| Bharti Enterprises joint managing director Rajan Bharti Mittal (right) with Bharti retail head Vinod Sawhny in New Delhi on Monday. Picture by Ramakant Kushwaha
New Delhi, Feb. 19: Bharti Enterprises plans to invest $2.5 billion (around Rs 11,250 crore) in retail and expects revenues of $4.5 billion (Rs 20,250 crore) from the business by 2015, according to Rajan Bharti Mittal, joint managing director of the company.
Mittal said retail will be the “big focus” of Bharti in the next eight years. The company has recently joined hands with Wal-Mart for stores of all formats — hypermarkets, supermarkets and others — in cities with a population of more than a million to sell an array of items ranging from groceries, clothing, furniture to electronic goods.
“The first store will be opened in the first quarter of 2008. Our plan is to invest $2.5 billion by 2015 and open stores across all major cities in the country,” Mittal said.
Mittal, however, said the investment is only for the stores, and a separate plan for real estate will be announced soon.
“We are still studying the model to be adopted — to buy the property or to get land on lease. Our group company, Bharti Real Estate, is looking at all options,” Mittal said.
He said the company’s plans will not in any way push the small neighbourhood stores out of business, adding it is open to bring them under the company’s fold as franchisees. “We want to co-exist with smaller convenience stores. We are even looking at franchising these stores.”
The footprint of organised retail is just over 3 per cent to 5 per cent of the sector, with the rest being covered by family-run enterprises.
Mittal said the company is putting in place the back-end of the business, where it has Wal-Mart as partner. “The details of the back-end chain and our tie-up with Wal-Mart will be announced in due course of time,” he said, adding a high-level team from Wal-Mart will be in India this week.
A Wal-Mart spokesperson said the US giant is looking forward to working with Bharti in establishing the back-end supply chain encompassing farmers and other suppliers.
Mittal said Bharti is scouting for 10 million square feet for its hypermarkets, supermarkets and convenience stores. The company will give employment to about 60,000, he added. Analysts said the possibilities in retail are immense. The country’s middle class, numbering 1.1 billion, spends about $300 billion in the retail sector.