Saturday, March 24, 2007

India Inc joins summer gold rush

THE HEAT is on, April is knocking on the doors. And marketers — from budget airlines and travel agents to cola biggies and AC makers — are drooling. Summer of 2007 promises to be packed with big action and big new launches... and the buzzword is the “young consumer.” “Companies will also be focused on kids, as they would be enjoying vacations and are the perfect target audience,” feels Harish Bijoor, CEO, Harish Bijoor Consults Inc. From Les Elfes, a company that’s organising two-week adventure camps in locales such as Switzerland and Australia for kids at Rs 1.5 lakh per participant, to Coca Cola’s ‘Red Lounge’ - a destination for the youth to hangout, surf the net, chat and watch TV — the kids will be woo’d in a big way this summer. And if it’s good to be young, it’s even better to be cool - specially in the sizzling summer. So from Lacoste’s French Riviera collection in innovative light fabrics, to funky, floral Tees and tank tops from Adidas, the cool quotient will be high in the branded fashion apparel section this summer. “All things cool and breezy will be the flavour of the season,” says Mr Bijoor. This is also set to be the summer of a big splash from the organised retail segment. “Summer 2007 will see new products being launched and jostling for space in the big retail outlets. In fact, we will see the launch of at least 15 international brands. This summer is also expected to see two to three times growth in mall traffic over last summer, partly because of new malls coming up in all the metros,” feels Prasenjit Roy, CEO In-Store Consulting Services, a marketing company that specialises in tracking shopper behaviour in the retail space. Unni Krishnan, country manager, Brand Finance, India, too agrees that this summer is going to see arrival of retail and a number of luxury brands. “We’ll see a lot more new launches especially in organised retailing,” predicts brand consultant Jagdeep Kapoor, chairman and managing director Samsika. But it’s not just new products at the malls, summer has brought with it new combo offers for Indian outbound tourists too, who are are growing in numbers. Air fares may be going up to shave off a part of your summer holidays budget but despite that hot destinations include Sri Lanka with South East Asia or Maldives and Mauritius with South Africa and Turkey.


Everybody loves a good summer
The sizzling season is just round the corner. From colas to ACs and from Switzerland to Bermuda...here's an update on the hot deals that Indian companies have lined up

John Sarkar
IT’S that time of the year again when the sun never seems to set. With global warming pushing up the mercury every year, most people dread the onset of summer. But there are some, to whom sunny days mean a superb business opportunity. No surprise that beverage majors are gearing up for the hot and humid season with a vengeance with a slight twist. While colas used to be big earlier, health drinks are currently in. The Indian soft drink market is worth about Rs 6,000 crore per annum. But here too, innovation is the key if you have to capture a share of the consumer’s throat. Coca-Cola has big plans for the oncoming summer and is all set to roll out a radical concept, The Red Lounge experience, in Pune. Coca-Cola officials say: “Red Lounge is a one-stop destination for the youth to hangout, surf the net, chat, watch TV and experience our entire portfolio, all under the same roof.” Other plans include beefing up their online presence with a one-stop interactive, online destination for Coke consumers in India. The innovative Internet platform has over 4 lakh plus registered users in the age band of 19-24 years. Coca-Cola has also launched new campaigns for each of its brands. Venkatesh Kini, VP- marketing, Coca-Cola India, says: “Over the years, we have made ‘thanda’ and refreshment synonymous with Coca-Cola. The new campaign ‘Sabka Thanda Ek’ strengthens the universal appeal of the brand. It offers a higher order of emotional benefit of bringing people together.” The cola giant has also launched a juice brand Minute Maid Pulpy Orange supported by a 360-degree marketing communication plan involving road shows, extensive experiential sampling sessions in markets, offices, malls, colleges, and a range of contests. “The roll out of the naturally refreshing, orange beverage with real pulp has been designed to extend the company’s market leadership in the juice drink segment,” adds Mr Kini. If Coca-Cola is there, Pepsi can’t be far behind. PepsiCo India has also launched its new drink Mirinda Sorbet and is planning to follow it up by reaching out to its consumers through radio tie-ups and activation plans across Modern Trade & BPOs. Pepsico officials say, “The sampling activation, planned across 22 cities will aim at targeting nearly a lakh consumer across channels. Mirinda Sorbet is a premium offering targeted at young consumers, ranging from students to first jobbers.” Dabur Foods is also going into overdrive with its summer preparations. Sanjay Sharma, GM, sales and marketing, Dabur Foods also reveals his company’s plans for summer: “We have reinvented our ‘Real’ brand to create a stronger differentiation from competitors’ products. In the juice segment 10 years back there was only one flavour that is mango. We have come out with new flavours like pomegranate and ‘mausambi’ this season. We also plan to target teenagers in the 13-19 age group with our new brand, Real Twist. For the health conscious we have launched a Soya drink too. With rapid expansion of distribution we intend to penetrate more towns and cities this season.” Similarly, Rasna also has a few aces up its sleeve. Penetrating small towns and cities seem to be the flavour of the season. Piruz Khambatta, CMD, Rasna says. “We plan to enter towns with product offerings that cost as less as 50 paisa. During the group eight matches of the World Cup we will launch a new campaign with a new Rasna girl,” he says. If beverage companies are planning strategies, can ice-cream companies be far behind. The Rs 800 crore branded ice cream market in India will see players grappling for market share. Currently the number one player in the market Amul is ready with innovative products in its probiotic and diabetic range. Jayen Mehta, AGM, marketing, Gujarat Cooperative Milk Marketing Federation (GCMMF) says, “There are 5-6 crores diabetic persons in India. Since we are first to introduce the innovation, we expect to build the market and generate additional business of Rs 30 cr this year.” In the beverage segment too Amul has plans to launch three new drinks in the summer of 2007 - Amul Kool Koko - in the branded ready to serve chocolate drink segment, Amul Kool Salted Lassi and ready to drink Nutramul. HLL, meanwhile, is playing its cards close to its chest. But by the look of things they have major plans for summer. An HLL spokesperson says, “For some of our product categories like ice creams there is a heightened seasonal demand. We will use this opportunity to launch product innovations, trade schemes and on ground consumer activities. These activities will help to strengthen brand equity and preference in consumers.”
Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv/

Wal-Mart’s Japan unit posts fifth year of loss. Tough times ahead for global retailers.

ALMOST five years since Wal-Mart Stores landed in Japan, the world’s largest retailer has yet to find itself on steady ground. Its 53% - owned local unit Seiyu has posted five straight years of losses, has not paid a dividend for a decade, and has lost three quarters of its stock market value since Wal-Mart first invested in the Japanese supermarket chain. The US retailer quit South Korea and Germany last year to focus on China and other promising areas, prompting speculation that it would also desert Japan in the manner of France’s Carrefour, which sold its stores to Aeon in 2005. Some analysts say Wal-Mart should either give up on Japan, where it has invested a total of more than $1 billion, or buy the whole of Seiyu to speed up an overhaul. Others say Japan’s $1.1 trillion retail market — the world’s second largest after the United States — is too big to pass up for Wal-Mart’s international expansion dream. “I believe that Wal-Mart believes they’re in Japan for the long haul and right now, that looks like the right bet,” said Darrell Rigby, head of the global retail practice at consultants Bain & Co. While the Wal-Mart chain is yet to get a steady footing in Japan, there seems to be crisis raging in the Carrefour group. A major stake-holder, the Halley family, is reassessing its holding in the retail chain. There is a possibility of a sale of the Halley holding.


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

American fast-food chains adopt snappier menus

Eateries Experiment With Cheaper Snack Innovations


FAST-food restaurant chains, eager to increase sales during the sluggish afternoon hours, are working hard to satisfy snack cravings with an array of smaller, cheaper products. For fastfood chains, selling snacks is an opportunity not only to boost overall sales, but also to make better use of existing employees and real estate. “The typical restaurant makes a vast majority of its business in a fouror five-hour time period, and there are arguably 24 hours in a day in which we can eat,” said Bob Goldin of food research firm Technomic. “They are saying, ‘you know, let’s figure out ways to even it out.’“ Between 1998 and 2006, the amount US consumers spent on snacks rose 39% to more than $27 billion. That number is still growing, though not as rapidly. Snack sales are expected to total about $30 billion by 2011, according to market research firm Euromonitor International. In the last two years, both McDonald’s and Yum Brand’s KFC chain have introduced blockbuster products targeted specifically at snack time. For McDonald’s, the $1.29-Snack Wrap, a strip of grilled or fried chicken wrapped in a tortilla that was introduced last year, has been one of the chain’s biggest launches ever. And at KFC, the 2005 launch of the 99-cent Snacker sandwich — a fried chicken strip on a sesame bun — is credited with reversing a prolonged sales slide at the chicken chain. Now, other chains are following suit. Earlier this year, Taco Bell introduced a taquito, priced at $1.79, that it is marketing as a snack. More recently, Jack in the Box introduced a sampler of stuffed jalapenos, mozzarella sticks and spicy chicken bites for $3.99, though customers can get a smaller serving for $1.79. CKE Restaurant’s Carl’s Jr and Hardee’s chains are adding boneless Buffalo wings, priced at $3.19 for three and $4.69 for five, to their menus. In addition, CKE Restaurants marketing chief Brad Haley said its addition of hand-scooped ice cream milk shakes in 2005 helped increase late afternoon sales, as kids looked for a snack after school. McDonald’s said it is working on other ways to boost sales outside of traditional meal times. Don Thompson, president of McDonald’s US business, said at an investor conference this week that the company’s plan to introduce more speciality coffee drinks such as lattes and iced coffees would draw in customers at different times of day.

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

Eau dear, at what price haute water?


There’s a drinking water revolution happening out there. But in India, we’re still bottled up about it

AT 360 o , the favoured haunt of Delhi's terminally trendy lunch crowd, we had the misfortune of being seated next to a high-maintenance kitty party this Monday. All 12 kitties, er...ladies, were slim, dressed in obviously branded designerwear and nibbled delicately on Caesar's Salad or vegetarian sushi as they chatted loudly about trips to Paris and Milan. But what caught my eye wasn't their identical matt makeup or similarly coiffed hair but that they seemed to have replaced Diet Coke with...water! As the magenta-labelled bottles of Himalayan weren't opened fast enough to keep up with their (go)sipping, many of them just tap-tapped briskly on their stilettos to the bar and topped up their glasses with paani and baraf. As I picked up my own glass of water feeling distinctly au courant, I remembered some water related incidents that may have been prophetic! There's been a significant change in attitudes towards water in the west, at least in the past decade that I've been observing it. Has India caught up with this water mania? Slumming it at our favourite downbeat Chinatown eatery in London's Soho area in the mid-1990s, it was always a pain to get water. It became a wearying cantation: “Could we have water, please? Water. Still water. Plain tap water in fact.” It needed several repetitions before glasses arrived and we said it so often that it was indelibly imprinted on our four-year-old's mind. One day he embarrassed us all by repeating it ad verbatim (including the weary tone) to a bewildered friend who asked him what he would like to drink... Cut to London 2006. At the local Waitrose, the non-alcoholic beverages section had as many brands of water (including Evian in 2-litre packs) as colas. And as we lunched with our now-teenaged son at the fashionable restaurant called The Ivy, more bottles of Hildon spring water stood on celeb tables than expensive wines. Iqbal Wahhab of London’s Cinnamon Club says, “Water sales are massive and growing. In London we’re a boozy lot, so it’s wine and water on restaurant tables. New Yorkers don’t drink much wine at lunchtime so they pour bottles of water like there’s no tomorrow.” Little wonder then that beverages lists at many tony eateries included water sections too - still, artesian, spring, sparkling, mineral, glacial, you name it. They are even categorised regionally - European, American, Asian water - and by taste and texture! In fact, Wahhab insists tht a “small bottle of water is a must-have accessory along with an iPod and a Blackberry.” But before you coo, “Aaah, how eco-friendly!”, imagine how many tons of carbon gases are emitted flying those distinctive bottles of “fresh spring water” across the world to fashionable haunts. That's why, even as bottled water sales worldwide have hit $1 billion, there's a counter-revolution in cool cities like New York in favour of plain tap water; many topselling brands are nothing but bottled, purified municipal water anyway! But since our rising bottled water sales are largely due to fears about the quality of the stuff supplied by our municipal water utilities rather than fashion, tap water drinking has expectedly not caught on. In India, therefore, we have a piquant situation. We want to be seen drinking the right stuff but premium imported brands Perrier and San Pellegrino have come - and gone. Evian is still hanging in there. Only just. The first two probably didn't succeed because they were sparkling and we prefer still water; we keep the fizzy stuff for whisky or nimbu. Evian (still) passes muster, but that's because its price imbues it with a special aura! So, as hotels and top notch restaurants in India spruce up their wines and spirits lists, water brands are conspicuous by their absence. Water’s just not haute enough here, yet say Delhi and Mumbai restaurateurs. So water drinkers stick to desi mineral water brands . Will India ever join the international drinking water revolution? Sadly, for that we have to depend on quality improvement by sarkari water mandarins. Eau dear.

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

Acer aims for third slot in Indian PC market

ACER, the number four PC vendor globally, is gunning for the third spot in the Indian market with its current position hovering between fourth and fifth.The top three in the are held by HP, HCL and Lenovo respectively, with the fourth and fifth spot alternating between Dell and Acer.“We are looking at achieving the number three position in two years,” said, Acer India MD WS Mukund.The firm has been in the Indian market since 1999 with a manufacturing plant in Pondicherry. It provides an array of products ranging from laptops, desktops, servers and peripherals. According to IDC India, in the overall client PC (notebooks and desktops combined), HP retained the top slot with a market share of 21%, followed by HCL a 14% and Lenovo at 9% in terms of unit shipments. The total shipments in the Indian market crossed 5 million units in 2006, recording 25% year-on-year growth with notebook PCs touching nearly one million units. Acer India is looking at expanding its retail presence in the major metros as well as smaller towns. Currently it has around 252 retail outlets in 109 towns and this would be expanded to over 350 outlets. Besides, it is also looking at expanding its presence in the large format retail stores and has been in talks with a host of retail players.The Acer official said most of its growth would be coming outside the top 16 cities in India as there is higher adoption of PCs in the B & C category towns from home and SME segment. Mr Mukund said the growth drivers for PC will be the latpops and form factor, those PC which would consume lesser space as well as being aesthetic.Acer traditionally has been very strong in the laptop segment and is the number one player in 17 countries. Even IDC has projected that 2007 is also expected to be the year when overall PC shipments through retail outlets, especially the notebook PC form factor would see a higher traction.

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

Brand getting lost in private-equity haste


The trade unions hate them. Investors love them. Germans refer to them as locusts. The Economist describes them as a ‘superior model of capitalism’. They may soon get their hands on even bigger ones like Sainsbury’s and Boots. Suddenly, private equity is everywhere

THE concept is relatively straightforward: a partnership of business brains raises a load of investment capital from pension funds, wealthy individuals and their own pockets. Then they go out and buy companies, often taking them private in the process. As soon as possible after this, they sell the company or float it on the stock market and make a sizeable profit for everybody involved. The term private equity simply connotes the fact that the acquired companies are not publicly listed on the stock market, but privately owned through the money raised from investors. The absence of public shareholders also means that the industry is notoriously secretive about its aims, operations and profits. Essentially, there are two types of private equity. The first, venture capital, focuses on buying a stake in a small business and injecting extra capital and expertise to grow the company’s value. But it is the second, in which a fund acquires a big company, which is making all the headlines. Central to any private-equity acquisition is the premise that the purchased company can be sold for more than it was acquired in a relatively short amount of time. The problem comes when you begin to explore exactly how this profit can be realised. In some cases, notably New Look or Travelodge, the privateequity fund actually recognises that the brand has far more potential than its current owners appreciate. Money is invested in the brand and the company grows. Unfortunately, there are other, frankly more reliable, methods enabling these groups to make a profit on their newly acquired company. They can identify a big brand such as the AA, which has lots of overheads and infrastructure and a relatively captive consumer base, and fire 3000 staff with no immediate negative impact on sales and a very positive one on profitability. They can then make a huge performance-based profit and even more money when they offload the streamlined company, which may or may not prosper in future. It really is a tale of two equities. On the one hand, it can represent a very beneficial force for brand revitalisation and investment. On the other, it can resemble the old assetstripping era of the 80s.Confusingly, most private-equity funds can play either role, depending on which will deliver the most profit. There are no black or white hats in this game, just lots of grey suits. I’ve worked for private-equity firms several times during big-brand acquisitions. I can happily report that, like every other major player in the corporate finance world, they pay extraordinarily well and don’t have the faintest clue about branding or brand equity. Indeed, whenever the dreaded ‘b’ word comes up, noses wrinkle and eyeballs head skyward. Pace is the big danger for brands in this new era. The success of private equity depends upon rapid acquisition, fixing and divestment; often, the whole process takes just a matter of months. During these frenetic ownership cycles, it’s all too easy to forget about brand equity. Our challenge is not to debate the relative merits of private-equity ownership - let’s leave that to the unions and politicians. Instead, let’s help our new masters appreciate (in both senses of the word) the value of the brands they have acquired.

