Wal-Mart, Tesco, Carrefour seeks
retail foray in India
Seeks local partners to tap the
$300 billion retail sector
BY OUR AVIATION CORRESPONDENT
February 25, 2007
As Wal-Mart, the world's largest
retailer, seeks a footprint in India's
$300 billion market, UK's Tesco and
French retailer Carrefour are giving
final touches to enter the country.
Reports said Tesco is talking to the
Tata group for a retail foray in the
Tesco was earlier talking to Bharti
group, but Wal-Mart clinched the deal.
Bharti has announced plans for the
retail foray and is lining up a war
chest of $2.5 billion. India's largest
private sector group Reliance has
plans to invest $5.5 billion in
retail. Pantaloon group will invest $1
billion by 2010 to increase its number
of stores to 4,000. The Aditya Birla
group is also nurturing ambitious plans
A Tesco official reportedly said the
firm is interested in the market and
is doing research, but did not confirm
or deny any talks with Tatas.
This could be because the firm may be
pursuing talks with many groups.
The Tata group owns lifestyle and
specialty apparel stores under the
Landmark and Westside brands.
Domestic law does not permit foreign
multi-brand retailers. So Wal-Mart and Tesco may have to invest in in
cash-and-carry (wholesale) and
back-end linkages. In case of single
brand retail, 51% foreign direct
investment is also allowed.
There has been some political
opposition to the entry of foreign
retailers , basically on the
assumption that they will endanger the
over 13 million kirana stores.
Organised retail comprises of just 3%
of the huge Indian market. Sales
through organised retail chains are
expected to reach 35% by 2015 in the
Wal-Mart international contributes 20%
of Wal-Mart's overall revenues of $60
India 's economy is growing at a
scorching pace clocking 8% in the past
three years. It is projected to grow
at 9.2%, boosting disposable incomes.
Wal-Mart Vice Chairman Michael Duke
was in the
country recently. He met Planning
commission vice chairman Montek Singh
Ahluwalia to clear doubts about the
retail policy. Duke did not give any
time frame for the retail venture.
Bharti had announced the venture in
November, 2006. Bharti sees sales at
its retail venture to touch $4.5
billion in eight years, through a
chain of supermarkets, hypermarkets
and convenience stores. While Bharti
will own supermarkets and
hypermarkets, the convenience stores
would be operated trough franchisee
model. Bharti's retail venture will be
headed by Rajan Mittal, brother of
billionaire Sunil Bharti Mittal, who
owns the parent company Bharti