The Indian retail market has again turned the cold shoulder on international giants, this time the world’s second largest; Carrefour.
The French retailer’s efforts to find a local partner for expansion in India hit another stumbling block as talks with the latest potential, New Delhi-based real estate group MGF Developments, petered out without result.
Carrefour does not expect to find a partner in 2008 now, according to an unnamed source quoted in Live Mint, although it was still talking to several possible partners.
The company’s general manager for India, Gerard Freiszmuth, said last November Carrefour hoped to find a partner by March this year, and was in discussions with “three very willing Indian partners”.
Carrefour India’s marketing director, Somesh Dayal, said the company was now talking to six companies about a partnership, but only at a preliminary level. He said the retailer was focusing on its wholesale venture in India.
A franchise format had been Carrefour’s eventual goal, working around India’s tight foreign-owned retail legislation.
Foreign-owned retailers cannot sell directly to the public in India, but can sell to other businesses via the wholesale model, leading several foreign groups to venture into that format.
Carrefour launched two companies last year, Carrefour WC and C India Pvt Ltd, to roll out fully-owned wholesale chains in the subcontinent.
The franchise model, however, would allow Carrefour to own 51 per cent of each outlet selling direct to the public, but requires a local partner to act as franchisee.
A recent boom in India’s organised retail market, which had been expected to triple in market share by 2015, has tapered off over the last few months, squeezing retail chains already finding the complex Indian market tough.
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