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

Fedders Lloyd to become a durables company

FEDDERS Lloyd is reviving the Lloyd brand to become a consumer durables company. The Delhi-based BR Punj group company had over the years shifted its business model to commercial airconditioners, a B2B space. It’s now reviving the consumer brand not only for ACs but also for new categories like electronics and other appliances with a dual positioning in the mass-premium and mass-market segments. According to the strategy, Fedders Lloyd would launch airconditioners, microwave ovens, DVD players and LCD televisions under the Lloyd brand as the categories are growing faster than the overall durables industry. Over a period of time, Lloyd would further expand its presence in televisions though restricting itself to the mid-premium segment. The company is planning an initial investment of about Rs 50-60 crore. All products except ACs would be initially imported. Currently, Fedders has two plants in Noida and Himachal Pradesh while the third plant is coming up at Uttarakhand. The company has roped in Pavan Bhargava as president, who was earlier heading Hyundai Electronics in India. At the same time, former Electrolux India marketing executive Sanjeev Wadhwa has joined as the head of sales & marketing. According to Fedders Lloyd chairman and managing director, BR Punj, “Our change in market strategy reflects the developments in the domestic market which has been on a high growth path. This is especially true for home appliances.’’ The last few years saw Fedders Lloyd focusing on commercial airconditioners targeted at institutions like Railways, defence, mining and telecom markets because it was marginalised in the consumer retail space since the late 90s. Fedders Lloyd had in the distant past also sold refrigerators under the Zenith brand which was discontinued. Zenith however, doesn’t form part of its new gameplan. One of the reasons for Fedders Lloyd’s diversification into other product categories is linked to the distribution challenges faced by single product companies. In the recent past many such companies in the durables industry have expanded their brand across categories which helps in pushing products to dealers while capitalising on the brand extension.

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

Madura Garments eyes 3-fold growth next year

MADURA Garments expects to see its business venture with global lifestyle brand Esprit grow three-fold next year as higher salaries and glitzy shopping malls boost demand for premium apparel brands. “This (fiscal) year we’ll post sales of about Rs 20 crore. Next year, we are looking at a figure of about Rs 70 crore as the demand (for premium brands) is growing sharply,” Aditya Birla Nuvo director Vikram Rao said on Friday. Although the global brand is also bullish about the growth in India, it said it would count India and China as its main markets only after it sees the trends for the next five years. Esprit is still focused on Europe and North America as its growth areas. Madura Garments, a unit of Aditya Birla Nuvo, formed a partnership with Esprit, to retail the global company’s products in the women, premium and accessories segments in India. The venture has over 10 stores in India, which will be increased by an additional 15 stores, in the next two years, said Madura Garments president Hemchandra Javeri. “The business will be driven by a combination of new spaces and growth in like-tolike stores,” he added. The $5-billion Esprit is present in 44 countries and manages over 640 outlets globally. “We are optimistic about India , but honestly, we are here for the long term and would like to wait for some more time (to see the growth),” said Esprit chairman Heinz Krogner. A surge in manufacturing and services sectors in the world’s second-fastest growing economy after China, has led to a demand for premium lifestyle products. The trend has also fuelled a growth in the retail sector. According to Morgan Stanley, India’s organised chain-store retail industry is at an inflection point. We estimate it has the potential to deliver around 32% CAGR (compounded annual growth rate) over the next 10 years.” Madura Garments had joined with Esprit to boost its brand portfolio in segments such as women’s ready-to-wear, premium relaxed clothes and accessories. The move aims to offer Indian shoppers all the latest merchandise at prices “almost similar to those retailed in Dubai or Hong Kong and at the same time,” Mr Javeri added.


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

Modi Revlon to launch mass brand Color N Care

COLOUR cosmetics player Modi Revlon plans to take on Garnier, the mass hair colour market leader, with the launch of its mass brand, Color N Care. While this would be Revlon’s first India-specific brand, it would also mark a detour from Revlon’s premium positioning. Priced at Rs 120, Color N Care would compete with Garnier, which commands about 75% share of the mass hair colour market, and Godrej. About 60% of the Rs 200-crore hair colour market is dominated by mass brands priced around Rs 100. “It is the first India-specific brand from Revlon. If it succeeds, we would like to have the brand rights to distribute it in other markets,” said Umesh K Modi, chairman, president and CEO, Modi Group. The Rs 150-crore Modi Revlon, a 74:26 joint venture between Modi Mundipharma and Revlon, has hair colour brands like Colour Silk, Top Speed and Colour Stay, priced at Rs 250, Rs 375 and Rs 450 respectively. With the launch of Color n Care, it is targeting a 15% market share in the first year. The new brand would be promoted through a mix of mass media campaigns and instore promotions through its beauty advisors. For Modi Revlon, about 20% of its revenue comes from the hair colour business. It has a 12% market share of the total hair colour market. The company is also planning to strengthen its skincare range with the launch of a mass brand in the anti-ageing category and launch of a new premium hair care brand. It currently has Flex in its haircare portfolio.

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

Mall mania gives a lift to elevator companies

IT’S THE mall mania and it looks like the escalator manufacturers are taking a stairway to heaven. The long strip of moving stairways that relieve shoppers of many a legwork is a Rs 400-crore business in India. The coming three years is expected to be nothing short of heaven for escalator manufacturers, as an additional 500 malls would become operational. As per retail experts, around 4,000 escalators would be required over the next two years to cater to this demand. Leading manufacturers like OTIS, Kone, Schindler, Thyssen and Johnson are pulling up their act by ramping up operations and bringing in latest technology and product features.Close to 2,000 escalators were sold in 2007. Around 50% of the demand for escalators came from malls, and the rest from airports, hotels, convention centres and railway stations. OTIS is by far, the largest player in the world, with a market share of 35% and the Indian market is not expected to be any different. One unit of an escalator (that leads you from one floor to another) typically costs between Rs 12 to Rs 25 lakh. The price varies based on the length, brand, technology and other specific requirements. For instance, the cost of an escalator increases as it gets installed at higher floors and so on. There are no ballpark estimates as to the extent of escalator and elevator that would go for, say, a million square feet of mall space. This is because the mall designs are different and so are the traffic estimates. Says Dharmesh Jain, CMD of Nirmal Lifestyle: “Mall designers mainly decide on the placement (of the escalator), while consultants decide on the vendors. We have requirements for 100 escalators for the 3.6 million sqft of retail space and we are most likely to prefer one vendor per project”. OTIS recently got orders for 62 elevators and 28 escalators for the 1.1 million sqft Dreams mall in Mumbai. A section of the industry feels that the West is more scientific in its approach towards determining the optimal number of escalators and elevators for a mall than the local players. “While the primary role of the vertical transportation system is to enable least resistance (in flow of traffic), the current design and selection priority focuses on making it part of the attraction, even to the extent of totally neglecting the primary role,” says TAK Mathews, associate, TAK & Associate, an independent vertical transportation consultant. While proper placement of escalators is no assurances of sales for its tenants, the attempt is to ensure the shoppers are forced to see a whole range of tenants before exiting. For instance, an anchor tenant, who could be a multiplex or a food court, could be placed at the top floor to drive traffic. The escalators could be placed in such a manner that the shoppers are forced to see a whole range of tenants on their way up and down. This not only provides maximum exposure to the sub-tenants, but also leads to impulse purchase. But then, the game plan could for a toss if a holistic view is not taken. Mr Mathews cites the example of how, in a certain mall the anchor tenant placed strategically at the top-most floor didn’t get the intended traffic as only two lifts were installed creating congestion downstairs. People preferred to stroll on the ground floor instead.

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

Car sales in India may see slowdown next fiscal

MOTOWN’S top-gear run may slow down by 50% in the new financial year and the first signs are already visible in March. According to top auto financiers, the new fiscal should see car sales slowing down to 12-15% from the current trot of well over 20% as the interest increase and price mark-ups pinch auto demand. Says Kotak Mahindra Prime CEO Sumit Bali: “The slowdown will become visible from April onwards and we expect growth to come down to 15-17% from 28-30% earlier.” Dittoed HDFC executive vice president Ashok Khanna: “The rate hikes and price increases will definitely impact demand and growth will likely come down to around 12-15%.” Auto financiers say March, which is usually a good month for car sales due to depreciation demand, is already beginning to feel the hit. “This month has been bad so far,” says Khanna. “The sentiment is down and heavy tax returns have also dampened spirits.” A company or a business can write off 10% or 20% of the asset if they purchase a car in March. Some even split their car purchases in case of multiple buys to claim 10% depreciation in March and another 10% in September. Bali, for his part, feels March will pick up speed in the last week like 2006. “March has depreciation demand though it has been rather slow in the last 10 days but it should pick up in the fourth week,” he says. “But the slowdown will be apparent from April.” Industry experts expect the growth slowdown in new cars to perk up sales in the used car business. “Interest rates have also gone up for used cars but as budgets shrink people are more willing to settle for the latter so demand will be better and growth may not come down,” says Khanna.Car sales registered a nearly 25% growth in the April-February period this year. Including utility vehicles and multipurpose vehicles, the total tally was up 23%. The growth pep came after last budget cut excise on small cars to 16%. Last fiscal, cars closed with 7.5% growth while the entire passenger vehicles market clocked 7.6% growth.


SPEED BREAKER
New Financial year to see sales growth slowing down to 12-15% from 20%
March considered good month for car sales owing to depreciation demand is already feeling the pinch
Rate hikes and price increase to impact growth
Used car sales likely to pick up

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

Britannia Industries launches fortified biscuits

Britannia Industries and Global Alliance for Improved Nutrition (GAIN) on Friday signed an MOU to address malnutrition. Britannia has developed a specially designed 5 mg iron-fortified Tiger Biscuit, which in association with Naandi Foundation and GAIN, will be used to supplement the Andhra Pradesh government’s midday meal programme for 1.2 lakh school children. ‘’This is in line with Britannia’s central theme of promoting a healthy lifestyle,’’ says Mr Neeraj Chandra, VP, sales, marketing & innovation.

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

Kishore Biyani reshuffles top management with an eye on Future

KISHORE Biyani’s Future Retail, India’s largest retail house, is undergoing a major restructuring exercise to gear up for competition from the likes of Reliance and Bharti-Wal-Mart. Mr Biyani’s cousin, Rakesh Biyani, is taking over as head of the retail business from him and will be responsible for the four main retail formats of the company—Big Bazaar, Food Bazaar, Central and Pantaloon—each of which will function as independent profit centres with new operational and finance heads. So far, Kishore Biyani was directly looking after these businesses. All existing new businesses like Home Solutions, Depot, Wholesale Club and all future joint ventures and alliances will be under Damodar Mall, who will take charge as the head of incubation and innovation, and will report directly to Kishore Biyani. In addition, the heads of the group’s other four verticles—Future Brand, Future Capital, Future Media, and Future Logistics—will directly report to Mr Biyani. When contacted by ET, a Future Group spokesperson confirmed these developments and said, “As we grow, there is a need for accountability and such restructuring will ensure better top line and bottom line growth.” With the restructuring in place, Future Retail’s flagship venture Big Bazaar will now be headed by Rajan Malhotra. The two other important businesses of Future Retail—Central and Pantaloon—will be headed by Vishnu Prasad and Sanjeev Agrawal, respectively. This restructuring will free Kishore Biyani from day-to-day operational responsibilities and will enable him to focus on the big picture.


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

Retailscape Is Now All Set To Cash In On The Growing Retail Boom In India

PROFESSIONALS infected with the entrepreneurial bug and deciding to take the plunge is by now the most oft heard news. But what’s different about Manish Shukla, founder of Mumbaibased Retailscape, was his decision to set up a retail strategy, design and merchandising outfit to enable brands to work closely with the general trade — millions of shopkeepers and outlets dotting the Indian retail landscape. The initiative may look a tad surprising, given that today, modern trade is the flavour of the day and everyone seems to be predicting the demise of the corner shop. But Shukla after having invested nearly a decade in building his outfit knows that brands will need to work even more closely and help them upgrade. And here’s where he believes Retailscape fits in.Armed with an MBA degree, Shukla’s career followed the usual trajectory. Working with JWT, Gillette, Bausch & Lomb and Coca-Cola India, Shukla learnt the ropes of brand marketing. However, it was his stint at Coke as head of merchandising which exposed Shukla to the kind of work done on retail and merchandising globally. On a study tour to Mexico in 1995 to understand why the country has the highest per capita consumption of soft drink in the world, Shukla noticed that even people living on the street were consuming Coca-Cola. “I did a retail study on how Coke was an essential part of their daily life and similarly developed a programme for India. However, people here were not ready for it,” says Mr Shukla. Having seen how retail and merchandising could increase offtake, he began looking for a someone who could offer the same expertise in India. What he found was that there was no one. There was a vacuum and Shukla decided to fill it by starting his own outfit in 1996. Initially, it was consulting MNCs like HLL and Pepsi on retail plans for brands like Kwality Walls and Pepsi. On Kwality Wall, Shukla recollects that he recommended the use of tricycles and push carts to sell an impulse purchase item like ice cream. “This we did ten years ago and today nearly 75% of Kwality Walls sales now comes from tricycles and push carts,” he states. His success with HLL and Pepsi meant that word soon spread and brands like Bharat Shell, Bacardi, Parker Pens, Heineken and Evian to name a few wanted to avail of Retailscape’s services. Shukla says one of the challenges he faced initially was hiring people as work was pouring in. “No one in the industry had expertise, so I had to pick up people from backgrounds like sales, FMCG and event management and train them.” From a one-man operation, Retailscape today has a total headcount of nearly 80 employees across India.From pure strategy, Retailscape ventured into design and execution as well. Shukla say that through out the focus has been helping brands upgrade their value proposition towards the general trade. “We have done work for the modern trade, but while organised retailing is growing, the largest chunk of business still comes from general trade. So, even if modern trade becomes 15% of the total trade in the years to come, 85% still comprises of the general trade,” he says. So the work involves enabling companies understand how to leverage the general trade by raising their benchmark. Initiatives like Super Value Stores and Unicare programme conducted for HLL involved upgrading the grocer outlets and chemist stores through signages, planogramming and proper layouts. Retailscape, from a single office in Mumbai, has today ramped up to branches across the major metros in India. And using a hub-and-spoke model, it has created a network where it can reach nearly 30 cities across the country. “And all this has been done because the clients want to take our services across India,” he says. Shukla states while there is a need to acquire new clients, the focus more importantly is to retain clients like LG, Motorola and HLL by continuously offering them more and more services. “From strategy to doing retail audits to design and execution, the entire business model is geared towards meeting the clients’ requirement. From a turnover of few lakhs in the beginning, Retailscape today has a turnover of Rs 5 crore and is expected to grow almost 100% in the coming time.While Retailscape is on a fast growth track, Shukla has another ace up his sleeve. A retail academy which will be the one stop retail resource centre for independent and small retailers. For this, Shukla is sewing up an alliance comprising of knowledge inputs from IIM-A, technology from IIT Powai, various retail associations across the country and companies. “The idea is to develop relevant content and infrastructure which will enable the small retailers stand the onslaught of modern trade and the resultant changes it’s bringing to the marketplace,” he states.

