India yet to get foreign inflows on retail trade:
The government on Tuesday said the country is yet to receive any foreign inflow in single brand retail trade, even though 17 such proposals involving a total investment of $3.3 million have been cleared. The FDI policy for the sector, announced in February 2006, allows 51 per cent foreign investment in single brand retailing.
August 14, 2007
August 14, 2007
Source: The Economic Times
Women setting up franchisee outlets:
Call it retail’s tribute to independent women. As several leading corporates are expanding retail footprint, womenpreneurs across India are weaving success stories.
According to Franchising Association of India, the number of women setting up franchisee outlets is going up consistently. Industry experts say there are 75,000 franchisee outlets and around 10-15% are owned and managed by women. The share has increased around 20% in the past two years.
S Kumars Nationwide Ltd’s home linen brand Carmaichel House, which is reaching out to cities across the country, is also inviting women entrepreneurs to take up franchisee offers for company’s retail outlets. At present, the company operates around 22 franchisee outlets and has signed deals for 30 more outlets.
Usually in home textile retailing, the average investment is around Rs 5-6 lakh. Most of the companies also offer loans to individuals for setting up franchisee outlets. The entrepreneurs can earn around Rs 20,000-40,000 per month through these franchisee outlets.
The trend is just not limited to home textile or garment companies. Hero Honda, which recently launched Pleasure, targeting women, is encouraging women entrepreneurs to set up ‘Just 4 her’ outlets. At present, the company has 21 franchisee outlets. All of these outlets are operated and run by women. The company is encouraging women-owned franchisee outlets as well.
August 13, 2007
Source: The Economic Times
All roads lead to China:
It is ironical to say the least. Global retail giant Wal-Mart is working hard to develop India as a sourcing base and at the same time big retail in India is increasing its dependence on China.
While the growing presence of Chinese goods, typically sold by pavement shops or small stores bearing ‘China Shop’ banners, is a well-known, fact what is surprising is the extent to which big retail is dependent on China to meet its needs. A variety of products like sofa sets, beds, home decor, toys, stationary items, electronics, crockery, bought from up-market malls are now invariably made in China.
The proportion of Chinese goods is as high as 30-33% of the entire product range for some of these retailers. Home Town, Future group’s home division, sources 25-30% of its furniture products from China. Similarly, Hypercity, India’s first box format retail store, has more than three-fourths of its stationery and toys items sourced from China. One of their fastest moving segments, the electronics division, also sources about 65-70% items from China. For furniture also, it is as high as 70%. Likewise Spencer’s sources 25% of its electrical and electronics categories from China. About 50% of its general merchandise (home, work and play) category also come from China.
Newer entrants like TruMart are looking at increasing the China share from nil to about 5-7% of their total sales. They intend to import only in the general merchandise category since that would help them bring value for the customer. Similar is the case for Vishal Retail whose total imports from China include general merchandise, watches, sports items, electronics and electrical.
Vishal is a private label player and sourcing from China helps them to get quality products at competitive prices. Players like Vishal Retail, Lifestyle, TruMart and Piramyd are looking at increasing their share to at least 12-15% by 2010. Even players like Reliance Retail, which intends to change the face of Indian retail, is believed to be looking to the land of the Dragon for almost 30% of its entire footwear requirements.
While partly the reason is price, there are other factors as well such as the lack of availability of certain goods in India.
August 13, 2007
Source: The Economic Times
It’s not just hype, hypermarkets shall rule:
Brick by brick, the retail world is betting on the hypermarket to take growth beyond hoopla. That’s par for the course, if one looks at the successful retailing formats in emerging markets. Hypermarkets offer customers a destination shopping experience with everything available under one roof.
Hemant Kalbag, principal, consumer industries and retail practice at consultant AT Kearney, said: “The success in emerging markets can be replicated in India as well because organised retailing has literally caught fire.” He said real estate will be the key factor in the growth of hypermarkets. From the retailer’s perspective, the hypermarket format allows him to enjoy all the benefits of being an anchor. The occupancy costs are driven down drastically. Besides, the retailer gets to play the volume game (efficiency of scale), too.
And unlike supermarkets where one has to look at large number of stores, hypermarkets need not go into the multiples of 100 and one can still be a large successful player in the retail sector.
Highlighting the unparalleled success high-volume hypermarkets have enjoyed in Asian markets, according to A T Kearney report, local hypermarket retailers are already making their moves before the Centre further loosens foreign investment in this sector. In fact, Pantaloon Retail’s success story largely comes from its hypermarket format, Big Bazaar.
