Homoeopathy gets a dose of brand war as top guns slug it out

THE Rs 630-crore organised market for homoeopathy is witnessing fierce competition with players such as Baksons, Dr Batra's, SBL and Schwabe India on expansion and marketing overdrive. They're launching specialty clinics, new drug combinations, courting homoeopaths, and fighting a high-decibel ad war. When it comes to specialty homoeopathy clinics, it's essentially the preserve of two players—Dr Batra's and Baksons. While Dr Batra’s caters to 8-9 specialities, including hair-care (tricology), dermatology and respiratory, Baksons largely follows the rule of four across its clinics—respiratory, dermatology, stomach and arthritis. With 51 clinics across 19 cities in India and a presence in Mauritius and the UK, Dr Batra's is definitely on the growth path. "We normally add 10 clinics every year and will soon be present in Abu Dhabi and Dubai," says Dr Mukesh Batra, MD, Dr Batra's. The company has also set up a cyber clinic that offers online consultation and treatment to more than 4.5 lakh online consumers each month from over 86 countries. Dr SPS Bakshi-promoted Baksons is also gearing up to increase its presence from 22 clinics at present. Meanwhile, in manufacturing too players have upped the ante. Although Dr Batra's share in manufacturing is minuscule (since its focus is largely on clinics), it's fast learning that a grip on manufacturing is essential to ramp up clinics. "We're also expanding our range of products where our presence is minimal today," says Dr Batra. Baksons, on the other hand, rides on two factories and 600 distributors. "Today, Baksons has a 30% marketshare in homoeopathy products with a turnover of Rs 45-crore last year," says Dr Bakshi. For the 110-year-old German company, Dr Wilmar Schwabe, which started ops in India 10 years ago, growth in the country is impressive (over 50%), with 2006 sales touching Rs 28-crore. "At this rate, we'll touch Rs 40-crore by the end of this calendar year," says Sangeet Agarwal, GM, Schwabe India. SBL, yet another pan-India homoeopathic drug-maker, is today a Rs 60-crore company with three facilities in Jaipur, Haridwar and Sahibabad. It sells over 10,000 stockkeeping units, with bio-chemics and bio-combinations topping the list. Clinics, products, and now huge spends on advertising and promotions (A&P)—homoeopathy companies are maintaining the splash factor to be oneup in the market, and be one with consumers. With a turnover of Rs 65-crore, Dr Batra's is coughing up as much as Rs 15-crore in A&P. "Over the last two years, we've built up our brand and the competition has gotten fierce too. We have to reserve one-fourth of our revenues to stay top-of-mind," says Dr Batra. Similarly, Baksons, with Rs 45-crore in the bag, is slugging it out with an A&P arsenal of Rs 5 crore. Other players too have taken a leaf out of the competition by eating into their ever-growing pie to create that buzz among consumers. Reining in the 300,000-odd homoeopathy doctors is also part of the promotional costs. As Baksons is eyeing Rs 60-crore by 2007, they're largely relying on doctors to push sales. "We have 1,200 people working with us who cover 30,000 doctors every month. We're giving incentives like foreign trips and discount schemes to doctors based on the business they bring in," sais Dr Bakshi. Meanwhile, Schwabe India is waging another battle. Popular for anticataract eye drops and weight reduction remedies, the company is now promoting sealed packs in small quantities since quality is sacrosanct in the trade. "Normally, homoeopath doctors don't recommend sealed packs since they feel if the patient gets to know the name of the company (that manufactures these drugs), he can directly buy off the pharmacy and there would be no repeat visits. So homoeopaths seldom hand out prescriptions," explains Mr Agarwal. This is where Dr Wilmar Schwabe steps in with 10 ml packs in the market, where the doctor can only dispense to one patient at a time. Usually, homoeopaths have access to 100 ml and even 500 ml packs that last longer. "But slowly, the sale of the 10 ml pack is on the rise as we're educating the market about the contamination that seeps in once the seal is broken," adds Mr Agarwal. Marketers are also moving out of the traditional single remedy homoeopathy to combination drugs—that is, one drug for several ailments. "Traditional homoeopathy addresses single ailments but now with the burgeoning market, there's a shift to provide combinations of drugs. In the market, there are 20% combinations and the rest adhere to the traditional practice," says Rajneesh Chandan, GM, Sales, SBL.

Courtesy: EconomicTimes

For more detail on Retail India visit: www.retailindia.tv

McCormick sets sight on southern spice brands Eastern and Lalah’s

GENEXT OF INDIAN BUSINESS LIKELY TO SELL OUT BUT ELDERS MAY OPPOSE

SPICES and curries are the flavour of the season. World’s largest spice and seasoning company, US-based McCormick, has renewed work on its acquisition plans in India following the break down of talks with MTR Foods which was eventually bought by Norway’s Orkla. Sources said this time Mc-Cormick is high on Indian spices and training its eyes on some South-based spice brands such as Eastern and Lalah’s. The Rs 170-crore Eastern is one of the bigger local players in the packaged spices market. Sources said a top team from the $3-bn McCormick flew down to Kochi to meet the owners of the Eastern family. However, it’s believed that Eastern, which is growing well, has not yet responded to Mc-Cormick's overtures as yet Industry analysts believe that the Genext of the family-owned spice companies are keen to sell out to foreign players but the older generation, which set up these businesses from scratch, may not want to sell the family jewels. “That’s the dilemma facing the owners. However, foreign companies are offering attractive terms ,’’ said a source. Eastern, with a predominant presence in the Southern markets, has been interested in a better national spread through the inorganic route. Private equity firm New Vernon is already an investor in the company. It’s learnt that the McCormick team had also visited other players in the packaged spice market such as MDH and Lalah's. However, this could not be independently verified. Sources pointed out that McCormick’s joint venture company in India, the Kochi-based AVT McCormick, engaged in processing and exports of spices, is helping the US company with its acquisition plans. McCormick’s Indian JV, which kicked off in 1994, exports Rs 100 crore worth of value-added spices to developed markets. AVT has over eight decades of experience in agri-business including rubber, tea and a portfolio of spices. However, sources said Mc-Cormick's foray into the domestic consumer market may not be routed through the export JV. While AVT has been advising McCormick on its India plans, it’s not clear whether the Kochi-based group would be a part of it. For instance, McCormick independently bid for MTR Foods. McCormick is the global leader in the manufacture, marketing and distribution of spices, herbs, seasonings and other flavours to the entire food industry. Customers range from retail outlets and foodservice providers to food manufacturers. Founded in 1889 in Baltimore, McCormick is known as Club House in Canada, Schwartz in the United Kingdom and Ducros in France and other parts of Europe.

Courtesy: EconomicTimes

For more detail in Retail India visit: www.retailindia.tv

Now, Godrej India too joins retail rat race

Soaps-To-Software Major In Talks With Foreign Retailers; UK’s Makro & Tesco Seen Among Possibe Partners

THE Godrej Group plans to set up a chain of retail outlets across the country as a surging economy and rising affluence create new business opportunities for one of India's oldest business houses. The Rs 6,000-crore soaps-to-software major wants to use its brand equity in the retail space and is looking at tying up with a foreign retailer, people close to the development said. The group is understood to be in talks with the UK's Makro, which is owned by Germany's Metro. A tieup with British retail giant Tesco could also be another possibility. "This is not an issue I'd like to comment on at present," Godrej Group chairman Adi Godrej told ET. The move marks a change in the group's approach to the retail business. The group derives one-third of its turnover from the FMCG business and the rest from sectors such as agri business, appliances and furniture, properties etc. It was hesitant about such a venture given the potential of a conflict with the retail trade. Godrej is a leading manufacturer of consumer goods and relies on a vast network of shopkeepers and stockists to sell its products across the country. The group’s initiatives were therefore tentative. However, given the 35% plus growth rate in modern retail, the group is believed to have been advised by experts to cash in on the Godrej brand equity with consumers and harness the synergies of being a consumer goods player in the retail space. Also, such a move would fit in with Mr Godrej's vision of a higher degree of direct interaction with the consumer and the need to come out of a 'manufacturing mindset' and lay more emphasis on the consumer. The identity of the foreign partner is not clear. Makro is the third-largest cash & carry wholesaler in the UK with a turnover of £1.1 billion and a portfolio of 33 depots nationally. It was owned by Nederlandse Steenkolen Handels Vereniging (SHV). In 1998, the European Makro stores were acquired by Metro, a Germany-based retail and wholesale company founded in 1964. The non-European Makro stores are still owned by SHV, except for the ones in South Africa and Zimbabwe. Those are owned by Massmart Holdings. Tesco is the UK's largest retailer and one of the world's leading international retailers. The retail initiative may be undertaken through Godrej Industries, which holds more than 80% in Godrej Properties, handled by Mr Godrej’s son Pirojsha. At present, Godrej Properties is developing 20 million sq ft of land across India. There are clear synergies in the retail business for the group, which enjoys tremendous brand equity and has a sound understanding of the Indian consumer market through Godrej Consumer Products, Godrej Appliances, Aadhaar and now Nature’s Basket.

