Click to play videoProperty prices down will be good news for Bharti as it prepared to enter the $280 billion retail industry. The company will invest $2.5 billion by 2015. In a joint deal Wal-Mart will handle the backend operations.
Bharti enterprises if finally ready to dial in to the retail revolution. The company will invest up to $2.5 billion over the next eight years. This amount will be raised through a combination of debt, equity and internal accruals does not include investments in real estate and back end operations.
Subsidiary, Bharti Realty is looking after the real estate operations and JV partner Wal-Mart will help put the supply chain logistics in place.
Wal-Mart will operate via the cash and carry model, in compliance with FDI regulations.
In fact, further clarity on the Wal-Mart agreement is expected later in February. So while Bharti hopes to adopt Wal-Mart's best processes and technology, what about the brand?
"The first store will be opened in the first quarter of 2008. Our plan is to invest $2-2.5 billion by 2015 and open stores across all major cities," Bharti enterprises joint managing director Rajan Bharti Mittal told reporters here.
Joint MD of Bharti Enterprises Rajan Bharti Mittal said, ”Brand have not taken a call. "
With or without the Wal-Mart brand you will need to wait till the first quarter of the next calendar year to experience retail the Bharti way.
Bharti retail will have a pan India presence, and will employ about 60,000 people over the next eight years. Its stores will include everything from food and grocery to furniture and household items.
Bharti is looking at multiple retail formats including hypermarkets and supermarkets, and aims to cover 10 mn sq feet of retail space by 2015.
For the small store format, Bharti retail is also looking at partnering with existing local store owners across India through a franchise model.
Rajan Bharti Mittal said, “Roll out will happen in phases, first looking at cities with population of more than one million.”
Bharti hopes to earn revenues to the tune of Rs 20,000 crore through its retail venture by 2015.
Other big boy Reliance, will have the first mover advantage, as it would have a virtual Pan India presence by the time Bharti kick starts its retail venture.
But with Bharti's proven track record of good customer interface, it could well make its retail roll out, worth the wait.
With Sandeep Gurumurthi
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