German retail giant Metro AG does not feel threatened
by the entry of the recently announced Bharti Wal-Mart
Cash & Carry joint venture. The company feels it
has the first mover advantage and is gearing up to face
the competition by consolidating its presence through
rapid expansion.
The company, which entered the Indian market five years
ago with its wholly owned subsidiary, Metro Cash &
Carry India, believes that its model has worked well
in India and there is no need for a change in its business
model.
Says Martin Dlouhy, managing director, Metro Cash &
Carry India, "Our business in India has clearly
shown that our business model of offering a one- stop
location for businesses especially HORECA-hotels, restaurants,
caterers and small retailers is working well. We have
spent almost four years since opening to understand
Indian business customers and also work on the supply
chain to offer better value, both to our customers and
suppliers. Going forward, we are poised for rapid expansion
across the country."
Metro is at present busy setting up its fourth and
fifth distribution centres in Kolkata and Mumbai. Its
Mumbai centre is being set up at Neptune's Magnet Mall
by the end of 2007. At present, Metro operates two distribution
centres in Bangalore and one in Hyderabad. It will open
its fourth wholesale store in Kolkata this year.
"In several countries, local players have emulated
Metro's successful model of connecting producers and
manufacturers with trade and business. In all such countries,
Metro Cash & Carry continues to have a strong position
in the cash & carry wholesale business. So, we do
not fear competition at all," adds Dlouhy.
Metro has so far invested over Rs 250 ($60 million)
crore to set up three distribution centres in Bangalore
and Hyderabad . Its Mumbai and Kolkata centres will
see a combined investment of over Rs 150 crore. "We
are also looking to open at least three centres in Kolkata
and enter as many cities as possible. We are presently
looking for real estate in many other cities,"
a senior Metro official said.
In India, Metro serves three types of customers - retailers,
hotels and caterers and other businesses including IT
companies, offices. Metro sells around 8,000 type of
food products and 10,000 non-food products. About 90
per cent of the goods offered originate from local producers
and suppliers. Its products are sold only to its registered
members.
Metro plans to invest about Rs 1,800 crore ($440million)
to expand its operations in India over the next three
to five years. The group is also looking at greater
export opportunities from India.
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