My submission for the final project in the World Bank's MOOC on Unlocking Investment and Finance in EMDEs

1. Unlocking Investment and Finance in
Emerging Markets and Developing
Economies (EMDEs)
Final Project on
Walmart’s Investment Strategy into India
By Aanchal Kapoor

2. Overview
Perspective: Direct Investor
Chosen Direct Investor (Multinational Corporation): Walmart
Target EMDE: India

3. Agenda
Investor Highlights
Country Highlights
Rationale of Direct Investment
Market Entry Modalities
Market Opportunity
Some Obstacles
Solutions

4. Investor Highlights - Walmart
• Founded in 1962
• Headquartered in Arkansas, United States
• Listed on NYSE
265 million
customers
11,200
stores
27
countries
US-based retailer which operates a chain of hypermarkets, discount
department stores and grocery stores globally
Source: Walmart website and media articles

5. Country Highlights - India
• Population: 1.3 billion
• GDP: USD2.7 trillion
• GDP contribution by Agriculture sector: 15.87%
• World’s largest democracy, 2nd most populous
country & 7th largest economy
Source: Media articles Source: World Bank website
FDI in India

6. Rationale for Direct Investment
• Walmart’s direct investment in India would provide the company
exposure to the growing consumption needs of the Indian market as
well as the diversification benefits of investing in an EMDE country.
Growth
Potential
Diversification
Benefits

7. Market Entry Modalities
• Walmart can invest in India through the following alternatives:
1. Direct Investment, where Walmart will need to set up its own, new
facilities and infrastructure in India. This would incur significant capital
expenditure and require a longer timeframe to penetrate the Indian
market;
2. Joint Venture (JV) with an existing retail player in India. This may be a
win-win strategy where Walmart can benefit from the existing
infrastructure and networks of the Indian JV partner, and the JV
partner can benefit from Walmart’s brand and expertise in the retail
sector; or
3. Acquisition of an existing retail player in India.

8. Market Opportunity
India is home to the world’s second largest population. With over 1.3 billion
mouths to feed, the Indian agriculture sector remains attractive.
Agriculture remains a key driver of the Indian economy, contributing
approximately 16% of GDP. Smallholder farmers are the backbone of the Indian
economy, with over 50% of the total workforce employed in the sector.
Source: Media articles
Favourable Demographics
Importance of Agriculture in the Indian Economy

9. Market Opportunity (cont’d)
To achieve its ambitious target, the Indian government announced various
measures to bolster the agriculture sector, including new agricultural universities,
irrigation schemes, a price stabilisation fund, and a national market for farmer
produce.
Source: Media articles
Indian Government’s Goal to Double Farmer’s Income by 2022
Indian government realizes the key role of FDI in financing development in the
Indian economy, and has taken active steps to promote a conducive investment
environment for foreign investors, such as tax incentives, greater transparency
and governance etc.
Indian Government’s Efforts to “Crowd-in” Private Sector

10. Some Obstacles Faced by Walmart
Existing
Middlemen in the
Food Supply Chain
Volatility in
Agriculture
Produce Prices
Currency
Devaluation Risks
Lack of Awareness
about AgriTech or
Sustainable
Farming Practices

11. Environmental, Social and Governance (ESG) is
an important aspect integrated into Walmart’s
investment strategy, in line with the SDGs.

12. Solutions
• In view of the key challenges faced by Walmart in India as well as the
company’s commitment towards SDGs/ESG considerations, some
solutions are presented below:
Local and direct sourcing of agricultural produce to eliminate
middlemen and provide better margins to smallholder farmers
Support local farmer organisations to develop knowledge of
sustainable farming practices, share business and AgriTech best
practices etc. to enhance their market-readiness

13. Solutions (cont’d)
Local currency financing or currency hedging through World Bank’s IFC, to
mitigate currency devaluation risks
Collaborate with microfinance institutions to catalyse working capital loans to
smallholder farmers
Price stabilization fund implemented by the Indian government and
commodity hedging futures to reduce/eliminate the impact of volatility in
agricultural produce prices

14. Snapshot of Walmart’s ESG Impact
Sustainable
Livelihood for
Smallholder
Farmers
Stronger
Supply Chain