Tesco, Sainsbury’s to open sourcing centres in India

Supermarket chain Sainsbury’s and the world’s third largest retailer Tesco are planning to open sourcing centres in India. Both retail chains have applied for the same with the Indian government. The applications were made during Prime Minister

David Cameron’s visit to India a month ago but no details have been given yet as to what kinds of products would be sourced in India or about the markets where they are supposed to be used.

Fact is that both retail giants rely on clothing as a strong revenue segment. Sainsbury’s sells clothing under its own label TU and Tesco offers clothes from its F&F line as well as from other fashion brands.

Giant retail brands want to enter Indian market

Since the Indian government allowed 51 percent foreign direct investment in the multi-brand retail segment, many foreign brands and retail giants like Walmart, Carrefour, Tesco and Sainsbury’s are said to enter the Indian market. Most eager has been Swedish home furnishings retailer Ikea so far, which had lobbied heavily and plans to invest more than Rs. 100 billion (1.21 billion pounds) in India.

Tesco currently has a tie-up with the Tata Group’s Star Bazaar chain of retail outlets and is also eyeing China for an online grocery business across 50 cities. This would be the most ambitious part of Tesco’s strategy to grow its online business worldwide and a trial is planned in Shanghai later this year whose success will determine the reach of the expansion.

Image: Lynn B.