Kmart considers entering Indian market

By

Isabelle Crossley

Published
Nov 30, 2018

A team from Kmart Australia came to India to scout out the possibility of entering the country according to reports.

Kmart Australia, the Australian arm of the US business Kmart under separate ownership, is considering the possibility of entering the Indian market, according to two sources who spoke to ET Bureau. Where the US division of Kmart is struggling financially, its Australian namesake is doing far better.

Kmart Australia is “studying the Indian market for a possible entry and studying the options,” according to a source close to the matter. Kmart retails a number of product categories in Australia, the largest of which includes fashion and homeware. The brand has not yet made an official statement on the matter.

If Kmart Australia does enter the Indian market, there are two main routes that it can take. For direct to consumer selling, India allows for up to 51 percent of foreign ownership of an Indian multi-brand retailer as long as other conditions are met such as sourcing at least 30 percent of products in India. However, this route is less favoured and the only major investment done this way was Tesco’s joint venture with Tata Group in 2013.

Another route is illustrated by Walmart’s recent acquisition of Flipkart. Foreign investors can fully own Indian companies through the wholesale route. They can fully own businesses that sell to other businesses but cannot sell directly to customers.