Retailing

Multinational retailers and suppliers search for new market strategies: 

Several retailers have been showing their hand recently in terms of their international expansion plans so it seems like a good time to have a look at two of the more interesting emerging markets which our own domestic retailers will be keeping an eye on. The first one to consider is Central & Eastern Europe (CEE) as retail markets in CEE are in the midst of a shake-out as multinational retailers and suppliers search for new market strategies.

Some of the indigenous retailers quickly fell by the wayside when the foreign firms first entered the market. Those that remained soon learned from their foreign competitors and realised that competing purely on price was not the way forward for them. They are now concentrating on providing a better experience for the customer through improved service, new ideas and speed – and are enjoying considerable success.The much-used hypermarket format is also starting to show signs of saturation. However, new retail formats and a focus on improved customer service offer a way forward for retailers committed to the region.

 

Dabur ropes in Accenture for global acquisitions :  

 Higher valuations within
India have compelled Dabur
India to turn to global markets for acquisitions in the personal care and herbal health care segment. The company has roped in Accenture to help identify companies and brands as part of its corporate growth strategy to increase global footage and double turn over by 2010.    Dabur India management is seriously eyeing acquisitions not just to scale up business, but also to extract synergy in areas like technologies, get access in new  markets and acquire new technologies and capabailities. The acquisitions are “ an effort to put into place a new set of growth drivers which will help the company increase its international earnings from 13% of its total turn over to 25% by 2010.Simaltaneously efforts are on to grow it cash-cow business like food &  beverages and home care organically. 

 

Retail companies move into lift Gujrat farmer’s lot :  

The retail sector’s growth history is showing the potential to help the economy of rural Gujrat. Teams from big corporate houses are paying visits to all the leading mandis in Gujrat and testing waters. Though most of the corporates have not formally agreed to buy so far, farmers in the state are hopeful of some big purchases in the coming months. In last one month or so, teams from Reliance, Adani, Future group, P&G, Tata and Subhiksha have paid visits to various mandis and farm lands to understand the cropping pattern, pricing, availability, daily arrivals and climatic conditions in Kheda, Unjha,
Rajkot and surendranagar districts of Gujrat.

 

 

Adani kicks off process to sell retail venture to Reliance: 

The Adani group has begun the process of selling its retail venture to Reliance industries as employees are being interviewed by the latter. While both the companies continued to keep mum about the deal and its value, market sources say that it could be around Rs 200 crore. The Adani group has already informed its retail staff about the sell out. The Adani retail outlet which sells groceries and apparel have stopped sourcing new products from the market and are in the process of disposing off the existing stocks.

Adani Retail operates a total of 54 outlets across Gujrat. The Reliance group may not maintain the entire staff of Adani and they are in process of short listing the staff they want to retain.

The acquisition will provide a ready infrastructure to Reliance.

 

Reliance Fresh to open 75 agro-retail outlets in MP: 

Reliance fresh the neighbourhood vegetables and food store  brand of Reliance retail will open as many as 75 outlet in Madhya Pradesh starting april this year. The stores which represent the front end of reliance’s farm-to-fork project, would be opened in cities like
Indore,
Bhopal,
Gwalior and
Jabalpur under the 1^st phase. The Retail initiative will help farmers, as they would be able to sell their produce directly to Reliance thus saving transporatation  expenses, adding  that Reliance would also provide ryots valuable tips on new farming techniques. 

 

 

 

 

 

 

Retailing

On Future’s shelves: Fresh veggies at frozen prices 

If Kishore Biyani has his way you will pay the same price for veggies and fruits all year around. The Future Group is moving towards ‘a consistent pricing model’ for food in all its food Bazaar stores. In effect, you would continue paying the same price throughout the year for vegetables like onions and potatoes, even if the market prices increase. Currently vegetables and food are prone to seasonal variations in the open market as well as the supermarkets and grocery store chains. The volatility in the case of certain commodities like onions, for instance, could be between Rs 5 to Rs 30 a kilo in a year to the open market. This is a move to gain consumer confidence and loyalty because seasonal variation in the prices is a key driver of consumer dissatisfaction in grocery shopping.

