Top > Business > 2007 > January > 2007-01-06

Bharti to Invest $7 Billion in Deal with Walmart

Bharti Enterprises, an Indian corporation specializing in communications, signed a contract with Walmart in the end of November. This contract stipulated the creation of cross-India chain of retail stores. Bharti said it will invest $7 billion in the project. The company, which owns the largest telephone operator in India, said it plans to open 200 "mega-stores" and hundreds of smaller stores, planed to cater to India`s growing middle class, estimated at approximately 300 million souls.

Ravi S Deol, Director of Bharti Enterprises said: "I think it`s a market grossly under penetrated and has high per capita spend. So for obvious reasons, we would like to give the consumers a choice in a market, which doesn`t have retail representation." Deol also told reporters that due to the projects real-estate and logistical needs, the company will invest approximately $7 billion by 2010. Last month Walmart and Bharti announced the joint-venture retail chain, to be owned and operated by Bharti under Walmart license. Indian Law prohibits foreign companies from investing in retail in India, excluding one-brand-stores, such as, Nike, Nokia and Adidas stores.

Most of the Indian retail market is owned by nearly 15 million traditional "mom n` pop" stores, while retail chains only hold 3% to 5% of the retail market. Reliance, India`s largest private company, began to build a India-wide supermarket chain as a part of its billion dollar investment plans in the retail market. The company said it intends to open 4 thousand stores by 2011, with a sales objective of $25 billion annually.