beyondbrics

Walmart’s top international executives were in typically ebullient form at the company’s autumn investors meeting in Arkansas on Wednesday, with Mike Duke, chief executive, highlighting “tremendous” growth opportunities in emerging markets in particular.

Doug McMillon, head of Walmart’s international business, delivered a robust defence of the company’s decision to make an offer for Massmart, the third-largest South African retailer. He said Walmart believed it could use Massmart to develop more business both inside and outside South Africa itself, while also bringing in its own expertise in global sourcing and in the operation of smaller scale store formats that it has developed in Latin America.

Scott Price, head of Walmart’s Asia business, expressed enthusiasm about the potential of Walmart’s new  Best Price wholesale stores in India, operated as a joint venture with Bharti, the Indian retailer. Only three stores have opened so far since the business launched last year, but Mr Price said he expected to see the format expand across India.

He also highlighted the company’s efforts to build relationships with local small retailers, who use its stores as a supplier, including running mock-ups of small convenience stores inside the locations to demonstrate merchandising and presentation techniques.

Walmart said it is interested in the possibility of launching e-commerce businesses in both India and China, while Mr McMillon said the retailer would be interested in making acquisitions to support its development of a new global e-commerce platform.

Eduardo Solorzano, head of its Latin American business, said the retailer would be focusing its efforts there in particular in Mexico – where it is already the largest retailer – and in Brazil, where it is working to integrate three regional businesses it acquired over the past decade.

“In Brazil, the opportunity is huge,” he declared, saying that would include demand stimulated by investment in infrastructure around the 2014 World Cup and the 2016 Olympics.

Executives said Walmart was now stepping up efforts to integrate into a single business the three separate regional retail operations it acquired in Brazil over the past decade – Sonae in the north, Bom Preço in the south, and the Walmart Brazil stores, focused around Rio de Janeiro and São Paulo.

It is also going to concentrate increasingly across Latin America on what the company calls the “compact hypermarket” – represented by stores such its Bodega Aurrera in Mexico and Chango Mas in Argentina, which run around 70,000 sq ft, and sell both food and general goods.

“There are hundreds of cities where we can open a format like Chango Mas,” Mr Solorzano said.

On possible future acquisitions, Mr McMillon said Walmart was still interested in buying a retailer in Russia, but was prepared to wait for a suitable deal. He also said the retailer would be interested in “bolt on” acquisitions in both Chile and Argentina as it seeks to increase its operating scale.

Related reading:
Walmart looks to international market for growth, FT
Walmart’s $4bn bet on Africa’s consumers, beyondbrics
Walmart stays strong in China, Brazil and Mexico, beyondbrics
Activity in M&A in emerging markets boom, beyondbrics