ET, 10th Dec.   

 

 

Reliance to retail shirts for Rs 99 

            The early wave of cut throat competition in organized retail is on its way to
India. Even as the competitors are gearing up for the entry of Reliance Retail, it continues to unleash surprises that could change the industry dynamics rather dramatically. After mega plans to offer a pair of jeans for Rs 199, the company is understood to be in talks with manufacturers to retail shirts for as low as Rs 99.           Industry analysts say that unlike its planned jeans offering at Rs 199 where loss is imminent, a 100% polyester shirt or a polyester-cotton blended shirt can be manufactured for Rs 65/67. It only helps that RIL is one of the world’s largest polyester manufacturers.          The strategy is an invitation price to attract mass consumers into the organized channel. Reliance is working on wafer thin margin just enough to cover the running cost.ET, 13^th Dec.  

Retailing

Arch-rival Lotte Mart may chase Wal-Mart in
India

           

            Wal-Mart will not get a respite from its Korean nightmare just yet. Discount store chain Lotte Mart, which played a role in elbowing out Wal-Mart from
South Korea, is chasing the world’s largest retailer all the way to
India. Lotte Mart is planning its
India strategy and has set up an office in
Delhi to study the domestic market. Last year, Lotte Group’s confectionary unit, Lotte Co, had forged a joint venture with
India’s diversified FMCG player DS group. Early this year, Wal-Mart announced its decision to sell its 16 stores in
Korea to Shinsegae for $882 million after posting reasonable losses. Meanwhile, Wal-Mart, after exiting the Korean market, is set to debut in
India in partnership with Bharati Enterprises.

ET, Dec 5^th                                    

 

 

 

Retail majors promise steal deals  

          Retailers are gearing up to ensure consumers have the option to buy cheaper products. For the not-too-brand conscious consumer, every retail house is planning private labels or store brands in innumerable categories like food, cosmetics, beverage, durables and apparel. The latest entrant, Reliance Retail under its store brand Reliance Select, will sell a host of products at prices lower than those charged by big brands. Piramyd Retail with store brands in home linen, apparel and footwear expects its contribution to rise from 12% of sales to 20% next year. ET, 2^nd Dec. 

 

Large retail: Average consumer spend doubles on last 2 years 

          Changing shopping habits in the country are giving global retail giants the perfect setting for their Indian entries. The average ticket value of Indian consumer in large retail formats like Lifestyle, Shopper’s Stop and even malls has doubled in the last two years.           While demand and potential for more formats will grow, the country’s supply chain is yet to match the requirement. Lack of enough merchandise and variety is still restricting the Indian shopper, but there has also been an increase of cash memos by 20 percent. Business Line, 6^th Dec.

Retailing

Wal-Mart and & Bharati for retail run

                               

            Wal-Mart to set up its first shop in
India on August 15, 2007, through a franchisee agreement with Sunil Mittal’s Bharati Enterprises. The whole idea behind the numerous restrictions behind the numerous restrictions on foreign investment in the retail sector was to keep the $316 billion Wal-Mart at bay, even though its main USP is value-for-money buy. Sunil Mittal will own and operate JV, running front end operations.

ET, 28^th Nov

 

                    

Aditya Birla Group joins the retail race, on its own.

                     

            The stakes are getting bigger with the Wal-Mart name causing ripples in some of the biggest Indian business houses. Hours after Bharati’s Sunil Mittal struck the deal with Wal-Mart; the Aditya Birla Group had a series of close door meetings to finalize its retail plans. Aditya Birla Group will pump in Rs 5,000 crore to 6,000 crore into retail in the initial phase. Birla TMT Holdings is likely to partly finance the investment, while some debt could be also be mopped up. The new company, Aditya Birla Retail, will be headed by Sumant Sinha.

