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US retail chain SuperValu sets shop in Bangalore
By siliconindia
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Wednesday, 13 December 2006, 18:30 IST
Bangalore: SuperValu has announced of its plans to set up operations in Bangalore, investing about $50 million (around Rs 230 crore) over the next five years. It is looking to support the companyâs IT requirements by leveraging the talent pool in India.
The company will start off with, SuperValu Services India (SSI) employing 50 people, supported by 1,800 associates working at three different locations in the U.S as part of its IT division.
Plans are to grow SSI to a team of 300 IT professionals in the next 12-18 months.
SuperValu is a Fortune 50 company, $44 billion (last financial year) third-largest grocery retail chain in the U.S. This is the first time it is venturing out of the U.S to fulfill its IT needs.
"SSI will be a key part of SuperValu's IT organization and will help in new applications development, technical operations and testing to support the overall corporate functions of the company, including the retail and supply chain operations. We want to build a strong local team here with strong skills in Java and other leading edge development tools,â said Paul Singer, Chief Information Officer, SuperValu.
The company has links with many Indian IT companies, TCS, Wipro, Infosys, Cognizant to name a few, for sourcing the applications and solutions required for its retail management. Apart from having its in-house IT division, SuperValu also works with 800 contractors, of which 200 are based out of India.
Tony Jolley, VP, IT of SuperValu, said the Bangalore team will work on end-to-end application developments, supporting the IT division round-the-clock. He will head SSI in India.
The IT division within the company, which works on project-to-project basis, is presently working on 400 projects, said Jolley. While the initial focus will be to cater to the companyâs retail chain spread over all the 50 states in the US he added, "We may think of supplying to the local retail companies in the next couple of years."
According to B.V. Naidu, Director, STPI (Karnataka and Andhra Pradesh), 95 IT companies have set up operations in Karnataka (Bangalore) in the last six months, with a net addition of about 60,000 people to the existing IT workforce in the state.
This is not for the first time that any retail chain is coming to Bangalore for its IT requirements.
The UK retail major Tesco has already set up its captive unit in Bangalore. Tesco Hindustan Service Center in India has a team of about 1000 people, of which, more than 60 per cent are focused on IT development. Also Target, a US company, ranked 27th in Fortune listings, has around 200 employees working at its Bangalore service center.
"Cost arbitrage is definitely one among the many factors for which the retail majors are looking at India for software application development and back-end support. Besides, availability of technical manpower in Bangalore is also another factor, which is enticing them to set up shops here," said Naidu.
According to sources, the cost-saving in case of developing applications and solutions for retail requirement is almost 50 per cent cheaper in India, than in the US or UK.