The joint venture will be outside Future's listed entity, Pantaloon Retail, and be part of Future's investment vehicles, sources said. The venture is to operate large wholesale markets on the lines of the YIWU market in China and Dragon Mart in Dubai, and to import products from China and other Asian countries and sell to Indian retail chains and small retailers.
Future and Fung Group already have a partnership with Bangalore-based Sattva Properties to develop a wholesale market in the city. A second one is expected to come up in Mumbai in the next couple of months.
"Our family investment vehicle wants a closer relationship with Future Group and we want to support them in wholesaling and cash & carry ventures in the country," said Victor K Fung, at the launch of the distribution centre of Future Supply Chains (FSC), logistics arm of Future Group, in Nagpur yesterday.
Fung Group has 26 per cent stake in FSC, which it had bought for $30 million.
The 1.5 million sq ft wholesale market coming up in Bangalore will have a wholesale store run by the Future-Fung combine, with the rest of the space leased to multiple wholesellers. Depending on the success, the partners are looking to roll it out in other parts of the country, said Rajesh Ranavat, who looks after the Fung family's business interests in India.
While the venture will focus on supplying slightly high-end products to modern trade, it will supply mass products to smaller retailers.
Fung Holdings, the privately-held entity of Fung Group, is into trading, distribution, retailing and logistics. It does business in 40 countries and its revenue in 2011 was S$21 billion.
"We want to cater to both modern trade and small retailers who want imported products from China and other countries. We can look at importing for chains such as Shoppers Stop and Lifestyle," Ranavat said.
Fung Group is also looking at increasing its stake in FSC. "We are looking at that. That could be a possibility," he said. "The existing venture is beyond breakeven. It never lost money."