Tesco Lose Out To Wal Mart In India

Tue, 28 Nov 2006
 
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British supermarket giant Tesco Plc have lost out in the race to enter India’s sprawling retail market . Instead US based chain Wal Mart, the world's biggest retailer, is set to join with Bharti Enterprises Ltd as the two companies are set to jointly explore business opportunities in India .

The joint venture will start from 2007 when the first stores should start to operate in Asia's fourth largest economy . The Chairman of Bharti Enterprise Sunil Mittal said he expected several hundred stores to be open across India in the next 4 to 5 years.

On Friday Tesco announced it had ended negotiations with the Bharti group after failing to agree a deal, but said it still had plans to enter India's retail sector soon.

The Financial Express daily who earlier this month said that the two firms would initially invest $100 million (£51.6 million), going up to $1.46 billion, citing industry sources.

Consultancy Technopak Advisors estimated that the Indian retail industry is roughly worth $300 billion, and is forecast to grow to $427 billion by 2010 and a staggering $637 billion by 2015.

Sunil Mittal said of the deal, "The joint venture with equal stakes will operate in areas where the government allows foreign investment in retail like cash and carry and logistics ."

"The retail shops will be owned by Bharti Enterprises under the Wal Mart franchise . The idea is to give Indians the lowest price everyday."

"This joint venture is a winning combination. Wal Mart's logistics skill and Bharti's execution capability will create a potent force in the Indian market," said Gajendra Nagpal, director at Unicorn Investments.

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