New Delhi: Bharti Retail Pvt. Ltd, which is set to announce its plans on Monday, will not use the brand name of partner Wal-Mart for its stores, according to a source close to the development. And Rajan Mittal, younger brother of Sunil Mittal, will head the business.
When contacted, a spokesperson for the company confirmed that the younger Mittal would spearhead Bharti’s foray into retail but said no decision had been taken on the name.
According to television channel CNBC-TV18, Bharti Retail will invest $1.5-2 billion over the next five years to grow revenues to around Rs10,000 crore, and the first store will open in December.
Bharti’s announcement comes less than two weeks after Sonia Gandhi, chairperson of the ruling Congress-led alliance, asked Prime Minister Manmohan Singh to ensure that the retail sector was opened to foreign investment only after all “issues” had been “examined”. And on Sunday, Prakash Karat, general secretary of the CPI(M), a key ally of the alliance, said there was need for “strict regulations for the entry of (the) corporate sector” into retail. “Companies like Wal-Mart are tying up with Indian companies and entering the retail trade through the backdoor,” he added.
Wal-Mart Stores Inc. will assist Bharti in managing the supply chain part of the business, called the “back-end”. The “front-end”, the stores, will be managed by Bharti. A team from Wal-Mart, including its CEO Michael T. Duke, will visit India later this week.
Meanwhile, Wal-Mart is fighting 11 cases in Indian trademark offices to stop the use of names similar to its own. Last year, it dragged a local dealer for Samsung Electronics to court. The dealer’s lawyer, Pragyan Sharma, says his client is filing for a settlement and will no longer use the Wal-Mart name. Wal-Mart’s lawyer Sharad Vadehra says his client has already registered around a hundred trademarks in India.
India’s organized retail market is worth $12 billion and is growing by 40% a year. “We want to see a successful Wal-Mart entry,” Ron Somers, president, US-India Business Council had told Mint earlier this month. “That will signal (that) others (other retailers) can enter too.”