Krishna Kumar: Wide options

Mumbai, Oct. 3: Ratan Tata, who heads the $22-billion Tata conglomerate, wants to grab a larger slice of the organised retail pie.

The group has floated Infiniti Retail Ltd, which will sell consumer goods and electronics across the country.

Infiniti Retail will be a 100 per cent subsidiary of Tata Sons and will receive an initial equity infusion of Rs 400 crore.

The Tata retail venture has joined hands with Australian retail giant Woolworths Ltd, which currently operates more than 2,000 stores in 12 different formats. While Infiniti will own and run retail operations in India, Woolworths, which has attained notable success in selling electronics and consumer goods through its Dick Smith Electronics chain, will provide technical support and strategic sourcing facilities from its global network.

The formation of Infiniti Retail indicates the group’s entry into new domains within the organised retail space in addition to Trent Ltd, which now operates in three formats.

Clearly, the Tatas are preparing to take on the titans in the retail space like Mukesh Ambani, Kumar Mangalam Birla and Sunil Bharti Mittal who have all drawn up ambitious plans in the arena.

Technopak Advisors has estimated the size of India's retail industry at about $300 billion and forecast it to grow to $427 billion in 2010. At present, organised retail only accounts for 3 per cent of the industry.

Infiniti plans to have a pan-India presence that will sell various brands of consumer electronics and durables. These mega stores, branded Croma, will offer multiple brands across eight categories and the large format stores will be spread over 15,000 to 20,000 square feet. The first Croma store, covering 20,000 sq.feet, will be launched in Mumbai on October 9 and in the first 18 months, Infiniti Retail Ltd plans to launch 30 such large format stores.

Tata Sons director R.K. Krishna Kumar said, “Woolworths will bring their power in sourcing various products…we have picked the right vertical in retail space.”

While he didn’t rule out the possibility of Infiniti entering into other formats over a period of time, Krishna Kumar said the group had no immediate plans of listing the company.

Carrefour move

Carrefour, Europe’s largest retailer, is in talks with Dubai's Landmark Group about opening up to 200 stores in India, Landmark chief executive Micky Jagtiani has said, reports Reuters.

Landmark's India unit, Lifestyle International Pvt. Ltd, is in the early stages of talks about acquiring a Carrefour franchise as economic growth in India spurs retail demand, he said in Dubai on Sunday.

organised retail in India was set to explode in both scale and size as aspirations of the people rise in tandem with higher income.

In such an environment, though the potential in consumer electronics and consumer goods was huge, it was not being tapped in the right manner. While there are regional players that focus on specific geographies, it is necessary to have a national player that not only provides a wide range of products, but also excels in after sales service.

“Woolworths will bring their power in sourcing various products…we have picked the right vertical in retail space,” Krishna Kumar added while pointing out that group’s successful interface with the customer would come in handy in this venture.

This number is expected to cross over 100 by 2010.

The eight categories in which Croma will be present include home entertainment, small appliances, white goods, computers and peripherals, communication, music, imaging and gaming software. It already has signed up with some of the leading brands that include Hitachi, Microsoft, LG, Siemens, Godrej, Alcatel, Motorola and Casio.