| Carrefour is world's second largest France-based retailer. The 40-year old store with an annual turnover or over € 97 b operates over 12500 stores in 30 countries.
It was among the pioneering entrants in the emerging markets of Brazil (1975) and China (1995). It opened its 104th Hypermarket store in China a couple of weeks ago.
As per the Indian FDI policy guidelines, 100% foreign equity is allowed in wholesale cash and carry retail. But, no such equity is permitted in multi-brand front-end retail.
The company will set up two companies; one for wholesale retail and another for technical partnership with a local partner for front-end retail.
According to Carrefour Group (India) MD Herve Clec'h, the retail major has already made a soft launch of its cash and carry business through "Carrefour WC&C India Pvt Ltd." This wholly owned company intends to carry out wholesale retail business on the lines of German retail major Metro AG, which has already set up three Distribution Centres in India.
Carrefour Master Franchise Company Pvt Ltd, according to Herve Clec'h, is the second company of the group in India which will act as the master franchisee of the group for carrying out front-end retail business in India.
This is similar to world's largest retailer Wal-Mart's India strategy, in which Wal-Mart has decided to allow local franchisee Bharti Retail to carry out front-end business through an entity in which Wal-Mart has no financial stake. Unlike Wal-Mart, Carrefour will lend its brand name to its franchisee partner for front-end business in India.
The French retail major is already in talks with three local potential partners to conduct its front-end business in India.
The first front-end store of the group will be opened by 2009, by when its cash and carry business will be on full steam.
Carrefour was earlier in talks with HDFC, Bombay Dyeing and Anil Ambani among others for its front-end retail business in India. Prior to this, Carrefour had an agreement with Lifestyle Max group of Dubai for a possible tie-up. Names of Tatas and Munjals of Hero Cycles were also being discussed.
Carrefour is also sourcing merchandise like footwear, garments, accessories and home decorations worth $450 million for its global operations from India. It employs 50 persons in India and has taken up premises in Gurgaon.
All the three activities, namely, wholesale retail (cash and carry), front-end retail (franchising), and sourcing will be carried out independent of each other in India.
Source: www.indiaretailbiz.com
Some of the earlier reports can be found on our website at:
http://www.indianwineacademy.com/dm_173_item_8.asp
http://www.indianwineacademy.com/dm_125_item_6.asp
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