Preity Zinta to endorse EON brand

THE appliances division of Godrej & Boyce will extend the recently-launched EON brand for its entire product basket. The company, which launched a new line of refrigerators and microwave ovens under the premium EON brand, will extend the brand to other product segments, including air-conditioners, washing machines and DVD players, reports Our Kolkata Bureau. Godrej & Boyce has also roped in Bollywood actress Preity Zinta as brand ambassador for the appliances division. Though the actress will promote Godrej's entire appliance range, the major thrust will be on the EON line. The company has decided to spent nearly 4% of its turnover for advertising purpose.

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Bajaj Auto to run products on separate tracks

AWAY from the headlines over the imbroglio in the Bajaj family, Bajaj Auto (BAL) is preparing to unveil a new brand strategy, signalling the emergence of a ‘new’ company. Slated for a May launch, this new positioning will allow the auto maker to build separate brands around its different segments of products. Looking at the not too distant future, it has also factored in its commercial vehicle business in its new branding charter. This segmentation, expected to create separate identities for its mid- and high end motorcycles and commercial vehicle businesses, is on the lines perfected by international auto majors like Toyota and Volkswagen. “There is an opportunity for Bajaj Auto to create a positioning platform for itself. Look at Toyota, which is positioned in the middle of the market, Daihatsu is below it, Lexus is its top luxury brand, Hino is its commercial vehicles range. So, Toyota (Motor Corporation) has very simply positioned all of them separately, the same way that Volkswagen has done,” Rajiv Bajaj, managing director, BAL, told ET. Today, (brand) Bajaj Auto is positioned at the middle of the market and Mr Bajaj wants to build separate identities for its other products. “An 18-year old Pulsar buyer does not identify with the dirty old three-wheeler, although both are Bajaj Auto,” he said. However, he declined to comment further on the strategy, and said: “Wait till May.” Industry watchers meanwhile said that the high-end bikes could be built around the Pulsar brand and probiking showrooms. BAL will also separate its commercial vehicle dealerships, currently comprising three-wheelers. Having chosen to exit the entry-level segment of 100 cc motorcycles, BAL is now abandoning the four-stroke in favour of its patented DTSi. The objective is to build a new Bajaj Auto out of the old one. “There will be no ‘me too’ now on the technology front. We need to be unique and different. So, we are abandoning the four -stroke and moving instead to DTSi, which is our patented technology. Pulsar is our platform to push technology,” Mr Bajaj said. He was emphatic that the new positioning will cover all aspects of the organisation—product, marketing, HR and manufacturing practices. The initiative is meant to lead to the emergence of a new Bajaj Auto, where products are sold more by customer pull than push from the manufacturer-dealer. “The Pulsar, at Rs 70,000, is all pull while the push driven segment, the commuter bikes, are now commoditised. Currently, at Bajaj Auto, 55% sales are pull driven and 45% push driven. In little over a year from now, we will have 80% pull-based sales, given that we have significant product launches lined up,” said a confident Mr Bajaj.

Courtesy: EconomicTimes

For more detail in Retail India visit: www.retailindia.tv

P&G to launch Olay in India

CONSUMER products major P&G India plans to launch its $1 billion-plus flagship skin care brand in India this year, sources close to the company said. Since the past few months, the company has been in serious talks with its major distributor, Universal Corporation, which has been distributing and marketing Olay in India since the past three years. Universal also imports Pringles, Wella, Herbal Essences and Camay, among other P&G brands. When contacted, the P&G spokesperson in India denied the development. However, during the launch of Pampers in December, senior officials indicated that P&G India is gearing up for a major launch in the premium products space. While fragrances like Boss and Escada will continue to be marketed by third party importers, P&G is bullish on the skin care segment and will launch the Olay range across price points. In December, P&G India officially launched its diaper brand, Pampers, after it discontinued its agreement with Universal Corporation. The company will follow the same route for Olay now. P&G's marketing team is currently in talks with major organised retailers for display tie ups at Shoppers' Stop, Pantaloons and Westside among others to cater to the brand's target group, the premium shopper. "Oil of Olay has been present through the import route and has a brand recall with consumers. On that basis, they should be able to grab a share of the market if they enter now," said the head of a leading retail chain in the country. Saatchi & Saatchi, which handles most of P&G's brands globally, has bagged the advertising account in India, sources said. The agency also handles the advertising account for the recently launched Pampers. Competition for Olay will come mainly from HLL's Pond's, Dove and Lakme, L'Oreal and others. P&G India is in advanced talks with leading retailers to promote the brand through point of sales counters through the kiosk route in a way similar to Pond's, Lakme, L'Oreal and others. "Launching Olay is the most obvious step for P&G now that it has chalked out the road map for its portfolio and has the distribution systems in place for its Gillette portfolio. At recent analyst meet the company has indicated that the premium end is a growth driving segment for it," a leading FMCG analyst said. Globally, the company sees a strong potential in emerging markets, where it is seeing a double-digit sales growth. At a recent analyst meet, AG Lafley, P&G's chairman, has been quoted in international media reports saying, "We remain pretty bullish on developing markets." The beauty industry in India is $3.6 billion, as per Euromonitor estimates, of which the skin care market is Rs 1,500 crore growing at a CAGR of 4.3%. Multinational beauty brands are increasing their presence in India with the market poised for a major grow drive. Olay has a range of products in the skin care and cosmetic segments. P&G also has the Cover Girl and Max Factor brands which are present in India. The Olay launch will give it a stronger toehold in the segment.

Courtesy: EconomicTimes

For more detail in Retail India visit : www.retailindia.tv

Maruti cars to be dearer by up to Rs 1,017

Maruti Udyog on Thursday hiked prices of all its models by up to Rs 1,017 on account of increased cess announced in the Union Budget 2007-08. The company said post price hike, its popular premium hatchback Swift will be costlier between Rs 656 and Rs 818 across different variants. The base model of Swift will now cost Rs 4,68,657 as against Rs 4,68,000 (ex-showroom Delhi) earlier. Its popular Maruti 800 Std model will now be costlier by Rs 268 at Rs 1,93,914 as against Rs 1,93,646, the company said. Zen Estilo Vxi would now cost Rs 3,74,019 as against Rs 3,73,500 as its price has been revised upwards by Rs 519. The prices of Esteem models have been hiked by Rs 912 and Rs 982 respectively for the Lxi and Vxi variants. Esteem's base model would now cost Rs 4,79,135 as against Rs 4,78,223 earlier.

