Chennai: Europe’s second largest retail chain Carrefour announced its exit from the Indian market in less than four years of its foray into the country. It is reported to be in talks with domestic retail firms including Reliance Retail and Bharti Enterprises to sell its Indian assets.
In an announcement late Monday evening, the French retail major said it would shut its cash-and-carry stores in India by the end of September. “The closure of Carrefour’s business in India will be effective at the end of September 2014. Until that time, the company will continue to be fully engaged with all its employees, suppliers, partners and customers to ensure a smooth transition,” it said in a statement. Carrefour is estimated to have invested about Rs 300 crore in its India operations and India is the only Asian country in which it operates cash-and-carry stores. In its five stores in India (in Delhi, Agra, Jaipur, Meerut and Bangalore) reported losses of $17 million (about Rs 102 crore) in 2012, on a turnover of Rs190 crore.
While the company has not spoken on the reasons for its exit, it is said to be exiting India operations to focus on its key markets in Western Europe, China and Brazil. “Although the new Indian Government does not support foreign retailers coming into the country, Carrefour’s decision to exit the market is because of the problems the French retailer is experiencing,” said Sourindra Banerjee, assistant professor of marketing of France Warwick Business School. The company is getting out of geographies that are not viable, like the difficult Indian market, he added.
“Most global retail giants have struggled to successfully export their business model to new continents,” said Arvind Singhal, chairman, Technopak Advisors. However, a day after the announcement, RPG Enterprises chairman Harsh Goenka tweeted that “the French can never understand India”.
