Casino to roll out in India
French retailer Casino is close to entering into an alliance with Delhi-based real estate player Parsvnath Developers for retail operations in India. India does not allow foreign direct investment (FDI) in front-end retail, although 100% FDI is allowed in wholesale. The two companies are therefore likely to form a joint venture for a wholesale business, and a franchisee or distribution arrangement for the front end.
The French group has 10,000 stores in 11 countries and earns 30% of its revenue from outside France, operates its stores under several formats, including hypermarket, supermarket, convenience stores, discount stores and restaurants. However, which format will roll out in India in uncertain.
Parsvnath, has no retail expertise, but most international retailers exploring Indian markets are attaching little importance to the potential local partner’s retail experience. The entire focus is on those who can bring in good real estate as the availability of suitable real estate has become a major issue in bigger cities. Land prices have skyrocketed, putting pressure on retailers’ margins.
The difficulty in locating suitable properties is also said to be one of the prime obstacles to a smoother rollout of Bharti-Wal-Mart’s retail operations, which the Casino- Parsvnath will most likely mimic.
