Bharti to invest $2.5 b by ‘15

BHARTI Retail plans to invest $2-2.5 billion by 2015 for opening multi-format retail outlets across the nation. The company estimates to generate over $5 billion as revenue in this time frame. At the same time, for its small store format, it’s looking at partnering with existing local kirana store owners (1,000 sq ft and above) through a franchisee model. This means that Bharti would provide its brand, technology and practices to such stores and earn a royalty in return.
Bharti Retail would be present in all Indian cities having a population in the excess of 10 lakh. The first store will come up in the first quarter of 2008. The company aims at having approximately 10 million sq ft of retail space and provide direct employment to around 60,000 people. Bharti Enterprises joint managing director Rajan Mittal said, “After revolutionising the Indian telecom sector, retail will be the next big focus area for us. Our main focus will be on offering quality products at affordable prices.”
Bharti will have stores in mainly three categories — hypermarkets, spread over 75,000-125,000 sqft each, supermarkets (30,000-50,000 sqft) and convenience stores (2,000-5,000 sqft). The company will have a presence in all food & grocery categories, fresh fruits and vegetables, meat and poultry, dairy products, staples, FMCG and processed foods, electronics & appliances, clothing & footwear, furniture & furnishing and other household articles.
The company will leverage its tie-up with global industry leader Wal-Mart for technology and best practices. However, on the issue, of whether the Wal-Mart brand name will be used in the retail venture, Mr Mittal said, “It’s too early to comment on this. Any such move would be based on a thorough consumer research.” As per the agreement between the two companies, while Bharti will manage the front-end of the retail business, Wal-Mart would be involved in the back-end, including logistics, supply chain and cash-and-carry.
The $2-2.5-billion investment figure excludes the real estate cost that Bharti will incur in its retail venture. The company’s real estate arm Bharti Realty, has already started creating land bank for the venture.
courtesy:economictimes
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