Courtesy: EconomicTimes
For more detail in Retail India visit: www.retailindia.tv

Also, American Kmart set for Indian Retail debut

Kmart, one of America’s leading discount retailers, is the latest to vie for a share of India’s $12-billion organised retail market. The Michigan-based retailer is believed to be gearing up for an India foray with cash-and-carry stores, which will be its first in the world. This apart, there are plans to forge a franchisee tie-up with an Indian partner. Kmart executives recently met Department of Industrial Policy and Promotion officials and discussed their entry plans. Kmart, which operates in the discount store and hypermarket formats, hopes to get an insight into the Indian retail market through the cash-and-carry venture, which could be leveraged when the government allows FDI in multi-brand retail. Currently, 100% FDI is allowed in the cash-and-carry format under the automatic route.

Courtesy: EconomicTimes
For more detail on Retail india visit: http://www.retailindia.tv

Train tickets can now be booked on mobile phone

Taking e-ticketing to the next level, Railways on Thursday launched a mobile phone-based service for booking train tickets. Indian Railway Catering and Tourism Corporation (IRCTC) launched IRCTCmobile, a mobile-based railway ticketing in partnership with US-based firm C-SAM. IRCTCmobile, which has a rich and intuitive user interface, will operate on Javaenabled handsets having GPRS connection, according to an IRCTC release. IRCTC's registered users will need to download IRCTCmobile by sending an SMS to IRCTC. "With the proliferation of the mobile as a ubiquitous device, this initiative shall enable IRCTC to reach further to the masses," said IRCTC MD P K Goel. The facility will be available for all service providers, including telephone companies and banks to make it available to their customers.

Courtesy: EconomicTimes
For more detail in Retail India visit: www.retailindia.tv

Pantaloon Retail goes for major organizational reshuffle

Pantaloon Retail has made major changes in its organisational structure, by creating five verticals — retail, incubation and innovation, products, JV and partnerships and zonal strategy. Pantaloon Retail Director Rakesh Biyani will be retail CEO. Under this vertical, its hypermarket chain Big Bazaar, mall business Central, food retail Food Bazaar and Pantaloon chain will operate. Rajan Malhotra, category head, Big Bazaar, will take over as CEO. South zone head Vishnu Prasad will be CEO of Central. Sadashiv Nayak, head, western zone, will be CEO of Food Bazaar. Sanjeev Aggarwal, President, Marketing of Pantaloon Retail will be CEO of Pantaloon chain. Second vertical of incubations and innovation will have Damodar Mall as CEO. Different business lines including fashion, food, general merchandise and home will operate, under third vertical. Kailash Bhatia will now head fashion business of Pantaloon. Arvind Chaudhary will be CEO of Foods business. General merchandise CEO will be appointed by the company once home business becomes a mature business, Pantaloon Retail head Sanjay Jog informed. "We have businesses which are both matured and in incubation stages. Now we have reached a stage where we can leverage on products and businesses within the group. These factors necessitated change in the organisation," Jog said. Zonal structures have also undergone major changes. All zones will be vertically aligned to vertical heads. "A zonal head will be responsible for our entire operations including projects, properties, supply chain, HR, IT and others in the zone," Jog said.

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Supreme Yarns sets its eye on retail venture in India

Ludhiana-based yarn-manufacturing firm, Supreme Yarns Ltd, having a turnover of Rs130 crore, is planning to venture into retail market in about a year's time with its own brand of ready wear garments. The company is planning to set up knitting facility in its existing unit at Ludhiana with an installed capacity of 30,000 knitwear garments per day with a possibility of raising weaving capacity to include woven garments like shirts and trousers along with t-shirts and tracksuits. "We are planning to enter the retail market of readymade garments with our own brand of clothing within a year’s time. The future of the Indian textiles industry is in value addition and that’s what we are trying to tap. Textiles companies which have value addition facilities like manufacturing of fabric, dying, knitting and weaving will always have an upper hand on the companies which limit themselves to only yarn manufacturing," Sanjay Gupta, Managing Director of Supreme Yarn."Initially we will start with five or six stores in the northern part of the country. After that we will monitor the market and will carry out a survey. We will spread our stores into the rest of India depending on the market situation. But one thing is clear that we will enter the retail market soon," Gupta said. The company intends to make t-shirts, track suits, shirts and trousers. For this purpose company will have to add weaving facility to its existing and upcoming facility of yarn manufacturing, dying and knitting as shirts and trousers are manufactured from woven textiles.

Courtesy: http://www.fibre2fashion.com

For more detail on Retail India visit: http://www.retailindia.tv

Essar Group to invest up to Rs 1350 cr in telecom retail

New Delhi, March 14: Essar Group, which is in talks with Vodafone Group over a stake in Hutch-Essar, will pump in Rs 1125-1350 crore (USD 250-300 million) over the next three years in its telecom retail venture and is expecting revenues to the tune of Rs 5,000 crore. "We will invest USD 250-300 million over the next three years to set up 2500 'the Mobilestore outlets' across the country," Essar Telecom Retail CEO Rajiv Agarwal told reprters. The company would also increase its head count by ten fold to 10,000 in the next three years from the current 1000. With its aggressive expansion plans, the company is aiming to garner about 15 per cent market share in this space with a top line of Rs 4000-5000 crore in the next three years, he added. The multi-service outlets, the Mobilestore, would offer handsets, mobile accessories, new connections, value added services, after sales support and bill payment facilities. "Country's mobile market stands at Rs 35,000 crore and is growing at an annual rate of 60 per cent. With this huge market, we expect to have 10-15 per cent market share," Agarwal said. The company currently has 60 mobilestore across India, including 21 in Delhi. "We are also looking at opening up of 4,000 touch points in the form of stores, kiosks and shop-in-shops," Agarwal added. The stores would be set up in three formats - large, medium and compact besides shop-in-shops in malls and large retail outlets, he said, adding the outlets would also offer electronic products such as digital cameras, Ipods and other gaming devices.

Courtesy: Bureau Report

For more detail on Retail India visit: http://www.retailindia.tv

Reliance opts out of race for ailing Super Bazar

Reliance Industries Ltd. said on Thursday it was withdrawing its bid for ailing cooperative retail chain Super Bazar over the government's refusal to hand over management and control."We would like to withdraw our offer in view of the government's refusal to change the law," Soli Sorabjee, a senior counsel for Reliance, told the Supreme Court of India.Reliance, which recently forayed into retail, had bid 2.88 billion rupees for the chain.Reliance had said at the previous hearing it would not want to invest a huge amount of money unless it had effective management and control over Super Bazar, which would require a change in the existing law for cooperatives.India's cooperative law has strict limits on shareholding, management and control of cooperatives.A cooperative unit may be merged, amalgamated or taken over by another cooperative unit. But it cannot be taken over by a private company, according to the law.The government will examine offers from Indian Potash Ltd. and the Indian Labour Cooperative Society for the revival of the ailing Super Bazar chain.Reliance Retail Ltd. is spending more than $5.5 billion in setting up formats ranging from convenience stores to hypermarkets in India. It also manages the supply chain and back-office operations of several cooperative stores in Mumbai.

Courtesy: http://www.ndtvprofit.com
For more detail in Retail India visit: http://www.retailindia.tv

BK Modi group to invest $100 mn in technology retail

The BK Modi promoted Spice Group will invest $100 million over the next two years to expand its multi-brand technology retail chain Hot Spot Retails Pvt. Ltd.

The BK Modi promoted Spice Group will invest $100 million over the next two years to expand its multi-brand technology retail chain Hot Spot Retails Pvt. Ltd. The retail outlets offer products such as mobile handsets, accessories, airtime connections, recharge vouchers, gaming devices, direct to home television services and other such telecom related products. 'We plan to open 400 stores by the end of this year by investing Rs.500 crores (Rs.5 billion),' Dilip Modi, vice chairman, Hot Spot Retails Pvt. Ltd. told a press conference here. In order to have a pan-India presence, the company plans to open 1,500 outlets in the next couple of years in 200 cities. 'At present, Hot Spot outlets are in Delhi and Mumbai, two of the most important mobile markets in India. We plan to open similar outlets in 200 cities over the next two years,' he added. This retail chain, which was started in the year 2005, is expected to earn revenues of Rs.500 million in its second year of operations.

