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'All competitors are sourcing within the country, so we'll be at the same level of competition.'
Carrefour is planning to expand in India through a cluster format and also considering entry into quick commerce.
In an exclusive interview with Sharleen D'Souza/Business Standard in Mumbai, Patrick Lasfargues, international partnership executive director, Carrefour, and Nilesh Ved, Chairman of the Apparel group, which is a franchise partner of the French major, speak about the retail chain's India plans.
How do you plan to expand in India and which format will you bring in?
Lasfargues: We have 14,000 stores, spread across 40 countries, giving a turnover of 95 billion euros. We have a brick-and-mortar format and an online one.
For the Indian market, we plan to go for small formats -- which is 8,000 square feet for supermarkets and 30,000 square feet for hypermarkets, which would be a kind of compact hypermarket.
At the same time, there is a format for gourmet for some region in Delhi and in future in Mumbai or Bengaluru.
We will focus on the three formats for India -- supermarkets, gourmet, and hyper -- but not cash and carry.
A key point for the first launch -- in Delhi-NCR -- will be the location and also the team we are building.
We will open the first store in summer next year.
What are your expansion plans under the first cluster?
Ved: We plan to open 50 stores in the first five years in the first cluster, which is Delhi-NCR, across formats.
In three years, if the other markets are ready and real estate is available, we will move to Phase II.
At this moment we are not looking at opening stores in any other markets.
Lasfargues: We want to be focused in our expansion approach.
What makes you confident of re-entering India?
Lasfargues: I sent my teams to run surveys and they dined with Indian families to understand their patterns in grocery buying.
We wanted to be sure before signing up with the Apparel group.
We are confident about it. And also the "Carrefour" name is well known from the United Arab Emirates.
Our intensity was low the first time we entered the country.
At the time, Carrefour was in many countries and had some issues to resolve. Now it's much bigger.
Your revenue expectations?
Lasfargues: We haven't communicated much on revenue so far.
What we can say is that pricing is aggressive in India compared to other markets.
Some are stock-listed, and you know the gross margin is much lower than what we have in Europe.
With the same number of stores, revenue will be lower than what we have in other markets because the margin is much smaller.
Will you source here?
Lasfargues: All competitors are sourcing within the country, so we'll be at the same level of competition. Prices here are much lower -- manufacturing and selling.
How much will the Apparel group invest?
Ved: We are learning from Carrefour. They are experts in this industry, and we wanted to tie up with them.
On the supermarket, hypermarket, grocery store business, India has changed so much and that is the experience we are betting on.
We have seen them and what they've done in West Asia.
We're investing in India in a big way. We are opening more stores, and will add 50 stores just for Carrefour plus our fashion business.
And we're looking at more brands across fashion, footwear, and food and beverage.
Are you looking to export from India?
Lasfargues: We are looking to export in the next five years from India.
Will you also look at entering quick commerce?
Lasfargues: We will address it in the business plan and see if we should start e-commerce from the beginning or later -- and maybe even consider quick commerce.
Our experience in Europe shows you lose money in quick commerce.
Feature Presentation: Aslam Hunani/Rediff.com