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

Friday, March 23, 2007

THE FRESH (RETAIL) REVOLUTION IN INDIA


The once ubiquitous push-cart vendor’s days look numbered. Many of the big retail players are setting up fresh fruits and vegetables and daily needs stores close to your homes, with innovative products and convenient options like shopping on the phone

As you enter the Reliance Fresh store on Coles Road in Bangalore that opened on Thursday, amongst the first things that catch your eye is this whole range of trays on a rack, neatly packed with cut vegetables. There are cut vegetables for English salad, for Mexi, spicy corn salad, for sambar. For harried working couples and lazy cooks, there are also options like cut vegetables for pulav, for Chinese fried rice. For those who hate peeling pineapples, there are peeled pineapples nicely wrapped in thin plastic filament. For those who want a quick bite of a watermelon, but don’t want to buy a full watermelon (which is typically the only option you have), there are similarly wrapped watermelon slices. The rest of the airconditioned and neatly arranged store, with nearly 150 varieties of fruits and vegetables, is equally distinctive. Till now, the fruits and vegetables section in organised retail formats have constituted a small fraction of the store space, the only exceptions being Namdhari Fresh, and cooperative initiatives like Hopcoms and Safal. In Reliance Fresh, this proportion is 40% to 50%. In Spencer’s Express — part of the RPG Group’s Spencer’s Retail — which too opened its first store in Bangalore this week in RT Nagar, this proportion is 40%. It goes up to 75% if you include all perishable items like milk, paneer, idli batter and fresh flowers, says Spencer’s Retail vice president (marketing) Samar Sheikhawat. The idea of this emerging retail format, as you perhaps guessed, is to tap into your daily needs, and wean you away from the local vegetable seller, grocer and push-cart vendor by providing a better ambience, a wider range of products, innovative offerings and the assurance of quality. A host of players — Heritage Foods, Fabmall/Trinethra and Subhiksha, apart from Reliance and Spencer’s — are now beginning to set up these neighbourhood stores of an average size of 2,000 sq ft to 3,000 sq ft (the traditional kirana store is no more than 100-500 sq ft). Since they are smaller than supermarkets, they find it easier to find locations closer to your homes. S Jagdish, vice president (retail) in Heritage Foods, says fruits and vegetables constitute about 22% of the average monthly household consumption expenditure in urban areas of Rs 4,300. Food and groceries as a whole accounts for about 50% of the monthly expenditure. “This is the rationale for us setting up exclusive food and grocery stores, with at least 30% of space reserved for fruits and vegetables,” he says. Greater options Most players are trying to build distinctiveness by offering a wide range of products. In traditional stores, you wouldn’t find more than 30-40 varieties of fruits and vegetables. “Reliance Fresh will have some 150 varieties,” says Gunender Kapur, chief executive of Reliance’s foods business. There are products you would normally not see, things like Chinese cabbage, jalapeno, broccoli, American corn, colour capsicum, avocado and anchovies. There are both packed and loose options. About 80% of buyers still prefer the loose option, says Spencer’s Sheikhawat. Most Indians still like to touch and feel the products. Some customers are wary of packed products partly because they are seen to perish faster. When the vegetables breathe, they cause humidity inside the pack that could lead to fungal growth. “But there are others who think fewer people would have touched the packed stuff, so they prefer that. Besides, it’s very convenient for those like working couples who are in a hurry,” says Sunil Chandran, chief executive (customer operations) of Reliance (Karnataka). Reliance has thin plastic bag rolls around the store which customers can pull out to put their vegetables or fruits into. There’s even a weighing scale next to the racks for anybody who wants to check the weight before going to the cash counter. Most are planning to offer the home delivery option, and even of taking orders on the phone. “But phone-ordering will require us to build a lot of confidence in people’s minds about our quality,” says Heritage’s Jagdish. Competitive prices The prices in the newer stores are competitive with general market prices. In some cases, it is actually lower, but whether these will be sustained remains to be seen. Most of these players eliminate part of the ‘middle-men’ costs and reduce wastage by handling the products better. But against these benefits are the signficantly higher infrastructure and retail costs, compared to those borne by the roadside vendor. The cut vegetables are likely to offer higher margins. While shredded carrots are sold by Reliance in a packed form at Rs 3.60 for 250 gms (or Rs 14.40 a kg), the same carrot in its loose form is Rs 11.50 a kg. Company officials say that part of this difference is on account of greater wastage when a shredding machine is used. Farm connect Most players are investing heavily in backend infrastructure and supply chain. There are collection centres across the state, where farmers come and deliver the produce. Spencer’s has its own huge farm in Hoskote. There are processing centres and distribution centres closer to the store locations. The processing centres are where the products get cut and cleaned, most of those operations untouched by human hands. Big investments have gone into setting up cooling facilities — in every location and in the transport vehicles — to minimise wastage and increase shelf-life. “Normally, a lot of the capsicum and tomato are broken in transport. But we provide crates to farmers, which ensure proper handling,” says Chandramouli, head of agri-business in Reliance (Karnataka). THE OUTLETS Reliance Fresh: Koramangala, Banashankari, Indira Nagar, Frazer Town, Malleshwaram, Rajarajeshwari Nagar, Basveshwar Nagar, Modi Hospital, Mahalakshmipuram Layout, Mathikere, Hebbal Kempapura Spencer’s Express: RT Nagar

courtesy:timesofindia

For more on Retail India visit www.retailindia.tv

Retail biggies’ surplus takes escape route to wholesalers

YOU have heard of yen carry trade. Now showing the retail ‘cash-n-carry’ trade. Mukeshbhai Chhadwa, a wholesaler who also runs a retail shop in Masjid, was witness to a curious sight a couple of months ago. Tempos carrying extra cases of ketchup, condensed milk, baby foods and other such products — the goods made by companies like HLL, Dabur, Nestle and Heinz — were doing the rounds of the wholesale market, selling at a discount even to the wholesale prices. Typically, wholesaler gets the best prices from the manufacturers. Soon the penny dropped. These goods were essentially excess inventory from companies in the modern organised retail. Says Mr Chhadwa, “I didn’t want to buy these products as my sales and demand from the customer are fixed. Besides, in areas like Masjid, it’s difficult to sell the kinds of items like condensed milk.” Unknown to some companies and — if some wholesalers are to be believed — with the tacit understanding of other companies, a parallel, informal cashand-carry market is taking shape. Both organised retailers and the stand-alone formats in Mumbai have been regularly moving stock back into the retail market. According to sources in the wholesale market, truckloads of goods come at night to Crawford Market and Masjid, but sometimes even individuals come in from outside Mumbai with two-three cases by train so they can avoid octroi. This happens predominantly with FMCG categories like foods and personal care. The scale of these operations isn’t small. Says a wholesaler who doesn’t want to be identified, “Every month we’ve bought goods worth Rs 30-40 lakh from the people who dump it back into the channel. There must be at least 50 wholesalers and semi-wholesalers doing the same.” This implies that goods worth Rs 15-20 crore are re-routed every month. Says former CavinKare COO KS Ramesh, “Dumping stocks back into the channel is a regular method to get rid of the excess inventory. But it’s mainly companies that don’t have a strong management direction that would let this continue.” Heinz India CEO Nilesh Patel said that he wasn’t aware of this but he was insistent that it wasn’t the company’s doing. Says Mr Patel, “This practice isn’t something that the company encourages. At the end of the day, both the small retailers and the consumers are getting hurt, and the brand suffers as well.” A reply from HLL to ET’s queries said, “There are adequate controls on our trade schemes and plans. The inference drawn is incorrect and speculative.” It’s not difficult to see where this comes from. Many companies offer trade discounts to both organised retailers as well as stand-alone formats. Typically, the modern trade including retail chains like Big Bazaar, Foodworld as well as the stand-alone self-service stores get a trade discount of up to 4% on FMCG on an average. For example, a jam costing Rs 100 to a kirana store will cost the big chains Rs 96 or less. This is where the arbitrage opportunity shows up. The big retailer sells his ‘unsold’ stock to the wholesaler at Rs 97. The wholesaler sells it to the kirana at Rs 97.5. The kirana guys, who would have otherwise had to buy the stock at Rs 100 and sell it to you and me at Rs 102 and make a profit of Rs 2, is now able to make Rs 4.5 per bottle of jam. This is great for everyone. The big retailer clears his unsold stock and keeps Rs 1 per bottle. The wholesaler makes 50 paise risk-free profit and the kirana person makes an additional Rs 3.5, which is also risk-free. Sometimes, discounts increase substantially if there are promotional offers running in retail stores. This is when huge stocks are then bought and dumped into the wholesale and semi-wholesale market in Masjid and Crawford Market in Mumbai and the price differential is huge between MRP and the actual price sold. For instance, according to a wholesaler, a hypermarket was offering Heinz Ketchup for Rs 49 for 1 kg bottle, whereas the MRP was Rs 85. The hypermarket shipped cases over to Masjid and sold them at exactly Rs 49 per bottle. Says a wholesaler who doesn’t wish to be identified, “I bought 150 cases of the ketchup. Local retailers bought these for Rs 52 per bottle, but they wouldn’t have got it for less than Rs 72 otherwise.” Another cause for this is the trade push involved, specially for stand-alone modern format stores. Companies often stuff the channel to show higher product sales. A Mumbai-based stand-alone retailer says, “Company salesmen often tell us to buy 20 cases of a certain product when we can at best sell only 10. I have to put the remaining 10 back into the retail channel, and retailers buy from me.” Eventually, encouraging such arbitrage will show up in the company’s bottomline. While sales volumes might continue to rise, the net revenues would actually be lower, since very few of the goods would sell at MRP. In fact, retailers do attest to the fact that a company, if diligent, could easily detect faults in sales volumes, specially if small retailers do not require fresh stock. But the stand-alone retailer says, “No company salesperson has even asked to see the monthly sales figures from my store.” There have been stray cases of companies actually transferring salespeople after they’ve stuffed the channel, but the retailers claim that these cases are few and far between, and sales targets are still most important, no matter how they’re met.


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

Durable retailers target smaller formats , Tata’s Croma & Videocon’s Next In Talks With Outlets For Revenue, Stores Growth

IN A bid to ramp up revenue growth and stores growth, national durable retail chains like Croma, a Tata-Woolworth joint venture and Next, led by the Videocon group, are learnt to be in discussion to buy out several smaller retail outlets across the country. The large formats are in talks with players like Sumaria, Sony Mony and Kohinoor in Mumbai, Shubham in Bangalore and Shah’s and TMC in Hyderabad although expectations of high valuations may delay deals, sources said. However, relatively larger chains like the Vijay Sales in Mumbai and Vivek’s in Chennai are believed to be opting for private equity investments to expand and eventually tie up with international players like Dickson or a Best Buy. Organised retail chains like Next, Croma and Vijay Sales did far more brisk sales than the smaller players during Gudi Padwa this year (traditionally considered an auspicious time to buy). Industry experts say consumers now increasingly prefer to make purchases in larger specialised formats which have put the smaller players under tremendous pressure for volumes. According to industry estimates, organised durable retailing is expected to grow from 4% last year to over 10% this year while the overall industry growth is pegged at 8%. “Given that the business is about scale, we are looking at acquisition possibilities with like-minded chains. But at the same time we are equally focused on setting up new outlets across the country” said Croma CEO Ajit Doshi. National players are stepping up expansions at a time when heavy-weights like Reliance, Godrej and Pantaloon’s Home Solutions Retail are setting up specialised national durable retail formats with a focus on high-volume business models Being price-competitive in a technology-led market, understanding the Indian consumer’s requirements, handling the back-end supply chain and distribution systems is a complex process especially given the country’s geographical diversity. Currently smaller chains have realised they need to expand operations. Says Kohinoor proprietor Ram Mewani: “Unless we scale up and get competitive, it would be tough to be in business in the long run. We are open to tie-ups but we need to get the right price.” “We are in discussions with smaller chains for a complete buy-out. It is crucial to expand faster to keep growth rates high” said a senior official from Next. Spends in promotions and offers are shifting to retail formats, which are bargaining for higher margins from manufacturers.


NEW GAME BEGINS IN RETAIL
Target formats: Sumaria, Sony Mony and Kohinoor in Mumbai, Shubham in Bangalore and Shah’s & TMC in Hyderabad

Smaller players under pressure as consumers prefer to shop in larger formats

Larger chains like Vijay Sales in Mumbai and Vivek’s in Chennai may opt for pvt equity investments to expand and later go for tie up with international players

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

Top 5 AD Duration on Television for Brands

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

iLabs invests Rs 23 crore in pharma retail chain MedPlus

Private equity firm iLabs has invested Rs 23 crore in Hyderabad-based pharma retail chain MedPlus, formerly branded as Aushadhi. MedPlus will utilise the funds for expanding its operations and venturing into health care clinics and laboratories in residential areas.

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

Luxor to open 100 designer stores in four years

Writing instruments maker Luxor will open 100 retail outlets across the country in the next four years at a total outlay of Rs 100 crore. “The objective of opening such stores is to offer customers a complete range of the luxor products ranging from Rs 5 to Rs 50,000,” company’s executive director Pooja Jain said after launching second outlet under the brand name Luxor Signature. She said the company would reach out to customers of all age groups by offering them an interactive and global shopping experience through these outlets.

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

Sony PS3’s India launch on April 27, to cost Rs 39,999

Consumer electronics major Sony on Thursday said it will launch its much-awaited gaming console Playstation 3 in India on April 27. The company has priced the 60 GB model of its gaming console at Rs 39,990, Sony said in a statement. Additional gaming titles from publishers including Electronic Arts, Namco Bandai and Sony online Entertainment would be available for users at a price of Rs 2,799 per game.

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

Fieldfresh to supply to retailers next fiscal

Fieldfresh Foods, the Bharti group’s joint venture with UK’s EL Rothschild, would begin supplying to domestic retailers next fiscal, apart from upping the ante on exports. The company did some trial exports to UK, Europe and the Middle East this fiscal. FieldFresh has about 4,000 acres under cultivation in Punjab and Maharashtra where it grows wheat, rice, legumes, grapes and mangoes. “We did trial exports to Europe, UK and the Middle East this year. We would start sizeable exports next fiscal and also supply to domestic retailers,” said Bharti Enterprises vice-chairman Rakesh Bharti Mittal. Asked if the Bharti-Wal-Mart retail venture would get preference over other retailers, Mr Mittal said, “We would like to supply to all retailers and Bharti-Wal-Mart would be one of them.” FieldFresh plans to start trial farming of vegetables in Himachal Pradesh and European carrots in Rajasthan next fiscal.

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

Gitanjali Group launches Sporteratti range

Integrated diamond jewellery manufacturer, Gitanjali Group, has launched a sports range, Sporteratti, to coincide with the ongoing cricket World Cup. The sports collection consists of a wide range of pendants, depicting popular sports played in India. The jewellery is created in gold and diamonds set in black and transparent polymer. The collection also features a diamond studded cricket ball, which would be presented to the best Indian player as well as the best international player of the ongoing cricket tournament.

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

Reliance Retail to open 11 stores in Bangalore

Reliance Retail is all set to expand its operations in South India with the opening of 11 `Reliance Fresh’ pilot stores at one go across Bangalore on Friday. Company executives said more stores would be opened in the city in the near future. The company’s president, foods business, Gunender Kapur and chief executive, customer operations Sunil K Chandran said it’s looking at opening Reliance Fresh’ stores in the cities of Mysore, Hubli-Dharwad, Belgaum and Mangalore in Karnataka in the second phase later this year. “We are rolling out to all parts of the country as back-end infrastructure comes up,” Kapur told reporters here. “We are planning to be in all urban parts of the country”.

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

Commodity trading gets a boost; no VAT on foodgrains, tea in Maharashtra Budget

MAHARASHTRA Budget for the year 2007-08 offers some good news for the commodity market players. From April 1 all commodity market transactions will attract no stamp duty. And what’s more, the duty concession has been offered with retrospective effect. Now, commodity market transactions would enjoy tax breaks that have already been offered to capital market deals. Last year, the state’s decision to levy stamp duty on capital market transactions being recorded in Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) irrespective of the geographical location of the participants had created quite a flutter in the market. After loud protests that exposed the irrationality behind the decision, the state government withdrew it. Mr Patil on Thursday acknowledged the difficulty the traders faced in the past. “The transactions in commodity markets and capital markets are now carried out on automated systems. In some instances both the broker and the purchaser are from outside the state,” he noted. Recalling his decision not to levy stamp duty in such instances, Mr Patil said: Exactly the same difficulty arises regarding transactions in the commodity markets. I have therefore decided that these types of transactions in the commodity market will be exempted with retrospective effect, from the same date as applicable to the capital market. Mr Patil also spared foodgrains, flour, tea and a few other essential commodities from VAT for another six months.

Courtesy: EconomicTimes

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

Eat, trade, but no dancing in the bar ,Cigarettes, liquor to cost more

THERE’S bad news for smokers, tipplers and tobacco chewers in the state. The Maharashtra Budget tabled on Thursday has levied a 12.5% value added tax on tobacco. However, bidis have been spared the tax. From April 1 this year, prices of all tobacco products, except bidis, will go up by 12.5%. “To enable states levy VAT on tobacco and tobacco products, a bill proposing amendments to the Additional Duties Excise Act as well as Central Sales Tax Act has been passed by Parliament,” state finance minister Jayant Patil said before announcing the Budget. The move to keep the bidi out of the tax net may have been driven by the fact that a senior NCP leader — the party Mr Patil belongs to — is one of the country’s big bidi players. Mr Patil rejected the insinuation that bidi was left out of the tax net because of political compulsions. “Normally poor people smoke bidi, and hence the tax concession,” he justified. However, a similar concession has not been granted to country liquor, largely consumed by the poor. Mr Patil’s budget has changed the ratio of manufacturing cost to MRP levied on all alcoholic beverages. The rate of minimum excise duty on country liquor is Rs 55/proof litre, and will rise to Rs 60/proof litre from April 1. In the case of IMFL, the MRP is related to manufacturing cost. At present, if the manufacturing cost is Rs 88 or less per litre, the MRP has been capped at four times the manufacturing cost. Mr Patil has raised the limit to Rs 92/litre or less. For fermented beer, the excise duty is equal to the manufacturing cost while the MRP is 3.5 times the manufacturing cost. Mr Patil has left the MRP for beer untouched, while raising the excise duty to 1.25 times the manufacturing cost.


