NEW DELHI (AFP) – Mobile phone firm Bharti Enterprises, which aims to start a chain of retail stores in India with US-based Wal-Mart, said it will invest up to 2.5 billion dollars in the project by 2015.
“After revolutionising the Indian telecom sector, retail will be the next big focus area for Bharti. The investment would be between two and 2.5 billion dollars,” joint managing director Rajan Bharti Mittal told a news conference.
Bharti Enterprises, which owns the country’s top private phone firm, said it will open stores in all Indian cities with a population of more than one million.
India’s fast growing affluent middle class estimated as high as a third of its 1.1 billion population spends about 300 billion dollars annually on retail shopping, according to an estimate.
That figure is expected to double by 2015, according to consultants PriceWaterhouseCoopers.
Organised retailing, however, makes up only three to five percent of India’s retail business, which is dominated by nearly 15 million traditional mom-and-pop stores.
Bharti tied up with Wal-Mart, the world’s largest retailer, in November to open stores that would be owned by Bharti and run under a Wal-Mart franchise.
India does not allow foreign investment in retail except for single-brand stores such as Nokia or Nike.
Bharti said it would manage the front-end of the retail business, while Wal-Mart would be involved in the back-end, including logistics and supply and hire an estimated 60,000 new people.
Other major Indian business houses have also been moving into retail.
The country’s biggest private firm Reliance started opening a chain of supermarkets billed as Reliance Fresh last year as part of a multi-billion-dollar expansion plan.