Retail News Update

NEW DELHI: French retail major Carrefour is considering the multiple-partner option for entering India. A senior industry source in discussion for a possible partnership with the retailer said the company may not go for a single partner for front-end retail in India as its American counterpart Wal-Mart has done. On the contrary, the French giant would test waters in India by appointing multiple licencees in various parts of India.

“They are not looking at a very long-term arrangement with any single partner in India as of now and want the flexibility of opening shops on their own as and when FDI is allowed in retail,” the source said. Carrefour India general manager Gerard Freiszmuth was not available for comment.

In case such a scenario unfolds, Carrefour won’t be the first foreign retailer to have multiple partners while opening shops in India. Quick Service Restaurant (QSR) chains McDonald’s and Yum! Restaurants (which owns brands like Pizza Hut and KFC), have been operating in India through multiple partners, in respective areas.

The source said that the model that Carrefour is looking at with its licencees is short renewable contracts of 2-3 years. This gives the retailer ample flexibility to take over the business as and when foreign retailers are allowed in the country. Carrefour has already set up two business entities in the country —Carrefour Wholesale Cash &Carry India and Carrefour India Master Franchise Company for the direct-to-consumer front-end retail.

“Unlike Wal-Mart, Carrefour is a very conservative company when it comes to expansion. It does not want to depend only on one partner at least for now. Anyway, they would prefer to own their shops, which is not possible under current regulations,” a Delhi-based consultant said.

In the recent past, there have been speculations of Carrefour being in talks with potential partners in diverse sectors, which includes real estate companies such as DLF and Parsvnath Developers, financial services companies such as HDFC and some other leading Indian business families such as the Anil Dhirubhai Ambani group (ADAG) and the Wadias. It is learnt that Carrefour wants a conservative approach and a slow rollout, which is not agreeable to most Indian partners.