Hamleys & Tesco Venture Into India

It seems quite a while since we’ve featured news about India. There seemed to be a time when we couldn’t stop writing about innovation and opportunity there – and it’s all kinda gone quiet. Are we to blame, in our New York citadel? Hmmm… anyway – two UK-India stories that caught our eye: Tesco & Hamleys.

After years of planning to go to India, British grocer Tesco will finally enter the market with the help of Indian auto manufacturer Tata. Tesco will first move into the market as a wholesaler. The Financial Times reports:

Restrictive foreign direct investment rules in India allow overseas supermarket chains to operate as wholesalers but not as retailers. That means if Wal-Mart, Tesco or Carrefour wants to open a hypermarket, it has to find a franchise partner to own and operate that store.

Under the terms of yesterday’s Tesco-Tata tie-up, the British chain will spend £60m on three cash-and-carry outlets in Mumbai, Delhi and Bangalore over the next two years. Those Tesco-owned sites will supply goods to Tata’s retail stores and the British grocer will also offer up its retailing know-how in return for a fee.

Meanwhile British toys retailer Hamleys plans to enter the market too with a relationship with Reliance Industries. The Finanical Times reports that India has one of the world’s youngest populations, with nearly half of its 1.1bn population below the age of 25 and 300m under 15:

However, the country has one of the world’s lowest spending patterns on toys. Bijou Kurien, president and chief executive of Reliance Retail’s lifestyle division, said Indians spent $1.20 a year per child on toys. “Toys as a category in India are underexploited largely because retailing of toys is consigned to the ‘unorganised’ sector’.” India lacks stores of the standard of the west, with toys sold mostly by street vendors or corner shops.