Carrefour may tango with Reliance in retail

By siliconindia   |   Friday, 11 January 2008, 19:13 IST
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New Delhi: After the French retailer Carrefour's numerous attempts to cinch partnerships with Indian companies had failed, the company is now in talks with Mukesh Ambani's Reliance Retail to enter the Indian market, reported The Economic Times. A recent meeting between Carrefour's top team and a few executives from Mukesh Ambani's office has triggered such a speculation. Sources indicated that a top Reliance team led by Mr Ambani's close associate Manoj Modi is likely to go to France for further talks. "If it happens, it will be a global alliance. But these things take very long time to materialise," they added. The exact contours of a possible Carrefour-Reliance tie-up is still unclear. But sources said that Reliance could well emerge as a potential partner for Carrefour's cash-and-carry business in India. The deal might be akin to the Bharti-Wal-Mart arrangement, sources added. After a considerable soul searching on the tenure of its Indian strategy, Carrefour is said to have figured out that its Indian partner must possess three key strengths: a cache of prime real estate, undeniable clout with the government and a long-term interest in retail. Reliance scores on all counts. It has already tied up 30 to 35 million square feet area across the country. But there is clearly one issue is that Reliance does not have a track record of partnerships. So far, India?s biggest private sector company has little experience in managing complex joint ventures. "We won't comment on speculation," said Reliance Retail when contacted. Sources said that the initial proposal for a possible alliance between the two giants was mooted by Carrefour and it was for a front end retail venture in the country. However, it is understood that Reliance has not shown much interest in this and the two companies have decided to jointly explore a mutually acceptable model. "One thing is certain, Reliance Retail will not operate Carrefour-branded outlets," sources added.