The India office of Target, the US retail major, is busy strategising these days on how to display products across the shelves of nearly 2,000 of its American stores, to woo Christmas shoppers.
The Bangalore hub, where Target has its India operation, is going all out, making predictions on the number of buyers expected in the holiday season and taking a call on what promotional offers would click at these US stores. All this, while Target Corporation's Minneapolis headquarters is watching the Indian retail space keenly. It is likely to finalise its plan for this market only after the chain’s Canada foray.
The retailer refers to its Bangalore operation as Target’s “second headquarters”. However, like any other multi-brand chain, it is not permitted to open stores in India yet. Currently, foreign direct investment (FDI) is not permitted in multi-brand retail. In single-brand retail, up to 51 per cent is allowed. There’s no restriction on FDI in cash and carry or the wholesale business.
Asked about the chain’s India plans in terms of opening multi-brand retail stores, Lalit Ahuja, chairman & president, Target Corporation India, told Business Standard, “We have started thinking beyond the shores (of the US) now. We will plan other international destinations once we have success in Canada. We will look at other international destinations at an appropriate time.”
Target has announced its Canada plan, and is slated to open anything between 100 and 150 stores there in 2013-14. Ahuja said the chain was closely tracking retail developments in India. According to him, it is only a matter of time before multi-brand retail is opened to foreign investment. This would benefit the sector in terms of technology, supply chain and best practices, he said.
On the industry view in the US, he said, “There’s a fair amount of interest in the big story in India.” However, also anxiety and frustration on how long it may take for India to open the sector. International majors such as Walmart (US), Tesco (UK) and Carrefour (France) have been waiting for years to open stores in India. On current operations, Ahuja said, “Where Minneapolis ends is where Bangalore begins.” The India operation is not an outsourcing entity; rather, it’s the second headquarters for Target, he reiterated. The Bangalore centre is focused on strategic work, finance, technology innovation, analytics, property development and marketing, among other functions. “The functions here are in-step and aligned with our counterparts in Minneapolis.”
Target India has 2,500 staffers. In addition, there are 1,000 contract workers. The company refused to give any investment figures, but said, “We have invested significantly”. “There are no specific numbers that we can give, but there’s a nice story ahead,” according to Ahuja.