Another large retailer — Spencer’s — has recently restructured its retail business and its hypermarket format has been identified as the key driver for growth. Similarly, there are others like K Raheja Corp, which made its foray with Hypercity sometime early 2006. With plans to expand the Hypercity network in primary and secondary cities, it plans to add another 5-8 stores in this fiscal. Mukesh Ambani’s Reliance Retail, on its part, is all set to unveil its first hypermarket called Reliance Mart in Ahmedabad this week.
According to the A T Kearney 2007 Global Retail Development Index titled “Growth Opportunities for Global Retailers”, modern retail in India is just 2-3% of overall retail, but is growing at a remarkable 25% per year. It is expected to grow at a compounded annual growth rate of 40% from $8 billion to $22 billion by 2010. Overall, India’s retail sector is expected to grow from its current $350 billion to $427 billion by 2010 and $635 billion by 2015.
August 8, 2007
Source: DNA
'Retail giants pose no threat to mom and pop shops':
Notwithstanding apprehensions among small-time shopkeepers that the entry of retail giants will pose a threat to their existence, some organised retail networks here feel there is "ample space for all" in the sector.
Top officials at Subiksha, which has a network of 750 supermarkets across the country, and Spencers Daily, which has a strong presence in south India, are unanimous in their view that new entrants like Wal-Mart or Reliance Retail would not pose a threat to them or the "mom and pop shops".
Mohit Khattar, President (Marketing), Subhiksha, and Samarjit Singh Shekhawat, Vice-President (Marketing), Spencers Daily feel that in a country like India, there is plenty of space for everyone and the organised supply chains represent just a "miniscule" portion of the sector with organised retailers accounting for only three to four per cent of the total business.
Meanwhile, 'kirana merchants' feel the organised retail chains cannot make much impact on their customer base as their higher establishment charges will not let them always provide goods at cheaper rates.
A 'kirana merchant' in the neighbourhood cannot be wiped out as long as customers are conscious of prices, quality and convenience, Madras Kirana Merchants Association secretary Kailash Kothari said. Moreover, small shops have a strong presence in rural and suburban areas, he said. "Maybe, 10-15 years down the line, the bigger retailers can pose a threat to us. But we also hope to change ourselves to adapt to the new situation," he said.
Some neighbourhood shop owners, however, beg to differ."I lost several of my regular customers once a nearby supermarket started offering onions and potatoes at Rs eight per kg irrespective of the prevailing wholesale rate," said A Anandan, owner of a provision store in a residential colony in the city.
Lured by advertisements for cheap onions and potatoes, several people drop in at the supermarket and end up purchasing all they need, be it provisions or vegetables, at higher prices than neigbourhood shops, he claimed.
August 8, 2007
Source: Hindustan Times
Reliance says not seeking retail partner:
Reliance Industries has no immediate plans to involve a foreign partner in its retail venture and sees no threat from Bharti group's wholesale tie-up with Wal-Mart, a top company official said.
"We are not scared of competition. We are ahead of them. Our great challenge is to satisfy our customers. And that is the only benchmark," Raghu Pillai, president and CEO of Reliance Retail told reporters on Tuesday at the launch of a hypermarket in western India.
August 14, 2007
Source: Economic Times
Trent may help Benetton’s Sisley into India:
Europe’s famous fashion house Benetton is likely to enter into a distribution partnership for its premium fashion brand, Sisley, with Tata Group company, Trent. This marks the Indian business house’s first brush with a foreign apparel brand and its foray into high street retail. Benetton Group’s deputy chairman and son of Luciano Benetton, Alessandro Benetton, is expected to ink the deal with Trent MD Noel Tata next month.
Benetton has decided to join forces with the Tatas because its wholly-owned India subsidiary has decided to focus on the eponymous flagship brand. India is emerging as the most important market for Benetton in Asia-Pacific. Brand Benetton commands a higher, although affordable, premium here compared to other global markets.
Benetton’s India arm had test launched Sisley in the country last year but could not scale up operations as it remained focused on the flagship brand’s expansion in a fast growing economy. Besides, a partnership with the Tatas may have seemed attractive as it is a formidable name in India which has proved its mettle in apparel retailing through the Trent-managed Westside stores.
Sisley, with over 850 outlets globally, is targeted at the premium end of the apparel market. The brand was created in 1968 in Paris and entered the Benetton fold in 1974. It started developing a distinct niche identity from 1985 onwards with the famous Benetton marketing machinery working aggressively behind it even though critics argue that brand Sisley never touched the dizzying heights usually expected from the Benettons.
