New Delhi: Bharti Group, which has signed a wholesaling joint venture with Wal-Mart Stores Inc., plans to open its first retail stores in India by the middle of next year to benefit from the country’s rising personal wealth.
Bharti plans to open 200 large stores in the next seven years, Sunil Mittal, chairman of Bharti Group, said in an interview on 21 July.
Wal-Mart expects India’s sales through retail chains, as opposed to traditional family-run stores, will reach 35% of the total by 2015, up from about 4% now. Bharti and other India companies are trying to grab a slice of a market that may grow by more than eight times to $97 billion (Rs390,910 crore) by 2012, according to consultancy Technopak Advisors Pvt.
“Organized retail is just beginning to happen; we want to invest in areas in the start of the curve,” Mittal, 49, said. “India is a very large country and you will need at least seven or maybe even 10 large retailers to cover the ground.”
Mittal said the supply chain and wholesale joint venture with Wal-Mart was on track. In November, Wal-Mart agreed to form an equal wholesaling company with Bharti that will connect suppliers and retailers, with the Indian company owning the stores.
“We are hiring people, looking at real estate and the back end supply chain is being organized—a lot of work is going on in that area,” he said. Bharti plans to spend $2.5 billion on the retail network to compete with local rivals such as Reliance Industries Ltd. The company expects the retail unit’s sales at Rs20,000 crore by 2015.
Bharti Retail will set up supermarkets, hypermarkets and convenience stores and sell products ranging from food, electronics, clothing and furniture.