Carrefour seeking Indian partner?

carrefour_logoJose Luis Duran, Chairman and CEO, Carrefour, the France-based, US$ 177 billion, second biggest retailer of the world, is currently on a visit to India. He is meeting high ranking government officials including Kamal Nath, the Union Minister of Commerce & Industries and senior secretaries, to understand the government’s present policy framework and future roadmap on retail.

Carrefour Chairman during his visit is also likely to gain a hands-on understanding of the growing retail business in India by meeting local business leaders. Carrefour (pronounced: Cahr-uh-foor, meaning ‘cross roads’ in French), like the world’s biggest Wal-Mart, which recently tied-up with telecom giant Bharti, will have to seek an Indian partner for its India foray for front end operations as it is a multi brand retailer and present Indian policy framework on retail does not allow majority FDI stake in such format. Present policy guidelines, it may be noted,  allow FDI of up to 100% in wholesale format (cash and carry) and up to 51% in single brand retail format.

Speculations are, therefore, rife that during this visit, he would explore possibilities of doing business jointly with major business leaders including Kumar Mangalam Birla, Chairman of the A V Birla group. To put records straight, it should, however, be said that Mr. Kumar Mangalam Birla, in several media interviews earlier, has clarified that his group would like to go it alone without seeking any foreign partners. It may be recalled that the AVB group, early this month, had unveiled its plans to foray into the retail business and as a first step had announced acquisition of  Hyderabad-based, food and grocery supermarket retail chain, ‘Trinethra’ and ‘Fabmall’ – which has over 172 retail stores spread across southern parts of the country.

Mukesh Ambani owned Reliance Retail, which is another major business group that is foraying into retail has also decided to go it alone and not seek any foreign partners. Reliance, which has started rolling out its food and horticulture retail stores in convenience and cash & carry wholesale formats, in Hyderabad and Jaipur, as a part of its Rs. 25,000 crore, multi format, multi verticles, pan India retail initiative, like Birlas has also recently acquired Ahmedabad-based, food and grocery retail chain ‘Adani Supermarket,’ which has 54 stores spread across Gujarat.

This leaves Tatas, among other major business houses, to tie-up with Carrefour. Tata group has two companies, Trent (Westside, Landmark and Star Bazaar) and Tata Infiniti (Croma) operating in the retail business. Tatas, however, are thought to be in advance stage of negotiations with the UK-based, world’s third biggest retailer- Tesco.

ITC, another big business house, as reported earlier, is also betting big on retail. However, ITC is mainly focussed on agri products as its long standing linkages with farmers are not limited to retailing alone.

Among other major early entrants in the field, Kishore Biyani owned Pantaloon and Raheja owned Shoppers’ Stop are already having a number of brand, product, or format specific tie-ups with foreign retailers of all shapes and sizes.

The dark horse, which could match Carrefour’s India ambitions, may well be the Munjal (Hero Honda) Group, which despite having announced its retail ambitions, has yet to unveil its retail plans. Munjals have a large network spread across the country as it has been a major player in the two wheelers market -both manual and motorised, for several decades. The group, which is the world’s biggest bicycle and the second biggest mobike manufacturer as good understanding the Indian consumer, both urban and rural.

It may be recalled that as reported earlier,Carrefour was earlier in talks with Landmark, the Dubai based retail group, to form a joint venture for its retail foray into India. However, these talks with Landmark, which already has a presence in the Indian market through it Lifestyle and Max retail chains, were recently called off with mutual consent.


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