industry

Retail chain Kmart Australia explores India foray


Some experts have predicted that this would be the last Christmas for US big-box department store chain Kmart, but its Australian namesake is exploring possibilities of entering the Indian market, two people familiar with the development said.

A team from Kmart Australia — which is under a separate ownership than the troubled US retailer and is financially healthier — was in the country recently, one of the persons said. “They are studying the Indian market for a possible entry and studying the options.”

Kmart Australia operates more than 200 big-box department stores in Australia and New Zealand, selling everything from fashion to furniture. It did not respond to an emailed questionnaire as of press time Thursday.

India allows up to 51% overseas ownership in multibrand retailing provided the investor meets a host of conditions. Some include making $100 million upfront investments with at least half of it going into creating back-end infrastructure, and locally sourcing at least 30% of the merchandise the retailer sells in the country.

So far, Britain’s Tesco is the only foreign retailer to have invested in the country through this route, forming a 50:50 joint venture with the Tata Group in 2013.

Some other global retailers, including Walmart, Germany’s Metro and Thailand-based Siam Makro, have forayed into India through the cash-andcarry wholesale route where the country permits 100% foreign ownerships. Such ventures are not allowed to sell their wares directly to consumers, but can sell to retailers and business operators such as hotels, restaurants and other institutions. It’s not clear which of these two routes Kmart Australia is exploring.





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