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

Dabur India set to buy 60% in Singapore co for Rs 675 cr

IN ONE of the largest overseas acquisition deals in the FMCG space, Dabur India is close to acquiring more than 60% in Singapore-based consumer goods company Unza Holdings for Rs 600-675 crore. If the deal is signed and sealed, it will boost Dabur’s consolidated sales by 22% and make it the third largest FMCG company after HLL and ITC. Dabur India group director PD Narang declined comment on the deal. Unza has 48 brands in its portfolio and a presence in five markets — China, Singapore, Malaysia, Hong Kong and Indo China. The $150-million company is owned by private equity funds Actis, Standard Chartered and the company management with a 30% stake each. While the deal will give the two PE funds an opportunity to exit, it will give Dabur access to 58,000 retail outlets and five manufacturing locations in the Asean countries, including one in China, all of which can serve as low-cost hubs for making Dabur products. At the same time, Dabur will be able to launch its ayurvedic range in the Asia Pacific, which includes the high growth markets of China and Vietnam. The takeover will give the ayurvedic company entry into categories such as laundry detergents, skin care, fragrance, toiletry, splash colognes and hair colour, beefing up Dabur’s domestic portfolio as well.


Unza is among top 3 consumer goods cos in Malaysia
SOMEof Unza’s prominent brands are Enchanteur (toiletry), Eversoft (skincare), Romano (personal care for men) and MaxKleen (detergent). Unza set up shop 27 years ago as a marketing company with one brand. With a workforce of 4,100, it’s now among the top three consumer goods company in Malaysia and among the top 10 in Vietnam with 9% and 6% market shares respectively in the personal care category. Dabur’s consolidated sales are in the region of Rs 2,300 crore and if Unza’s Rs 650 crore ($150 million) are added, it will boost Dabur’s consolidated topline to nearly Rs 3,000 crore. The appetite for overseas acquisitions is growing larger among Indian companies striving to make it big globally. Even those who have seldom attempted an acquisition in the past, such as Godrej Consumer or Marico, have bought brands abroad. Godrej Consumer bought UK’s Keyline Brands, an FMCG company with the Erasmic and Cuticura brands in its portfolio. Last year, Marico acquired haircare brand Fiancée in Egypt from the Ready Group which gave it easy entry in Egypt’s Rs 170-crore hair care market.
Courtesy: EconomicTimes
For more detail on Retail India visit: www.retailindia.tv

Thursday, March 22, 2007

Click before you buy

Social Retailing’s In; Buyers Share In-Store Trial Pictures

MOVE over social networking — it’s time for some social retailing. A new in-store experience that combines social networking and shopping, social retailing is the latest fad among the world’s top-end retailers. Social retailing technology uses an in-store intelligent mirror that can send photos and videos of shoppers in outfit options to their family or friend’s e-mails and mobile phones for some real time feedback. So, even if your significant other couldn’t join you for the shopping, she can see what you are buying, or well, trying. Social retailing will allow customers to see what others have purchased. Retail chain Bloomingdale started using this last week in its stores in the US. While retailers in India are keen to adopt new technology, something like interactive mirrors is too futuristic for them. “Competition will drive them to adopt new technologies both in the back end and the front end, but it’s still early days,” says Technopak chairman Arvind Singhal. Social retailing has been developed and trademarked by US-based IconNicholson and was first demonstrated at the ‘Store of the Future’ conference in the US a few months back. It allows an interactive mirror placed outside trial rooms that streams high-definition videos of shoppers modelling clothes to mobile phones or computers.

Social retailing may take time to catch up in India
ABOUT the use of social retailing in India, Pantaloon Retail MD Kishore Biyani told ET, “We have seen the social retailing product. It is interesting, but in India, shoppers tend to come with their families. It may not be very relevant immediately in India. However, we are looking at other technologies like predictive analysis, mobiles as ecommerce tools, and using artificial intelligence to understand customer behaviour.” Indian retailers will first tackle the back end before getting to the front end. Also, retailers don’t spend too much on technology. Says Mr Singhal, “India is still not that tech-savvy. For technology applications in retail, there has to be a certain scale. Many retailers do not have even the basic ERP and supply chain systems. Most investments will go in the back end before they target the front end. Some retailers are experimenting with cell phone-based coupons that can be redeemed at retail outlets.” Technology spends are typically less than 2-3% of the turnover for Indian retailers. Says Balaji Jagannathan, country director, Sybase India (a software integration company), “Technology adoption by retailers still has a long way to go, particularly at the front end. Airlines have, however, been at the forefront of change. Some airlines such as Jet Airways and Kingfisher are using hand-held terminals for quick issue of boarding passes to travellers who don’t have check-in baggage with them.” Hopefully, social retailing will also get there soon.
Courtesy: EconomicTimes
For more detail on Retail India visit: www.retailindia.tv

India Has Been Unable To Create Youth Brands



We have had Thums Up, Titan, Karizma
NO. India has seen the creation of some great brands for the youth over the past few decades. Those of us who were in our teens in the late 70s and early 80s could hardly think of being ‘cool’ without a Thums Up in hand. The list is long and exciting: Lakme and Elle 18, launched by the Tatas for the teenybopper crowd; Titan Fast Track; Hero Honda’s Karizma and Bajaj Pulsar in two-wheelers, Limca, launched by the Parle Group and subsequently acquired by Coca Cola. Kingfisher from the UB Group stable has of course, acquired iconic proportions among youth within, and beyond, India. Another brand which is in the making is Café Coffee Day, signifying a great gathering place for youth. And why not? India is a young country with over 60% of the population being below 30 years of age. It is critical for companies to talk to the young. They are after all, very early adopters and must have their own brands. Brands like Thumps Up, Limca and Lakme — all of which were born in the 1970s as a result of visionary thinking of their founders — were created specifically to reflect the ‘Can-do’ attitude of young Indians. Each of them provided a wellrounded experience and transcended geographical borders in their appeal. The fact that some of them have been acquired by MNCs to bolster their portfolios is testimony to their enduring nature. The two-wheeler segment is arena that abounds with examples — be it TVS with its Scooty, Hero Honda with Karizma or Bajaj with Pulsar. All of them have created distinct positions in the youth’s mind. What each of them play up are styling and maneuverability. Catering to young college-going students — for whom this was often their first bike — they are also fuel efficient with easy financing options, keeping in mind limited budgets of their Target Audience. Karizma and Pulsar are for youngsters wanting to make a lifestyle statement — sleek and stylish with huge ‘flaunt’ value. Finally, there is no dearth of youth brands in the telecom sector, a sector that itself is relatively young. It is the country’s young who are the first adopters of telephony. Airtel keeps introducing for its young audiences offerings like its MTV Card and Magic. To sum up, the commonality in all youth brands is that they have delved into the mindset of the youth, gained distinct insights and tailor-made their offerings around them. This was then supplemented by great advertising, reaching out to the youth through youth channels. In addition, they were backed by 360 degree activation around youth agglomerations – college fests, multiplexes, concerts, and in recent times, reaching out using the new media like the internet. I therefore, rest my case that India and Indians have been very successful at creating youth brands.
The writer is director marketing, Nokia India
Maggi, Heinz, Puma are surely not local brands
Shailesh Chaturvedi , YES. The “Don’t ever use what Dad is using,” theme has always been at the heart of aspiration of the youth segment. In my college days in the late 80’s, we wore Proline Tshirts, Flying Machine Jeans (FU’s jeans were cooler still), Woodland rugged shoes and looked into Titan watches while waiting for girlfriends. Most of these Indian brands have, unfortunately, not kept pace with the times and have become papa’s brands while Nike/Tommy/Diesel continue to retain parts of their young appeal. Let’s cut to another age. My six-year-old son’s favourite brands are Maggi Noodles, Heinz ketchup, Puma shoes. There are hardly any Indian brands in his preference set (other than Haldiram Bhujia and Kaju Katli). In a decade from now, he will enter the youth segment with hardly any Indian brands in his preference set. When one analyses the trends of the last two decades, one realises that India has not been able to create or sustain youth brands. In my industry (apparel and lifestyle products), jeans and sneakers are two very important categories for the youth. Unfortunately, there are hardly any Indian brands in both these key categories. While Nike/Adidas/Reebok remain leading shoe brands with youth, Levi’s/Pepe/Giordano may be strong brands with youth in ‘popular priced jeans’ segment, while Diesel, CK or Tommy Jeans are the important jeans brands in the ‘aspirational’ jeans segment. There are no important Indian brands to talk about here. Reasons for inability of local brands to connect with youth segment, especially in India, may include the following:
The issue of sustainability:
Youth segment demands constant innovation. Many Indian brands like Proline, Titan, Woodlands, Flying Machine, Liberty shoes started with energy and unique ideas but most of them could not sustain the tempo and the youth brigade migrated to the latest brand on the horizon with the cooler attitude.

The fear of loss of existing core consumers:
As the existing core users of a brand start to age (‘Papa-isation’), their tastes start to change gradually. At the same time, the youth of the time may demand a complete new makeover.

The common language:
Tech-savvy youth endorse a common language in this information age. They follow the same role models, watch the same TV programmes and play with the same games on their wireless game consoles.

Older youth Icons in India:
In most polls on youth icons, one sees the names like Amitabh, SRK, and Sachin. They have already grown old. These idols favour more mature brands.

The writer is CEO, Tommy Hilfiger Apparel, India. These are the writer’s personal views and do not reflect the views of his organisation.

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

Wal-Mart going for employer branding

MIRED in several employee-related controversies in its home country, USbased Wal-Mart is in search of an able hand which can help build its image amidst Indian employees. The world’s largest retailer is in talks with advertising firms for an employer branding exercise pointing to the fact that Wal-Mart wants to wants to position itself as an employee friendly organisation in India. According to industry experts, employer-branding as a concept has caught up in sectors that need to recruit in large numbers and at the same time facing a huge talent crunch. In a bid to woo and retain talent, companies in the attrition-hit IT sector are aggressively doing employer branding. Retail is expected to be the next sector to join the bandwagon, as it needs to recruit a large workforce. The cash & carry business, where Wal-Mart will invest in a JV with Bharti Enterprises, is human capital intensive. Sources say that to set up the entire pan-India operations which includes sourcing, logistics and supply-chain, the company would need over 2500 people at various levels. According to sources, some representatives of the company have already met 2-3 well-known creative agencies in India. Employer branding would be particularly important for the company in India, as organised retail, as well as the cash & carry business, is in its infancy and there’s a major talent shortage at entry and mid-management levels. The company is learnt to be particularly apprehensive about the high attrition level that the Indian retail sector is currently facing. The company perhaps fears that its global repute may cast a shadow once it goes into full-fledged recruitment drive in India. Internationally, on many occasions, Wal-Mart has been in the line of fire for violating labour laws in the US, Canada and some European countries. In January 2006, the company had to pay $135,540 to settle federal charges that it violated child labor laws in Connecticut, Arkansas and New Hampshire. Still earlier, in March 2000, the company was fined $205,650 for violations of labour laws in one out of every 20 stores in the state of Maine, US. The company is also accused of lobbying with the Canadian government to introduce favourable changes in the country’s labour laws. Sources in the recruitment business in India, however, point out that this has not dampened the spirit of wannabe Indian Wal-Mart execs. “We have been getting enquiries about openings in Wal-Mart on a daily basis. The young Indian executives wants to get associated with the Wal-Mart name,” said an official in a Delhi-based recruitment firm.’’

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

Reliance Retail loses 2 top execs to Wal-Mart

Reliance Retail (RRL) has lost two senior executives to Wal-Mart signalling another round of hectic movements in India’s emerging retail sector. S Ramesh, head of buying operations at RRL is learnt to have put in his papers and joining Wal-Mart as head of sourcing operations. Another executive Abhinandan Shukla, looking after confectionery, is also learnt to have quit and headed for Wal-Mart. Sources said Wal-Mart is scouring the country for retail talent with attractive terms. Those who’ve got offers said that apart from the 30% flat hike over existing remuneration packages, the world’s largest retailer is also throwing its five-day-work schedule as a bait to lure talent. Many executives are finding it hard to resist as domestic retailers don’t offer such a condition. While Reliance Retail has a six-day work schedule, the Pantaloon group has six-day work schedule twice a month. While the Reliance Retail spokesperson declined comment, the Wal-Mart spokesperson said as a matter of policy, it does not comment on speculations about its recruitment plans. Sources said the war for retail talent would only intensify as Wal-Mart progresses on its business plans in India. “Though the US retailer is not known to be a good employer, even then Indians would like to work with it, for sometime at least, just to get the exposure.” However, S Ramesh who is learnt to be joining Wal-Mart (some say he would be a supplier to Wal-Mart through his own company) was initially heading Wal-Mart’s sourcing office in Bangalore and played a role in increasing Wal-Mart’s sourcing from India which currently stands at around $650 million. Another top executive slated to join Wal-Mart is the former chief marketing officer of Yum! India Arvind Mediratta. He would join the retail major as senior VP of Wal-Mart’s cash and carry business in April. Mr Mediratta would be reporting to Raj Jain who has been designated as president & CEO of Wal-Mart India.

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

UK retail major keen to invest in Rajasthan

In a bid to increase its presence in India, British property and retail major Liberty International plc Wednesday announced its plans to invest about Rs.10-20 billion in Rajasthan.
Liberty International, which has a joint venture in the country with apparel manufacturer Provogue, is a major FTSE-100 ranking UK-listed property business with investments of over eight billion pounds. The company focuses on premier property assets, particularly shopping centres and other retail, which have high potential, scarcity value and require active management and creativity. David Fischel, chief executive officer of Liberty International, met Chief Minister Vasundhara Raje here Wednesday and announced his investment plans.
The British firm had set up a joint venture with Provogue to develop and manage prime regional shopping centres for the 'growing organised retail sector'. Prozone-Liberty, as the joint venture is known, plans to initially build six shopping centres in India.


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

Expansion up the designer sleeve

The business of fashion should be business. And on day one of Wills Lifestyle India Fashion Week, some domestic buyers were doing just that even as the frocks came prancing down the ramp with slightly sluggish energy levels. Designers are talking business, which is good given that they rarely talk numbers. Says Sanjay Kapoor, managing director, Genesis Colors which owns the high fashion brands like Satya Paul and a multi-brand fashion store called Samsara, “For the financial year 2007-2008 we are planning to open 10 Satya Paul stores, which means that we will require 18, 000 sq feet carpet area just for one brand. Then, we will be opening five Samsara stores which is another 15,000 sq feet carpet area and three stores for luxury brands that we are bringing to India.” Talking more figures Kapoor says that a typical Satya Paul store would cost about a crore each and the company has earmarked about Rs 15 crore for retail expansion in this financial year. But fashion retailing isn’t a lost cause in India. Kapoor talks of a 100 per cent year-on-year growth in the last three years. Ritu Kumar, who has 28 retail outlets in India, of which six are store-in-stores, is looking for more space for her prêt line, Label. she says: “Finding store space is not easy and real estate is expensive.” Adds Amrish Kumar, director, Ritu Kumar: “Real estate inflation is making margins very difficult to accomplish. Fashion needs multi-brands outlet support and the available infrastructure doesn’t support fashion retail.” Other than space crunch, the fashion retail industry also faces a challenge in terms of trained manpower. Says Yatan Ahluwalia, director and head operations, Y&E Style Media, “There aren’t enough trained people who know how to sell luxury and fashion at the retail level. People at many luxury counters don’t know what they are selling.” Ahluwalia who has brought two brands, HOM and Susan’s Soaps & More, to India finds that he has to spend under Rs 20,000 on training a single sales person so that he can sell luxury and fashion the way it is done worldwide. But whatever be the case, it’s evident that fashion has come a long way from when it all began — with a handful of tailors and a lot of hype.

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

Tea Production, Consumption & Trade

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

Steel Authority of India entered into an agreement with Jaiprakash Associates for Cement Production

IN A first of its kind public-private partnership in the cement sector, Steel Authority of India (SAIL) on Wednesday entered into an agreement with Jaiprakash Associates (JAL) to form a 26:74 joint venture company to produce 2.2 million tonnes of cement. The venture will spend Rs 600 crore to set up the new plant, which would use slag generated from SAIL’s Bhilai Steel Plant (BSP) as basic feed for cement production. The JV has already signed a 30-year agreement with BSP for supply of slag. SAIL will hold 26% stake in the venture while the balance will be held by JAL, a SAIL press release said. It is understood the clinker and partial grinding unit of the plant would be located in Satna (MP) and slag cement would be made in Bhilai. The project is expected to be completed in 37 months. SAIL is also looking at using its slag generated from Bokaro Steel Plant for conversion to cement. A source said JAL may be roped in as partner in that venture also. SAIL’s foray into cement production is important as cement prices have shot up in wake of demand overshooting supplies. The country’s current cement production capacity is 165 million tonnes. About 30 million tonnes of new capacity is expected to be added in a couple of years. SAIL currently sells slag to cement companies through mediumterm contracts but the exercise is not enough for a total disposal of its stocks. The JV would enable the company for more productive use of the waste generated by it while producing steel.

