes to contest that and support Wal-Mart. India's communist parties are already screaming 'back-door entry!' and the Congress is vigilantly waiting for any chance to let Sonia Gandhi display her Indianness.

Icing on the cake, Walmart also has to contend with environmental campaigners such as Vandana Shiva who, in a New York Times story, likened Walmart to an economic tsunami as shoppers would now drive to the store in place of buying food from local vendors who deliver produce to middle class doorsteps.

Add to Walmart's woes, a slumping US economy and what you have, Mr. Lee Scott, are plenty of roadblocks you don't want to run into when you have just started driving.

This is going to be one interesting show to watch!