Videocon targets huge turnover

Mumbai: The Videocon Group is targeting a turnover of Rs 10,000-Rs 11,000 crore from its cash and carry venture in the next four years.

The Venugopal Dhoot-promoted group, which is a leading consumer durables maker and has oil interests, has joined the retail bandwagon with plans to launch 16 stores under the Bolld Cash & Carry brand with an initial investment of Rs 400 crore.

Bolld will have food and groceries, consumer durables, IT and apparel and a range of other product categories.

Sunil Mehta, chief executive officer, Bolld Cash & Carry, said, “The company will invest Rs 2,000 crore in the next three years and we expect a turnover of Rs 10,000-Rs 11,000 crore by the fourth year. We intend to open five stores, measuring 1-1.5 lakh sq ft, in this financial year. The first store is scheduled to be launched in September.”

Videocon plans to take Bolld to Hyderabad, Ahmedabad, Bangalore, Jaipur and Pune in the first stage of expansion.

“The company will introduce private labels in certain categories like consumer durables, in the second phase,” Mehta said. “Our understanding of the local market will enable us to create a pull for the private labels.”

In response to a query whether Videocon would look for partners for the cash and carry venture, Mehta said the company was not looking for tie-ups just now, and that it would undertake logistics and supply chain activities through a group company that already handles their consumer durables operations.

The cash and carry market is a small portion of the whopping $340 billion (about Rs 13,60,000 crore) Indian retail sector. Technopak consultancy firm has projected this retail market at about $408 billion (or Rs 16,32,000 crore) in 2009.

The business is attracting such international retailers as Germany’s Metro Cash & Carry, Carrefour (France) and Tesco (UK), while Indian companies like Reliance, Bharti-Wal Mart and Pantaloon have also firmed up plans.

The main attraction for these players is the absence of an organised player in the cash & carry retail sector and the prospects of a 35-40 per cent growth in the business.