International News - Obi looks abroad to ride German economic storm

Europe's second-largest DIY retailer, Obi, is eyeing several new markets - including India, Korea and Vietnam - to strengthen its presence outside Germany.

Founder and supervisory board chairman Manfred Maus said the retailer hopes to mimic the strategy pioneered by German retail giant Metro, which makes more than 50 per cent of sales in other countries.

Obi opened its first store outside the country in Italy in 1993 and the international division accounts for about 30 per cent of the retailer's EUR6 billion (£4.12 billion) a year turnover.

'We think that the European (DIY) market, and especially Germany, is going to be flat in the coming years,' Maus said.

Speaking at the DIY and Garden Show Conference on Monday, he explained that Obi could not afford to rest on its laurels and wait for the German government to address deep-seated domestic economic problems.

Indian stores will not appear until Obi achieves a firmer hold on existing markets, such as Russia and China.

The store group has opened six stores in China since 2000 with local franchise partner Haier. It now plans to have 100 in China by opening 10 stores or more a year. Obi also intends to have 50 Russian shops - the first two opened in November last year.

Obi operates stores with franchise partners, for which it charges a 2.5 per cent fee.

It also has a holding of up to 100 per cent in about 45 per cent of Obi stores.

Finding a knowledgeable local partner and becoming familiar with the customer were key to international expansion, Maus said.