French retail giant Carrefour cashes in Indian chips
Press reports have linked the move to the general election victory in May by the Hindu nationalist Bharatiya Janata Party (BJP), said to oppose opening up the huge Indian retail market to foreign distributors.
Carrefour chief George Plassat had already indicated that the group had been considering whether to maintain a presence in India, where its first store opened in 2010.
Carrefour, which gave no reason for its decision to withdraw, had annual sales of 28 million euros ($38 million) in 2012.
But Indian press reports cited sources at the French company in May saying it was working on ways to withdraw from India after an eventual BJP victory.
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@Aseem: What Carrefour did is normal in business. No one waits to make decisions until all ambiguities are resolved because by then window of opportunity may close. You make decisions based on which direction you think things will go and if that does no pan out, it is wise to change course. Walmart changed course in one way and Carrefour in another.
@Professor: Flipkart is Indian and further more it is an internet retailer. There are serious restrictions on foreign FDI in mutil brand retail and moreover there is political opposition too in many states.
@Ahmad:
If Carrefour stocks 'made in Pakistan' goods then growth of this company is good for you; if it stocks 'made in China' goods, not good for you. This is exactly the bone of contention between GoI and multi-nationals in retail business. GoI wanted at least 30% of items should be locally produced/made; multi-nationals wanted to stock all cheap Chinese stuff.
Carrefour has only 2 branches in Pakistan while 3rd one will open in Emporium Mall, Lahore. It is already successful here & Pakistan doesn't have much restrictions on FDI, so I think Carrefour can easily have overall 20+ branches in all major cities of Pakistan...
Why did carrefour enter India in 2010 when the policy was and still is not favorable for FDI in retail sector or they just entered doing speculation? Again, they are leaving after 4 years speculating that Modi govt. will not allow FDI in retail. Looks like decision makers in carrefour have not been given lessons in "politics and business environment".
$38 million only? Indian online retailers like Flipkart and Snapdeal have a turnover of over $1000 million a year. The "Cash n Carry" model is a big flop. I expect Metro to close shop too.