Even though the government continues its ban on foreign direct investment (FDI) in retail, Bharti already has the option of using the Wal-Mart brand name on its front-end stores.
NEW DELHI: The Bharti Group, which is tying up the details of its cash-and-carry joint venture with Wal-Mart, is keen on getting the Giant of Bentonville to the front end of the retail business. Even though the government continues its ban on foreign direct investment (FDI) in retail, Bharti already has the option of using the Wal-Mart brand name on its front-end stores.
Speaking to DNA Money, Bharti group chairman Sunil Bharti Mittal said, “Whenever government opens up FDI in retail, Wal-Mart is absolutely welcome to come into the front-end.” Shrugging off suggestions that Wal-Mart may want to get into the front end on its own, he asserted.
“Wal-Mart will be brought to the front end in partnership with us… Why have they partnered us for the back-end business otherwise?”
So far, Bharti has been fighting shy of declaring its intentions on bringing Wal-Mart to the front-end and this is perhaps the first time Mittal has given any indication about his plans for the front-end. His assertion comes even as many government functionaries feel that Wal-Mart’s entry is a backdoor one.
On his part, Mittal has all along maintained that the pact with Wal-Mart is being inked only for carrying out the wholesale cash-and-carry business, in which government regulations allow 100% cent FDI. Mittal dismissed reports that the two partners have differences of opinion over the use of the Wal-Mart brand name, clarifying that the two sides are yet to come to a decision over whether the Wal-Mart name should be used in the front end stores. “
“This issue (use of the Wal-Mart brand name) is not sensitive at all. It is up to us to use it or not, it’s a prerogative we have … we have a franchise from Wal-Mart for the front-end and (we will) do what we have to. If we use the brand name, there will be a royalty, otherwise not.”
“We are in the process of taking a decision on this, but work on the retail venture is ongoing. Land is being acquired at various places and we have already hired a competent team of people,” he said.
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