August 14, 2007
Source: Economic Times
Organised retailing in slums! Biyani makes it possible:
Kishore Biyani, whose Future Group changed the country's retail landscape through unconventional ways, is taking a step further by exploring possibilities of tapping the potential of urban slums.
On the heels of setting up neighbourhood new format stores named KB's Fair Price shops, the group is toying with the idea of taking retailing to the bottom of the pyramid in urban areas -- the slums.
According to sources, the group recently conducted a study on Mumbai's slum dwellers detailing out their lifestyle, earning and spending behaviour, consumption pattern and attitude toward shopping destinations and brands. With eight million out of Mumbai's 12 million population living in slums, the potential of retailing in those areas appeared very big.
When contacted, a Future Group spokesperson confirmed it had conducted a study to understand the market potential of slum areas. "However, there is no concrete plan as such on whether to enter this space or not at the moment. We were just exploring possibilities," the spokesperson said.
If it finally decides to open stores in slums, this will be yet another innovative method from Future Group which changed the rules of retailing with throwaway prices at its Big Bazaar chain of outlets.
August 12, 2007
Source: Economic Times
Spencer’s plans foray into garment retailing:
Spencer’s Retail, part of the Rs 11,500-crore RPG Group, is looking at a foray into garment retailing two quarters from now. These would be exclusive stores retailing only apparel.
Spencer’s hypermarkets are retailing ‘basic garments,’ and nearly 16 per cent of its revenues comes from these SKUs (stock keeping units) In addition to increasing garment retailing in hypermarkets, the retailer will be launching exclusive garment retail stores similar to its music and book stores.
RPG Retail currently has a presence across 40 cities with 250 Spencer’s outlets. This includes 11 hypermarkets, seven supermarkets, three Fresh, 55 Express and 125 Dailies. The Group’s other retail presence is in the area of music (Music World), books (Books and Beyond) and RPG Cellucom (mobile phone retail) with a total of 500 outlets, expected to grow to 2,000 by 2009 and 5,000 by 2011.
August 12, 2007
Source: Hindu Businessline
Wal-Mart in India:
America's Wal-Mart and India's Bharti are hoping to bring a dose of modernity to India's retailing landscape, and good for them for trying. But it's going to take a lot more than Wal-Mart's legendary supply-chain management and margin-shaving acumen to bring "everyday low prices" to Indian consumers.
This week, the two companies finalized a 50-50 joint venture to go into the business-to-business, cash-and-carry wholesaling sector. This structure evades India's strict ban on foreign department stores and supermarkets setting up shops by themselves and selling directly to consumers. Foreign direct investment in single-brand stores such as Nike shops or Samsung outlets has been allowed only since 2006, and even then foreign ownership is limited to 51%.
Wal-Mart hopes that entering India now, even if it can't open retail stores, will give it a leg up if the country's market opens further. Meantime, Bharti is planning to open its own Wal-Mart-style chain with technical expertise from its American partner. To the extent Wal-Mart's new wholesale outlets reduce costs for retailers, Indian consumers may see at least some indirect benefit.
August 11, 2007
Source: The Wall Street Journal
Trumart expanding in-store label:
Pyramid Retail group’s supermarket chain Trumart is to aggressively expand its in-store label. “It is more profitable for a supermarket to sell its own private label products, as it requires zero marketing cost and brings greater margins,” Mr Upamanyu Bhattacharya, Chief Executive Officer, Trumart, said.
The store will launch private labels in household cleaners, oil and grocery by the end of this year, following the success of Uttam, the recently launched in-store label in the grocery segment. “We will sell products with a low brand loyalty like sauces, jams, jellies and a range of FMCG items,” he said. “The prices of products under the label will be competitive or lower than that of other brands,” he added.The supermarket chain is looking to make its presence felt in tier-II cities. It currently has 29 stores in Mumbai, Pune, Jaipur, Nagpur, Ahmedabad and is to enter Madhya Pradesh next month. It has plans to take the number of stores to 90 by the year-end, preferring to set shops in residential and main street areas. The store is present in malls such as Raghuleela in Mumbai, Eternity in Nagpur and Arya Square in Jaipur and is open to entering other malls, depending on the real estate costs. Predominant in western India, the store will enter tier-II cities in South India in the next phase of expansion.
August 10, 2007
Source: Hindu Businessline
Rahejas to invest Rs 1,500 cr in hypermarkets:
The K Raheja group has lined up an investment of around Rs 1,500 crore for setting up 68 hypermarket stores named Hypercity and 250 convenient stores christened Expresscity across the country in five years.