Courtesy: http://www.indiaprwire.com
For more detail in Retail India visit: http://www.retailindia.tv

Reliance Retail plans to acquire foreign retail firm

Reliance Industries` retail venture, Reliance (Q, N,C,F)* Retail, is planning to acquire a foreign retail firm, reports Business Standard. The company is reportedly in talks with a dozen overseas firms for an acquisition. There is also speculation that Reliance is in talks with French retail distribution company- Carrefour for acquiring its supply chain business. A top Reliance team, which has so far confined its activities to small acquisitions in India, recently visited the US and the UK. The team reportedly held discussions with a dozen companies, mostly tier-II or smaller firms like Coles & Myers and J Sainsbury. Sources close to the development said RIL was keen on outright acquisition and not a strategic tie-up, which some companies had wanted.
RIL has already earmarked Rs 270 billion for its retail business. A large chunk of this money, plus around Rs 225 billion from the sale of its treasury stock, could be used for the buy-out. RIL has also been looking for targets within the country, in addition to its recently-concluded acquisition of Adani Retail for over Rs 1 billion. RIL runs its retail venture through its wholly-owned subsidiary Reliance Retail, which currently has 71 stores under the Reliance Fresh brand name. The shares of the company closed at Rs 1,285.05, down by Rs 41.85, or 3.15% at the BSE. The total volume of shares traded was 873,493. (Wednesday)

Courtesy: IRIS NEWS DIGEST

For more detail on Retail india visit: http://www.retailindia.tv

Dabur India unveils strategic roadmap for its retail venture

1. Plans Chain Of Over 350 Stores On The Health & Beauty Format
2. Targets Revenues Of Rs 1,700 Cr In 5 years
3. Business To Operate As Subsidiary Of Dabur India
4. Announces Interim Dividend Of 75%

Dabur India Limited, a leading FMCG company in India with a consolidated turnover exceeding Rs. 2000 crores, today announced plans to enter the high-growth organized retail market in India. The Board of Directors of Dabur India today approved its entry into the organized retail market in India through a wholly-owned subsidiary, H&B Stores Limited (under incorporation).The Board of Directors of Dabur India Ltd also announced an interim dividend of 75% for 2006-07, on the enhanced capital (post-Bonus issue). With this, Dabur India has announced a total dividend of 213% for the 2006-07 fiscal on pre-Bonus capital.Dabur India will invest Rs 140 crores by 2010 to establish its presence in the retail market in India with a chain of stores on the Health & Beauty format. As part of its plans to provide a world-class retailing experience to consumers across India, The Company plans to establish stores ranging from 1,500 sq ft to 6,000 sq ft in size, offering international quality store environment and product range.Three senior professionals and experts from the global retail industry have been roped in to drive Dabur India's retail foray. These expatriates have retail experience of more than 25 years each, encompassing merchandising, store design and sourcing.Mr. V C Burman, Chairman, Dabur India Ltd, said, "Retail is the next big focus area for Dabur India. H&B Stores Limited plans to set up 350 retail stores across India in 5 years and expand it to over 1,000 stores by its 10th year of operation."Dabur India's Health & Beauty Stores would roll out in Metro and Tier-1 cities in 2007-08. "The Company recognized a clear need gap that exists in Health & Beauty retail space in India, thereby enabling Dabur to have early mover advantage. The retail venture would be run under a separate brand name, which will be decided in due course. H&B Stores expects to start generating profits by the 4th year of operations with revenue exceeding Rs 1,000 crores," said Mr. Sunil Duggal, Chief Executive Officer, Dabur India Ltd."Organized retail, which currently accounts for only 3% of the total retail market in India, has tremendous growth potential in the fast expanding Indian economy. Dabur India, with its in-depth understanding of the Indian consumer and capability to deliver a great experience at affordable prices, is uniquely placed to enter the Indian retail sector. We will bring great value to consumers by offering quality products at affordable prices," said Dabur India Ltd, Group Director-Corporate Affairs, Mr. P D Narang.This venture is also synergistic with Dabur's current portfolio of Ayurvedic & Herbal products and would add significantly to the company's distribution footprint.

Courtesy: http://www.prdomain.com

For more detail on Retail India visit: http://www.retailindia.tv

India to become 2nd Largest Economy of World by 2050

Goldman Sachs in its report has quoted that India will emerge the 2nd largest economy throughout the globe.

India will emerge as the 2nd largest economy throughout the world by the year 2050, ahead of US, said Goldman Sachs in a statement that Economics Times published on 24 January 2007 broadening the estimates of the prospects of India in its October ’03 research paper “BRIC’s report”.According to the report productivity growth in India will help the country sustain above 8% growth until the year 2020. The GDP (Gross Domestic Product) of India will exceed France, UK and Italy by the mid of next decade (that is around 2015). It’ll then surpass Japan and Germany and then finally the United States ahead of the year 2050 to become the 2nd largest economy following China. Growth acceleration of India since 2003 has shown a structural upward trend and not a simple cyclical upturn, as per the research arm of Goldman Sach in a global research paper that was released on 22 January 2007. The paper wrote that nearly 50% of the total growth was driven by the productivity growth and will likely continue for next few years as well.Between the years 2007 and 2020, GDP per capita of India is expected to quadruple. The escalating growth rate will signify huge demand here, since the people of India will also use up additionally about 5 times car and 3 times crude oil. The contribution of India to the growth of the global economy will also continue to increase, as per the report.RNCOS report on “India Retail Sector Analysis (2006-2007)” notifies, “The economy of India has shown a healthy growth during 2003-2006. The GDP growth rate of the country almost crossed 9% mark during the year 2006. The retail industry of the country has received a strong boost due to this steady growth in its GDP. There has been a continuous rise in the personal income as well as household consumption in the country. The GDP of India is expected to rise further in the years to come.”This research reports on “India Retail Sector Analysis (2006-2007)” also addresses some interesting issues for today’s global business environment. The key questions answered in this report include: what is the current market size and scope of the organized retail in India; what & where are the growth prospects and issues related to the industry; what are the factors driving growth in this sector; what are the opportunities & challenges faced by retailers in India and so on.

Courtesy: EconomicTimes
For more details in Retail India visit: http://www.retailindia.tv

ITC gets a taste of Patak’s, may snap it up

HIGH VALUATION MAY COME IN THE WAY OF DEAL

ITC Foods is likely to put in a formal bid for Patak’s, Britain’s popular pickles and Indian curries brand. Heinz could also look into it as it already has a partnership with Patak’s, said sources. The £200 million price tag, however, could be a sticking point as it is being seen as a tad on the higher side for potential partners or buyers. According to information with ET, the tobacco major has been approached by Patak’s investment banker, N M Rothschild with a proposal. “A decision will be taken once the company has studied the details,” said persons close to ITC. When contacted, Ravi Naware, CEO, ITC Foods, declined to comment. From Patak’s point of view, ITC is being seen as “exactly the type of company that could be interested in talking to them,” said persons close to the family. One caveat, though, is that Patak’s owner family — Kirit and Meena Pathak — are looking for a strategic partner to grow Patak’s global ambitions, and are “more likely to be interested in a company with a global distribution network, rather than one with only a presence in India”, an observer close to the family told ET. The Pathaks are personally “1,000% wedded to the company” and would be looking at options to continue their involvement with the 50-year-old brand, say insiders. Patak’s makes a good fit with ITC Food’s current portfolio and its intent to become a total food company. If the deal materialises, ITC could do a lot of things with the brand, both in the domestic and in the global markets. Patak’s claims to be the best-recalled brand in its category, and its mission is to become the world’s leading supplier of authentic Indian food. Patak’s on its kitchen shelf will give ITC Foods a global footprint, and could also open doors for its existing premium brands such as Kitchens of India, in the overseas markets. Patak’s has a footprint in 40 countries, and is active in markets like the US, Australia and Canada, besides the home market of the UK. Before that, though, industry circles say the valuation may need to be scaled down. Valuing Patak’s at a revenue multiple of three — the company’s current revenue is £66 million — may be too high for serious players to move ahead, say experts in food industry. The exact contours of a deal are still hazy, as the Pathak family has appointed Rothschild to explore all options. While not ruling out an outright sale, it is likely that the Pathak family would prefer a deal which allows them to remain actively involved.

