Wal-Mart and Bharti in India deal

A joint venture between Wal-Mart Stores and India’s Bharti Enterprises has been finalised, the pair said on Monday. Bharti Wal-Mart Private Limited will operate wholesale cash-and-carry and supply chain operations in India.  Opening 10 to 15 outlets by 2015, it plans to employ about 5,000 people selling groceries, consumer goods, fruits and vegetables.

India’s retail industry is worth $300bn (£148bn) a year and has attracted the interest of international retailers.  Large overseas retailers are currently barred by law at the retail level in India, but not in the wholesale market.  Tesco, France’s Carrefour, and Germany’s Metro are all big names who have expressed an interest in establishing operations in India.

The first Bharti Wal-Mart Private Limited cash-and-carry store is set to open by the end of 2008.  “This venture promises to bring great value to millions of farmers, artisans, small manufacturers and retailers across India,” said Sunil Bharti Mittal, chairman and group CEO of Bharti Enterprises.

“We are pleased to be a partner in developing this sector which is set to become a significant engine of India’s economic growth.”

Source: scotlandsoracle.co.uk

Slump may delay Carrefour’s India retail plan by one year

Carrefour SA, the world’s second-largest retailer, will take at least a year to tie up with an Indian partner to start retail operations in the country as its prospective partners grapple with the ongoing financial crunch and slowing sales. The French retailer is also delaying its retail plans to focus on launching cash & carry (wholesale) operations next year, according to a top company source.

“We are making thorough due diligence and understanding the finer details of retailing in India, which is why we are taking some time. We are still in talks with two-three Indian companies,’’ a company official said.

An e-mail sent to the company’s headquarters in France did not elicit any response. Carrefour is in talks with more than six Indian companies that include diversified business groups, retailers and mall owners to find a retail partner, the company had said earlier. Foreign retailers are opening wholesale stores in the world’s second-most populous country, because the Indian rules bar them from setting up or owning stake in local retail chains. The ban does not apply to wholesale stores.

The name of the wholesale stores could be ‘Carrefour Cash & Carry’ depending on getting the regulatory approvals, the official said. Another key reason delaying Carrefour’s entry into the retail segment is the French giant’s tough bargaining stance. “Many of the companies do not like this bargaining,” a retail consultant said, who declined to be named. In November 2007, the Paris-based company announced that it may start operations from metros such as New Delhi, Mumbai, Bangalore and Chennai. The company will be setting up cash & carry outlets under the brand ‘Carrefour’ in the suburbs of these cities.

Carrefour has held talks with Bharti Enterprises, the Wadia Group, Delhi-based realty companies such as Parsvnath and DLF for potential tie-up, according to reports. The size of the franchise stores and cash & carry outlets will range from 32,000 sq ft to 86,000 sq ft. Barring the cost of the real estate, the fit-ins may cost $5-10 million per outlet, Carrefour said earlier.

Though their home markets are passing through recession, US and European retail chains such as Wal-Mart, Tesco and Carrefour are betting on emerging markets such as India due to its high economic growth and large organised retail opportunity.

Sources :- Business Standred

Bharti to launch medium-sized retail store next month

Nov 3 (IANS) Bharti Enterprises, one of the leading business groups in the country which has interests in telecom, insurance and retail, Monday said it will launch its first medium-sized retail store in Punjab next month.“We will start with Ludhiana as our first destination for the medium-sized format and then move on to other cities next year,” Bharti Enterprises managing director Rajan Bharti Mittal told reporters here on the sidelines of a conference. The company currently has 12 convenience stores, christened as Bharti EasyDay, in the country.

Bharti has a technical agreement with the US retail giant Wal-Mart for the latter’s front-end retail stores. The two groups have also entered into a 50:50 joint venture deal for the back-end cash and carry segment. Asked about the economic slowdown, Mittal said: “There is no slowdown as far as retail plans are concerned, one just needs to have a strong back-end and infrastructure in order.”

Sources:-Thaindian News

Carrefour-MGF talks end without deal

The French firm’s troubles in finding an Indian partner come as the boom in organized retail sector is fading

New Delhi: The world’s second largest retailer by revenue, Carrefour SA is again struggling to find a partner for its Indian expansion after talks with the latest in a long line of potential allies, New Delhi-based real estate firm MGF Developments Ltd, ended without a deal.

