Tata signs Retail agreement with Tesco

August 13, 2008	(2 votes, average: 3.5 out of 5)  Loading ...
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After the Bharti-Walmart deal, the Tata Group, are signing up a partnership agreement with Tesco, UK’s largest retailer, to launch retail business in India. Tesco and the Tata’s will sign a 50:50 joint venture for cash and carry and a franchisee agreement for the front-end. A formal announcement is expected very soon.

This is the most viable option for foreign retailers wanting to enter India as Indian government does not allow foreign direct investment in direct-to-consumer retail that sells many brands and products. Those who know the culture of both Tesco and Wal-Mart says that they complement each other. Both are conservative companies who tread cautiously. They wouldn’t make gigantic plans which would be difficult to follow later. Both would take one step at a time, given the low consumer sentiments and still-high real estate prices.

One of the reasons why Tesco couldn’t work out a deal with Bharti was because the two couldn’t agree on common milestones. Tesco wanted to follow a more conservative approach; Bharti wanted a rapid expansion of retail. The latter signed on Wal-Mart subsequently.

News Published Under:   Real Estate India, Retail Market in India |

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