The Dubai-based Landmark Group is in talks with two global retailers as part of its plans to roll out supermarkets and hypermarkets in India later this year, jostling with a horde of local and foreign players for a piece of the country’s retail market.
Landmark plans to invest $500 million (Rs2,150 crore) to open 300 outlets such as department stores and hypermarkets—by 2010. It already operates 11 department stores under the Lifestyle brand and five home décor hypermarkets called Home Centre in various Indian cities. Landmark targets India to contribute $1 billion or 16% of the company’s total global turnover by 2010.
“Hypermarkets and supermarkets (in India) are big business opportunities, but we realize and understand it would be a challenging business,” said Ramanathan Hariharan, director of the group. “We know pretty well that it is not so easy to compete with many of the international retailers who are eyeing India,” he added. Therefore, Landmark will target middle to upper middle class consumers, company officials said.
Companies ranging from Wal-Mart Stores Inc., France’s Carrefour SA and Britain’s Tesco Plc have either announced or said they have plans to enter India. However, the current Indian regulations prevent such foreign retailers from selling multiple products directly to consumers. Foreign companies can own and operate fully-owned wholesale subsidiaries selling products from pens and pajamas to other retailers and businesses.
Also, local companies are allowed to operate franchisee stores of global retailers. Landmark is currently exploring options either to operate the franchisee stores of a global retailer or seeking a partnership with global retailers in the supply chain or back-end management. Landmark officials declined to name the companies they are in talks with. But they said they hope to finalize a deal and open one supermarket and a hypermarket in Bangalore by the end of the year.
Landmark also plans to open its first budget hotel in Bangalore by the mid-2008. The company has already leased the land for the yet-to-be-named three-star hotel.