French retailer Carrefour will enter India in July with its first cash-and-carry outlet, and set up three or four more such outlets by year-end, sources say.
* The retail sector in the nation of 1.1 billion people is estimated to have annual sales of $450 billion, according to consultant firm A.T. Kearney. Nearly 80 per cent of the market is in the hands of tiny family-run shops.
* Organised retail, or large chains, make up only 6 per cent of the market but is expanding at 20 per cent a year. This is driven by the emergence of shopping centres and malls, and a middle class of close to 300 million people that is growing at just under 2 per cent a year, according to data from National Council of Applied Economic Research (NCAER) and World Bank.
* People living in villages and small towns account for 59 per cent of consumer durables such as refrigerators and washing machines sales and 53 per cent of consumer goods like soaps, detergents and shampoos, according to the NCAER.
* Incomes in rural areas, where nearly two-thirds of the population lives, have risen driven by growth in agriculture for four consecutive years to 2008/09, according to a study by the Rural Marketing Association of India.
ROADBLOCKS
* India only allows foreign direct investment in cash-and-carry, or wholesale, ventures; there are restrictions on foreigners in retail because of opposition from millions of small shopkeepers that are valuable vote banks during elections.
* Foreign retailers can enter retail through franchise arrangements with local players, and are allowed to own up to 51 per cent in single-brand retail, while 100 per cent ownership is permitted in cash-and-carry ventures.
LOCAL COMPANIES
* Pantaloon Retail, is the country's largest-listed retailer, with hypermarkets, supermarkets, and department stores.
* Other prominent players are Tata Group's Trent and Shoppers Stop, Reliance Retail, a unit of Reliance Industries, Aditya Birla Retail and RPG Group which runs the Spencer hypermarkets.
MAJOR FOREIGN PLAYERS
* Wal-Mart has a joint venture with Bharti Enterprises, the parent of leading mobile services provider Bharti Airtel. It has launched two wholesale stores and plans to open another 10-12 over two-three years.
* Tesco, UK's largest retailer, has a tie-up with Trent for a franchise agreement for its hypermarket chain.
* Germany's Metro AG has its own cash-and-carry business, which operates under its own brand name.
* UK's Marks & Spencer operates an apparel retail chain and has a joint venture with Reliance Retail.
Wal-Mart Stores Inc, the world's top retailer, is accelerating its rollout of wholesale stores in India, a crucial growth market that has long frustrated global firms with restrictive rules.
Tags:organised retail, chains, carrefour, franchise arrangements, franchise agreements, india entry strategy,pantaloon retail, trent, reliance retail, walmart,tesco, joint venture india, india master franchise,
Source:Reuters / Mumbai May 21, 2010, 12:26 IST
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