The Mahindra Group is one of the latest entrant to retail sector. Mahindra Intertrade, a fully owned subsidiary of Mahindra and Mahindra, has entered the organised retail business. The retail foray of the Rs 18,000-crore group is through the brand name “Mahindra Retail”.
Despite the recession and the global gloom, Mr Raghunath Murti, Executive Vice-Chairman, Mahindra Intertrade, said, “The group believes that this is the opportune time to enter and extend its distribution business into direct retailing, when the organised retail market is expanding in India. As such, it is a natural extension of the group’s existing business,” he said.
Mahindra Retail plans to invest up to 1 billion rupees during the financial year ending March 2010 to open stores for mother and child products, a company official said on Wednesday.
Mahindra’s entry into retail will likely not attract the kind of opposition the other companies have because of the kind of products it wishes to sell: toys, apparel, and other such products.
The group, which also has interests in automobiles and real estate, has a majority stake in the retail venture, while private equity firm ICICI Ventures will hold 26 percent stake, he said.
The company has so far opened speciality stores for mother and children's products in Ludhiana, Pune and Ahmedabad, said Venkataraman, who inagurated the company's store in Delhi called 'Mom and Me'.
" We will shortly open such stories in Mumbai, Bangalore and other major tier I and II cities," he said.
Apart from distributing toys, games and apparel under licenses from international brands like LEGO, Disney and Mattel, Mom and Me stores will offer products of Mahindra and other Indian companies, he said.
According to industry estimates, India has an organised retail market for mother and child products worth 70 billion rupees, growing at a substantial rate annually, he said.
"There have been some good advantages of the downturn in our segment," he added, pointing out that economic slowdown, which has pulled down rents and costs of products has benefitted the retail sector. " Indian market in the long term is very promising. We need to take it by step by step," he said while declining to provide details about expansion plans or revenue targets for the year.
