5 Stocks Seeking Growth Through India

Guess who's moving into India? Howard Schultz and the rest of his Starbucks
(NASDAQ: SBUX ) team. Reuters reported Oct. 10 that Starbucks is finalizing a
joint-venture deal with Tata Coffee Limited to open coffee shops all across
India. Starbucks largest market in Asia currently is China, with 470 outlets
open and plans for 1,500 by 2015. India's not going to be nearly as easy to
conquer. China is a tea-drinking culture, so coffee-shilling Starbucks had
little competition when it first started opening stores there in 1998. India, on
the other hand, has an established coffee culture, dominated by Café Coffee
Day, whose 1,000 outlets dwarf anything Starbucks will be able to open in the
next few years. Nonetheless, the inroads Starbucks is making in emerging markets
are exactly what other large companies are hoping to accomplish. Here are five
publicly traded companies that, like Starbucks, are trying to put their stamp on
the Indian market. Wal-Mart The world's largest retailer unsuccessfully tried
for years to convince the Indian government to let it open retail stores in the
country. Undeterred, it entered a joint-venture partnership with Bharti
Enterprises a company controlled by the powerful Mittal family to sell goods
under the name "Best Price Modern Wholesale" to retailers and other
businesses in the country. Raj Jain, Chief Executive of Bharti Walmart, believes
it will have a leading position in India's wholesale market by the end of
2013, when it's expected to have at least 12 stores open each averaging
between 50,000 and 100,000 square feet. The Indian government said recently that
it might be willing to let foreign retailers open stores directly, eliminating
the need to go wholesale. Regardless of what happens, Wal-Mart is likely to keep
its wholesale operations open, as the company has done so in other foreign
markets, such as Brazil, Mexico, Guatemala and China. Ford/General Motors
Let's get something straight. India isn't China. From January 2011 to
September 2011, General Motors (NYSE: GM ) sold 1.9 million vehicles in China
and Ford (NYSE: F ) 386,000. Both companies are spending billions of dollars in
China. India spending, on the other hand, is in the hundreds of millions, and
the sales volumes show it. The good news is that Ford and GM had volume
increases year over year of 9.5% and 17.4%, respectively, in September.
Unfortunately, that's not likely to last. In late July, General Motors India
reduced its 2011 vehicle sales from 160,000 to 140,000 because of continually
rising interest rates and fuel costs that are making car ownership prohibitive
for many. Ford's experience surely is no different, and it should see a big
slowdown in the final three months of the year. However, despite a slowing
market, Ford's car sales in 2011 should break the 100,000 mark for the year.
It might not be China, but Indias large population will continue to be a
tempting target both car companies.