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April 10, 2008

INDIA: Retail giants eye tie-ups with kirana stores

As part of their continuing expansion drive, larger Indian retail companies are teaming up with smaller players in organised retail and even the independent “Kirana shops”.

As part of their continuing expansion drive, larger Indian retail companies are teaming up with smaller players in organised retail and even the independent “Kirana shops”.

Delhi based Vishal Retail, a group focusing on smaller cities, has said it is open to the formation of partnerships with the Kirana shops.

“This partnership will help Kiranas survive the onslaught of organised retail as it will enhance their competitiveness. Kirana stores can also benefit from the economies of scale, a key advantage for big retailers,” said R. C. Agarwal, Vishal Retail’s chairman and MD.

The scheme looks at providing the Kiranas an efficient and complete backward integration infrastructure that will include new technology, processes and training in product merchandising and marketing, in return for hoisting the Vishal brand on the shop.

Another large retail-chain owner, Bharti Enterprises, is in talks with the retail chain Big Apple who has a total of 65 stores in and around the Delhi region.

Bharti is looking to expand by buying-up smaller retail chains across the country. This strategy echoes the company’s approach to expansion in the telecoms industry.

Big Apple’s last reported consolidated turnover was around US$35m. Bahrti has offered the company $25m for a 70% stake.

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