UK supermarket giant Tesco signs joint venture agreement with Tata Group of India
UK's supermarket giant Tesco has sealed a joint venture agreement with a unit of India's Tata Group that will see it invest $140 million and become the first foreign supermarket to enter one of India's $500 bn retail sector - one of the biggest economy sectors in India.
This deal with Tata's unit Trent Hypermarket Limited (THL) will be in a form of a 50:50 joint venture. THL will open 12 retail stores selling all sort of products from groceries and clothes to home and kitchen appliances.
TESCO Supermarket: TESCO PLC is a British multinational grocery and general merchandise retailer headquartered in Cheshunt, Hertfordshire, England, United Kingdom. It is the second-largest retailer in the world measured by profits (after Wal-Mart) and third-largest retailer in the world measured by revenues (after Walmart and Carrefour).
TATA Group: The Tata Group and its companies & enterprises is perceived to be India's best-known global brand within and outside India is a multinational conglomerate company, It encompasses seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals.
This joint venture will allow Indians to buy more quality products while at the same time increasing Tesco global presence and access to the second largest consumer's market. Tesco believes there is a huge potential for them in India, however, taking into account slowing down of the Indian economy and unstable political situation and weak regulatory base, Tesco should monitor the situation very closely. I believe that other retailer chains will be following Tesco steps rapidly if they prove to be successful in their investment.
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