 

 

Wal-Mart’s Indian story begins 

          The
US retail giant’s Indian entry is expected to drive Tirupur the knitwear capital of
India, to modernize. Though the industry here by and large believes this is an opportunity worth seizing there are complaints of ‘uncompetitive prices’. Exports from Tirupur touched Rs 8,000 crore in 2005-06 and are expected to touch Rs 10,000 crore this year. ET, 29 Nov 

           

 

 

Retailing

Wal-Mart and & Bharati for retail run

                               

            Wal-Mart to set up its first shop in
India on August 15, 2007, through a franchisee agreement with Sunil Mittal’s Bharati Enterprises. The whole idea behind the numerous restrictions behind the numerous restrictions on foreign investment in the retail sector was to keep the $316 billion Wal-Mart at bay, even though its main USP is value-for-money buy. Sunil Mittal will own and operate JV, running front end operations.

ET, 28^th Nov

 

                    

Aditya Birla Group joins the retail race, on its own.

                     

            The stakes are getting bigger with the Wal-Mart name causing ripples in some of the biggest Indian business houses. Hours after Bharati’s Sunil Mittal struck the deal with Wal-Mart; the Aditya Birla Group had a series of close door meetings to finalize its retail plans. Aditya Birla Group will pump in Rs 5,000 crore to 6,000 crore into retail in the initial phase. Birla TMT Holdings is likely to partly finance the investment, while some debt could be also be mopped up. The new company, Aditya Birla Retail, will be headed by Sumant Sinha.

 

 

Wal-Mart’s Indian story begins 

          The
US retail giant’s Indian entry is expected to drive Tirupur the knitwear capital of
India, to modernize. Though the industry here by and large believes this is an opportunity worth seizing there are complaints of ‘uncompetitive prices’. Exports from Tirupur touched Rs 8,000 crore in 2005-06 and are expected to touch Rs 10,000 crore this year. ET, 29 Nov 

           

 

 

Retailing

Future Group in talks with WPP for retail media play 

          Retail baron Kishore Biyani Future Group is understood to be in talks with communication conglomerate, the $ 10 billion WPP Group for a possible alliance involving Future Media, the division in charge for the development and management of retail media. For Future Group, the alliance with the world’s No.2 holding company would mean adding an entire host of WPP clients and advertisers. With many formats like Pantaloon, Big Bazaar, Food Bazaar, Central Electronics Bazaar, Furniture Bazaar and E-Zone, Future Media will be looking to exploit the retail space that is continuously expanding. For WPP, which has a strong presence in India through ad agencies like JWT, O&M and Rediffusion DYR and Grey Worldwide, and media buying conglomerate GroupM, it would serve as a platform to tap the communication opportunities afforded by organized retailing in India.  

 

Dabur likely to merge ayurvedic, natural brands 

Dabur
India wants to ride the retail bandwagon to drive incremental sales in ayurvedic and prescriptive domain. The FMCG major wants to aggregate natural and ayurvedic products brands under one roof, Dabur Ayurvedic Centres (DACs). It wants to leverage them to buttress its consumer health care top line. The company is reinvigorating the chain of existing 300 DACs across the country and plans to increase their number to over 600 in the current fiscal year.  The DACs will just not stock Dabur’s own products, but those of other companies as long as the products are natural and herbal. This would also include health products from other systems of Indian medicines, such as Unani, apart from the herbal brands from all FMCG companies.  ET, 21^st Nov 

 

SEBI asks NSDL, CDSL & DPS to pay up Rs 116 crore 

          In a first of its kind judgment that seems to be promising for small investors in the capital market, the Securities and Exchange Board of India on Tuesday directed the major depositors NSDL & CSDL and eight other depository participants like Karvy, HDFC Bank, ING Vysya and IDBI bank to pay up around Rs 116 crore as compensation to retail investors who suffered an opportunity loss in the initial public offering share allotment scam that came to light last year.  

