MUMBAI, Feb 19 (Reuters) - French retailer Carrefour (CARR.PA), the world’s No. 2 after Wal-Mart (WMT.N), said on Friday it would enter India this year with a wholesale business after looking to crack the restrictive market for seven years. [ID:nSGE61I05D]
The company said it was in talks with potential local partners, but declined to name them. Below are some facts, issues and players in the Indian retail sector.
* The retail sector in the nation of 1.1 billion people is estimated to have annual sales of $450 billion, according to consultant firm A.T. Kearney. Nearly 80 percent of the market are run by tiny family-run shops.
* Organised retail, or large chains, make up only 6 percent of the market but is expanding at 20 percent a year. This is driven by the emergence of shopping centres and malls, and a middle class of close to 300 million people that is growing at just under 2 percent a year, according to data from National Council of Applied Economic Research and World Bank. * People living in villages and small towns account for 59 percent of consumer durables such as refrigerators and washing machines sales and 53 percent of consumer goods like soaps, detergents and shampoos, according to the National Council of Applied Economic Research.
* Incomes in rural areas, where the vast majority of Indians live, have risen driven by growth in agriculture for four consecutive years to 2008/09, according to a study by Rural Marketing Association of India.
* Though farm output is expected to be lower this year due to poor monsoon rains, employment opportunities and income streams in rural areas have grown steadily with consistent demand for goods and services in these regions, Cushman & Wakefield said in a recent report on the retail sector.
* The economy has also got a boost from a 1.8 trillion rupees ($39 billion) package for improving rural infrastructure, farm loan waiver of 716 billion rupees and 300 billion rupees spend on a job scheme.
* India only allows foreign direct investment in cash-and-carry, or wholesale, ventures; there are restrictions on foreigners in retail because of opposition from millions of small shopkeepers that are valuable vote banks during elections.
* Foreign retailers can enter retail through franchise arrangements with local players, and are allowed to own up to 51 percent in single-brand retail, while 100 percent ownership is permitted in cash-and-carry ventures.
* Pantaloon Retail PART.BO, is the country’s largest-listed retailer, with hypermarket chain Big Bazaar, supermarket Food Bazzar and the apparels brand Pantaloons.
* Other prominent players are Vishal Retail VIRL.BO, Tata Group’s Trent (TREN.BO) and Shoppers Stop (SHOP.BO), Reliance Retail, a unit of Reliance Industries (RELI.BO), Aditya Birla Retail and RPG Group which runs the Spencer hypermarkets.
* Wal-Mart has a joint venture with Bharti Enterprises, the parent of leading mobile services provider Bharti Airtel (BRTI.BO). It has launched one wholesale store in north India and plans to open another 10 to 15 over three years.
* Tesco (TSCO.L), UK’s largest retailer, has a tie-up with Trent for a franchise agreement for its hypermarket chain Star Bazaar.
* Germany’s Metro AG MEOG.DE has its own cash-and-carry business, which operates under its own brand name.
* Marks & Spencer (MKS.L), UK-based department store, operates an apparel retail and has a joint venture with Reliance Retail. ($1=46.3 rupees) (Compiled by Janaki Krishnan; Editing by Ranjit Gangadharan)