Walmart bets on Uttar Pradesh’s small businesses

Walmart is banking on India’s large micro, small and medium enterprises (MSME) sector, and it sees the north Indian state of Uttar Pradesh as its key focus area. To that effect, the global retail giant on Thursday launched its new Vriddhi e-institute in Agra to provide small businesses in the state access to skills and Walmart’s global supply chain network, which also includes online retail channels such as that of its Indian e-commerce arm, Flipkart.

On December 9 last year, Walmart had announced that it would soon come up with its Vriddhi Supplier Development programme, through which it aims to train 50,000 MSMEs over the next five years in order to equip them with stronger domestic capacities so that these businesses can then integrate themselves into the larger Walmart ecosystem. This training would commence on the company’s several Vriddhi institutes—of which the newly launched e-institute in Agra is the latest one—and would seek to cover aspects of business strategy, upskilling, promoting customer-centric strategies, and best practices in environmental sustainability.

Siddharth Nath Singh, Cabinet Minister, MSME, Investment & Export, Textile, Khadi & Gram Udyog in the Yogi Adityanath-led government of Uttar Pradesh, welcomed the presence of Walmart in the state and pointed out that very soon the American retail major would realise that its initial focus of training 50,000 MSMEs was too small as it would encounter an even larger number of small businesses who have been contributing to the economy of U.P. Singh also said that Walmart’s presence and its commitment to Indian MSMEs would not only bolster the Make in India programme, but would also give a tremendous fillip to Uttar Pradesh’s own One District, One Product (ODOP) scheme. “Uttar Pradesh, at the moment, is home to over 9 million small businesses, which translates to over 45% of total MSMEs in India. I am more than certain that very soon Walmart will realise that its initial number of 50,000 is too less,” the minister said.

The Uttar Pradesh government has been focussed on showcasing the state’s developmental agenda, and the ODOP scheme lies at the heart of it. The scheme’s primary focus is identifying various clusters of industrial activity in the districts of the state. Many of these industries—such as carpet weaving, wood carving, leather work, handicrafts, and so on—are centuries old and are centred around certain districts. Under ODOP, traditional artisanship for which a district is known for would be identified and promoted. This would ensure that the demand for these industries shoots up. Walmart’s entry, as Singh argued, would also ensure that these traditional businesses would receive not only training in the best business practices, but also, through Walmart, newer markets.

This was a point that was also echoed by Leigh Hopkins, Walmart International Executive Vice President (International Strategy, Development and Asia Region). “ODOP is a great and novel idea that would ensure that U.P.’s traditional crafts and artisanship would be promoted and preserved,” he said.

Hopkins also pointed out that 2020 was a very disruptive year for everybody, and especially more so for small businesses who had to bear the brunt of the pandemic’s economic fallout. “Although facing the worst of the pandemic, small businesses have stayed resilient through it all, and we at Walmart recognise that,” he added.

However, the pandemic has also ensured that businesses, whether large or small, have had to adopt the digital route in order to stay afloat. In fact, as attested by several research reports, the pandemic has pushed e-commerce and digitalisation to top gear. This reality is not lost on Walmart, especially with Flipkart in its pocket. “Walmart has over 20 years of a relationship with India. And U.P. represents the richest and some of the most diverse stocks of MSMEs in India. Being a part of Walmart, these small businesses would have access to a rich digital dividend, and those in the tier 2 or tier 3 cities would have access to a new platform, and larger markets,” said Adarsh Nigam, senior vice president and head-Flipkart Wholesale and Walmart India.

Nigam further said that under the Flipkart Samarth programme, skilled artisans from U.P. would have the opportunities to showcase their products to customers across the country, through Flipkart. The programme, which was launched in 2019, is a nationwide initiative of Flipkart to give local businesses and skilled artisans the chance to set up their shop on the e-commerce platform.