Conglomerate Reliance said Thursday its plan to set up the Indian equivalent of Wal-Mart to transform how the subcontinent shops was on track .
BANGALORE: Conglomerate Reliance said Thursday its plan to set up the Indian equivalent of Wal-Mart to transform how the subcontinent shops was on track despite fears for millions of mom-and-pop stores.
The company is pushing ahead with plans to invest as much as 5.5 billion dollars to build a retail chain comprising convenience stores, supermarkets and hypermarts, said Bijou Kurien, a senior executive at Reliance Retail.
"There is no slowing down in any of our retail investment plans," Kurien said in an interview in the south Indian city of Bangalore.
Reliance chairman Mukesh Ambani launched the retail foray a year ago, saying he wanted to build the Indian equivalent of Wal-Mart and setting an ambitious annual sales target of 25 billion dollars by 2011.
Organised retail or chain stores account for only around four percent of India's 350-billion-dollar retail industry, making the sector an alluring prospect for big domestic and foreign corporations.
But Reliance was forced to suspend retail operations in India's biggest state, Uttar Pradesh, after violent protests led by small retailers amid fears for the livelihood of the country's 15 million neighbourhood stores.
The state government ordered the closure of stores run by Reliance and another chain, citing law and order worries in the cities of Varanasi and Lucknow, where stores were attacked by protestors.
Two Reliance stores were also ransacked in the city of Bhubaneswar, the capital of eastern Orissa state, forcing their closure and leading the police to forbid the opening of a third.
The communist government of southern Kerala state says it will ban the entry of retail giants amid fears that street-corner grocers will be put out of business by the deep pockets and discounting power of chain stores.
The resistance faced by organised retail is similar to protests that followed the entry of private insurance firms and airlines, and will eventually die out, said Asitava Sen, a vice president at retail consultancy Technopak.
"These kind of concerns are common when there is a tectonic shift under way in any industry, and the coming of modern retail is one such development," he said.
Kurien conceded that the company had faced what he called "starting trouble" in some of its retail operations. But that is no deterrent to its long-term investment goals, he said.
"Once it enters a business, Reliance doesn't look back," he said. "Our aim is to be the biggest in every business we are in."
Reliance Retail, which has set up about 390 outlets in 16 states in the past year, on Thursday opened in Bangalore what it said was the first of 300 jewelry stores planned nationwide.
The jewelry business in the nation of 1.1 billion people, traditionally the largest consumer of gold, is worth 800 billion rupees (20.35 billion dollars) a year and expanding as household incomes rise, said Kurien.
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