Aiming to penetrate deeper into the Indian market and offer cost-effective brands, US-based retail giant Walmart has decided to establish smaller stores in the country.

Walmart, the world's largest retailer, has plans to hit affiliations with small and mid-level Indian suppliers across various product categories to offer private label brands that will cost 10-15 per cent lower than established brands.

Raj Jain, managing director & chief executive of Bharti Walmart, said that Walmart's that strategy would allow it to go deeper into the Indian market.

Analysts say lack of huge spaces within a city will also force retailers to go for smaller stores.

Commenting on the potential Walmart's strategy, Harminder Sahni of consultancy group Wazir Advisors said, "Tapping an existing catchment area means there will be no space to set up such huge stores. As a result, retailers are likely to go for small format stores in India."

Arkansas, US-headquartered Walmart, which currently has partnership with Sunil Mittal-promoted Bharti Enterprises for a wholesale business, has revenues of more than $400 billion. It boasts a considerably huge list of private label brands in the numerous countries it operates in.