Patak’s fits ITC’s global ambitions

ITC Foods may bid formally for Patak’s, the iconic pickles and Indian curries brand of Britain. “The company has appointed Rothschild to explore a number of routes, which could include a equity participation, forming of a joint venture, or a sale. Till now, Patak’s has grown through retained profits, but now it needs more to achieve its global ambitions,” said Patak’s spokesperson. ITC, with its deep pockets could be a strong contender if the two could arrive at the right price. ITC has demonstrated a great deal of seriousness in its food business during the past few years. The company just launched its snack food brand, Bingo, and is believed to be exploring several options to enter new products category in food and beverages segment. It is already present in ready-to-eat foods, confectionery, biscuits and staples. Patak’s, on its side, enjoys an iconic status in UK’s curry circles, and its recent campaign with the tagline ‘Patak’s Cures your Curry Cravings’ has generated quite a bit of spontaneous recall in the UK. Patak’s already has partnerships with Unilever and Heinz, and it is likely that either of the two partners could develop the relationship into something stronger. “As yet, there are no new developments on this front,” said people familiar with the situation. Patak’s expects to grow net sales by 7% in the current financial year ending September 30, 2007 to £71 million, and gross margins to £31 million (£27 million in 2006). If an Indian company does manage to buy Patak’s, it will not be India’s first FMCG acquisition overseas. The first time any Indian company made headlines was some years ago when Tata Tea acquired Tetley of the UK and followed it up with a series of beverage acquisitions, the US energy drink Glaceau being the last one. Given its appetite for overseas acquisitions, one wild-card theory doing the rounds is that the Tatas might even have Patak’s fall into their laps.

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv/

Beer makers say cricket fans ain’t canned

IT SEEMS cricket and beer don’t mix. The world cup season is on but Indian audiences are not feeling canned enough, say top breweries. In fact, big beer marketers such as UB and SabMiller are stocking up more for the upcoming summer than the cricket calypso, though a few bars and pubs are stocking ale in anticipation of cricket-led binge drinking. “The culture of watching sporting events in a bar or pub and drinking beer in a community has still not caught up in India. But with the mercury shooting up in most parts of the country, we are banking on 35-40% growth in consumption. This will be inclusive of the consumption due to the cricket fever,” says Shekar Ramamurthy, executive VP (Sales & Marketing), UB Group. Every year, the March to June period contributes almost 40-45% of beer sales in the country. The cricket mania will just be an add-on. Interestingly, ICC’s decision to host the world cup in West Indies may also hit Indian breweries. “We expect high consumption only in the first part of the evening,” says Mr Vinod Giri, marketing head of SabMiller, the world’s (India’s too), second largest beer marketer. Due to the time difference, most Indian viewers are likely to miss out on the crucial last moments of the tournament, when they could have soaked in a pint or two more. “Nevertheless, we are tying up with our high-end special clients (luxury hotels which have bars) for special events. We may sponsor some promotional events to invite audiences. But overall, it will be difficult to isolate growth in sales from cricket fever from the seasonal growth,” adds Mr Giri. Bars and pubs have a different story to tell. Of the 100-million cases of beer sold each year in India, about 60% are consumed in bars and pubs. And this is the market which may drive growth this cricket season. Anirban Simnai, director, F&B, The Park, Kolkata says, “We are expecting a 40% jump in beer consumption.” Vikas Nanda, operations manager, Steel, The Ashoka, New Delhi says, “We are expecting 30-40% increase in beer consumption.”

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Parker & Luxor brands to be extended to personal electronics

Luxor Writing Instruments, the flagship company of the Rs 1,000-crore Luxor Group, is extending the ‘Parker’ and ‘Luxor’ brands to personal electronic items and office accessories. For starters, the company plans to enter segments like PDAs, laptops and office accessories, which will be sold through the company’s exclusive retail outlets christened ‘Luxor Signature’.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Carrier India unveils 2 sub-brands for airconditioners

Carrier India has repositioned its sub-branding strategy for airconditioners. The Indian subsidiary of Carrier on Wednesday unveiled two new sub-brands — Durakool and Estrella — which would henceforth be positioned as the mass and premium subbrands for residential airconditioners for the consumers. The existing range which is under GenX, would be repositioned to cater to corporate and institutional sales.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

ITC bites into snacks pie with ‘Bingo’ in India

ITC Foods has forayed into the snacks segment with the launch of a new brand, Bingo. The company plans to invest Rs 150 crore in the snacks business in the next two years. ITC Foods is targeting a market share of about 25% in the next 4-5 years. The organised snacks market in the country is estimated to be worth Rs 2,000 crore and growing at 30%. The company is also redefining its brands Kitchens of India and Aashirvaad. The ready-to-eat (RTE) meals would now fall under Kitchens of India and Aashirvaad would become the cooking ingredients brand. Until now, RTEs were sold under both these brands.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Reliance Retail eyes major stake in Carrefour

Primed for a global footprint in the retail business, Mukesh Ambani's Reliance group is talking to French retail major Carrefour as also other global players for acquiring controlling stake to reach out to international consumers with its basket of Indian food produce.Reliance Industries, which has a war-chest of Rs 1,00,000 crore (Rs 1000 billion), is looking to create international business arms for accessing global markets by leveraging on its supply chain that was put in place as part of the farm-to-fork project.Besides Carrefour, Reliance is also talking to tier-2 companies like Salisbury and Marks and Spencer for food business, sources said. When contacted, an RIL spokesperson in Mumbai declined to comment.Sources familiar with the development, however, said that top officials of RIL are already shuttling between continents to work out details for a deal, which could be through direct equity participation, a joint venture or outright acquisition.An announcement on the progress related to the group's global retail foray is expected at RIL's next AGM, possibly in June.The group has enough liquidity and Ambani is believed to have created a trust with cash up to Rs 25,000 crore (Rs 250 billion), which could be doubled with other investors for leveraging the equivalent debt for global acquisitions.Ambani, who is the world's 14th richest person as per Forbes, had last year pledged an investment of Rs 25,000 crore in the retail business, which was kicked off in November 2006 with the launch of food format stores -- Reliance Fresh.The other formats like hypermarkets, supermarkets and speciality stores are set for launch in the first quarter of FY'08.Going by the present level of real estate acquisition for the purpose, the investment in the domestic retail business could double.Ambani, whose group has embraced contract farming in a major way, is hoping to market India's agriculture produce, including fruits and vegetables that could fetch much higher value abroad than the domestic market.Reliance Retail has already emerged as the single largest player in the fresh food format stores within months of its launch and Ambani is believed to be keen on taking his farm-to-fork project global.The move comes amid a rush among global retail giants to enter India, one of the most promising retail markets with a population of over one billion. Besides, India could emerge as an attractive sourcing destination. Asked whether Reliance had approached it, a spokesperson for J Sainsbury Plc said: "As a matter of policy, we do not comment on market speculation."Meanwhile, British media reports said that four private equity firms -- CVC Capital Partners, KKR, Blackstone and Texas Pacific -- have jointly offered an $18.3 billion bid for acquiring Sainsbury, UK's third largest supermarket chain with 769 stores.Sainsbury's potential suitors include Wal-Mart's UK unit Asda and Marks and Spencer, UK's biggest clothing retailer, which said earlier this month that it was considering a bid, but would not be making an offer "at this time."Shares of both Carrefour and J Sainsbury rose between 1-3 per cent on takeover talks.
courtesy:rediff.com
For more on Retail India visit www.retailindia.tv

Test Your Brand Width

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Advertising is more robust in brand building than promotion