Apart from Hypercity and Expresscity hypermarkets, The group will be introducing a third format which will cater exclusively to hi-end customers. The first such store of 10,000 sq ft, which is yet to be named, would come up in Mumbai by May 2008. It would ideally be a gourmet store housing luxury food items and select grocery items.
The Hypercity offers its customers valued-added services like consumer finance, ATM facility, telecom services, pharmacy, bakery and restaurants etc under one roof while convenient stores, Expresscity, offer daily-use products such as groceries, dairy products, bakery items and meals.
The group is eyeing tier II and tier III cities as well for its rapid expansion plans. Terming Indian market as vast and diverse, Mr Livermore, CEO of Hypercity said that the Indian retail space can easily accommodate retail giants as well as around 12 million kirana stores across the country. There’s opportunity for everyone.
August 9, 2007
Source: Economic Times
Metro unfazed by entry:
German retail giant Metro AG appears unperturbed over the entry of the world’s largest retailer, Wal-Mart, into India’s wholesale cash & carry business through a joint venture with Bharti Enterprises. The company feels that it has the first mover advantage and is now gearing up to face the competition by consolidating its presence through rapid expansion.
The company, which entered the Indian market five years ago with its wholly owned subsidiary, Metro Cash & Carry India, thinks that its model has worked well in India and there is no need for a change in its business model.
Metro is at present busy setting up its fourth and fifth distribution centres in Kolkata and Mumbai. Its Mumbai centre is being set up at Neptune’s Magnet Mall by the end of 2007. At present, Metro operates two distribution centres in Bangalore and one in Hyderabad. It will open its fourth wholesale store in Kolkata this year.
Metro’s distribution centre in Mumbai will be spread over 100,000 sq ft and create more than 400 jobs. Its Kolkata centre launch has been delayed due to a legal dispute over land acquisition. Further, it aims to open distribution centres in all major cities having over 1 million population.
Metro, till now, invested over Rs 250 crore to set up three distribution centres in Bangalore and Hyderabad. Its Mumbai and Kolkata centres will see a combined investment of over Rs 150 crore.
In India, Metro serves three types of customers - retailers, hotels and caterers and other businesses including IT companies, offices. Metro sells around 8,000 type of food products and 10,000 non-food products. About 90 per cent of the goods offered originate from local producers and suppliers. In the last four years of its presence in India (till March), Metro has acquired 3.13 lakh members. Its products are sold only to its registered members.
Metro plans to invest EURO 300 million (about Rs 1,800 crore) to expand its operations in India over the next three to five years.
August 8, 2007
Source: Business Standard
Steve & Barry's likely to set up shop in India:
The entry of the world’s largest retailer, Wal-Mart, into India seems to be paving the way for others to follow suit. Steve & Barry’s, one of the fastest-growing retail chains in the US, is planning to set up shops in India and China.
Sources said Steve & Barry’s had started putting in place a blueprint for the foray, with an initial investment of Rs 500 crore, which is likely to be scaled up to Rs 2,000 crore.
Avirat Sonpal, managing director, Unisource Group, and vice-president, Steve & Barry’s, in an email reply said: “Our feasibility studies are under way, but we have no firm plans to enter India and China yet.’’ The company is looking at forming a core team that will focus on India and China. The first store is expected to be operational by late 2008 or early 2009.
Started by childhood friends Steve and Barry to sell screen-printing T-shirts for $1 at flea markets across Long Island and New Jersey, Steve & Barry’s currently has about 220 stores and is looking at adding 70 more this financial year. Typically, a Steve & Barry’s store ranges from 50,000 to 100,000 sq ft. Perceived as a value-for-money brand, the prime focus of this brand is the youth.
August 9, 2007
Source: Business Standard
Reliance Fresh to launch in Uttar Pradesh, Uttarakhand:
Hoping to usher in a socio-economic revolution in Uttar Pradesh and Uttarakhand, Mukesh Ambani-led Reliance Industries Ltd (RIL) is all set to create at least 500,000 jobs through its jumbo Rs 80 billion investment in its agri-food retail network to be launched Tuesday in the two north Indian states.
Reliance Fresh has already opened its outlets in New Delhi and Hyderabad. RIL says it will invest Rs 250 billion over the next five years in the retail business across the country and is eyeing 4,000 outlets in different cities.
The latest venture is regarded as the largest single operation by any industrial house in the state. The first phase to be launched Aug 14 will include Lucknow, Kanpur, Varanasi, Allahabad, Bareilly, Meerut and Agra in Uttar Pradesh and Dehradun in Uttarakhand.
August 12, 2007
Source: Economic Times
Odyssey’s new store at Hyderabad:
Leisure store chain Odyssey will be expanding its presence by adding three more stores over the next 8 months.