 

Mall Branding turns into a fine art 

          Mall marketing and managing has emerged as the mantra for developers across the country. Managing and marketing sustained brands on a sustained basis seems to be the emerging challenges for the industry. Some of the developers are even working o creating an entirely separate company to plan the marketing on regular basis. Strategies include round the year promotional campaigns, customer loyalty programmes and an increased expense on advertising. ET, 22^nd Nov. 

Espirit set for big retail play with 50 doors in two years 

          Global Lifestyle brand Espirit is set to unveil a bigger retail play in the Indian market. From the current six outlets in the country, scattered through Mumbai,
Delhi,
Chandigarh,
Bangalore and Pune, Espirit plans to grow to “50 doors, including shop-in-shop format in the next two years.”ET, 24^th Nov. 

Bharati to pick retail partner soon 

          Bharati enterprises Ltd is all set to announce an agreement with a foreign partner for its retail venture next week. Bharati is still in talks with Wal-Mart, Tesco and Carrefour, says its chairman, Sunil Mittal. A staggering $412 billion will flow in as investment into the Indian retail sector by 2011, as per a study conducted Pricewaterhouse Coopers. Business Line, 26th Nov

Retailing

RIL looks to milk Nestle’s dairy biz 

Reliance retail is believed to be in negotiations with FMCG major Nestle for a possible strategic alliance in its dairy business. According to sources, Reliance Retail could help out with the logistics, procurement, and processing of dairy products by Nestle. A complete buyout is also an option. Nestle had recently divested its dairy business in
Malaysia and
Thailand, to
Singapore based Fraser & Neave holdings and it may follow a similar course in
India. Nestle’s dairy business in
India includes products such as liquid and condensed milk, several yoghurt-linked brands and whiteners.                           

Dabur Dares sales team for better focus          With organized retail growing at 25-30% and rural demand on the rise, Dabur
India is rejigging its retail strategy. The FMCG company is working on a retail excellence programme to improve distribution efficiencies and better tap the different set of opportunities presented by modern trade and rural demand. The programme called DARE- Driving Achievement of Retail Excellence-includes reorganization of sales team for channel alignment, special rural focus in six states and working on brand visibility and special consumer packs for organized retail. This strategy is part of Dabur
India’s Vision 2010, was unveiled this year aims at doubling its revenues and profits in the next four years through expansion, innovation and acquisitions.ET, 14^th Nov 

 

Rasna in outsourcing talks with CarrefourRasna is in outsourcing talks with global retail giant Carrefour for an outsourcing deal. The home-grown Indian FMCG player is looking at an agreement wherein it will provide Carrefour a host of products to be retailed under its own label. Rasna is supposed to be keenly eyeing several acquisition targets in the
Middle East,
South Africa and other emerging economies to have a focused presence in those markets. After conquering an astounding 93% share of the Indian soft drink concentrate (SDC) market, the Rs 225 crore Rasna has made a foray into the highly competitive fruit juice market by launching Rasna Juice Fit. The food processing industry is growing at a fast clip with the market expected to touch $ 3.1 billion by 2007. ET, 16^th Nov 

 

The Fresh Push to promos in Hyderabad           The organized retail trade is showering consumers in
Hyderabad with special promotion schemes and discount offers in the wake of Reliance’s foray into retail trade in fruits, vegetables and groceries through their outlets called “Fresh”. “Spencer’s”, run by RPG group had announced a month-long maha save campaign on October 25^th. Business Line, 13^th Nov. 

 

Logistics players set to ride retail boom 

          The boom in the retail sector is opening up a gamut of opportunities for players in allied areas, who are now aggressively expanding their operations to cater to future demand set to come from this sector. Industry officials point out that it is the logistics companies which will benefit the most from the retail wave. Many logistics firms including American logistics major Bax Global, Prologis, PWC Logistics are looking to expand their operations in
India.Business Line, 19^th Nov.

