Japanese retail group Aeon is likely to tap into the Indian retail market shortly with investment negotiations underway with two Indian retailers.

It has selected two unnamed Indian grocery chains to negotiate a shareholding. One is said to be pricing a stake at US$110-120 million.

Aeon is a multi-format conglomerate with convenience stores, department stores, supermarkets, drug stores, discount stores and financial services spanning across Japan, China, Malaysia, Thailand, Indonesia, Vietnam, South Korea, Taiwan and the Philippines. Its revenues last year totalled US$60 billion.

A similar move was made by Hong Kong-based pharmacy retail chain Watson which has been in talks with Indian convenience store retailers.

“While some are starting their presence in cash and carry formats, some others are looking at investing in the backend of Indian retail chains, hoping that sooner or later the sector is opened to an extent,” observed an investment banker.

GB