According to The New Zealand
Herald, British retailer Tesco agreed
to make a joint venture with a company Trent Hypermarket Ltd. owned by Tata
Group in India to invest in a chain of grocery and household goods stores.
Tesco is investing in this joint venture about 110 million to take a 50 percent share of Tata-owned Trent Hypermarket Ltd.
It would operate 12 stores in southern and western India selling food and
groceries, home and personal products, plus fashion and accessories. The Tata
Group, owner of Trent Hypermarket, is one of India's largest and best-known
conglomerates.
I think this strategy will
enable Tesco to increase their sales volumes as Indian population is growing
rapidly and also there are few capable indigenous competitors in India .On the
other hand India will also have an advantage over it as Tesco will buy food and
groceries from local Indian suppliers. Moreover Indian consumers will have more
choice and spur spending in an economy. The only disadvantage would be that
this joint venture would impact the sales of small traders and family –run shops
in India.
The strategy Tesco has taken
to enter foreign markets via joint venture in India will probably be successful
in future. Tesco is able to bring its expertise in retailing as well as its
financial strength to the venture where it is paired with the Trent Hypermarket’s knowledge of
the local market.
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