PRAKASH Wakankar, MD, Perfetti Van Melle India is a cricket buff and regularly doubles up as a commentator on All India Radio. Having had a motley career that spans pharma marketing, a stint in a packaging company, soft drinks and hospitality industry, Mr Wakankar is now grappling with the colourful and challenging task of confectionery marketing. He spoke with ET on a host of marketing issues facing the confectionery industry. Excerpts:

How has changing profiles of kids and shorter attention span affected the shelf life of confec tionery products?
Sugar confectionery in India has always been impulse-driven. The terms “loyal consumer” and “most often consumed brand”, have little meaning in a category where the average consumer has a set of 11 loyal brands. With kids getting increasingly exposed to new ideas, their gratification benchmarks have definitely undergone a sea change. Things which used to appeal to a 10-year-old five years back, are now passe’ for him. These are the realities of marketing in this category and our attempt is to influence decision at the point of purchase by being top of the mind to drive impulse to consumption.
Confectionery industry has been heavily promotions-driven. Doesn't that limit the role of strategic marketing and make the category heavily dependent on tactical initiatives?
Good consumer promotions, especially for brands which target kids, usually result in significant blips in sales. Having said that, more and more marketers are realising that exiting a consumer promotion is not easy. With kids becoming increasingly demanding, we are consciously reducing our dependence on promotion and investing more in advertising which is a more robust brand- building exercise. I do not think the strategic role of marketing gets diluted in any way in this kind of a situation--on the contrary, various (promotional) activities need to be in sync with the brand values and the brand promise.
With margins in confectionery products under pressure and high import levies, what is the way forward for marketers?
In a scenario where input costs have been increasing year-on-year, we are in an unenviable position of not being able to increase our prices in steps. The problem is compounded by coinage issue unheard of in most other industries. For instance, Alpenliebe at 60 paise would be a nightmare for both seller and buyer, given the currency and coin configuration that exists. We have tried to remain ahead by aggressively pushing top line growth by moving up the value chain. This will remain our thrust area in 2007 and we will continue to look at various methods to keep our margins at or above internal benchmarks. The other way to ease pressure on margins is to import high-end confectionery products and launch in the modern trade. There we have to confront a big grey market and we cannot be competitive on price when we import these legally. A combination of greater consumer awareness and governmental action will help level the playing field over a period of time.
How do you think has the emergence of modern trade and malls impacted confectionery retailing?
Despite the development, our dependence on small outlets and paan shops is unlikely to come down in the near future. Having said that, modern trade is a key growth driver for us and we are looking to customise our offerings for these outlets. I see this as segmenting the ‘outlet profile’ – the growing modern trade and related formats on the one hand and the rural opportunity on the other will straddle the `traditional’ outlet base. We want to do what we do even better and, of course, focus on improving our presence even further on both sides of the traditional base.
What are the regulatory issues that have or in some way stifled the expansion of organised confectionery industry?
Our industry is governed by PFA regulations, and some of those outdated laws need revalidation in today’s context. For instance, worldwide, sugar- free gums are gaining currency even among kids. However, in India, we still have to carry “not recommended for kids” notice on the pack. The other thing is, the reservation of “hard boiled sugar candy” for the small scale industry (SSI) as the result offerings in this segment are not keeping pace with the development in the other categories of sugar confectionery. It is clearly a big opportunity for player like us and we feel it will benefit the SSI in the long run. In today’s context, when manufacturing is being governed by HACCP guidelines, the SSI may not have the necessary wherewithal to comply. The bread and biscuit industries are a clear example of an industry which has thrived after deregularisation.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

It’s women & children first at world cup exit

FMCG Biggies Keep Off From TV Spots Citing Lack Of Market

CRICKET is a gentleman’s game but does its viewership attract only men? Mandira Bedi and Sony Entertainment Television (SET) may disagree but the consumer goods industry certainly seems to think so. Hindustan Unilever (HUL), Procter & Gamble (P&G), Henkel, Dabur, Marico, Reckitt Benckiser and Perfetti are some of the industry biggies not buying a single spot on any of the World Cup matches. The logic: the series would be played through the night when their target audience — the housewife — would be asleep. The consumer goods companies say that even if a percentage of women and children do end up watching the matches, the steep outlays do not justify their spends.“SET (official broadcaster for the World Cup) has been selling inventory for all 51 matches together. For select matches, the rates are too steep,” said the head of a Delhi-based media buying firm. Adds Rahul Welde, head of media at HUL, “Even at the current rate, we won’t be able to reach our target audience.” HUL had bought ad spots during previous World Cup editions because the matches were largely played during the day when women and children joined the menfolk to catch the action. there are other reasons TOO. Perfetti’s marketing head Sameer Suneja said that buying airtime on each of the 51 matches would lock up to 70% of the company’s annual ad budget.

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Sportswear giants at daggers drawn

NIKE JUST DOES IT, REEBOK LINES UP ARMY OF ENDORSERS & FOR ADIDAS IMPOSSIBLE IS NOTHING

IT IS not just a war between the cricketing nations, the Cricket World Cup is also a slugfest for brands wanting to lure the cricketcrazy fans into their fold. For the sportswear giants Nike, Reebok and Adidas, it is a war to stake a claim on the game as their own. While Team India’s official apparel sponsor Nike is telling the cricket fan to Just do it, Reebok is charging on all fronts with its army of cricketer endorsers. Not to leave out Adidas, which is launching its global campaign to tell the viewer why Impossible is Nothing’. With there being no global sponsor for the apparel category, the field is open to competition and hence, a marketing blitzkrieg. Take Nike. While the Indian cricket team would wear the swoosh, Nike’s latest campaign targets the cricket-crazy fan who breaks out bowling and batting wherever he gets the chance. Nike India marketing director Sanjay Gangopadhya said, “Having dressed up the Men in Blue, we now want to dress up the Indian cricket fans for whom we have launched a new line of products- cricket shoes and the ODI team jersey. We are also involved in below-the-line activities at schools and colleges to provide a brand experience and connect with the youth through our cricket products.” Market leader Reebok has earmarked 30% of its marketing budget for the World Cup campaign. Based on the theme ‘the game is all that matters’, the campaign focusses on the hard work behind the glamour and hedonism. As part of its brand extension, Reebok has also developed a cricket website-rbkcricket- which has live match simulation and online games and will dole out Reebok goodies for the winners. The company is also launching the RBK Fangear consisting of T-shirts and polos of Dravid, Dhoni, Yuvraj and Harbhajan, apart from the ‘Rahul Dravid 10’ signature collection shoe. Not to be left behind, Adidas tied up with cola major Pepsi and launched the Blue Billion authentic fan range of T-shirts, jerseys, scraves and accessories. It will soon launch a new global campaign explaining the evolution of its brand philosophy, Impossible is Nothing. More than 30 international sports stars including Sachin Tendulkar, David Beckham, Lionel Messi and Yelena Isinbayeva would recount their Impossible stories using their own handdrawn illustrations and paintings in the campaign. “We are particularly excited about Sachin Tendulkar being featured in the campaign. With Cricket World Cup fever already on, it would be great for Sachin’s global fans to hear his impossible story from him,” said Adidas India MD Andreas Gellner.

