Booker opened its first depot in India last week - beating Tesco and Carrefour to the punch. Beth Philips walked around the Mumbai DCX with Charles Wilson to learn more about the wholesaler's ambitions

It's coming to the end of the monsoon season in India. But nothing was going to rain on Booker's parade when the wholesaler officially opened its first cash & carry in Mumbai last Saturday. With temperatures approaching 40c as he cut the ribbon on the 35,000 sq ft depot, CEO Charles Wilson couldn't have been further from the cold, rainy Preston railway station platform where, somewhat implausibly, he and the now Booker India MD came up with the plan.

"In one week I had suggestions from three customers to go to India and was out on a depot visit with Zunaid [Bangee]," recalls Wilson. "We were sitting at the railway station and discussing the feedback and thought it could be a good idea."

Two years on, it's no longer an idea, it's a reality. Opposite the depot, stray dogs doze in the wasteland, but, inside, customers are milling around desperate to get a first glance of the 6,000 lines on offer, including the fabulous-sounding Buzy Woman instant meals and Baker Street Tea Rusks.

Tesco and Carrefour will no doubt be looking on closely, too. The pair have long been plotting entry to India but so far, only Wal-Mart and Metro of the big international grocers have established a presence in the country.

So how has Booker managed to steal a march on the second and third-biggest supermarket chains in the world? And just how big can Booker India become?

That Booker is a wholesaler has undoubtedly helped its cause. To protect traditional retailers, the Indian government has slapped restrictions on foreign retailers entering the country, but no such restrictions apply to wholesalers because they are deemed helpful. Wilson is wasting no time capitalising on the advantage.

"India has a population of 1.1 billion, an estimated eight million kirana stores, a lot of street traders and a lot of restaurateurs," he says. "We see India as very similar to the UK in the 1960s in terms of property, suppliers and customers, and cash & carries was a good business to be in. If we can do the same in India, we can fulfil the needs of retailers and caterers there."

Unsurprisingly, these are very different needs to the UK. India's grocery retail market is the sixth-largest in the world and could leapfrog France's and Germany's by 2020, believes IGD. But it is highly fragmented. Although large hypermarkets similar to Western-style grocers are starting to open, India's core retail business is conducted through hand-cart and pavement vendors, and traditional kirana stores family-owned convenience shops. There are an estimated 12 million traditional retailers and with the vast majority served directly by suppliers, the C&C market remains largely untapped.

Booker has had to dramatically change its offer to suit the demands of the Indian market. Indian-born Bangee, a Booker veteran of 25 years and the man who launched Booker Malaysia (sold in 2000), is the wholesaler's 'man on the ground'. He recruited all 130 staff in India and sent them out into the market to recruit 20,000 customers which they have done. "None of the team has a background in wholesaling, but they all have a background in retail," he says. "This has allowed me to teach them how Booker and wholesaling works."

And in India, it works very differently. At first, the depot looks similar to its British counterparts. The garish orange livery, the promotions and the checkout process are all familiar. But there's a much bigger focus on fresh fruit and vegetables than in a UK depot because fresh produce is such big business for street traders, and the area designated for meat, fish and eggs is simply called Non-Veg.

Booker has also adapted its merchandising tactics. In India, bags of rice are traditionally left open in stores so customers can inspect the quality of the grain. To accommodate this, Booker has attached pots of each rice to shelves so buyers can check before purchasing.

Sachets are also big sellers because kirana store customers are often unable to afford the full-size product. And biscuits are more popular than in the UK too (the poor will often eat one soaked in warm water as a main meal).

Another novel sight is that of India's ubiquitous auto rickshaws being deployed to help retailers without transport get wares to their shops (the three-wheeled vehicles are ideal for Mumbai's heavily congested roads because they are small enough to weave in and out of traffic, explains Wilson).

Prices don't bear much resemblance to those in the UK either. Although kirana stores are small and therefore most transactions will be too (the minimum purchase value on every invoice is 500 rupees or £6.52), Booker thinks it can make this low-cost model work because of the high volumes involved.

The analysts certainly seem impressed. "The store reflects the in-depth research Booker has put into this venture," says Investec's Nicola Mallard. "You're getting the standards and controls we see in the UK, but there are clear changes to reflect the Indian market."

As to how big Booker India could become, Wilson is reluctant to be drawn on the scale of his ambitions. "We want to understand the market and ensure we are offering the best choice, price and service before looking to expand further," he says. "However, we see the market could offer huge opportunities."

Dr Rajat Baisya, an Indian retail guru and chief adviser to Booker India, is more forthcoming. "We will look at how it goes over the next two months and then we'll think about opening more," he says, estimating Booker could open up to 20 depots across India. Bangee adds that with an estimated 70,000 retailers, Mumbai alone could support 10 depots.

The long-term prospects could be enormous, agree analysts in Mumbai, in particular. "It has a population of 20 million," says KBC Peel Hunt analyst Charles Hall. "It has the potential to offer an attractive one-stop service for other products."

Of course, all of this will require investment. Booker has disclosed that it has spent £1m on set-up costs and expects to outlay £1m in running costs in the first year figures that don't present the complete picture but nevertheless represent a mere fraction of the 35m spent by Metro when it entered the market six years ago and the £60m Tesco expects to fork out in its first two years in India.

Feedback at the busy opening day suggests Indian customers are impressed a large UK company is willing to work for kirana stores rather than larger retailers. And in the afternoon, the depot was soon heaving with customers as the morning's customers returned home to spread the news about the new wholesaler in town.

Wilson claims Booker is now in "wait-and-see mode". The cash & carry has got to prove to its Indian customers it can offer them Booker's mantra of the best choice, price and service, and improve their profits. It won't be easy, but with some 70,000 retailers on Booker's doorstep in Mumbai alone, you wouldn't bet against it.