“We have aggressive expansion plan for Hyderabad. By March 2008, we will launch three more large format stores in the city taking our total retail space to over 1.2 lakh sq ft,” Mr T.S. Ashwin, Managing Director, Odyssey, said at the launch of its fourth store in the city at Vikramapuri here on Sunday.
The newly-opened store had a ‘Candy Corner&# 8217; with candies from all over the world. Mr Ramesh Prasad, Managing Director, Prasad Group of companies, inaugurated the store, according to a release.
August 12, 2007
Source: Hindu Businessline
Food & Grocery:
Nature’s Basket relaunch:
Godrej Agrovet is re-launching its Nature’s Basket retail outlets as ‘authentic world food’ stores.
It has launched an upgraded format of its existing stores in Mumbai with a new look and feel, with an added section for international gourmet foods ranging from wines to cheeses. The company has roped in design house Fitch and Madison Retail to upgrade its existing stores across the city.
While the old Nature’s Basket stores would continue to exist, the company is launching new upgraded stores in Mumbai with the new positioning. Targeting the affluent section of society, Nature’s Basket is expected to cater to families exposed to international lifestyles, including diplomats.
The company expects to launch 75 to 100 stores within the next two years across the country. At present, Nature’s Basket has 8 operational stores in Mumbai.
August 9, 2007
Source: Hindu Businessline
Brothers in arms:
For small and mid-sized manufacturing units in the country, it’s time to make hay, till the retail sun shines. Growth in the retail sector is not just about boom time with a handful of blue-chip retail firms.
Almost all proposed and existing retail and cash and carry ventures in India, including those by Reliance Industries, Bharti–Wal-Mart, the Aditya Birla Group and Kishore Biyani’s Future group, are planning to make significant investments in the businesses of their respective vendors and suppliers.
The idea is simple: To ensure that the vendor is able to scale up his operations to match the requirements of the retailer. “It’s not just about investing in the retailer. This obviously is an option we may exercise as per our needs. In fact, we are looking at a model where we will also extend our technical expertise and know-how to our vendors,” says Wal-Mart’s India head Raj Jain. For the world’s biggest retailer, this is a global policy.
Meanwhile, Swedish home furnishings major Ikea has made a virtue of working closely with its 1,300 suppliers to reduce costs on its 9,500 products. This model is critical for the minimalist low-cost and high-volume business model that the company works on. Ikea has a presence in the India, along with Pakistan and Bangladesh, from where it has been working with about 90 suppliers, which it’s looking to expand further.
Homegrown retail major Kishore Biyani has not only mastered the art of involving vendors, but has gone a step ahead. Clearly understanding that real estate will also be a major opportunity, he had floated a realty fund, which partners with vendors in this space.
August 13, 2007
Source: Economic Times
League One launches in-shop ads thru LCD screens:
While everybody is focussing on the entry of big retail shops and innovating ways of marketing, a Delhi-based marketing services company is quietly revamping the way traditional retail outlets advertise. League One has launched in-shop advertising of brands through 32 to 40 inch LCD screens placed in various retail outlets. Each digital video screen is attached to a central system by broadband connection. Every product gets a display slot of one minute, with 10 to 12 hours of display time per terminal. Also, specific time slot for training videos meant for store staff in resource training is provided.
Envisaging the country’s retail sector revenue to go up to Rs 12,00,000 crore, the company is targeting telecom, lifestyle, pharmaceuticals, IT, modern departmental stores and select retail chains to set up its display screens.
The marketing concept is a hit in China with the presence of over two million display screens, while it is still at a dormant stage in India, with only a few big shopping malls employing the concept for advertising, he added.
August 9, 2007
Source: Hindu Businessline
Distributors plan dharna against FMCG ‘practices’:
The is looking at launching an agitation against what it terms the “discriminatory practices” of FMCG companies. A few weeks back, the Association wrote a letter to over 60 FMCG companies protesting against alleged moves by the companies to bypass distributors and sell products directly to major retail chains.
The letter also opposed the special rates and credit terms that FMCG companies offer large retail chains. Mr P. Venkitarama Iyer, President of AKDA, told Business Line that the organisation was not against retail chains. “What we are against is the undue terms and favours that the companies offer large retailers.”
So far, there has been no response to the letter from the managements of any of the companies, which is why the AKDA has now decided to launch a protest against the companies, he added. Later this week, the association will hold dharnas outside the Kochi offices of some of the companies. The organisation will also launch a campaign in Kerala to create awareness about the various “discriminatory practices” followed by the companies and their implications.
August 8, 2007
Source: Hindu Businessline
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