Retailing

Retailing

 

India now in hot retail offshoring business too  

             Biz may double in a couple of years from $500m now. Global retail giants now look at
India not just for sourcing goods, but also for outsourcing their core processes.  International retailers look at India for merchandise planning, training supply chain and loyalty programme management, store administration and customer analytics. Some existing BPOs have already started leveraging the impending opportunities. Store administration and customer analytics are other critical areas that may witness a lot of action on the outsourcing block. With significant growth in the retail sector drawing more global retail giants to India, there is a huge opportunity in the retail offshoring business beyond the traditional IT and HR outsourcing.  

Retailers want a slice of airport revamp 

Modernization and privatization of Indian airports appears to have opened up new vistas for the Indian retailers. Most of them are working on their business strategies to grab a slice of this emerging business either independently or through partnership with foreign specialized airport retailers. While players like Future Group and Shopper’s Stop have already entered into JV agreements, others like
Trent’s Landmark and Ebony are believed to be exploring options. The re-modelled and privatized airports will require retail and F&B partners to make themselves viable and a refreshing experience for travelers. 

 15C 6 Nithin D Pai [fk-1301]Vivek Namboodiri [fk-1356]Midhun Jose [fk-1440]Karthik Suresh [fk-1371]Sumi Sundaresan [fk-1404] 

Retailing

                                                 RETAILING 

 RIL may launch 22 retail outlets in
Hyderabad            The ambitious Rs 25,000- crore retail venture of Mukesh Ambani is expected to roll out in style in
Hyderabad soon with the group planning to launch about 22 outlets in the city, a hotbed retail action. These include stores of fresh fruits and vegetable outlets that would sell groceries and FMCG goods apart from perishables.  The first hypermarket is said to be coming up at Uppal.            
Hyderabad is now a hotbed of retail activity with many retail firms chalking out expansion plans in the city. Metro Cash & Carry is planning to set up its operations in the city. ITC, which has been popular for its retail initiatives in the rural hinterlands, has also set up Choupal Fresh, a 10,000 sqft retail store in
Hyderabad. According to Trammell Crow Meghraj, at least 14 malls occupying 3.28 million sqft space are expected to come up in the twin cities,
Hyderabad and Secunderabad in the next few years. 

 

Reliance Retail to make simultaneous global foray 

          Reliance Retail has decided to simultaneously foray into international markets. Identified countries include
Sri Lanka,
Nepal,
China,
Vietnam,
Cambodia,
Indonesia,
Philippines,
Maldives,
Kenya,
Myanmar,
Nigeria,
Ghana and
Tanzania. The company will enter into specific retailing activities which include a range of products from cheap and quality consumer durable to vegetables, fruits and garments. Sourcing would be done from both
India and
China. Retail operations would be drafted specifically for each country.Economic Times, 18^th October. 

 

Canon plans to ramp up retail ops in
India  

Canon is ramping up its retail operations in the country significantly as it eyes a turnover of Rs 500 crore next year. Canon has signed up with 35 retail chains including national and city-based retail chains and is planning to extend this to 45 chains by the end of 2005. The plan for next year is to more than double it, by tying with 100 retail chains. Canon’s medium-term revenue target from
India has been set at Rs 1,000 crore by 2009.  

 

Everyone wants to make it big in retail 

The retail boom has sent the aspirations of small regional retailers soaring. Delhi based pharmacy chains Guardian and 98.4, garment retailer Ritu Wears and Bombay Selections , department store Big Jo’s, V-Mart, Gokul Mart and SRS, South Indian durable retail chain Viveks are all engaged in talks with the banks. Also with high network individuals and private equity funds to raise money for expansion.

Economic Times, 19^th October.

 

Reliance retail map sports pharmacy 

          Reliance’s retail prescription for the country includes setting up a network of 4000 pharmacies across
India. Economic times, 20^th October.                                     

Karthik Suresh (fk-1371)Nithin D Pai (fk-1301)Midhun Jose (fk-1440)Vivek Namboodiri (fk-1356)Sumi Sundaresan (fk-1404)