Carrefour Enters the Indian Market

Carrefour, the French based company and the world’s second largest retailer, has now entered the Indian retail market.

This retailer has a capital of 97.24 bil- lion euros. Carrefour entered the Indian market with the help of a franchisee route, using its Hypermarket. They opened their first cash and carry store in New Delhi on December 30, 2010. This store is located in east Delhi, at Seelampur Metro Mall which was developed by the Parsvanath Developers.

Carrefour’s CEO Lars Olofsson was glad to explain the media that the opening of their first store is simply the beginning and they will shortly create many other similar cash and carry stores in India. The purpose behind Carrefour’s first cash and carry wholesale store is to prop- erly understand the needs of the Indian retail market and then expand their other business formats.

The Carrefour’s wholesale store cash is spread over an area of about 5,200 square meters and has a capacity to stock 10,000 units catering to businesses like restau- rants, local retailers, institutions and pro- fessional business people.

At present, India allows only 51 per- cent of Foreign Direct Investment (FDI) by a single brand in the retail segment, but 100 percent FDI is allowed in this cash and carry segment. Thus, this segment of the market is the only part which foreign investors can have the authority to build up a sole entity in India. This clearly in- dicates the government’s hesitance in al- lowing FDI, but that it is unable to stop the foreign investors from taking a slice of India’s retail sector.

Carrefour was in the news recently because of its plans for entering into the country’s multi-brand retailing market with the help of a joint venture with one of India’s largest retail companies, Future Group. Both of these groups are consid- ered to have reached an advanced stage of discussion.

As per the Indian retail laws, the multi- brand retailers, like Carrefour, are only al- lowed to operate their whole-sale outlets and give back-end support to local opera- tors.

Sources even say that the Carrefour Group has already signed an all exclusive franchise agreement with the Landmark Group to build up hypermarkets in the country. The Landmark Group is a big group with a capital of $500 million. The hypermarkets set up by the duo will sell a huge array of products like FMCG, food and grocery, electronics and apparel.

Around 58 percent of the revenue gen- erated by several retail outlets worldwide is occupied by hypermarkets. Carrefour al- ready has its franchise model in countries like Spain, Dubai, Belgium and France.

Carrefour operates in five formats all over the world; however, it wants to invest in hypermarkets within India because it is the only segment which is completely absent in the Indian retail segment. This is because supermarkets and convenience stores dominate the retail market.