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

Made-in-India BMWs from next week

THE India-assembled high-end BMW cars are set to formally roll out on March 29 at the company’s assembly facility near Chennai, when the plant’s operations are officially inaugurated. It will initially roll out the BMW 3 series from the new assembly plant, reports D Govardan in Chennai. BMW’s plant has come up in Mahindra Global City, about 40 km south off Chennai. The company has initially invested close to $26 million or Rs 110 crore in the plant, which will be used to assemble completely knocked down (CKD) kits, imported from Europe. It is expected to provide direct employment to about 200 people. “Trial productions have started since the third week of February and cars have been rolled out to achieve stabilisation of assembly process. To begin with, the company intends to roll out six cars a day,” company sources told ET. “At present, well over 90% of the components, except for seats and few other parts, are imported as part of the CKD kits. However, this is expected to be gradually reduced,” the sources added. Meanwhile, the company has also expanded and strengthened its dealership network in time for the roll out from India. It now has a total of eight dealers, covering major cities. Besides two dealerships each in Delhi and Mumbai, it has one dealer each in Chennai, Bangalore, Hyderabad and Chandigarh. “It is likely to expand this to Kochi, Kolkata and Ahmedabad,” sources said.


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

RPG’s Spencer’s opens new stores in Bangalore

RPG Group’s Spencer’s Retail, which currently operates 125 stores spread across different formats, has launched a new retail format store, Spencer’s Express in Bangalore.

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

Essar tech collaboration with Virgin

Essar Telecom Retail (ETRL) has tied up with the UK-based Virgin group for technical collaboration and brand licensing. Virgin will provide retail knowhow and consultancy services to ETRL, the Essar group’s telecom retail arm. “Virgin will provide expertise in the areas of branding, marketing, customer care, store operations and staff training,” ETRL CEO Rajiv Aggarwal said.

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

Gulf Air to add more cities in its flight path

With air services talks between India and Gulf countries slated for review shortly, premier middle-eastern carrier Gulf Air plans to add new destinations of Hyderabad and Ahmedabad and expand commercial ties with Indian airlines.

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

Samsung launches energy efficient refrigerators

Consumer durables company Samsung on Wednesday launched nine new refrigerator models in the frost free and direct cool range priced between Rs 15,500 and Rs 1,50,000. The company’s new range has been labelled as per Bureau of Energy Efficiency (BEE) norms for star rating which certifies electric products as per their energy consumption, Samsung India said in a statement.

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

RIM unveils BlackBerry 8800 for high-end Indian market

Research in Motion (RIM), the makers of smart phones BlackBerry, on Wednesday unveiled its high-end BlackBerry 8800 for the Indian market. Targeting the enterprise business executive, BlackBerry 8800 is the thinnest model from the RIM stable and the sixth of the model to be provided by service providers Hutch and Airtel, RIM vice-president (Asia Pacific) Norm Lo told reporters here.

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

Dabur Foods forays into fruit drinks segment

Dabur Foods, a company dealing in packaged food products, on Wednesday announced foray into the fruit drinks segment with the launch of Real Twist juices, a combination of Mango, Orange, Apple and Pineapple. “Real Twist will have three variants, Mango-Orange, Mango Apple and Mango pineapple,” CEO of the company Amit Burman told reporters after launching the product.

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

Centre moves apex court against Vicco’s products

The central excise department, which believes Vicco Laboratories’ products to be cosmetic and asked the company to pay Rs 9.09 crore as duty, has moved the Supreme Court against the Bombay High Court order that restrained it from recovering dues. The department had issued notices to Vicco demanding that it pay Rs 9.09 crore as excise duty for the period between April 2004 and December 2005 on the products — Vajradanti (toothpaste) and Vicco Turmeric (skin cream). It contended that these products were being marketed as cosmetics in trade parlance and thus cannot avail benefit of Modvat Credit. Also, the products were not manufactured exclusively in accordance with the formulae described in authoritative books specified in the First Schedule to the Drugs and Cosmetics Act, 1940, or Homoeopathic Pharmacopoeia of India or the US, the UK or Germany, it argued. The matter will be heard on March 26.

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

India's Essar ties up with Virgin Group for mobile retail chain

India's Essar Telecom Retail, a unit of the Essar group, has tied up with Virgin Group for brand licensing, technical and consultancy services for its mobile phone retail chain, The Hindu Business Line reported. According to the report Essar Telecom Retail will invest 250 mln usd over three years to set up a chain of 2,500 mobile retail stores across 600 cities in India. Virgin will provide expertise in branding, customer care, store operations and staff training, and will be paid royalty for use of its name, the newspaper said.

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

Wednesday, March 21, 2007

The Unfaithful Stories of Indian Stars


Ash, SRK, Sachin, Dravid, Ganguly... ...All Have Switched Camps Unabashedly

IT’S the ultimate nightmare for marketers. While brand ambassadors plead consumers to remain loyal to brands, they are increasingly turning fickle themselves, switching brand loyalties at the drop of a hat. Cricketers are the most unfaithful.Team India's leading men—Sachin Tendulkar, Sourav Ganguly, Virender Sehwag and Rahul Dravid—have all changed camps unabashedly. Take Virender Sehwag, Pepsi's new endorser, who until late last year was gulping Coca-Cola. Batting maestro Tendulkar, who is now seen peddling ITC Sunfeast's Sachin Fit Kit biscuits, was the face of Britannia for a long time. Bengal tiger Sourav Ganguly shifted dens when he moved from Korean consumer electronics major LG to Chinese electronics brand TCL in January. Dada is not new in the game of brand-switch, having shifted from Coca-Cola to Pepsi earlier. Captain Rahul Dravid, who padded up for Team Samsung till last year, is now championing the cause of Sansui.

Creating confusion?
DOESN'Tthis switch create confusion in the consumer's mind? Says Percept D'Mark celebrity management services VP Vinita Bangard, "It depends on the extent to which a brand uses an endorser. The confusion in a consumer's mind would arise if the endorser is synonymous with the brand, which is not true in most cases." Explains Sansui COO Anil Khera, "Rahul Dravid was part of Team Samsung along with a host of other cricketers. When we decided to sign him, we factored in a time gap which we feel is enough to erase his association with the other brand in the consumers' mind."Cricketers are not the only fickle endorsers. Bollywood's reigning star Shahrukh Khan, who endorses Swiss luxury watch brand Tag Heuer, sported Omega at one point. Aamir Khan may be strongly associated with Coca-Cola today, but remember the classic Pepsi 'Sanjana' ad featuring Aamir, Aishwarya Rai and now-forgotten Bollywood actress Mahima Choudhary? Both Aamir and Ash are now part of camp Coca-Cola. Brands say the endorser-switch to the rival could also result from a change in its own marketing strategy. Says Britannia's marketing head Richa Arora, "To be fair to endorsers, they are not the only ones to switch loyalties, brand's requirements also change with time. Brand Britannia has changed over time and we have reduced the use of cricketers in our campaigns." Internationally too, celebs have switched brands over time. American tennis superstar Andre Agassi switched to Adidas in '05 after a 17-year long association with Nike. Or take French soccer sensation Thierry Henry, who plays for English soccer club Arsenal, last year switched from Nike to arch rival Reebok, now owned by Adidas. Last year, Swiss tennis champ Roger Federer also started sporting Rolex watches, after reportedly paying a termination fee to Maurice Lacroix.

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

Hutch, ICC at Loggerheads

Breach Of ICC Contract: Telecom Major Wants Sachin Ads To Be Withdrawn


HUTCH and International Cricket Council (ICC) are on collision course. Hutch, one of the four global sponsors of the ongoing World Cup, is likely to seek compensation from ICC for breach of contract for its failure in stopping Reliance Communications (RCOM) from using ace cricketer Sachin Tendulkar in its ad campaigns. RCOM has been endorsed by Sachin in TV, outdoor as well as press campaigns, which Hutch alleges goes against the contract entered into with ICC. Sources said that Hutch was writing a fresh letter to ICC, seeking details of action taken by the council in this regard. “If things don’t fall into place quickly, Hutch will ask for compensation,” said sources familiar with the development. Hutch, India’s fourthlargest operator, has paid millions of dollars for securing global sponsorship rights of the six-week tournament spread across nine Caribbean nations. “The global partner status was sold to us with an understanding that ICC has control on the activities of the players, and, therefore, can grant us exclusivity against endorsements by players for our competitors,” Hutch director (marketing and new business development) Harit Nagpal said. ICC assured Hutch that it was taking action to stop RCOM from using the ads. But this was immediately disputed by the Anil Ambani company. RCOM branding head Sanjay Behl said that ICC has not approached the company and that RCOM would not withdraw the campaign. “If our competitors have not been approached to cease and desist, then it is a serious issue and, apparently, we have paid for rights which ICC can’t enforce,” Mr Nagpal said. Hutch has been ICC’s global telecom partner for the past three years. RCOM, meanwhile, is cashing in on the popularity of the little master, who gives unlimited score updates to Reliance mobile users in his voice besides a host of other services. According to Hutch, this is a case of “ambush marketing”. Ambush marketing is a tool in a brand’s arsenal as it aims at creating a differentiation in a competitive marketplace by stealing the thunder from the campaigns of a rival, who is an official sponsor. ICC currently has deals with four global sponsors, Pepsi, Hutch, Hero Honda and LG Electronics. These deals will expire after the World Cup later next month. Reliance ADAG had earlier pulled out as one of the main television sponsors (for India) on Sony Entertainment Television for the World Cup. It is said to be negotiating global sponsorship tie-ups with ICC for 2007-13. Under the terms of their contracts, players are not allowed to endorse products that are in direct conflict with the ICC’s official sponsors for a period of 45 days before, during and after an ICC tournament is held. However, the world cup is already in its second week and RCOM has been using Sachin all this while. While ambush marketing is not new to the world of sports, the current case raises questions about the protection available to official sponsors of such tournaments. Ahead of the 2003 World Cup, the South African Government had passed a legislation that could land those engaging in ambush marketing into jail.

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

LG to foray deep into the kitchen in India

LG ELECTRONICS is expanding its home appliance business to capture more of the Indian kitchen. The company which is already the market leader in mainstream categories such as refrigerators, washing machines, air conditioners and microwave ovens is now opening another business frontier for built-in kitchen products and dishwashers. LG last expanded its product portfolio more than two years ago with GSM mobile phones. LG’s home appliance business in India is pegged at about $500 million of the total $11 billion global appliance revenues. The executive vice-president of the appliances division and a key member of the LG’s top global management team Teddy Hwang said, “We are looking at a two-fold strategy to maintain leadership position in India. This include re-investments in building and supporting new product platforms.” The plan is to showcase built-in kitchen products like ovens, refrigerators and dishwashers which is embedded in the kitchen architecture as against selling them as separate standalone products today. In the developed markets built-in category is a large part of the appliance business. In the past, LG had introduced dishwashers on a limited scale but this year the plan is to penetrate the market on a larger scale. The main target for the built-in category would be top end residential apartments. According to Mr Hwang, “Our overall gameplan for India revolves around the mass premium segment.”

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

Pushy salesmen lead to customer dissatisfaction

INFINITY Retail, the joint venture between Tata Sons and Woolworths, has started off in durables retailing with Croma, stocking nearly 6,000 products in multiple categories. The first two Croma stores are already operational and Infinity Retail expects to start another 28 in the next 12 months. Infinity Retail CEO Ajit Joshiwho was formerly vice-president, operations, Shoppers Stop, spoke to ETabout challenges of durables retailing. Excerpts:

There are many international formats in durable retailing. Which one did you look at for Croma?
The model that we have adopted is similar to Australian retailer Dick Smith Electronics’ ‘Powerhouse’ chain, whose stores are 15,000-20,000 square feet large. We’ve tweaked it for India. We have adapted the height to store the same number of SKUs. By having displays and prominently highlighting product information within the store, we’re actually reducing service time since people can make buying decisions quicker. We’re also sticking with a consistent pricing policy — we would like to offer the best price everyday, and go in for deep discounting since we don’t want any customer to lose out.


Will you look at leveraging distribution network using Woolworth’s backbone or use the disruptive potential that Woolworth’s sourcing brings?
Yes, durables retailing is largely a distributor-driven business. We could disrupt the chain using Woolworth’s backbone — I could go directly to the manufacturer and pass on the benefits to consumers. But the channel is very well-established and perhaps the best existing channel. So Woolworth’s would like to capitalise on the strength of the existing channel. If a dealer has a customer who wants 100 TV sets, we can tell him, we want 500 TV sets, now can you look at your margins differently and give us what you have on priority? We are looking at managing the chain rather than acting as a disruptive force.

How does your business get affected by the tax regime, in which CST still hasn’t been phased out?
We can’t have a national hub and spoke model. We would have ideally liked to have a centralised hub like Woolworth’s has in Australia. Just one distribution centre services nearly 600 stores all over Australia. For Croma, Woolworth’s does the stock-keeping, the warehousing and the sourcing. Woolworth’s has to move it from hub to hub. For a stock transfer from a Croma store in Mumbai to our upcoming one in Ahmedabad, we have to pay octroi. In the NCR, I would love to have 15-20 stores, but these are three different states, so I need to have three different distribution centres. To improve efficiency, I have to make sure that my distribution centre doesn’t lose money and service at least eight stores one DC. A state like Gujarat with its fantastic road network will definitely make it easier for us to service 15 stores from one distribution centre that Woolworth is opening there.

What are the challenges in durables retail today that you’re looking to address in Croma?
The biggest challenge is in getting the range right, since that is a huge source of customer dissatisfaction. Customers don’t always get everything that they find in some catalogue. We’ve got nearly 40-45 brands of laptops but do we have the entire range? Perhaps not, since we don’t keep assembled models. Today, we have nearly 180 brands in our two stores. Salespeople in other durables chains work on a commission basis. We felt that isn’t right and we give the sales force fixed salaries. They then leave the customer alone because he has no incentive to push any particular brand and will only help when he’s asked. Pushy salespeople are a huge source of customer dissatisfaction. If our customers say we want to check prices at a competing store we encourage them to do it, but if a salesperson was hired on commission he would have started bargaining with the customers.

A good after-sales service is vital for the business. What measures have you adopted in this area?
We try and ascertain customer requirements and then recommend a product. Our team has often gone to people’s homes to recommend exactly what sort of TV size is required for families. At times we also invite architects to design kitchen platforms. They then suggest what would bethe best fridge as per the design or requirements. When our customers come back with their goods, Croma is their only point of contact. So we’re following up for the customers ourselves rather than them chasing the company.

Lots of department stores and hypermarkets too have a segment purely for consumer durables even if it doesn’t have a similar range. How do you reckon that will play out?
If a person is going to buy shirts and ties, he probably won’t pick up a toaster at the same time. It’s (durables buying) always a planned, organised purchase when it comes to durables.They are still bought as a family decision. You’ll still get kids coming into the store when parents come to the store and they’re part of decision making. We have to create a family store and avoid the trap of making it a “man’s toy store.”

How would you deal with realty costs, especially after the budget brought commercial rental income under the service tax net?
I think flexibility in formats is very important. Most of our large formats will be in the region of 15,000 - 22,000 square ft. We are opening a store in Churchgate (South Mumbai) and we naturally won’t get that sort of space, so we’re adapting the format. We want to offer a full width and range in every store.

Courtesy: EconomicTimes
For more details on Retail India visit: www.retailindia.tv

Subhiksha ties up with vJive Networks

vJive Networks, India’s first and largest broadband out-of-home media & digital signage network announced that Subhiksha will deploy the company’s integrated out-of-home media solutions for their retail stores across India. This will be the country’s single largest digital signage deployment. Subhiksha is one of India’s largest retail chains with over 650 stores spread across 30 cities. The company has set in motion a nationwide expansion spree to elevate the store count to 1000 by December 2007. The retail chain already has an enormous presence in Chennai, Ahmedabad, Bangalore, Hyderabad, Mumbai, Pune and Delhi, amongst several other smaller cities. As per the terms of the agreement, vJive will equip each Subhiksha store with cutting-edge audio-visual banners that will constantly display valuable advertorial content to shoppers. vJive’s internet-based media streaming engine will transport advertorial content in real time to digital screens across stores. Implementation for the 650 active stores will be carried out in two phases. Subsequently, vJive will work in conjunction with Subhiksha for additional nationwide store roll-outs. Mohit Khattar, president-marketing, Subhiksha, said: “Subhiksha’s association with vJive is in keeping with our sustained effort to offer better value to our customers. Through this association, we will use cutting edge technology to offer relevant and engaging point of sale content to our customers and enable them to make more informed choices.” Rajesh Jog, CEO, vJive Networks, added, “Subhiksha has taken a brilliant futuristic marketing stance. We are extremely delighted and privileged to be associated with a highly motivated and fast growing retail chain such as Subhiksha. vJive’s enhanced network will compliment Subhiksha’s value driven approach.”

