Carrefour to enter India as wholesaler

French retailer Carrefour, which had held talks with several Indian companies for a joint venture, may now enter the country through the wholesale cash-and-carry route.

According to sources, the world's second-largest retailer is preparing to inform its decision to the Foreign Investment Promotion Board (FIPB).

Since 100 per cent foreign direct investment (FDI) is allowed in the wholesale cash-and-carry route, Carrefour is most likely to come on its own, without any Indian partner.

If it does take the plunge as a wholesaler, Carrefour would merely be following the footsteps of Wal-Mart - its toughest competitor and the world's number one retailer.

Wal-Mart has already used this route to set up shop in India. Globally, Carrefour operates many retail formats such as hypermarkets, supermarkets, discount and convenience stores, but its cash-and-carry business is restricted to the home market of France and Italy.

Of the 154 cash-and-carry stores from Carrefour, only 20 are in Italy. The remaining 134 are spread across France.

Each store is between 2,000-4,000 sq m in size. In France, the cash-and- carry operations is done under the Promocash brand. In Italy, it's known by the Docks Market and Gross Iper brands. Carrefour's decision to open cash-and-carry stores in India comes after months of unsuccessful deliberations with potential Indian partners.

Over the last few weeks, it reportedly held talks with many big Indian industrial houses, including the Ruias of Essar, Anil Ambani of ADAG Group, K P Singh of DLF and Kishore Biyani of the Future Group.

To an earlier query on whether Carrefour was talking to these Indian majors for a possible tie-up, a company spokesperson had said in an e-mailed response from Paris: "In a recent press conference, Duran, president of the management board of the Carrefour Group, said Carrefour was studying a short-list of Indian partners to enter the market��..We do not comment further our strategy and do not communicate the names of the different companies".

The talks remained inconclusive because of the tough condition Carrefour imposed.

It wanted 100 per cent control of any joint venture as and when FDI was allowed in India.

At present, 51 per cent FDI is allowed, but only in what is known as "single brand retail".

Carrefour's latest decision may also stem from an urgency to be part of a market where most of the global retail action has shifted over the last few years.

The company may enter front-end retailing later, if the policy environment becomes conducive.

Also, with Reliance Retail and others facing stiff opposition in several states, Carrefour may have opted for the most sensible option.

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