Auchan wants its new venture in India to build a “national” retail chain in the country, the French retailer told just-food today (13 August).
The company has agreed a franchise partnership with Dubai retail and hospitality firm Landmark Group.
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The deal marks Auchan’s entry into India and the retailer wants to build on Landmark’s presence in the fast-growing market.
The Dubai firm operates in India through its Max Hypermarket chain. Its 13 Max Hypermarket stores will be re-branded as Auchan outlets and the two companies intend to open 12-15 stores a year.
“Max Hypermarket already has a presence in south, north and western India. The intention is to build on this and have a national footprint,” an Auchan spokesperson told just-food.
Restrictions on overseas investment means foreign firms cannot own stakes in multi-brand retail outlets. However, some retailers have operated in India on a franchise basis. Auchan said it can provide “expertise” to the venture.
“We can give our expertise on trade, the best offer of discount products and services tailored to customer demand in each store,” the spokesperson said.
Auchan is Landmark’s second overseas partner in India. Landmark had worked with Spar International in India but earlier this year the two sides decided to end their venture.
There followed months of speculation about a possible deal between Landmark and Auchan.
The French retailer said teaming up with Landmark was “a great way” to enter a growing market that has a sector closed to foreign direct investment.
“India is a country that we have been watching for many years, due to the size of the market and the demographic and economic growth – but India has also been hitherto closed to direct foreign investments in the retail sector,” the Auchan spokesperson said.
“For many years, we have been arguing our commitment to develop a hypermarket franchise in the country and we think that this opportunity could be a great way to discover this big country full of diversity and so different from the others where we operate. Also, we have in Max a reliable and knowledgeable partner in the country, so it seemed like a good time.”
