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Local sourcing from small farmers is a win-win for all

May, 2018

How does Walmart India stand to benefit from the landmark tax reform measure of GST?

GST is a game-changing structural reform that our country has seen recently. Progressive measures like this highlights Government’s intent to improve ease doing business in India. Initial teething problems notwithstanding, reports suggest that GST regime is not only positively impacting key sectors of the Indian economy but is also resulting in a host of benefits for the end consumers by way of lower prices on a wide range of goods and services, greater transparency and formalisation of the Indian Economy. GST is indeed transforming the way India Inc. conducts its business because of efficiencies created by ‘one single market’ and reduction of transaction costs in the inter-state movement of goods and services in many ways. Our SME suppliers and local kiranas in the country now understand the huge positive impact that GST will create. Lot of our suppliers are small and medium enterprises and regional suppliers and we are working with them and will continue to work with our kirana members to educate and support as they transition to GST regime. In a bid to help in the transformation, Walmart India had conducted a series of workshops for SME supplier partners to help them evaluate their GST compliance levels and help them in the transition. We also launched a National Toll Free Helpline to address GST related queries, clarify doubts and explain the nuances of this biggest structural reform.

Your comments on how Walmart is eyeing a big space for itself and benefit in India and growth plans?

We are pleased with our established and successful omni-channel B2B cash and carry business and plan to grow this format. We have 21 such stores under the brand name of ‘Best Price’ across India and plan to take the total number of Best Price stores in India to 70 over the next few years. Through our operations in India we are creating Shared Value for all stakeholders.

Spurring employment and sourcing from Indian markets. How does it give a competitive advantage to Walmart India?

Walmart India is augmenting the local economy by creating thousands of local jobs (at least 2,000 direct and indirect jobs per store). We employ unskilled local youths and make significant investments in training them. With more than 95 per cent sourcing from within India, our focus on local sourcing brings in significant amount of collateral advantages. It aids in the growth of local SME suppliers, small farmers, creates skilled jobs and contributes to local prosperity of the communities.

It provides the small suppliers, especially small and marginal farmers with the opportunity to become part of the inter-regional/global supply chain. As we source local, we are able to cater to the regional and local tastes. For example – AVG Prasad, a grower from Rajahmundry, Andhra Pradesh, started by supplying seedless watermelon and yellow flesh melon, pomegranate, coconut and guava to our Best Price Stores in Guntur, Rajahmundry and Hyderabad. Eventually, his produce was sourced for our stores in Kota in Rajasthan; Bhopal and Indore in Madhya Pradesh and Raipur in Chhattisgarh. Prasad was one of the first farmers of the region to grow a unique variety of melons (seedless watermelon and yellow flesh melon), which we introduced in our stores in Guntur, Rajahmundry and Hyderabad in 2015. By 2016, he had started introducing crops like pomegranate, coconut and guava. Backed by encouraging feedback from members, we steadily increased sourcing from Prasad. Eventually, with an efficient supply chain network in place, he started supplying guavas and coconuts to our stores in Kota, Bhopal, Indore and Raipur. We clocked a record sale of 90,000 units of coconut in 2017 in our Kota store alone. He says, “Price transparency is the biggest benefit apart from a lot of support from the company’s teams in identifying members’ needs and sharing volume forecast accordingly. Being part of their inter-regional supply chain makes me firmly believe that I took the right decision when I quit my job to start farming.”

Has has it been Doing business in India and how do you see it evolving given the current climate?

Walmart India has been delighting around one million members, especially Kiranas & other small businesses since it opened its first store in the country in 2009. We have been striving to create `shared value’ for our members, local suppliers, small farmers, employees and the community and contributing to the national and local economies through employment generation, by establishing inter-regional supply chain network, developing SME suppliers, sourcing directly from farmers, enhancing women’s economic empowerment and the community at large.

This is India’s time. With a young demographics, increasing disposable income & consumption, extraordinary talent, improved connectivity, entrepreneurial environment, India is emerging as one of the most open economies globally. There is tremendous focus from Central and State Governments to improve ‘ease of doing business’ which is giving further boost to Retail, FMCG and e-commerce industries to grow and flourish. Initiatives such as ‘Make in India’, Skilling India, Digital India to realize the common goal of bringing long-term benefits to the country has created tremendous potential for Retail to create millions of skilled jobs for our young population as well as boost domestic manufacturing and consumption.

Is Walmart is looking to foray into food retail, as the government now permits 100 per cent FDI in the sector?

As mentioned, we are committed and focused on growing our B2B omni-channel Cash & Carry business in India. However, we certainly think that this progressive decision by the Hon’ble Prime Minister to allow 100 per cent FDI under Government approval route, including through e-Commerce in trading of food products manufactured and/or produced in India is far reaching. It will help in reducing food wastage, farm diversification and encourage industry to produce locally within the country. This reform will benefit farmers, give impetus to food processing industry and create vast employment opportunities. We welcome this reform.

How does a robust in-house research driven approach help in sustaining in the Indian market? And also keeping pace with the fast-changing demography and consumption patterns

A strong Research and Analytics team helps the organisation with primary data, analysis,  consumption patterns, unbiased market insights and thus helps immensely in aligning our growth strategy. Digital influence has a strong play today and leveraging big data, analytical, sophisticated CRMs and digital marketing, today retailers can more effectively serve and delight their customers.

What is the Women’s Economic Empowerment Program and how is Walmart promoting women entrepreneurship?

By training women in agriculture, factories and retail (with support from Walmart Foundation); and sourcing, our Women’s Economic Empowerment Initiative is significantly expanding economic opportunities for women across India. Through the flagship ‘Women Entrepreneurship Development Program’ launched in 2016, we are enhancing women entrepreneurs’ professional and personal skills for building robust businesses. This program is not only helping us build our pipeline of suppliers but also providing a pool of trained women owned business for the industry at large. We trained 32 women owned businesses in the first edition and are training 64 in the second edition. Working with women entrepreneurs is more than just a social desire. The objective is to bridge the gender gap between women entrepreneurs and the supply chain. From marketing, access to finance, soft skill development, and mentorship, we try to provide training on several industry-relevant topics. We will continue to make a difference to the lives of women and the overall growth of society and the country as a whole.

Indian e-commerce sector: A battleground of sorts. Your views on the scenario.

I believe that providing the best ‘total’ retail experience is not a case of online versus offline, it is the seamless integration of both the platforms. Today’s customer demands omni-channel experience so that she can buy anytime and anywhere, choosing the channel as per her convenience. Businesses that understand that well and adapt accordingly and are customer centric, grow well. As we see today, the landscape continues to evolve. While online players are trying to make it a ‘touch-feel’ experience by setting up physical stores, brick and mortar players are walking the online path. This continuum Omni-channel is the reality.

All our Cash & Carry Best Price Stores offer omni-channel shopping options as our members could buy directly from the stores, by calling customer centre and by booking order through the Best Price app or e-commerce site and also through our Business Development Associates

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