Press Centre
Wal-Mart Weighs Tie-Up: U.S. Retailer Begins Talks with Indian Firm As It Looks to Expand
The Telegraph
Monday, December 31, 2007
NEW DELHI -- Indian logistics company Radhakrishna Foodland Pvt. Ltd. said it is negotiating a tie-up with Wal-Mart Stores Inc. to support the U.S. retailer's plans for expansion in India.
The Indian company, which manages parts of distribution systems for many companies here -- including international concerns such as McDonald's Corp. and Unilever -- is in talks to create a partnership arrangement with Wal-Mart, the world's largest retailer in terms of sales, said Ivan Rodrigues, general manager of sales and marketing at Radhakrishna. He declined to explain what kind of relationship is being discussed.
Wal-Mart representatives weren't reachable to comment. The Economic Times newspaper reported Thursday that Wal-Mart was considering buying a strategic stake in Radhakrishna Foodland.
In November, Wal-Mart announced plans to team up with an Indian phone company, Bharti Enterprises Ltd., to set up a retail chain to cater to India's burgeoning middle class.
In the joint venture between the two companies, scheduled to open its first store later this year, Bharti would operate a national chain of new stores, acting as a franchisee. Wal-Mart would manage the chain's technology, logistics and wholesale operations. Indian regulations block any foreign ownership in general retailers.
The venture is aimed at giving Wal-Mart a jump on global rivals such as Carrefour SA, of France, and Tesco PLC, of Britain, which also have been angling for a piece of the $300 billion-a-year Indian retail market.
Wal-Mart's toughest competition in India will likely be homegrown, however.
Several major Indian conglomerates -- including Reliance Industries Ltd. and Aditya Birla Group -- have their own multibillion-dollar plans to build nationwide networks of supermarkets, department stores and convenience stores.
Big retailers also face regulatory and political hurdles. Many Indian politicians want to limit the number of large retailers to protect the livelihoods of local shopkeepers. Small shopkeepers have been staging demonstrations around India protesting the jump in the number of modern chain-store competitors.
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