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Hrithik Roshan set to endorse Acer products

ACER, the number four PC vendor globally has signed actor Hrithik Roshan to endorse its brand and products. Acer India MD W S Mukund said, “The tieup with Hrithik is a natural fit with personality of the brand....Brand association with Hrithik will give us better mindshare among the young and the first time users.” Acer joins the list of leading PC vendors who have signed up film stars as brand ambassadors with the previous examples being Shah Rukh Khan-Compaq and Saif Ali Khan with Lenovo.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Betting gets a promising wicket

Fastest Growing Sector In Cricket Economy; Rs10-15k Cr At Stake

TALK of cricket and immediately endorsements, telecast rights, TV shows, advertisements and publishing involving billions of dollars come to mind. But these are just some shades of the greenbacks. Betting, which perhaps falls in the shade of grey, captures the lion’s share of the cricket economy. Put simply, even by conservative estimates, betting accounts for more than 30 to 35% of the money involved in cricket. Surprised? Now get ready for the sixer — this segment is now considered the fastest growing in the cricket economy and it’s estimated that more than Rs 10,000-15,000 cr will be at stake in the domestic satta den during the world cup. In the international market, the figure might cross even Rs 15,000 cr. With the tournament underway, bookmakers and punters across the globe are heavily betting on Australia as the favourite to lift the Cup. They are at the top of the chart with odds of 2:1, closely followed by South Africa with 4:1. In fact, Sri Lanka and West Indies also enjoy the confidence of the bookies, sharing the third position at 8:1. But if you want to make real money, then bet on India and England as the returns are very high on them at 10:1. In fact, both are holding fort jointly in the betting sweepstakes with England as the fifth favourite country to lift the Cup. So how does the odds work on the betting table. Simply put, if the odds are 1:2, it means for every 100 you bet, you get back 120. According to a top Delhi-based bookie, the turnover of betting on cricket alone last week was around Rs 800 cr to Rs 1,000 cr and starting March 13, it is expected to cross Rs 3,000 to Rs 4,000 cr every week. ”The initial odds of Australia may be very minimal but nothing is certain in this game and even they can lose. If they lose their first two matches, then the odds may move up drastically. With host West Indies and Pakistan playing the match today, millions of rupees would have changed hands with the delivery of each ball. Every wicket, every run prompts change in odds,” he said. Among individual players, Australian captain Ricky Ponting is the favourite followed by Sri Lanka’s former captain Sanath Jayasuriya and South African skipper Graeme Smith.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Tatas aim to be biggest in tea business

Tata Tea targets to become the largest player in the Rs 6,000 crore organised branded tea, toppling HLL by next year. At present, Tata Tea has a share of 18% in volumes, while HLL's share is higher at 19%. Percy T Siganporia, MD Tata Tea said, "All our brands have attained double digit growth this year (fiscal), while the industry has grown by a little over 3.5%." In value terms, Tata Tea has 21% of the domestic tea market, with three major brands Tata Tea Premium, Gold and Agni. Tata Tea brands contribute one-third of the company's turnover, with Tetley brands contributing a two-thirds share. Tata Tea announced the launch of a new mainstream brand, Tata Tea Life, which is positioned on promoting overall health and wellness. The brands competitor is Brooke Bond Red Label Nature Cure which has been positioned as a niche product with therapeutic qualities. "Market for such functional and medicinal teas is on the rise internationally, and in India," Sangeeta Talwar, Tata Tea ED said.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Samsung to make printers in India, launch new products

Samsung India Electronics is planning to manufacture printers at its second facility in Sriperumbudur near Chennai. “The first phase of the facility will be operational in August. We will start manufacturing printers during the second phase, which is expected to start in 2008,” said R Zutshi, deputy managing director of Samsung India. Addressing a press meet at the launch of its advanced series of split air conditioners, he said the capacity of the new facility would be 2.5 times more than its first plant in Noida. “The capacity increase will also help us augment our export turnover. We are targeting SAARC countries especially Bangladesh and Sri Lanka. Our export turnover from India is Rs 200 crore,” he said. In the first phase, the facility will have a capacity to manufacture 1.5 million colour TVs and 1 million colour monitors.

Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Yum! India CMO may join Wal-Mart Retail

Yum! India is back in news. Its chief marketing officer (CMO) Arvind Mediratta is learnt to have put in his papers and is heading to retail major Wal-Mart as senior VP, cash and carry business. The exit of Mr Mediratta comes at a time when the US-based fast food major, with marquee brands such as Pizza Hut and KFC, is grappling with top management changes that took place in the company earlier this year. When contacted by ET, Mr Mediratta declined to comment. Industry sources say Mr Mediratta would be reporting to Raj Jain who has been designated as president & CEO of Wal-Mart India and would officially join the retail giant in April, which is currently getting its team together in the country. Mr Mediratta, an IIM Kolkata and IIT Delhi alumni, has spent many years in the FMCG sector. First with Procter & Gamble, where he worked for more than a decade, and then with Marico Industries. Prior to joining as CMO of Yum! India two years ago, Mr Mediratta was Whirlpool India‘s VP marketing. His responsibilities at Yum! entailed looking after KFC and Pizza Hut’s marketing initiatives in India, Bangladesh, Sri Lanka, and Mauritius. In his new role, the 40-year-old would be heading the cash and carry business of the US retailer in India. Despite the structure of the company not being clear as of now, sources in the retail industry say he might be trained by an expat before he comes on board and embarks on his new role.

Courtesy: EconomicTimes
For more detail on Retail India visit :

UK’S ICONIC Indian food brand Patak’s looks at stake sale

£200M UK Food Brand Gives Review Mandate To Rothschild

Spice King Patak’s is up for grabs. The spicy brand, a rage in Britain, is considering an outright or part sale, and has been valued at £200 million (Rs 1,700 crore). The deal is likely to generate huge interest among Indian companies, which are eager to establish a global footprint. Even though the announcement came in late last evening, ET spoke to investment bankers and FMCG companies to find out the best suitor for Patak’s from India. The consensus was in favour of the Tatas though ITC is also tipped by some as being a strong contender. However, none of the two names could be independently verified. Patak’s, which turns 50 this year, has appointed NM Rothschild to review strategic options for the development of its business, just months after a bitter family feud over the ownership was settled. A leading manufacturer of pickles, sauces, and ready-to-eat Indian food, Patak’s is run by 54-year-old Kirit Pathak and wife Meena. In a brief statement, chairman and chief executive Kirit Pathak said the review will help the business to become the “world’s leading supplier of authentic Indian food.” Meena Pathak, 50, is group director of recipe development, and is credited with coming up with the original tandoori sauce in the bottle that adorns the shelves of most supermarkets. Kirit Pathak received an OBE in 1997, and Meena was awarded one in 2002. Patak’s had sales of £67m last year. It has plans to grow the business to more than £500m worldwide. Patak’s already distributes in over 40 countries, and was earlier considering an outlet in India. As Patak’s already has partnerships with both Heinz and Unilever, there’s media speculation that this may develop into something deeper with either of the two partners. A closer association would allow the brand to benefit from the greater distribution muscle the big multinationals enjoy. The company claims to supply to over 75% of Britain’s Indian restaurants. Of the options that Rothschild is reviewing, one is that of an outright sale though it is understood that the family is extremely keen to retain some involvement with the company. According to reports, it is unlikely that Patak’s which is 100% family owned, will consider a stock market flotation. The company may also consider a sale to a private equity player. Pathak told The Independent: “The growth of Patak’s over the past decade has been a remarkable success story. Our goal is to be the world’s leading supplier of authentic Indian food and we have exciting plans for the future development of the business. “We have, therefore, felt it appropriate to retain Rothschild to assist us in reviewing how best to achieve these ambitions.” Indian food is the fourth most popular cuisine in Britain, and the market for Indian ready meals and snacks is estimated at £500m. Sir Gulam Noon, the other Curry King, as he was known, sold his business to the Irish company Kerry Foods in 2005 for £124m. Forget the £66 million revenue, Patak’s is crucial for other reasons. Given the craze for Indian curries, especially chicken tikka masala in Britain and neighbouring countries in Europe, Patak’s curries and pickles offer mouth watering prospects for Indian companies. The company was recently embroiled in a bitter family dispute over ownership between Kirit Pathak and his two sisters.

