France’s Carrefour, the world’s second-largest retailer, said on Friday it plans to enter India’s vast retail market in 2010, following years of delays. “Carrefour will develop its activities in India with the start of cash-and-carry activities in 2010,” the company said in a statement emailed to AFP. Cash-and-carry is the term used for wholesale outlets.
Carrefour, number two behind US retail giant Wal-Mart, added in the statement it had been “discussing partnerships” with some Indian companies, but that it did not wish to divulge names. The company has been scouting for years for Indian partners. Retail tycoon Kishore Biyani has often been mentioned and Carrefour and his Future Group were linked most recently in an Indian media report in January. India’s estimated $500-billion retail sector is seen as having high growth potential but it remains tightly regulated with large retailers accounting for around 6% of industry sales.
Carrefour had previously said it planned to have an Indian franchisee which would open branded hypermarkets in the country. It had said Carrefour’s 100%-owned cash-and-carry business would supply these stores. Under India’s tight foreign investment rules, no foreign chains are permitted in the retail sector – except for single-brand outlets such as Nokia or Reebok – to protect local retail players.
Foreign groups can only be wholesalers and must partner with domestic companies to enter the retail market. Last year, Wal-Mart opened its first sales venture in India, teaming up with Bharti Enterprises, parent of India’s biggest mobile firm Bharti Airtel, in a wholesale joint venture called Best Price Modern Wholesale.
Carrefour’s announcement came as the retailer reported separately that net profit tumbled in 2009 by 74.2% $505 million dollars, hit by huge restructuring charges.