The buzz around the Anil Dhirubhai Ambani group's (R-ADAG) entry into the retail business is getting louder. In the past month, top R-ADAG officials are learnt to have met representatives from three global retail companies: UK's Tesco, France's Carrefour and US consumer electronics chain Radio Shack.
Sources said Radio Shack may be of particular interest to R-ADAG as it would give both companies “better synergies”. Worldwide, Radio Shack operates small-format stores while in India ADAG has a pan-Indian chain of Reliance Shops (formerly Webworlds). This may take care of Radio Shack's initial real estate requirements.
Also, Radio Shack has major interest in mobile accessories retailing, which is another visible synergy between the two groups. “However, nothing is clear on this front and ADAG is exploring all options,” a source said. When contacted by ET, an R-ADAG spokesperson declined to comment.
Some industry watchers, however, do say all this talk about R-ADAG's proposed entry into retail may be yet another case of one-upmanship between the two Ambani groups. More so since Radio Shack's business model for India is also not known. “The chain has evinced interest in setting up a presence in India. It is not known though if it will directly invest or look at a pure franchisee model,” the source added.
The government had recently said that it would allow up to 51% FDI in consumer durable retailing but the policy has not yet been announced. The highly-fragmented consumer durable retail business has recently come into the radar of large business houses.
Prominent groups like Reliance Retail, the Tata group, Kishore Biyani's Futures group and the Videocon group have either got into the sector or are planning big splashes in the coming months. The Texas-headquartered $5-billion Radio Shack Corporation operates more than 7,000 company-owned and dealer stores selling multi-brand products like digital cameras, memory cards, batteries and charger sets, wireless phones, bluetooth headset, clips, holsters and cases.
Besides mobile handset retailing, ADAG has also made headway in pharma retail and is in talks with the All India Organisation of Chemists and Druggists. Former Medicine Shoppe executive director Rajendra Gupta is learnt to be heading the healthcare retail venture for the group.