The Hindu Business Line : Carrefour unveils India plans

Under own banner: Mr Herve Clec’h, MD, Carrefour Group India, and Mr Gerard Freiszmuth (left),General Manager, Carrefour India Project in the Capital on Tuesday. -

Debdatta Das

New Delhi, Nov. 20

After Wal-Mart, Carrefour, the world’s second largest retailer, is setting up shop in the country. Revealing its blueprint for kickstarting its foray into the organised Indian retail market, the company said that it has put in place two business entities in the country — one for its cash-and-carry business and the other a master franchisee which will lend its banner, technical services and knowhow to an Indian company for direct-to-consumer retail.

The cash-and-carry venture, Carrefour WC&C India Pvt Ltd, and the direct-to-consumer retail company, Carrefour India Master Franchise Company Pvt Ltd, have set up their offices here with a current employee strength of 50, which is expected to grow to over 100 within the next few months.

Prospective partner

Carrefour has also zeroed in on three “large and powerful” prospective Indian companies that could be its possible partner for the direct-to-consumer business. “We hope to start rolling out the outlets in both formats by the second half of the financial year 2009,” said Mr Herve Clec’h, Managing Director, Carrefour India, who will head both the companies here.

However, unlike the Bharti-Wal-Mart model that will not use the ‘Wal-Mart’ brand name for its business, the $130-billion French retailer said that it would be franchising its Carrefour banner to its Indian partner. It would also franchise its know-how and technical services to the partner along with back-end supply. Also, majority of the merchandise for the franchise model, whose front end will have 100 per cent Indian ownership, will have to be sourced from the wholesale venture.

“Though we will not be very strict about it, this will be reflected in the agreement we make with our Indian partner,” said Mr Gerard Freiszmuth, General Manager, Carrefour India Project. “It is also only logical that the brand name is that of Carrefour’s. It is like that across the world. And even the three Indian companies we are talking to want it,” added Mr Clec’h.

Locally sourced

Mr Clec’h said that the wholesale business would be spread across a built up area of over 5,000 sq. mt. and added that over 80 per cent of the merchandise sourced will be local.

Carrefour already sources products such as footwear, garments, accessories and house decorations worth $450 million from India. “We will use the current bunch of manufacturers from whom we source and are meeting with several new suppliers,” he said.

With most Indian retail chains betting on the discount model and Wal-Mart claiming to provide the cheapest prices, the competition has heated up on the pricing front. Mr Clec’h said, “Starting a price war is not our way in Asia. However, we always try to be the cheapest. It may take time, but we will adjust to the market conditions.”

The French retailer is also gung-ho about introducing private labels in to their Indian operations. Mr Freiszmuth said, “We will do private labelling in India. But it will depend on the maturity of the country as well as maturity in the different categories in the market here.”

On location specification to open the stores under both formats, Mr Clec’h said, “As a company we believe in a localised approach. So, it will be different from Wal-Mart’s model of creating sourcing hubs. However, we are yet to reach a final blueprint on that.”

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