INDIA: Indians Protest Wal-Mart's Wholesale Entry

 Wal-Mart, in a struggle to expand its global reach, is trying to enter India through the back door, but many consumers here have taken notice.

Wal-Mart completed a joint venture this week with the Bharti Group to build as many as 15 large wholesale outlets over the next seven years. Most Indians will not be able to shop directly in the new stores, but many took to the streets Thursday, fearing that Wal-Mart could eventually undermine the small retailers that dominate the Indian market.

India does not allow multibrand foreign retailers to sell directly to consumers, but such businesses can open wholesale operations.

Wal-Mart's initiative is the largest push by a Western supermarket group into the Indian market, and analysts see it as the first stage in a long campaign to begin selling directly to Indian shoppers.

Several hundred shopkeepers gathered Thursday at the center of Chandni Chowk, Old Delhi's main bazaar, to protest the prospect that foreign-owned corporate retailers might soon encroach on traditional Indian marketplaces.

Shouting "Go home, Wal-Mart," owners of nearby produce stalls joined union leaders to burn in effigy 10 international supermarkets, represented as a 10-headed pink-and-yellow demon.

The protest coincided with similar demonstrations elsewhere in the country, an effort to mount a nationwide show of opposition to the arrival of companies like Wal-Mart.

Other international retailers like Tesco and Carrefour are lobbying the Indian government to allow them to open supermarkets here.

Protesters chanted "Quit retail," their slogan a deliberate echo of Gandhi's "Quit India" rallying cry, which led India to independence from Britain 60 years ago this month.

Dharmendra Kumar, of India FDI Watch, which organized the demonstrations against foreign direct investment in retailing, said large-scale retailing ran counter to Indian traditions.

"Our culture is not the wasteful consumption that we see in the first world," he said. "This is the country where Gandhi taught people to live on minimum resources. These large retail companies will push us aggressively to consume more and more."

Arvind K. Singhal, chairman of the New Delhi retail consultant KSA Technopak, said Wal-Mart should take these protests in stride. He said all large retail companies, Indian and foreign, should brace themselves for sporadic demonstrations, adding that "these are not mass movements."

No Wal-Mart representative was immediately available for comment, but company officials have said they plan to buy more goods made in India, which could help Indian farmers and small manufacturers.

The protests were not likely to quell the company's enthusiasm for expansion into the Indian retail market, estimated at $350 billion. Across Asia, the company's presence remains small. Wal-Mart recently left South Korea and has posted five consecutive years of losses in Japan.

The entry of foreign retail giants into India is politically delicate: the governing Congress Party seems eager to be seen as protecting the needs of Indian retail workers.

Hakim Singh Rawat, general secretary of the Delhi Hawkers Welfare Association, told protesters, "Millions of people involved in the business will lose their jobs."

Chand Gupta, 62, a vegetable seller, said such demonstrations would do nothing to change the direction of Indian retail.

Two months ago, an Indian-owned supermarket opened a few minutes' walk from the spot of concrete where he has been selling vegetables for 17 years. The effect was immediate.

"My produce is fresher because what I can't sell I have to throw away at the end of the day," he said. "They have fridges to store things in, so their vegetables are older. The customers don't know this, but they prefer the new shop because prices are lower."

He said that he has taken home about 300 rupees a day less since the supermarket arrived and that he has been searching for a new line of work. "It's all over for us now," he said.

AMP Section Name:Retail & Mega-Stores
  • 104 Globalization
  • 184 Labor

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