A person with knowledge of the development who didn’t want to be identified confirmed the ending of talks with MGF. As a result, this person added, the French company no longer expects to sign a franchisee partner in India in 2008. He said the firm was talking to several possible partners, but declined to name these.An MGF spokeswoman said the company “continues to explore strategic relationships with leading domestic and global brands”. She added that her company had never “committed to any discussions” with Carrefour and that any “conclusion or reference in this regard is nothing but mere speculation”.

Shopping around: A shopper outside a Carrefour store in Paris. Antoine Antoniol / Bloomberg

In a November interview with Mint, Gerard Freiszmuth, general manager for Carrefour in India, said he hoped to sign a franchise deal with a local firm by March and that it was in talks with “three very willing Indian partners” that he would not identify.

Six months after the deadline, Carrefour is still without a partner. Somesh Dayal, marketing director of Carrefour in India, declined comment on whether his firm had ever been talking to MGF for a potential partnership, and said while it is still looking for a partner, the primary focus is on the wholesale venture.

He added that there were six companies with whom Carrefour was talking to for a potential partnership, but discussions were still in an initial stage.

Last year, Carrefour had floated two separate units in India, Carrefour WC and C India Pvt. Ltd to roll out fully-owned wholesale stores, and Carrefour India Master Franchise Co. Pvt. Ltd, which was to partner with an Indian company to open the French firm’s branded stores in the country.

Although India allows foreign retailers to sell directly to other retailers or institutions, it bars them from selling to individuals. Single-brand retailers, however, are allowed to own up to 51% in Indian arms that can sell to anyone. The franchise route, where a foreign retailer appoints an Indian firm as a franchisee, is one way companies such as Carrefour can operate in India.

Over the years, Carrefour has been in preliminary conversations with Bharti Enterprises Ltd, real estate companies DLF Ltd and Parsvnath Developers Ltd and Mumbai-based business house Wadia Group among other local firms, for a possible alliance.

Carrefour’s troubles in finding a partner come even as a boom in the nascent organized retail sector in India is tapering off, with firms that entered the business struggling to succeed in a complex market.

So far, Reliance Retail Ltd has around 700 stores, though well short of its September 2007 target of 2,000 stores. Basmati exporter Rei Agro Ltd entered retail with some 200 grocery stores called 6Ten but has shuttered dozens of these in recent months.

Indiabulls Retail Services Ltd, part of the group that also has a presence in financial services and real estate, has shut four of its nine Indiabulls Megastores. Mumbai-based HyperCity Retail closed its pilot small stores and abandoned plans to open about 250 grocery outlets by 2012.

Analysts and experts, however, say India’s modern retail business will grow over time.

A recent report by consulting firm McKinsey amd Co. said the number of potential shoppers at branded stores in India will jump fivefold in the next eight years from 13 million households currently to 65 million households or 300 million consumers.

That could explain why the world’s top retailers including Wal-Mart Stores Inc., Tesco Plc., Metro AG and Carrefour are betting on India. Wal-Mart has forged an alliance with Bharti Enterprises for a wholesale retailing venture while Tesco plans to set up a wholly owned cash-and-carry unit similar to Germany’s Metro.

It is unclear whether Carrefour’s inability to enlist a local partner will in any way affect the company’s plans to open its fully owned cash-and-carry stores by mid-2009.

In Wal-Mart’s case, the joint venture it has with Bharti will feed into retail stores wholly owned by the latter. And Tesco has a similar arrangement with the Tata group’s Trent Ltd.

Metro AG plans to double its presence in India

Germany’s Metro AG aims to double the number of its cash-and-carry centres in India, a senior official said on Thursday, as global rivals draw up their plans to tap the fast-growing economy.

Metro, Germany’s biggest retailer, plans to invest $120 million in at least four new wholesale cash-and-carry centres in the eastern state of West Bengal, Henry Birr, the firm’s vice president of international affairs, said at a news conference. It has four other centres in India, which only allows foreign multiple-brand retailers to operate via wholesale or franchise and licence arrangements.

“We see the same growth potential in India as in China,” Birr said. In West Bengal, the company was waiting for the state to issue licences so it can deal in agricultural produce that it can source directly from farmers, Birr said. Metro, one of the earliest entrants in the sector in India, has been measured in its approach.

Its global rivals have recently struck deals to enter the market, estimated at about $350 billion, and widely forecast to nearly double in size by 2015. Wal-Mart Stores Inc , which has a venture with Bharti Enterprises, plans to open its first wholesale centre in India next year, and aims to roll out 10-15 centres over seven years.

Britain’s Tesco Plc last month said it would set up its first wholesale centre in India towards the end of next year, while Carrefour has also said it plans to enter.

Source: Economic Times