Bharati Chairman Sunil Bharti Mittal told Reuters he was in talks with the U.S.’s Wal-Mart, Britain’s Tesco and France’s Carrefour and the final decision would come down to “chemistry”. “We are in the final stages of choosing a partner,” Mittal said in an interview with Reuters Television on the margins of an Indo-British trade summit. “I would expect there would be a decision by the end of the month.”
“India is a continent of customers. It is entirely in the unorganised sector and it needs to be organised. So, the opportunity for organised retail is very large,” added Mittal.
Mittal said Bharti Enterprises, a diversified telecoms conglomerate, was considering launching stores from the small-sized convenience level to giant hypermarkets. Its partner would provide backoffice and logistical investment.
Cracking the Indian market, with its 1.1 billion population, remains the holy grail for the world’s biggest supermarket chains as they suffer saturation and slowing growth at home.
While U.S. and European consumers pinch their pennies, India’s retail industry is estimated to be worth $300 billion with forecasters seeing it growing to $427 billion by 2010 and $637 billion by 2015, says report.
The Indian government has thus far barred companies such as Wal-Mart and Tesco at the retail level in an attempt to prevent them from swamping local “Mom and Pop” stores, making a joint venture vital for foreigners seeking entry.
Bharti Enterprises and its foreign partner will be pitted against Reliance Industries Ltd, an Indian conglomerate in the midst of a rapid retail rollout and is investing $5.6 billion in outlets ranging from convenience stores to hypermarkets hawking everything from clothing to airplane tickets. It aims to turn revenues of $20 billion by 2010.