Courtesy: EconomicTimes

For more detail on Retail India visit : http://www.retailindia.tv

Keep your customers happy to stay on growth course

THE MOST striking feature of the Indian car customer is the sheer diversity within this universe. The most auspicious months in the South, when customers literally lap up cars from showrooms, often turn out to be the lean season in the North or the West. Again, while diesel cars are now starting to get more or less popular in many parts of the country, the bulk of diesel car sales have traditionally been cornered by markets as far apart as Andhra and Punjab. Car customers everywhere, even in more homogenous societies in the West, are known to nurture very specific and distinct preferences. Each one prides at being “different”. But in India, the scope and scale of this “difference” is on another plane. On the one hand, we have a set of about 50,000-odd customers in this country who will buy any new car that is launched. Neither price, nor product nor advertising can claim credit for this; the only inducement for their purchase is their urge to get noticed. At the same time, there are many hundred thousand people in the country who can well afford a car, but refuse to buy one. They believe a car does not fit into their lifestyle. For a family that commutes by bus or train, driving and maintaining a car is not worth the hassle. Then there is another section that aspires to have a car, but does not know how to drive. Possibly offering him a decent facility, a driving school, where he can learn driving can help him own his dream car. Some of them are deterred by the glamour and razzmatazz of car showrooms, preferring instead to hand in cash and buy their car at a village fair. From Moga to Gorakhpur to Coimbatore and Burdwan, that is our experience over and over again. This category of affluent non-buyers has to be persuaded, reassured and supported adequately before they decide to buy. Once one member of the community is persuaded, peer effect leads many others to follow. Car finance has, as in other retail areas within the economy, catalysed the boom in car sales. Three out of every four cars sold in the country are funded by a loan. This has obviously brought in many more entry-level customers. But it has catalysed demand in other ways as well: replacement cycles seem to be shortening. Owing to the flurry of new models and availability of attractive car loans, more and more customers are replacing their car within 3-4 years. Car finance is encouraging another trend: the second car in the family. Like with the second TV or multiple music systems, the trend of a second car in the family seems to be catching on. Children are playing a critical role in deciding the model and the colour of the car his father or mother should be driving? Their knowledge influences parent’s decision perceptibly. But even in car finance, the real thing is yet to come. Organised finance has not gone deep enough into semi-urban and rural areas. Banks, especially those in the private realm, still have very many “negative profiles” who are refused loans. Policemen, lawyers, teachers and journalists are left out. Entire localities are excluded. For us, that is a missed opportunity. The car loan industry is not geared yet to offer car loans to well-to-do families in rural areas who may not have a salary statement or a PAN card. But all this is changing quickly. Several finance companies have switched to more flexible systems whereby their field staff uses alternative cues to assess creditworthiness and sanctions loans on the spot. Banks are evolving rural models, backed by innovative structures and relevant technology. That will unleash the demand potential in rural areas. There are other attributes peculiar to the Indian car customer. The reliance on “word of mouth”, for one. The abracadabra of the most creative – and expensive —- ad campaign is no match compared to the opinion of an uncle, a friendly neighbour or even a fellow motorist at a traffic light. The best route, therefore, is to try and keep your existing customers happy. Service their cars well, organise free check-ups for cars, handle insurance claims and repairs with dignity and when customers want to sell off their car, help them do it conveniently for them. That is the smartest marketing tool. The goodwill and positive word of mouth takes you a long way. Offering customised solutions is the need of the hour. The Indian car customer is demanding more and more at the same price, and this behaviour ties in well with the way middleclass India itself has evolved. Young people want the best and latest in terms of global brands and western lifestyles. But they want this without having to give up their traditional values and tastes. So while a car customer desires good looks and the latest technology in her car, none of it can be at the cost of the traditional values of fuel efficiency, reliability, low cost of ownership and quality. The theory of natural transition from small car to luxury segment comes becomes debatable here. Our own experience in car replacement shows that 50% of small car owners are re-buying small cars; they are reluctant to experiment with luxury cars due to high cost of ownership. None of this should suggest that I have figured out the Indian car customer. Far from it. As demand booms, categories and segments blur, preferences become more marked and mature, the latest models roll in, the great Indian car owner continues to startle and bemuse like never before.

Courtesy:EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Commercial PC users not hit by new excise rule in Retail sale

THE proposed retail sale pricebased excise assessment for personal computers (PCs) and peripherals — announced in the recent Budget — would not cover sales to institutional and industrial customers - thereby leaving the price of these products unchanged within the commercial category. However, in case of excise assessment for household sales, the IT industry would soon hold discussions and approach Abatement Committee with suggestions on the suitable level of abatement that would be in tune with the cost built-up between the ex-factory price of these products and their end-user price. “The clarification by a senior finance ministry official during our recent meeting means that a bulk of the hardware sales will not get affected with the new assessment system. It is unlikely that there would be a price change in this category,” said MAIT executive director Vinnie Mehta. Institutional consumers buy packaged commodities directly from the manufacturers/packers for the service industry. Industrial consumers buy packaged commodities directly from the manufacturers/packers for using the product in their industry for production. According to MAIT, for 2006-07, the commercial category is expected to account for 77-78% of the overall PC sales of over 6.5 million units. During the first half of the fiscal itself, the business segment accounted for 77% of sales, registering a 7% growth on a year-on-year basis and 19% on a sequential basis. Households accounted for 23% of the total desktop market with sales crossing 5.7 lakh units. This represented a growth of 12% over H1 2005-06. It may be recalled that the Union Budget has proposed to bring products like PC (including laptops and portable computers), printers, monitors used for automatic data processing machine, computer keyboards, scanners, mouse, computer plotter, fax machines, modems and set top boxes (used for accessing the internet and for television sets) under the new system of RSP based excise assessment. The excise duty is currently applied on the ex-factory price. RSPbased assessment would make excise duty applicable on the price sold by the distribution channel (end-user price), which will include dealer margins.

Courtesy: EconomicTimes

For more detail on Retail India visit: http://www.retailindia.tv

Hypercity's IT Path for Retail growth in India

Hypercity Retail India Pvt. Ltd. that is planning expansion to 20 more sites across India by 2009, is scouting e-procurement and technology partners. The retail outlet is scanning space between 50,000 and one lakh square feet area for each of these stores. It plans to house super markets, convenience stores and also hypermarkets. "Hypercity is undertaking new projects. Since these are large scale expansions, we are looking at e-procurement service providers for civil and also various service providers for IT projects," says project controller at Hypercity, Dayanand Sonar. Though hedgehog.com had done e-procurement for Hypercity when it opened its first retail outlet at Malad, Mumbai, the company wants to try out other partners this time around. Queries on why does it not want to go along with hedgehog.com, were met with mute responses or I don't know shrugs. For its new outlets, Hypercity would invite tenders for requisition unit, project management, interiors, refrigeration systems, store fixtures, accessories, asset management, etc. Listing out the benefits of e-procurement, Sonar informs, "It saves a lot of time, encourages global participation in bids, is convenient to negotiate with global vendors for follow-ups, besides doing away the lethargy of manual work." Veneeth Purshottam, IT head at Hypercity says that it has deployed ERP solutions from JDA(JD Armstrong) at Malad. The same ERP solution would be deployed across all the 20 outlets, he adds. JDA will also cater to the front end needs of all Hypercity outlets. At present, Symbol provides wireless services at Malad. Hypercity also has a self scan service called 'I-Scan', this handheld barcode scanning device lets customers scan their merchandize as they take them off shelves. When they are ready for checkout, customers don't need to stand in a queue as their merchandize is scanned and billed - saving time and improving customer experience, Purshottam explained. We also use scanners for stock-take and price checks on the shop floor. They have the main data center in Mumbai and the disaster recovery cell in Bangalore. The disaster recovery project is currently in progress and is expected to be completed by March end, said Veneeth. Hypercity has also partnered with JDA to use the Intactix space planning module. Intactix helps the store managers visualize how to stock shelves using optimal sales and margin expectations. They manage the inventory and distribution through JDA-MMS (Merchandise Management System from JDA). They have rolled out replenishment applications called E3. The mathematical software helps HyperCITY analyze inventory trends, helping the enterprise refill its shelves faster at lower costs, forecast better, and address the critical element of product availability. The stores are all connected to the data center using the VPN network of SIFY. We also have leased line connections as backup from the stores to the data center wherever possible. We may consider RFID at a later stage, Purshottam concluded.

Courtesy: cxotoday.com

For more detail on Retail India visit : http://ww.retailindia.tv