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

Godrej Gropu mulls boutique retail stores

The Godrej Group will shortly launch specialty boutique retail stores in four product categories - home appliances, home furniture, office furniture and non-apparel lifestyle products. The group’s flagship company, Godrej & Boyce Manufacturing Co, is finalising rollout plans which will crystallise in 2007-08. The Godrej group intends to set up 20-odd specialty stores by calendar 2010 with a major thrust on the top eight markets - Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune. While Godrej & Boyce operates a chain of 47 multi-product stores branded ‘Godrej Lifespace’, the group is working on a separate brand identity for specialty stores. Godrej & Boyce’s retail division business head and vice president Shyam Motwani told ET: “We will launch six of these boutique stores in 2007-08. Typically, each specialty store will be spread over 1000-1500 square feet (sq ft) in size. They will be present on both high-street and malls.” With the exception of the lifestyle specialty stores, all other formats will sell only Godrej branded products. “The lifestyle stores will mainly sell home decor merchandise like furnishing, home accessories and other decorative items. While these will be multi-brand outlets, we might launch some of the products under the Godrej brand as well,” said Mr Motwani. The present ‘Godrej Lifespace’ outlets operate in the home and office improvement space that involves the home & office furniture, home appliances and security suite of products. Such multi-product stores are spread over 3500 sq ft and are present only in high-street locations. The group has also lined up an investment of Rs 90-crore to increase its total retail space from the present 1.4 lakh sq ft to 5 lakh sq ft by 2010. “This includes both the specialty stores and ‘Godrej Lifespace’ chain. We intend to increase the number of retail stores under both the formats to 200 by 2010,” said Mr Motwani. With the proposed expansion plan on ground, the retail division is expected to generate Rs 450 crore revenue by March 2010 for Godrej & Boyce from present Rs 100 crore. The retail business is experiencing an annual growth of nearly 55%.

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

Fedders Lloyd plans retail foray into India

Cooling products maker Fedders Lloyd Corp. Ltd. said on Tuesday it plans to enter the retail segment under the 'Lloyd' brand name. It also plans to invest 500-600 million rupees for capacity expansion of air-conditioners and other consumer electronics products, the company said in a statement. Shares in the company ended 1.6 per cent down at Rs 119.05 in the Mumbai market.

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

Damas, Flemingo to set up duty-free shops

Look out for big-discount deals on gold jewellery and luxury watches at major airports across the country. Dubai-based jewellery major Damas Jewellery LLC has set up a joint venture company with the Indian arm of Flemingo International to set up duty-free shops at airports for selling jewellery products and luxury watches. Damas will be selling its gold jewellery brands like harmony and legacy and its diamond brands at major airports. Damas has already been allowed to set up shops at Chennai, Trivandrum and Jaipur international airports. Operations at these airports are expected to begin within a month. While Damas is holding a 51% equity stake in the JV, the remaining stake will be with Flemingo. The new company, which has been registered under the Indian Companies Act, 1956, is called Flemingo Jewellery India Pvt Ltd. This company has already won the contract from state-owned Airports Authority of India (AAI) to set shops at three airports. The proposed shops shall use the brand name Damas as long as the Damas Jewellery LLC remains part of the joint venture firm. The JV company is also keen on starting operations at other major airports, government sources said. Being a foreign investor, Damas has sought approval from the Foreign Investment Promotion Board (FIPB) to set up a JV firm in this regard, the sources said. Damas will be able to obtain 51% equity shares of Flemingo Jewellery India, the JV company, after FIPB approves its investment proposal. The JV firm will issue 22,95,000 shares at Rs 10 face value to Damas. While Flemingo will look after the day-to-day management, Damas will depute its personnel and specify other requirement to run the business. Dubai-based Damas LLC, established in 1993, is engaged in the business of gold jewellery, diamonds and watches. Damas has operations in six countries, 127 retail locations and it has one manufacturing & selling division. It also jointly controls companies in India, Dubai, Kuwait, Maldives and UAE. Its annual revenue in 2005 was more than Rs 3,200 crore. Damas operates in India through D’damas India which functions in partnership with diamond house Gitanjali Digico Group. D’damas India has granted a no-objection certificate to Damas to enter into a JV with Flemingo, as per the requirements of Press Note 1 (2005). Flemingo Duty Free Shop, in which Flemingo International has 51.22% equity stake, has been running duty-free shops at various airports and seaports. Recently, Citicorp Venture Capital International has agreed to pick up 15% stake valued at more than Rs 100 crore in Flemingo.

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

Essar Telecom Retail eyes $1 bln revenue in 3 years

Essar Telecom Retail, an Essar Group firm, expects $1-billion revenues in three years from its dedicated mobile phone retail stores and hopes to achieve breakeven in two years, its chief executive officer said. “The Indian mobile phone market is growing very rapidly. We are cashing in on that and we will offer customers personalised services at our dedicated mobile outlets,” CEO and director Rajiv Agarwal told reporters. The company on Tuesday announced its tie-up with UK’s Virgin Group for The MobileStore, Essar’s network of telecom retail stores, launched last month. Essar Telecom will set up 2,500 stores across 600 cities in three years with an investment of $250 million. Virgin would provide the branding and niche expertise it has in mobile retailing and get a royalty fee for it. In three years, Essar Telecom expects to have 10% of the mobile retail market share in terms of sales. “Around 70% of our revenues would come from the sale of handsets,” Agarwal said. The remaining would be from sale of talktime and value-added services.

Courtesy: EconomicTimes
For more details on Retail India visit: www.retailindia.tv

Coffee chain Starbucks may offer mineral water in India

When US coffee chain giant Starbucks forays in India later this year, it might offer more than just a cuppa — an annual ritual of free coffee, a new mineral water brand and grants for clean water projects could be part of the package. The world’s largest coffee chain, which is planning to open its first Indian store this year and has zeroed in on New Delhi and Mumbai for the launch, has announced a $1 million grant toward a clean water project to commemorate World Water Day on March 22. The grant would come from Starbucks’ Ethos Water Funds, which has also announced a similar grant for Kenya. Starbucks had acquired Ethos Water in 2005 and distributes it across its stores in the US. The company is eyeing to expand its product portfolio in order to gain further market share in the wake of growing competition from fast food joints like McDonalds and the company could consider launching its Ethos Water brand in non-US markets as well, an analyst said.

Courtesy: EconomicTimes
For more details on Retail India visit:
www.retailindia.tv

ICICI, King Khan team up to lure Non Resident Indians

Leading Indian bank ICICI has launched an advertising campaign featuring Bollywood superstar Shah Rukh Khan to lure the 1.3 million people of Indian origin living here to open an account. ICICI Bank teamed up with Khan, who has a big fan following in Britain, to launch its HiSave account that pays 5.65% interest on deposits of 1 pound or more. “He is our brand ambassador and his name is so easily recognisable to anyone of South Asian origin. He is very popular,” said Sonjoy Chatterjee, MD of the bank in Britain. ICICI currently has six branches in Britain. The bank’s branches are mostly located in areas populated by Indian community like Wembley, Leicester, Southall, Manchester and Birmingham. — IANS

Courtesy: EconomicTimes
For more details on Retail India visit: www.retailindia.tv

Asian Paints, JWL to provide home fashion solutions

India’s largest paints company Asian Paints (AP) has joined hands with Ahmedabad-based Jindal Worldwide (JWL) to provide ‘home fashion solutions’. The drapes that are proposed to be offered as freebies to consumers, is expected to fetch JWL a turnover of over Rs 36 crore while for Asian Paints, which already has a turnover over of Rs 3,000 crore, this is an exercise that will add value to the walls dressed by them. JWL which is currently manufacturing bed lines in India, expects an order of at least 1,000 home furnishing products from across India every month and has already supplied 25 sets to Asian Paints (west zone), Ahmedabad, for trials. “We plan to provide lifestyle products that are in sync with the interior walls. Although there is a wide colour choice as far as wall fashion goes, we did not want people to get stuck with them while selecting room accessories,” said design manager of JWL Iti Tyagi.

Courtesy: EconomicTimes
For more details on Retail India visit:
www.retailindia.tv

Godrej Group eyes home appliances, furniture

THE Godrej Group will shortly launch speciality boutique retail stores in four product categories — home appliances, home furniture, office furniture and non-apparel lifestyle products. The group’s flagship company, Godrej & Boyce Manufacturing Co, is finalising rollout plans which will crystallise in 2007-08. The Godrej group intends to set up 20-odd speciality stores by calender 2010 with a major thrust on the top eight markets — Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune. While Godrej & Boyce operates a chain of 47 multi-product stores branded Godrej Lifespace, the group is working on a separate brand identity for speciality stores. Godrej & Boyce’s retail division business head and vice president Shyam Motwani told ET: “We will launch six of these boutique stores in 2007-08. Typically, each speciality store will be spread over 1,000-1,500 square feet (sq ft) in size. They will be present on both high-street and malls.” With the exception of the lifestyle speciality stores, all other formats will sell only Godrej branded products.

Courtesy: EconomicTimes
For more details on Retail India visit: www.retailindia.tv

Infinity Retail Ltd goes for furnishing, footwear

INFINITY Retail Ltd, a fully-owned subsidiary of the Tata Sons which recently launched two consumer electronics and durables stores Croma in Mumbai now plans to set up speciality stores for different segments such as home furnishings and footwear amongst others. “We are considering to sell products in different market segments. No concrete plans have been drawn up so far,” Infiniti Retail CEO Ajit Joshi told ET.He says the retail sector is still at a nascent stage and there is a lot of scope across segments. Presently, the company has two such stores in Mumbai and plans to set up two more in the city coming months. The company plans to set up over 100 stores across the country by 2010. The electronic and durable goods segment is already generating interest among players such as Reliance, which plan to set up stores in this segment. “Competition will be there, but considering the share of organised retail, there are tremendous growth opportunities,” said Joshi. Infinity plans to set up 17 stores across Gujarat, including cities such as Surat, Vadodara, Mehsana, Anand, Rajkot and Vapi.

Courtesy: EconomicTimes
For more details on Retail India visit: www.retailindia.tv

Tuesday, March 20, 2007

Sachin,Saurav stocks on the offering.Sachin is costlier.

CAN’Ttake on the real action on the pitch? Come on, it’s just a game of cricket. You could turn to the virtual world and try winning the cup there. For starters, those who love watching cricketers in action but are equally smitten by the Sensex, www.crickstocks.com is the place to visit. The website launched by three fresh graduates from IIM and IIT last month came just in time when the real cricket fever is at its peak. So companies transform into cricketers on the website. When the IPO was launched, Sachin Tendulkar was oversubscribed followed by Saurav Ganguly. “There are 150 cricketers from 10 Test playing nations whose shares can be traded,” says Karthik Laxman, founder, www.crickstocks.com. The website has over 15,000 registered members and claims to register five lakh hits a day. The BSE, NSE, Sensex and the likes have been replaced by batsman index, bowlers index, wicketkeepers index, Indian Index and so on. “And it’s not only Indians but net users from Pakistan, Australia and the US too who are trading stocks of cricketers on the website,” added Laxman. Did some one say cricket has no boundaries. The cricket action might subdue in the real world but not on virtual. Post world cup, the trio plan to introduce mutual funds and other stock options on the site as well. If you aren’t among the players who love trading, check out this: www.indiatimes.cricket.com has interactive elements such as poll, blogs and chats. It also has astro predictions on forthcoming games, live action from the Caribbean, downloadable score cards and caricature based wall papers of cricketers. Not only this, surfers can write commentary as well. “We redesigned our website, making it easier to navigate. This was done after speaking to visitors of our website,” said Dinesh Wadhawan, CEO, Times Internet. The website is also getting lot of traffic from the US. Avid gamers can do with Electronic Arts’ (a game developer) released `cricket 07’ game. The game has player specific animation and a camera mode which enables players to see batting and bowling from different angles. “The cricket 07 version is all about fun. Also it has new batting controls making the game more exciting,” says a spokesperson of Electronic Arts. The game is available for Rs 999. And for those who think cricket never becomes stale cricket 05, cricket 04 and cricket 02 that is, older versions are available for Rs 499, Rs 299 and Rs 199. Gamers also have an option of downloading cricket games from www.electronicarts.in. Another portal, contests2win.com believes that enthusiasts just love following cricketers. Net users who know what the players do when they are not playing are being lured by the website. Sample this: Who has a bigger car? Rahul Dravid or Sachin Tendulkar? Who is more likely to take off his shirt and sing "I'm too sexy for my Shirt"? Sourav Ganguly or Andrew Flintoff? Think you can answer then log on to www.contests2win.com. And if you have questions cheekier than this, you can also post queries on the website. The website claims it is gets over 100,000 responses each day. It has 1.2 million registered users. “Indians are armchair experts on cricket. The website is not statistically driven but has taken a different take on cricket,” says Raj Menon, COO, contests2win.com. The content of the website may not be statistically driven but the business model for sure is. The website has roped in official World cup sponsor Johnnie Walker and Tata Sky for advertisements on its site. And what about prizes for cricket crazy contestants? “Well there are many gadgets such as iPods and mobile phones to be won as Indians just love gadgets,” said Mr Menon. Another website games2win.com also has a separate section for cricket games. So if it’s not a ticket to Caribbean, the happening cricket action is just a click away!

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

Reliance Retail to turn Adani outlets into speciality stores



RELIANCE Retail plans to transform the recently-acquired Adani Retail’s general purpose outlets into speciality stores such as jewellery, medicines, specs, home furnishing, telecom and even consumer electronic outlets. Around 10-15 out of the total 26 outlets will be transformed into speciality stores in Ahmedabad alone. In Vadodara, Reliance will start operations with 10 outlets and subsequently increase the number to 16. The company also plans two mega outlets in Vadodara. Reliance has already absorbed a few of the Adani Retail executives. However, many others have already left Adani to join other retail chains. While Reliance is yet to formally get possession of the Adani outlets, it is said to have shelled out Rs 170-190 crore for the deal. The Adani group has already withdrawn its in-house brand ‘Advantage’ across segments such as food and detergents. It was selling the in-house brands exclusively through its retail outlets. “The size of Adani outlets is not large enough to convert them into Reliance Fresh. The minimum area of Reliance Fresh stores is around 4,000 square feet while the outlets that we have acquired are mostly in the range of 2,000- 3,000 sq ft. So we have decided to create specialised stores in those outlets that will sell single product category,” a senior Reliance executive told ET. Most of the 56 Adani outlets are located in Ahmedabad, Vadodara and Rajkot. Sources say half of the total outlets in the three cities will be specialty outlets. The outlets in smaller cities such as Anand, Nadiad, Mundra, Gandhinagar and Navsari will largely have smaller format Reliance Fresh stores. The first Reliance Fresh outlet will be launched in March end in Ahmedabad, while the outlets acquired from Adani will be revamped and readied for launch by April end. It will also roll out its retail operations in Vadodara, Rajkot and Surat. “All our retail outlets will have differentials in terms of service, offerings and prices. While these will be relatively smaller outlets, we are also searching for sites to develop large-format exclusive furniture stores in Ahmedabad,” said the executive.



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

Retailers make a beeline for agri varsities now


THE search for a new kind of talent in retail has boiled over to colleges and varsities. With fresh produce and commodities forming a chunk of the trade, retailers are making a beeline to various agricultural universities and specialised educational institutions to hire. Graduates with technical knowledge on agri-sourcing are the most sought after as retailers look to streamline the procurement of produce, ensure quality and have an efficient back-end. Players like Spencer’s, Food Bazaar and Spinach have hired fresh graduates with specialisation in agriculture, animal husbandry and fisheries. Damodar Mall, president & CEO, Food Business division of the Kishore Biyani-owned Future Group, said the group has tied up with universities and colleges across Maharashtra, Rajasthan, Uttaranchal and Punjab offering specialisation in agri-business. The hiring is pertinent for formats like Food Bazaar — the food and grocery format of Future. “Over the last three years, there have been an increase in the number of graduates recruited from these colleges,” said Mr Mall. “Apart from commodity sourcing, the students have a good understanding of category management. With the technical background, they are playing an important role in ensuring an efficient back end,” said Mr Mall. The talent pool is being tapped in institutions like Indian Institute of Plantation Management, Hyderabad, National Institute of Agricultural Marketing, Jaipur and Institute of Agri Business Management, Bikaner. The move just doesn’t stop at picking up fresh graduates from universities; retailers like Food Bazaar are also working closely with local agri universities, helping them create customised curriculum relevant to modern trade. “With modern trade taking off, retailers like us can contribute some learning we have acquired from running retail operations,” explains Mr Mall. Similarly, formats like Spinach stores, from Wadhawan Retail, owned by the Dewan Housing Finance Group, has started picking graduates and the numbers, according to Spinach Dippankar CEO Halder, will increase as the format expands across the country. “Around 35% of our business is perishables and fresh food. Thus there is a need for expertise to handle these segments. Right now, it is a mix of experience and fresh graduates but soon we will institutionalise the process and recruit directly from campus,” said Mr Halder, adding that in the coming days the retail format plans to hire more than 100 people with experience in relevant segments. The need for expertise in food & agriculture, poultry, fisheries and animal husbandry comes as Spinach is planning to set up goat farms and fish ponds. “With Kolkata and Delhi next, we will setting up centres of excellence in each of the regional centres. Therefore, both at the senior and ground level, relevant expertise will be needed to ensure a smooth supply of necessary products,” said Mr Halder. It is this relevant expertise which has also prompted formats like Trumart to look at hiring from colleges specialising in agri studies. Upamanyu Bhattacharya, CEO of Trumart, says that it is looking to hire students from institutions in Bikaner and Jaipur for specific functions like buying from mandis and third party procurement. While the new recruits bring with them knowledge of the segments, retailers are training them to understand and integrate the back end with the front end of retailing. Mr Mall said the sourcing and back end efficiencies have to be in tune with the requirement at the point of sale. “While they may be handling the supply chain, orientation in terms of marketing and sales operations is needed as they come in handy when it comes to aspects like procurement,” he said.



