Is Carrefour finding it tough to arrive at a viable business model for India? Late last year, the world’s second-largest retailer had set up two separate companies in India.
Chain says talks are on with partners, there’s no change in plan
NEW DELHI: Is Carrefour finding it tough to arrive at a viable business model for India?
Late last year, the world’s second-largest retailer had set up two separate companies in India.
While Carrefour Wholesale Cash & Carry, as the name suggests, was for its cash-and-carry business, Carrefour India Master Franchise Company was set up to lend the Carrefour banner, technical services and knowhow to an Indian company for direct-to-consumer retail.
Carrefour had indicated that while both formats would commence operations only in 2009, the company was close to signing on a strategic partner.
But with several potential partners walking away from negotiations in the last few months, Carrefour’s plans to partner an Indian biggie for the consumer-facing retail venture may have been delayed.
Among the parties the Carrefour team has held (unsuccessful) talks with are real estate developers Parsvanath and DLF; and business houses of Nusli Wadia, Mukesh Ambani and AV Birla. But Herv Clec’h, managing director of both the Indian entities, told DNA Money from France that “there is no change in strategy for India”.
A company spokesperson based in New Delhi said negotiations were on with several potential partners but no decision has been reached as yet.
As per existing policy, Carrefour does not require an Indian partner to begin wholesale cash-and-carry business, but to enter front-end retail, it needs to partner with an Indian company since no foreign direct investment (FDI) is allowed in multi-brand retailing.
A retail industry expert points out that despite having a senior team of people stationed in India for the last four years, Carrefour has been unable to come up with a clear strategy.
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