India’s shoppers have gained the attention of yet another global retail player, with Tesco announcing in August its plan to start a wholesale cash-and-carry business in India.
Tesco, the world’s third largest food retailer by revenue, will make an initial investment of up to US$110 million over the next two years. In accordance with the law which requires that foreign retailers selling a range of brands must have a local partner in India, Tesco said it was entering into an exclusive franchise agreement with Trent, the retail arm of the Tata group.
Tesco’s announcement comes two years after Wal-Mart, one of its global competitors, announced plans to enter the Indian market through a joint venture with Bharti Enterprises.
Tesco plans to open its first cash-and-carry store by December 2009, a mere 16 months after the initial announcement. Wal-Mart will open its first store in March 2009.
The Tesco-Trent agreement allowed for a speedy launch process. For a fee, Trent will draw on Tesco’s experience to develop and expand Star Bazaar, a hypermarket chain launched by the company four years ago. Tesco’s wholesale business will supply produce to the stores.
