Argos set to enter India
Argos has announced plans to enter India later this year after signing a franchise agreement with a joint venture company owned by Shopper's Stop and Hypercity Retail India.
The stores, named Hypercity-Argos, are expected to open initially in the Mumbai region. Argos is the latest company eyeing the large Indian market. It's plans for India include providing its brand, catalogue, IT support and expertise in linking high street and home shopping.
Wal-Mart recently signed a deal with Indian firm Bharti Enterprises and is expected to spend $2.5 billion on developing a chain in India. Another retail major, Tesco, is also rumoured to be in talks with the Tata Group on forming a partnership to enter India.
A Tesco spokesman said 'We are interested in India and are researching the market.'
Terry Duddy, CEO of Home Retail Group said 'The heads of terms with Shopper's Stop and Hypercity, both pioneers in the Indian retail market, give Argos an initial foothold in what is a rapidly expanding market.'
The first of the stores is expected to open in Mumbai towards the end of the year and will be based on the Argos catalogue model. The financial terms of the deal were not disclosed.
Duddy said HRG had settled on India after ruling out Eastern Europe and China because of the potential it offered. 'It is exciting because strategically it will help us answer the question of what could happen to Argos in emerging markets.' HRG will invest about £10 million pounds to establish an Indian business, which will be called HyperCity-Argos. It will not get any revenues for the first two years but will move to a revenue-sharing agreement in late 2009 if the move is a success.