Subramaniam Sharma, Bloomberg

NEw Delhi: Pantaloon Retail India Ltd, India’s biggest publicly traded retailer, plans to set up a chain of wholesale outlets in the country’s smaller towns to tap rural customers such as farmers and village shopkeepers.

These outlets will be similar to a town square with different kiosks and offer interaction between the cultivators and customers, Atul Takle, spokesman at the company said in a telephone interview today from Mumbai, where Pantaloon is based.

Asia’s fourth-biggest economy has 3,784 towns with less than 100,000 people and 638,000 villages, which account for about 70% of the nation’s 1.1 billion people. Pantaloon Retail plans to set up its stores in the smaller towns frequented by farmers and shopkeepers from villages and benefit from rising incomes in rural India.

“There is a market beyond the metros,” said Takle. “The ethos is very different in the small towns, with a lot of rural folk living around them and the format is designed for them.”

The company plans to set up 15 wholesale stores in smaller towns such as Burdwan in the eastern state of West Bengal in the next 18 months, Takle said, confirming a report in a daily business paper today.

The paper reported the company plans to start a wholesaling business to compete with Reliance Industries Ltd and the proposed local joint venture of Wal-Mart Stores Inc.

Shares of Pantaloon fell Rs6.9, or 1.7%, to Rs411 at 10:35 am local time on the Bombay Stock Exchange.

Pantaloon plans to increase the number of its retail stores to about 3,500 in 90 cities and towns by 2010 from 160 stores in 38 cities and towns at present, Takle said.