Carrefour decides to come to India
23 Nov 2007
New Delhi: World''s second largest retailer Carrefour has decided to set up shop in India. The company has put in place two business entities in India as the first steps, of which Carrefour WC&C India Pvt Ltd will be for its cash-and-carry business, and Carrefour India Master Franchise Company Pvt Ltd will serve as a master franchisee that will provide its expertise to an Indian company for direct-to-consumer retail. For now, these companies reportedly have an employee strength of 50, which is predicted to double within the next few months.
The company''s facility at Gurgaon is capable of housing 150 people, which is a number two years away, according to the company. Carrefour has reportedly shortlisted three "large and powerful" prospective Indian partners to choose from for its direct-to-consumer business.
The company plans to roll out retail outlets in both formats by the second half of the financial year 2009. Reportedly, both companies will be managed by Herve Clec''h, who is the managing director for Carrefour India. For the direct-to-consumer retail venture, the French retailer was quoted as saying that it would franchise its Carrefour banner to its Indian partner, along with its know-how and technical services, plus back-end supply.
Media reports indicate that a majority of the merchandise for the franchise model would probably be sourced from the wholesale venture, even as the front-end would have 100 per cent Indian ownership, though it would be under the Carrefour brand name.
According to company sources, Carrefour''s wholesale business would span a built up area of over 5,000 sq meters, with over 80 per cent of the merchandise sourced being local. For its global retail operations, Carrefour is known to source products such as footwear, garments, accessories and house decorations worth around $450 million from India.
According to reports, Freiszmuth, who is the general manager for the Carrefour India project, has indicated that Carrefour would venture into private labelling in India, depending on the "maturity of the country as well as maturity in the different categories in the market here."
An agreement with an Indian partner for the franchise retail venture is expected to be signed around the second quarter of 2008, with stores planned for rollout around 2009. The three parties with whom Carrefour is in discussions include "a conglomerate, a retailer and a financial institution", according to Carrefour India project general manager Gerard Freiszmuth.
According to Clec''h, China has over 100 Carrefour stores, and will serve as a benchmark for India. Other than the cash-&-carry unit, Carrefour is also evaluating hypermarts ranging from 4,000 sq m to 8,000 sq m, he added.