Doug McMillon, President & CEO of Wal-Mart’s international division, in an interview with CNBC-TV18's Shereen Bhan, said that US retail giant is excited about markets in China, Brazil and India as they offer enough headroom for improvement and growth. "Going forward, the company expects to register double digit growth rates in the overseas division," he added.
Below is the verbatim transcript of his interview.
Q: Tell us about the performance of international division- You have done revenues of about USD 109 billion for FY11, registering a growth rate of 11.5% in the first quarter and CAGR of over 25% in the last 15 years. Growth in the US pales in comparison, so this is the engine of growth for WalMart. Do you anticipate being able to better this kind of performance?
A: We believe that we will able to grow internationally for many years to come. Meanwhile, we do expect to multiply in Untied States as well. Internationally, we are very excited about markets like China, Brazil and India as there is a great opportunity to grow over times. We have seen recent results that one can become strong and find room for improvement.
Q: How much headroom do you see for further growth from these levels?
A: We can continue to have strong single digit growth rates and, hopefully, double digit growth rates as we look at the international division. The US retail has got plenty of different options to grow. First, to grow same store sales or comp store sales (comparable store sales) within our existing base and we are also opening a lot of new stores.
In the last year, we opened more than 20 million square feet of new stores around the world. We are excited about e-commerce and multi-channel and the opportunity that it presents us. Second, we do plan to make some acquisitions as they fit within our strategic plan. But acquisitions are not our primary growth vehicle.
Q: You added India in the same pecking order like Brazil and China, which are your growth markets. Your expansion in India has been restricted on account of the fact that foreign direct investment (FDI) is not allowed into multi-brand retail. There is a glimmer of hope. The last conversation that I had with you about a year- and-half-ago, you said that you had enough patience. However, as we talk today and there has been no definitive movement on FDI in retail, are you losing patience now?
A: India moves at its own pace and there are decisions that the government leaders and others need to make, and we respect those. What we would continue to try to do is to demonstrate that we are good corporate citizen and that we can help. We want to invest in back-end. We want to help in areas like food safety.
We have learned a lot in the last year about how to work with farmers locally, and we have a good plan that we use around the world that has been adapted to work in India to help small farmers make more money and create fresher product through the retail stores that we have in our joint venture relationship with Bharti.
Furthermore, the cash and carry that we have been able to open in the market is a format that we continue to be very excited about. So the cash and carry opportunity is the one right thing in front of us and we want to open as many of those as we can from a practical point of view. It won’t happen overnight and we won’t wake up tomorrow and have hundreds stores opened, but we are making progress and are seeing that customers are responding very well to that format and over a time the decisions will be made. We will try to take full advantage of those and prove to everyone involved that was a good decision to open FDI.
source-moneycontrol
steven
management trainee-fundamental analyst
DENIP Consultants Pvt Ltd
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