Courtesy: EconomicTimes

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

Cement may get 5-year tax break in India

Govt May Set Rider That Units Must Start Production Within Three Years


UNABLE to put pressure on manufacturers to slash cement prices, government is now planning to offer them a five-year tax holiday to set up more capacity to end the current demand-supply mismatch and consequently soften prices. According to a DIPP (department of industrial policy and promotion) source, the government may give a five-year tax holiday to cement units announced on or after April 1 with a caveat that they have to commence production within three years. Cement makers and government have been slugging it out over prices, which have risen by over 40% to a peak of Rs 255 per 50-kg bag in the last 12 months. Manufacturers have so far not paid heed to government’s call to roll back prices, but have promised not to increase it further for a year. Official sources believe that as of now cement manufacturers are in a commanding position, as far as prices are concerned, due to a major demand-supply gap. Various infrastructure and real estate projects have seen construction activity growing at an unprecedented pace, and this has led to growing demand for cement. It is understood that the proposed policy move is also aimed at incentivising participation of many new companies. Indian cement industry’s current capacity is 165 mtpa and the capacity utilisation has been 92% so far this year. Cement production — 127 mt during April-January (2006-07) — has seen a growth of almost 10%. Industry players welcome the proposed move, but also point out loopholes in it. “Such short-term incentives may leave a trail of winners and losers. It would lead to bunching of capacity and the plants that commence production after these three years, would lose out,” says Cement Manufacturers Association vice-president and Shree Cements CMD HM Bangur.

BUILDING TENSION
40% Cement price hike in last 12 months
92% Capacity utilisation so far this year
10% Growth in output during April-January
Cement capacity expansion will be difficult

IT, HOWEVER, may not be easy for manufacturers to take advantage of the proposed incentives. “Equipment supply is a major constraint and cement makers will have to work very hard to finish projects on time,” points out Grasim Industries director DD Rathi. Equipment suppliers’ order book is already full and with increasing demand from India and the Middle East, equipment delivery time has almost doubled from the usual six months. The industry has announced the addition of 42 million tonnes in the next two years. Given the past trend, not all of them are expected to materialise. In 2006-07, manufacturers had announced the addition of 13 million tonnes, but only five million tonnes came up. The fact that cement makers enjoy high margins due to supplydemand mismatch is one reason cited by analysts for slow addition of new capacities.
Courtesy: EconomicTimes
For more detail on Retail India visit: http://www.retailindia.tv

Merrill to enter retail brokerage business in India

MERRILLLynch is planning to add retail brokerage to its business portfolio in India. The development comes close on the heels of reports about Merrill’s possible entry in the mortgage business. The $35-billion financial powerhouse has roped in ex-Citi Financial honcho and distribution head, Manoj Vishwanathan, to spearhead its foray into retail finance and brokerage in India. When contacted by ET, a company spokesperson denied any such development, and declined comment. Sources close to Merrill, however, maintain that the company is in talks with India Infoline for some kind of “arrangement” in the retail brokerage space. The contours of the talks, however, could not be verified. It already owns 14.1% stake in India Infoline. This will be the first big step for Merrill after the de-merger. The retail brokerage space in India is witnessing the entry of a number of global financial institutions, of late. While globally, Merrill is one of the biggest players in retail brokerage, it did not have a retail brokerage presence in India till now and experts reckon that it makes perfect sense for Merrill to leverage their global expertise in India as well. Recently, French banking major BNP Paribas picked up 33.35% stake in southbased brokerage firm, Geojit India. Similarly, E-Trade Financial, global online brokerage major, acquired controlling stake in IL&FS Investmart. In 2005, Merrill Lynch purchased The Advest Group Inc from French Insurance giant AXA to further strengthen its retail brokerage play in Europe. According to industry experts, with only 3% of India’s retail investors investing in the markets, retail brokerage is a huge opportunity. The thriving market and booming Indian middle class makes a strong case for the business segment, which will compliment Merrill’s existing distribution set-up. With 2% commission on brokerage of mutual funds and 0.25% commission on other brokerage transactions, retail brokerage is very attractive for most financial institutions. The other brokerage players in India include the likes of ICICI Brokerage Service (IBSL), Bajaj Capital, India Bulls, Kotak, LM Financial, Enam, Karvy, IL&FS (E-Trade), Geojit andIndia Infoline. Merrill Lynch is reportedly looking to invest Rs 100 crore in the first phase of the its mortgage business which will commence operations in the next six months.

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

HONDA Motorcycle and Scooter in India (HMSI) to launch 100 cc range


HONDA Motorcycle and Scooter India is planning to launch a whole range of 100 cc entry-level motorcycles to tap the Indian bike market’s biggest segment. At the launch of a sporty variant and a limited edition Grand Prix version of the Unicorn, HMSI CEO and president Yukihiro Aoshima said: “As long as the 100 cc market continues to grow, we will introduce not one model but several.” And although it is fellow subsidiary Hero Honda’s bread and butter market, it is big enough for both companies so there should be no cannibalisation. “Of course, 100 cc is Hero Honda’s major segment but it’s size is also the biggest in the motorcycle market. So there is more room for both companies to co-exist,” Mr Aoshima said. At the other end of the price band, HMSI is also looking at importing fully built bikes in the 500cc and above range. “We are studying the higher displacement segment and here there are two possibilities open to us,” Mr Aoshima said. “The first is to go for 500 cc and above models where we may look at importing completely built units. But for models less than 500 cc engine displacement, we must study options to assemble them here.” HMSI’s 100 cc plans also tie in with its second plant which will kick off once its 1.2 million unit Manesar plant has been fully utilised. The company, which sold 7.2 lakh units this fisc, is targetting 9 lakh units next year including 6 lakh motorcycles. HMSI — which launched the Sporty Unicorn at Rs 58,150 and Unicorn Grand Prix limited edition at Rs 59,425 exshowroom Delhi — exported around 25,000 motorcycles this year and is targetting a similar number next year as well. “We are selling to Europe, Middle East, central and south America now and we are also targetting Africa,” Mr Aoshima said.

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

Maruti gears up for competition with new models

CUSTOMERS are set to benefit from the competition in the auto market. As global OEMs set up shop here with an eye on Maruti’s dominant market share in the compact car segment, Maruti Udyog (MUL) is itself gearing up for the challenge, strengthening its product offerings. While it intends to bring in a product to replace the Baleno (in the A 3 segment) in 3-4 months, MUL is also set to strengthen its position in the Esteem segment. The Esteem has monthly sales volumes of over 2,000 units and MUL is expected to introduce another platform in the category. The A3 category has players like Honda City. As per its announcement, MUL will also bring in the upgraded Grand Vitara, its sports utility vehicle (SUV), in the next fiscal. Given that the domestic market is dominated by sedans and is attracting global OEMs, MUL is expected to bring in an entry level sedan, too, MUL sales & marketing director Shuji Oashi said. Mr Oashi, who was in Pune for the inauguration of its sixth dealer showroom here, said MUL was determined to retain its leadership in the small car segment. He repeated MUL’s stated position that a large car in the A4 category of the Toyota Corolla and the Honda Accord will take another couple of years to make its entry in India. Suzuki’s portfolio does not cover this segment, which has to be developed, and hence the two year wait. MUL chief general manager Arun Malhotra added that the diesel Swift, launched in January 2007, has a waiting period of 45-60 days. MUL is producing 2,500 diesel Swifts a month but the waiting list continues. He added that exports of the diesel engines to Suzuki’s plant in Hungary will begin from July 2007, targeted at the European diesel market.

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

Perfect product is now result of user’s creativity


IMAGINEthis scenario: sitting in an aircraft, busy making the last minute changes in your big presentation that will decide the next year’s road map strategy for your brand. A nudgy happy young man, about 20, sitting next to you, peering over your shoulder, just can’t resist blurting out, “Pardon my intrusion, looks like I could be your customer, but I kind of don’t relate to your description of the audience…seems a little theoretical and outdated.” As curious as I am to imagine his reaction, the situation today may not be totally hypothetical. You probably did forget to add him in your definition. Your next door neighbour could well turn out to be your customer and a smarter marketer at the same time. There is a sea change in the consumer’s outlook towards his life today. The democracy game is taking its true form now. The customer today knows that he is not a part of a mob, is aware of his worth and is ready to take matters in his own hands. Users are creating content that other users find appealing. The rise of the many “express yourself” platforms highlights this dominant need to connect. Youtube, MySpace, Flicker, SeeMe TV to name a few. Today, a recorded strumming of the guitar in the confines of one’s room, when uploaded on YouTube can invite viewer hits running into thousands. A day-to-day example of this phenomenon is the increase in citizen journalism, where users, armed with camera phones, laptops etc. are capturing news events and publishing them on the net or live news channels. Having a personal blog is almost a fashion statement today. And when freedom of self expression becomes fashion, the trend cannot be ignored. Marketers need to harness this trend by co-creating content with their consumers. Let your customers come up with your products for you. The power of harnessing your customers’ insights is amazing. You are connecting directly to the insights, dreams and beliefs of your customers, ensuring that you will hit a home-run with the rest of the world too. And the funny thing is – they will do it for free, and even create the right buzz for you. This trend might well turn out to be a marketer’s most competitive tool of obtaining customer-centric brand propositions and put an end to the conventional approaches to marketing. In the traditional system of value creation, the consumer had a secondary role. His needs were merely second guessed and the connection was a one way road, from the product to the consumer. The USP was a proposition to the customer that the competition either cannot or does not offer. It had to be unique – either a unique feature of the product or a claim not otherwise made in that particular product category. On the face of it, there seems nothing wrong with the USP theory. Marketing is all about creating differentiation visà-vis competition. However, we must not forget that 50 years back, technological capability was unevenly distributed. In those days a handful of companies had the muscle to innovate, while the rest were hurriedly trying to emulate them. Owing to technological disparity, there was a huge delay in imitator products hitting the market. This gave the innovating company ample time to harvest the profitability from these innovations. The unique selling proposition, which focused on differences from what competition had to offer, was probably a viable strategy then. Things changed rapidly with the significant strides in the field of information technology that led to instant availability of information which leveled the playing field and democraticised quality of products. More and more companies became champions at churning out me-too products with a slight change that made them legally acceptable. Thus, it became very difficult for manufacturers to create focused product advantages as means to brand building and creating differentiation and thus began the age of parity where consumers did not perceive any meaningful difference between brands. Enter the Unique Buying Proposition, UBP. The USP was essentially what the marketer wanted to say through the product whereas the UBP was something that the consumer needed to hear that the marketer could say. It was a complete 180 degree change in approach to the entire process of marketing and the basic premise of this was that the only sustainable source of competitive advantage was a thorough understanding of the customer. This resulted in multi-million dollars research budgets for marketers in their quest to understand customer motivations and needgaps. Focus groups, in-depth interviews, dyads, triads and all other forms of research to study the customer for insight – what does the customer really want and how can we connect our product to that primal need. While UBP as a proposition is certainly a better approach to the conventional USP and is still in practice today, the need of the hour has changed. The consumer is no longer merely a source of input for the brand but is willing to partner with you. The boom in technology has broken the barrier between the marketer and the consumer and managed unison between these ends. The consumer today is astute enough and knows the dynamics of the other side as much as the marketer believes he knows him. Not only is he aware today, but also proactive. The traditional research model of hunting down the target audience and coaxing him with questions is no longer mandatory. As the consumer himself is willing to express his feelings and opinions. The insight here is to open up your brand to its users. Not limiting the brand to being a spectacle, but being for the people, by the people. The age of the User-Generated Proposition (UGP) is here and now. The power of harnessing your customers’ opinion is not just an opinion now. It may well be the final word. Some marketers have already started cashing in on the trend. Nokia N-Series’ proposition is not its sleek looks or advanced technology or enough and more space for your world to fit in, but is based on the fact that you can create your own music. Furthermore, it even provides a platform for you to explore yourself and showcase to the world, by backing this proposition with “Discover the DJ in you” contest. General Motors worldwide has leveraged this trend successfully for the Chevrolet Tahoe. As part of a creative new ad campaign, General Motors teamed up with Donald Trump’s ‘The Apprentice’ franchise to create a website that allowed prospectives to make their own commercials online. The contest was called “Make your own Tahoe”. The readers had a handle on selecting backgrounds, video shots, as well as input text for the commercial. All this points out clearly to one thing. There is no defined conveyer and receiver of the message today. The boundaries are osmotic. Thus, the consumer will define what he wants. And if you have the muscle to deliver it, you can hope to score!

Courtesy: EconomicTimes

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

Budget hoteliers on a rough ride, lose to five-star cousins

SPIRALLING land prices in India and hardening interest rates have seen penny-conscious budget hoteliers go slow on development in the metro markets. While growth in premium hotel (five-star deluxe) rooms has been 6% over the last 5 years, two-star and one-star categories have seen a negative growth of 7% and 10%, respectively. Higher profitability and revenues that accrue from a five-star hotel as compared to a two- or one-star hotel, have seen many hoteliers upgrade their two- or one-star hotels to four- and five-star category over the last few years . Despite all the interest generated by mid-market and budget hotel development, developers in India still like to associate themselves with five-star deluxe brands because of the ‘snob value’ attached to it, say industry sources. The hospitality industry is currently witnessing unprecedented growth and the increase in revenue and profitability of most of the premium hotels is an indication of this, said Binaifer Jehani, analyst, Cris Infac. Some of the new hotel properties are expected to add an additional 12,332 rooms in the luxury segment and 15,924 room in the five-star category out of a total 53,333 rooms in the various metro markets in the next three to four years. However, hoteliers say running five-star hotels isn’t as easy as setting up one. The luxury hotel segment is also characterised by its higher service orientation, which makes it particularly vulnerable to the manpower crunch, said Nitesh Shetty, managing director of Nitesh Estates. A huge demand-supply gap saw premium hotels room rates go up by over 20% in the last few years. While the average rate per five star deluxe hotel is around Rs 6,667, with occupancy levels ranging between 74% and 78%, in the two-star and one-star categories, the average room rate is around Rs 864 and Rs 556, respectively. With gestation period ranging between three and four years, most of the capacity expansion for the premium category is expected in 2007-08 and 2008-09. Analysts also indicate that room additions on the back of a strong tourist inflow, would ensure better margins and profitability. The hospitality industry is witnessing unprecedented growth and the increase in revenue and profitability of most of the premium hotels is an indication of this, said an official of a Mumbai-based premium hotel.


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

Numero uno slot in three years: Tag Heuer

Moet Hennessy Louis Vuitton (LVMH) Group, which owns the premium Tag Heuer watch brand, targets to double its markets share in India’s Rs 300 crore premium watch market from the current 12% within next three years. “We are the third-largest player in India’s premium watch market in terms of sales now. We have a 12% market share at present. We want to make it to 25% within the next three years and grab the number one position,” LVMH Group director Ravi Thakran said. The Indian market is growing at around 20% each year, he said.

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

Haier appoints Kapil Dev as brand ambassador

Mobile manufacturer Haier Telecom India Ltd said it has appointed excricketer Kapil Dev as its brand ambassador. In his role as the brand ambassador of Haier, Dev would participate in ll major brand and product promotions of the company on TV, print and in other media, Haier Telecom said in a release here.

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

Citizen Watches to launch economy range this year

Citizen Watches, positioned at the top end of the price and feature range, is plugging price gaps in India. A whollyowned subsidiary of the $3.7 billion Japanese watch and allied products manufacturer, will launch the economy Q&Q range by December 07. Q&Q watches, priced in the Rs 500-2,500 range, will give Citizen a presence in the entry level domestic watch market, so far dominated by local players.

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

Swift’s diesel model costlier by up to Rs 7,000

Maruti has increased prices of its Swift diesel model by Rs 4,000-7,000 effective Monday. According to a company statement, the Swift Ldi will be now be priced at Rs 4.72 lakh, up Rs 4,000 from Rs 4.68 lakh before. The Swift Vdi will be priced at Rs 5.04 lakh, up Rs 7,000 from the Rs 4.97 lakh it was priced at before. According to the company, the price revision was on account of the debut invitation pricing coming to an end. The company had indicated that the debut price for the Swift diesel would be revised shortly. The Swift diesel was launched in January this year.

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

Techbooks rebrands itself as Aptara Inc

Content management solutions provider Techbooks on Monday said it has renamed itself as Aptara Inc. The company has selected this new identity to represent its expanded content transformation services and entry into new industry verticals, Aptara said in a release here. “The decision to re-brand our company reflects our new capabilities but we will remain focused on delivering the highest level of innovation and quality,” Aptara Inc president Ranjit Singh said.

