India's First Wal-Mart Draws Excitement, Not Protest
Venture Comes With Limits That Protect Merchants
Monday, July 13, 2009
AMRITSAR, India -- The wide, clean aisles of India's first Wal-Mart are nothing like Kavita Gopal's usual shopping haunts. There are no bicycle rickshaws careering past her as she buys sacks of rice, no humor-filled haggling over the price of an egg and no demanding neighbors yelling down from their windows for shopping favors.
"It's so relaxing and bright in here. It's like a really enjoyable day trip," cooed Gopal, a 22-year-old housewife who wore a mustard-colored sari as she slowly pushed a giant wagon through the air-conditioned superstore.
For shoppers like Gopal, the arrival of the world's largest retailer in one of the world's largest marketplaces has brought more praise than protest. In recent weeks, crowds have swarmed the store, located on the Grand Trunk Road, the ancient and fabled trade route that stretches across India and into Pakistan.
They all want to get a glimpse of the warehouse-like store and its neatly organized bulk packages of sugary fruit juice, flat-screen televisions and tubs of Indian sweets. Although Wal-Mart has occasionally been the subject of controversy in the United States, the store here -- BestPrice Modern Wholesale, a joint venture with India's Bharti group -- has drawn excitement and wonder.
"In Punjabi, we have an expression: When there is a wedding, everyone flocks to see the new bride," said Kamal Gambhir, a wholesaler whose congested offices are located in this city's oldest bazaar. "I myself had returned from a trip and came back to hear little children asking, 'Where is the new Wal-Mart?' I told them it's on our most historic road."
The Wal-Mart also happens to be in the middle of utter mayhem. On a recent day, merchants of watermelons and cold water maneuvered their rickety pushcarts through a nearby tumble of traffic; an ice cream cart competed for space with a feather-duster hawker and a bone-thin man in his underwear brushing his teeth on the side of the highway.
The Grand Trunk Road, in that sense, still resembles the Grand Trunk Road described by Rudyard Kipling more than a century ago: "a river of life as nowhere else exists in the world."
To protect its smaller merchants, the Indian government has ordered that Wal-Mart sell only to wholesalers, as well as business owners and their families and friends, a move that has eased the tensions among the merchant associations and left-wing political parties. Business owners are allowed to grant access to the store to up to three friends and family members, and many others are clamoring to borrow membership cards for a chance to benefit from the low prices.
Even so, Wal-Mart is unlikely to beat the wallahs, as many of the workers offering their wares are known. After all, experts say that only 3 percent of India's retail market is organized domestically.
Meanwhile, the Indian government -- wary of upsetting wallahs and political factions -- has been careful to limit foreign investment in single-brand retailers. Sweden's IKEA, the world's biggest furniture retailer, recently called off a $1 billion investment plan due to the restrictions, according to reports in the Indian news media.
Wal-Mart has also been mindful of local sensibilities. It has pointed out, for example, that more than 90 percent of its shelves here are stocked with Indians' favorite products, as well as household names such as Amul, a butter and dairy brand.
That's not to say everyone is welcoming Wal-Mart. India Foreign Direct Investment Watch, a national coalition of labor unions, environmentalists, nonprofit groups and academics, has said that the company will eventually hurt shopkeepers, even if its store is not open to everyone in the general public.