The retailer that currently operates in cash-and-carry format with 20 stores in India will begin the e-commerce pilot in Lucknow and Hyderabad in business to business format (B2B).
According to sources, each Walmart store has about 15,000 unique registered users visiting the store more than once a year. Through the e-commerce project, the company will not only target its registered users but will also engage with new users. "It will target local kirana shops and other merchants within the radius of 40-50 km from the store compared to the current reach of about 20-30 km. E-commerce will expand the catchment area for existing stores," said an industry source.
This year, Walmart might see a 30 per cent jump in its e-commerce revenue through global operations, according to firm's projections.
As for its e-commerce pilot, the company will begin its cash-and-carry operations through its existing website, Best Price - the brand name under which Walmart sells in India. The delivery will be managed by the local logistics suppliers. The company is likely to offer a combination of "home delivery" and "click and collect"- where customers can order online but collect the products from the store.
For its global e-commerce services, Walmart's team of engineers in Bangalore, Delhi and Gurgaon is catering to backend facilities such as payments and technological support. The chain is giving a push to its global technical operations to beat the competition coming from Amazon, experts said.
Speaking recently to Business Standard, Krish Iyer, Walmart India president and chief executive, said the company plans to cover all cities where it has its stores for e-commerce service by January 2015. The company will sell its 5,000 SKUs available in stores through the online portal barring fresh and frozen products such as vegetables, fruits, meat, and ice-creams.
To encourage people to buy online, additional benefits will be offered to existing customers, the company said. Also, a registration in the store is mandatory for consumers to buy online. Currently, online registration facility is not available.
Walmart announced in April that it would open 50 stores in the next five years. However, no new store is expected before the last quarter of 2015.
The company is believed to be in talks to acquire some of the existing stores of French retail chain Carrefour, which might be looking to exit India. When asked about its talks with Carrefour, Iyer said, "It's speculative."
The company will continue to focus on the B2B format for the coming time as the "FDI regulations currently permit this format and we are comfortable in this," said Iyer.
Walmart's e-commerce plunge comes at a time when the online space is on a tremendous growth path. "In the coming year, you will see a lot of wheat, pulses, rice and other non-perishable foods sold online," said Arvind Singhal, chairman and managing director, Technopak India.
Not just Walmart, even others like Future Group and Reliance Retail are focused on e-commerce initiative. While Future recently launched Big Bazaar Direct, Reliance retail is looking at integrating its existing stores with e-commerce portal this year.
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