French retailer Carrefour is adopting a cluster approach to grow its footprint in India. After marking its presence in four locations in North India, the world's second largest retailer is reportedly eyeing Pune and Bangalore to set up shop next.
Carrefour plans to have over 3,00,000 sq feet of retail space under its retail umbrella by 2013.
Foothold
“The new stores will give the company a deeper foothold in the Indian cash and carry business. Land has been identified at both the locations and work will commence soon. The stores will be ready for operation by early 2013,” sources close to the development said.
Carrefour has two stores up and running in India — in Delhi's Seelampur area and Jaipur. Its stores in Meerut and Agra, the other two northern cities, will start operations later this year.
“Carrefour is gearing itself up for opening up of the multi-brand retail sector. Also, with the economic crisis in Euro zone deepening, Asia would make most profitable business for the company both for retailing and sourcing,” sources said.
Infrastructure
Mr Harminder Sahni, Managing Director, Wazir Advisory said, “The market potential is huge. Carrefour should focus on building supply chain and backend infrastructure. If the company is making such an investment it will help the sector grow.”
In December 2010, Carrefour had set up its maiden outlet in Delhi's Seelampur area. The 56,000 sq. ft. store houses over 10,000 stock-keeping units. The Pune and Bangalore stores will have more or less the same retail area as the Delhi store.
In contrast, German retailer Metro has 10 stores including an outlet in Delhi, while Wal-Mart has 17 stores largely in the West and North. Both Wal-Mart and Metro have on separate occasions said that they want to expand their reach in the country.
Sourcing from india
A Technopak study says that retailers from semi-urban and rural locations travel about 40-50 km to the nearest wholesale market for sourcing. Sources note that Carrefour is also looking to step up its vendor base and sourcing from India.
The company has about 600 vendors. It sources and exports products worth $200 million from the Indian market. These include field fresh vegetables and garments among others.
Carrefour's Director Corporate Affairs, Mr Mohan Shukla, declined to comment on the issue when contacted.
Carrefour is the second largest retailer in the world, with revenues topping €90 billion (over Rs 6,25,000 crore).