Stores in India: IKEA can, Tesco can't | RetailDetail

Stores in India: IKEA can, Tesco can't

Stores in India: IKEA can, Tesco can't

India has finally loosened its law that forces foreign companies to work with a local partner. Good news for IKEA, Starbucks or Marks & Spencer, who only sell one brand. Multi brand retailers like Tesco, Walmart or Carrefour however are excluded from the new law, so they can still only hold a maximum of 51% of their Indian partner's shares.

With its 1.2 billion people and an estimated worth of $400 billion, India is the hottest retail market in the world. The country also has very promising demographic statistics: huge numbers of poor people are climbing up the social ladder and very few people are over 65 (5.5%, compared to 13.1% in the US and 17.3% in the EU).


IKEA dreams of India...

“We want to open in India”, was IKEA CEO Mikael Ohlsson's comment in the Financial Times.  “There is a real need of good home furnishings at low price in India.” So far, IKEA has opened no stores in the subcontinent, but this will soon change now the obligation of a local partner has disappeared. As of today, IKEA has come one step closer to the market of their dreams.


Marks and Spencer already has 24 stores in India through its joint venture with Reliance Retail, part of the holding Reliance Industries, which yearly earns $45 billion through oil, textiles and retail. Despite the new law, M&S has declared to continue the collaboration, as it is good to have a local partner with insight in the market.


IKEA's furniture however seems to be more universal than M&S's textiles or food: most of the protests against this new law are based on the fear that small local enterprises would be threatened – especially in the food business. This is exactly the reason why analysts think the new law will not be extended to multi brand retailers like supermarkets or hypermarkets.


... as does Tesco

Currently Walmart and Tesco are already active in India through local partners: Walmart has had a joint venture with Bharti Industries since 2007, running 12 stores. Tesco on the other hand has joined forces with Trent, part of the Tata Group (hotels, IT and steel), and supports their Star Bazaar hypermarkets. As many IKEA stores will start opening in India's urban agglomerations soon, Tesco's impatience to finally start operating their own supermarkets and hypermarkets will only get worse.

Questions or comments? Please feel free to contact the editors

CEO Peter Somers wants to take RetailDetail to the next level


RetailDetail has a new CEO: e-commerce entrepreneur and former bpost board member Peter Somers has major growth ambitions for the company.

"Protectionism makes everyone poorer" (Christian Verschueren, EuroCommerce)


Trade wars and discrimination within the single market create growing pressures on retailers in Europe. EuroCommerce Director-General Christian Verschueren is concerned, but looks forward confidently to the future.

Belgian online turnover surpasses 10 billion euro


Online commerce is becoming increasingly popular, in Belgium as well. Online turnover in the country rose to 10.05 billion euro last year, reaching the ten billion milestone for the first time. However, there is still a lot of growth potential online.

Claire’s files for bankruptcy


American chain Claire’s has now officially filed for bankruptcy, although it only relates to the company’s American division.

Amazon looks for additional cuts with manufacturers


Amazon wants to cut costs and that is why it will charge manufacturers with logistical fees more quickly. Up until now, the American online retailer often took it upon itself, but that move no longer seems profitable.

Amazon targets Toys 'R' Us stores


Amazon is apparently interested in several of bankrupt Toys ‘R’ Us’ stores, because their locations and stores would fit Amazon’s own retail formulas.

Back to top