Carrefour se dépêche de rentrer en Inde

Source : Economic Times

French supermarket giant Carrefour , the world's second biggest retailer, will sign a deal to enter India in the next two weeks, India's Trade Minister Kamal Nath said on Thursday.

Nath, at a conference in London, said Carrefour was in talks with India's Wadia Group and its Britannia unit, which is India's top biscuit maker and part owned by French food giant Danone .

Cracking the Indian market, with its 1.1 billion population, remains a key target for the world's biggest retailers.

Any deal would give Carrefour a foothold in the booming subcontinent, where world leader Wal-Mart last year secured a retail venture with Bharti Enterprises, owner of Bharti Airtel.

"Carrefour is looking at India very closely," Nath told reporters on the margins of a conference held by The Economist.

"They said they are very close to closing up a retail deal in the next two weeks, that's what they told me."

A Carrefour spokeswoman said the group was not immediately available for comment. Wadia's group spokesman declined to
comment.

To offset slowing consumption at home, global retailers Wal-Mart, Carrefour, Germany's Metro and Britain's Tesco are pushing to enter India's $300 billion retail industry, which is forecast to grow to $637 billion by 2015.

Yet their access is slowed by legislation banning these multi-brand retailers from entering India's front-end retailing, only allowing them access through cash-and-carry, licence and franchise operations.

Nath signalled however that India's stance could be changing, saying it would explore liberalising foreign direct investment to its retail sector in the next two to three months.

GAMBLE

Competition among world retailers for Indian partners is tough, with Wal-Mart late last year beating Tesco to the deal with Bharti. Metro has entered via the cash-and-carry route.

They are also pitted against home grown brands like Indian giant Reliance Industries, which is investing $5.6 billion in the rollout of hundreds of stores across the country.

Should Carrefour net a partner, pressure will mount on Tesco, Britain's biggest retailer, to strike a deal or be left behind in the global land grab by the world's biggest supermarket owners.

Ira Kalish, director of consumer business at Deloitte Research, said retailers had to take the gamble and enter India, although it was still uncertain whether it would echo the rapid growth of the Chinese retail market.

"It is worth it for retailers and other foreign companies to make a bet on India because this could be the real thing and if they don't bet on it ... they will lose out," he said in a telephone interview.

Carrefour, after a successful expansion into China, the world's fastest growing consumer market, has set its sights on entering India and Russia's booming consumer economies.

It has pulled out of countries where it failed to rank as among the top three retailers and wants to up its share of foreign sales to make up for its tough home market. France accounted for about 54 percent of operating profit in 2005 against 63 percent before, with some of that shifting to Asia.