City’s underbelly is new wholesale hotspot for global major

Four months ago,in Chand Mohalla in Seelampur,Carrefour’s staff introduced the world’s second largest retailer to V B Sachdeva,a kirana store owner,by promising the lowest prices and convenience of a one-stop shopping experience.

On January 1,Carrefour opened its doors to a target group of business licence holders in Delhi,positioning itself as the first wholesale retailer in the Capital.

The French retailer is among a slew of multi-brand foreign retailers including Wal-Mart Stores Inc and Germany’s Metro AG who have entered the emerging market to carve a piece of the India’s retail market that is pegged at Rs 18 trillion annually.

In India,100 per cent FDI is allowed in wholesale cash-and-carry trade. Up to 51% FDI is also permitted in single-brand retail trade. But such investment is not allowed in multi-brand retailing.

Carrefour has entered into an alliance with Future Group that operates Big Bazaar. But the French retailer will fully own its cash-and-carry venture in Delhi.

Two days ago Sachdeva was at his store when he was again approached by the retail chain’s staff who carried leaflets with comparative prices at the city’s first wholesale retail store sprawled across 56,000 sq ft on property owned by Parsvnath Metro Mall.

On Tuesday,Sachdeva walked out of the gates that are closely guarded — entry is allowed to only those with temporary cards that can be got by submitting a business licence. He carried two bags full of Dove and Lux brand soaps among other things. While he was at it,he also bought 2.5 kg of onions that were selling for Rs 45 per kg.

“I used to buy supplies from Sadar Bazaar and Chandni Chowk. The rates are quite similar but here we can buy everything under one roof,” he said. “But they have too many conditions for applying for this temporary card.”

A list was given to him on Monday when he came to the retail store to fill his registration form. Of 24 accepted business licences,he had quite a few and was issued a card which would give him entry into the structure.

By choosing Seelampur,a not-so-upmarket area in East Delhi,the retailer is trying to co-opt a part of its competition,the small kirana stores that dot the locality landscape,into its clientele.

“It is a place situated east of Delhi in a zone very rich in small businesses (kiranas),” Carrefour said over an email.

But that’s not all. Amar,Sachdeva’s son,said it was a strategic move on the part of the retailer to choose a location far from the malls of South Delhi.

“This is where you have Delhi’s wholesale markets like Sadar Bazaar,Krishna Nagar,Gandhi Nagar. Even Chandni Chowk isn’t very far. They are trying to cut into their business,” he said.

There’s another dimension to the choice. In the national capital,space is scarce in the more upmarket areas. There are already a number of queries from local kirana store owners like Vikas who owns an undergarment store in Seelampur main market. “We wanted to explore. But I need to get one of these business licences to buy from here. They have what we sell,” he said.