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

Emami to float arm for real estate business

FMCG company Emami has decided to float a wholly-owned subsidiary to make a foray into the real estate sector. A company official said that Emami had identified realty as a major opportunity which would also help in mitigating the risks of the FMCG business. Sources said that with liquidity in excess of Rs 100 crore, the company was well poised to enter the sector. The subsidiary would be formed by the end of March or April, the official, said adding it would take up select projects where the returns were high and quick.

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

Google phone may be in the works

GOOGLE is developing its own mobile phone, according to industry insiders and analysts, while a Google official in Spain last week acknowledged the company is “investigating” in such a project, reports in Google isn’t commenting directly on leaks from Europe and the US, which describe a low-cost, internetconnected phone with a colour, wide-screen design. Newspaper and blog reports in recent months have Google shopping its phone design to potential mobile phone manufacturing partners in Asia. “Mobile is an important area for Google,” Google spokeswoman Erin Fors said. “We remain focused on creating applications and establishing and growing partnerships with industry leaders to develop innovative services for users worldwide. However, we have nothing further to announce.” Gadget enthusiasts who only two months ago were obsessed with the potential revolutionary impact on the phone industry of Apple’s iPhone device — due out in June and at prices starting at $500 — have shifted their attention to whether Google is developing an even lowercost phone. To be sure, feverish speculation about Google products has been wrong before. Google was widely reported to be building its own line of personal computers a little over a year ago. What in fact materialised was a set of free software programs designed to make any existing Windows PCs easier to use. But Richard Windsor, a phone analyst with brokerage Nomura in London, told clients late last week that unspecified Google representatives at a major European conference in Germany had confirmed the company is working on its own phone device. “Google has come out of the closet at the CeBIT trade fair admitting that it is working on a mobile phone of its own,” Mr Windsor said in a note entitled “Google Phone: From myth to reality.” “This is not going to be a high-end device, but a mass market device aimed at bringing Google to users who don’t have a PC,” he said. Over the past year, Google has branched out beyond computers to bring web search, email, mapping and other web services to millions of new and existing phone browsers worldwide. Rivals Microsoft and Yahoo also are racing to run web services on mobile phones. Simeon Simeonov, a Bostonbased venture capitalist with Polaris Venture Partners, said in a March 4 blog post that an “inside source close to the company” had informed him that Google was developing a “Blackberry-like, slick device.” The device Simeonov describes could handle voice over internet phone-calling. He said it is being developed within a 100-person mobile phone group at Google that includes Andy Rubin, the creator of Sidekick, a popular phone/internet device that he developed at a prior company he founded, Danger. — Reuters .

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

Monday, March 19, 2007

Now, biggies rush to set up mobile retail chains

Organised mobile retailing is set to become talk of the town with big corporate houses chalking out aggressive plans to tap over Rs 70,000 crore market. Two diversified business conglomerates — Essar and Spice Group — had recently announced combined investment plans of about Rs 1,850 crore to set up pan India mobile retail chains. Even hypermarket chains like Subhiksha have started exclusive stores for mobile retail — Subhiksha Mobile and Big Bazaar with M Bazaar. The companies are getting a boost with the fact that the mobile users are expected to cross 220 million by this year-end and 500 million by 2010 with additions of about six million subscribers every month. The retail market for mobile phones — handsets, accessories and airtime — is already over Rs 70,000 crore market growing at the rate of 15-20%. Earlier this year, even the market leader Nokia reworked its 10-year alliance with its distribution partner HCL Infosystems, which has led to Nokia venturing into direct distribution and sales. The multi-service outlets by the companies would offer end customers not just mobile handsets but also mobile accessories, new connections, value added services, after sales support and electronic products such as digital cameras, iPods and other gaming devices. “With about seven-nine new mobile models being introduced every month, there is a huge opportunity for the mobile retail market of $16 billion,” Hot Spot Retails Pvt Ltd vice chairman Dilip Modi said. Spice Group has announced an investment of Rs 500 crore in the next two years in its telecom retail venture — Hot Spot Retail. Essar Group, which recently agreed to partner with Vodafone Group over a stake in Hutch-Essar, will pump in Rs 1,125 to Rs 1,350 crore 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 $250-300 million over the next three years to set up 2,500 The MobileStore outlets across the country,” Essar Telecom Retail CEO Rajiv Agarwal said. Modi said, “We are planning to take the number of our Hot Spots to 400 by the end of this year and 1,500 by 2008-end. “It has already set up 50 such outlets in Delhi and these retail chains will be the window to the telecom customers in India,” adds Modi. “We are expecting revenues to the tune of Rs 800 crore in the next fiscal from Rs 200 crore currently,” he said, adding, “we would introduce the touch and feel demonstration for our customers rather than traditional way of purchasing mobile just by looking at the dummy model.” Essar currently has 60 Mobile-Store 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-inshops,” Agarwal added. PTI


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

Real agri action needed to check rising inflation


MONETARY and fiscal measures seem to have failed in tempering rising prices as the new headline inflation numbers reveal fresh signs of pressure. The wholesale price index (WPI), pertaining to the week ended March 3 and released on Friday, stood 6.46% higher than the same period last year. This same number had stood at 6.1% last week. For a while, the inflation numbers showed signs of responding to various government stimuli, but only for a short while. The WPI curve seems to have resumed its upward trajectory now. Like previous weeks, this time the u p w a r d nudge to the p r i c e - l i n e came from farm products such as vegetables. Cement also pitched in this week. Stagnant foodgrains production over a period of time has been the main reason for the current overwhelming problem of inflation. Despite a robust 6% agricultural growth during 2005-06, prices of foodgrains shot up nearly 11-13% this year. This clearly indicates that the inflation problem is not incipient, or something that’s a by-product of this year’s economic problems, but has been simmering below the surface for years. We enjoyed the spill-over effects of the Green Revolution (which took place in 1970’s) till last decade. India became the world’s second largest wheat and paddy producer and third largest pulses producer. The country was able to meet its domestic demand for foodgrains. But, the agriculture sector hardly found any place in the government’s agenda for the new growth era, in which the Indian economy has surfed along on the strong growth wave powered by industry and service sector, despite the wide fluctuations in the agriculture sector. The economic non-viability of farming, an unduly large dependence on weather (making it a very risky business with a low level of rewards), failure of price mechanisms, lower productivity and absence of marketing techniques for agriculture commodities led to a dismal situation in the sector. The area under the crop witnessed a decline in past five years with the yield per hectare going down. As a result, foodgrains output fell by 1.4% (CAGR) during 2001-05, reducing the net availability of foodgrains per individual. The Economic Survey of 2006-07, while admitting the farm sector’s depressing performance, stated that the low level of public investment, exhaustion of the potential of new high yielding varieties of wheat and rice, unbalanced fertiliser use, low seeds replacement rate, an inadequate incentive system and low post-harvest value addition were contributing to lacklustre agricultural growth during the new millennium. What’s astounding is the fact that the government knows very well what the problems are, but lacks the political will to address these issues. The sector cont r i b u t e s around 17-18% of GDP, but a mere 1% of the total expenditure incurred by all central ministries is spent on the sector. If you break down even this minuscule amount, only small change was spent on capital building, agriculture research and education. Similarly, hardly any medium or long term irrigation projects were undertaken in past few years when the proportion of irrigated land to cultivated land is only 40%. Despite the large number of schemes announced and the incentives doled out, there is still no appropriate credit system which can address the real needs of poor farmers. The government has announced few schemes addressing these issues in the latest budget for 2007-08. Also, budgetary resources were increased 13% for the coming year. Large-scale, bold pre-emptive measures are required before the mismatch in demand and supply of foodgrains becomes a regular phenomenon and India turns into a regular importer of foodgrains. And, when that does happen, it’s likely to bring in its wake a fresh set of problems. Apart from the uncertainty it will create for more than 60% of the population which is still dependent on the agriculture sector, imports will also impose additional pressure on agri-commodity prices in the international market, ultimately leading to import of inflation.

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

Bharti goes into reinvent mode

BRAND Bharti Airtel is on a reinvent mode. The northbound and highly diversified subscriber base and rapidly changing technology have prompted the Bharti Airtel management to look into its brand identity for the second time in its 15-year history. With subscriber diversity growing by the day, the company is looking at increased segmentation of its consumers while delivering a common overarching message that binds all subscribers under one umbrella. While on the one hand, the company is mulling value-based segmentation of its subscribers, on the other, it plans to segment its consumers both demographically and psychographically. Never mind the size of each segment, Bharti Airtel plans to have one universal message going across to all of them. “Our first strategic priority is accelerating our marketshare in circles where we’re weak and how to tap opportunities beyond tariff. Secondly, we would like to nurture, grow and retain value consumers. Thirdly, we would like to drive music, messaging and money transfer using mobile. All the three activities would be carried on in the context of one idea,” says Bharti Airtel director-marketing & communication Gopal Vittal. In effect, the two-pronged segmentation — segmenting subscribers on the basis of the value a subscriber would generate over a period of time (say, a year) and segmenting the market into mass and high-value — is the new mantra to reposition brand Bharti Airtel. Markets such as those in the hinterland with a promise of growing tele-density are mass markets, whereas those markets, essentially in urban agglomerations, where there’s a concentration of high-value subscribers, are tagged high-value markets. Increasingly, with the march of technology, telecom has come to represent success and change. But there’s also a growing concern that users are losing touch with their near and dear ones. One of the very few companies to draw up a brand charter, Bharti Airtel is marching along to make its brand more appealing and draws on emotions to execute that with telling effect in its new campaign. “Our effort is to make the brand more human and that’s the reason we’ve discontinued our ‘Express Yourself’ campaign over the last six months. We want only the brand Airtel to stand out — whether it’s tariff, new service or technology, it is now all about how the brand brings people together,” adds Mr Vittal. From 1995-2005, the journey of the brand was largely entrepreneurial in nature, where it was trying to find its feet. The year 2004 marked a shift in the journey of the brand as it responded to the clarion call of consolidation in the industry with ‘Express Yourself’.

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

Future group to double stores, plans to invest Rs 400 crore

CLOSE ON the heels of spinning the flagship Pantaloons chain of stores into a strategic business unit, Kishore Biyani’s Future Group is all set to scale up its presence across the country. Expansion plans will involve doubling of the number of Pantaloons stores by December and entail an outlay of nearly Rs 400 crore, report Writankar Mukherjee & Anuradha Himatsingka from Kolkata. Speaking to ET, Pantaloon Retail India (PRIL) CEO-Pantaloons Sanjeev Agrawal said: “By December 2007, we will have some 50 Pantaloons outlets across the country. The focus will be on tier II and tier III cities. However, stores located in metros will continue to contribute nearly 75% to the company’s topline.” PRIL is the retail arm of the Future Group. Following this, total square feet area covered by Pantaloons stores will increase to 2 million sq ft from 0.5 million. A Pantaloons store typically on an average occupies 20,000 sq ft and entails an investment of Rs 2,500 per sq ft.

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

Cadbury Chewies

Cadbury India, the chocolates and confectioneries major, is learnt to be finally foraying into the chewing gum market in India. According to sources, the company would be importing some of the chewing gum brands from its global basket. Presently, the confectionery market in India is dominated by Perfetti and Wrigley’s.

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

Krissh has become brand ambassador for Acer

Hrithik Roshan is now the brand ambassador for the world’s fourth-largest PC-maker Acer. The Rs 755-crore Acer India roped in Hrithik Roshan this month to promote its desktops and notebooks aimed at the youth. Tightlipped about the size of the endorsement deals, the Acer management is learnt to introduce a slew of youth centric products in the Indian market, including the Ferrari co-branded TFT monitors.

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

Rain initiates legal steps against GLC Carbon

City-based Rain Commodities has commenced legal proceedings against GLC Carbon Income Fund, Canada, and GLC Carbon USA Inc for turning the acquisition of the latter in favour of a rival bidder Oxbow Carbon Minerals Holdings Inc. GLC Carbon Income Fund holds 73.56% stake in GLC Carbon USA Inc, the largest producer of calcined petroleum coke in the world. The contention of Rain is that the board of GLC Carbon Income Fund has considered Oxbow Carbon Mineral Holdings proposal, with a bid price of C$13.50 favourable despite the latter’s inability to provide the security required to complete financing for the acquisition. Originally Rain had bid for GLC Carbon quoting a price of C$11.60 per share but revised it to C$13.25 after Oxbow placed a competing bid of C$13 per share for GLC Carbon’s acquisition.

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

Corporates line up to tap Rs 70,000-cr mobile retail mkt

Organised mobile retailing is set to become talk of the town with big corporate houses chalking out aggressive plans to tap over Rs 70,000 crore market. Two diversified business conglomerates — Essar and Spice Group had recently announced combined investment plans of about Rs 1,850 crore to set up pan India mobile retail chains. Even hypermarket chains like Subhiksha have started exclusive stores for mobile retail — Subhiksha Mobile and Big Bazaar with M Bazaar. The companies are getting a boost with the fact that the mobile users are expected to cross 220 million by this year end and 500 million by 2010 with additions of about six million subscribers every month. The retail market for mobile phones — handsets, accessories and airtime — is already over Rs 70,000 crore market growing at the rate of 15-20%. Earlier this year, even the market leader Nokia reworked its 10-year alliance with its distribution partner HCL Infosystems.

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

Wills Lifestyle eyes 100 stores in two years

Saying it aims to create synergy between designers and mid-toupmarket buyers. Fashion Week sponsor Wills Lifestyle plans to ramp up its signature stores across the country to 100 in the next two years from the existing 40. “What we are saying is that designer outfits can be glamourous and yet wearable and affordable,” said ITC Lifestyle Retail vice president (marketing) Atul Chand. “It’s part of our wider engagement with India’s fashion fraternity as we explore greater tie-ups with designers,” Chand said. A beginning was made after the fall/winter edition of the Wills Lifestyle India Fashion Week in April when the outfits showcased at the grand finale by the Rohit Gandhi-Rahul Khanna duo and Monisha Jaisingh were positioned along with the brand’s range of men’s and women’s formal and casual wear and accessories at its stores across the country.

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

Young consumers? But veterans have buying power

With More Than 50% Of UK Predicted To Be Over 50 Years, Growth Of Mature Market Poses Serious Questions

FURTHERMORE, many advertisers and marketeers are quick to overlook the over-50s when it comes to marketing strategy, exacerbating the sense of isolation that many in this age group feel. The media activity directed at the mature market can fail to hit the targets required for many reasons, with one of the most important being a lack of understanding with regards to age group segmentation. Marketeers are all too aware of the need to segment their audience to a high degree when approaching the more junior end of society, with specific marketing targeted at increasingly narrow age groups. However, many are still reluctant to put this theory into practice when targeting the over 50s, treating them as one homogenous group. The subsequent disappointing results are no surprise. Whilst approaching the older reaches of society might seem like an insurmountable task to many, the truth is that the over-50s represent a significant untapped market for many companies. Old age and poverty are not synonymous. People over 50 account for 40% of Britain’s consumer spending and this figure is rising. In addition, this age group also holds 80% of the UK’s personal wealth, meaning that marketeers might have to change their traditional approach and apparent obsession with targeting the 15-35s if they want to return profitability to their clients. Effectively approaching the over-50s might require a sea-change for many marketeers, but industry specialists can provide advice to make the process easier. As with many western countries, we are obsessed with youth in all forms and this relates especially to marketing activity. The fact is that many companies will soon have to face the fact that we have an ageing population and targeting a dwindling youth market will not provide the return on investment that they had hoped for. Due to inexperience, many companies’ marketing attempts to woo the over 50s boil down to painful stereotypes and patronising calls to action. What is needed is a more thoughtful, considered and empathetic approach. It cannot be overstated that treating the over-50s as one homogenous group of people will not pass muster. With life expectancy continuing to increase, over 30 years will elapse between a UK woman being 50 years old and then reaching life expectancy at 81. It would be ludicrous to suggest that a 15-year-old boy had the same tastes and criteria for purchasing a product as a man of 45, so this ‘one size fits all’ approach must not be applied to marketing to the over-50s. Segmentation is the key and marketeers need to champion its effective use to produce campaigns that are focussed, empathetic and remunerative.

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

Pantaloon steps out of Gini & Jony

KISHORE Biyani’s Pantaloon Retail (PRIL) is learnt to have operationally withdrawn from Gini & Jony, one of the first apparel brands that Mr Biyani invested in. According to sources, while PRIL would continue to have a financial arrangement with Gini & Jony, it’s in the process of severing operational ties. While PRIL had invested in Gini & Jony, the idea behind the move was that the brand would drive business on its own. However, sources say, the two were not able to work in a cohesive manner and the brand became dependent on Pantaloon’s network, to the extent that PRIL had to depute people from its top management, including the CFO, to take care of the functioning of the brand. When contacted by ET, PRIL MD Kishore Biyani said, “I am not aware of any such development.” Gini & Jony is a lifestyle kids’ fashion brand, catering to the 2-16 age group. The brand is sold through exclusive Gini & Jony stores as well as Pantaloon stores. Gini & Jony Freedom wear, GJ Jeans and Palmtree are three brands under the Gini & Jony brand umbrella. Apart from PRIL, which has invested in the front-end of the business, Gini & Jony has also attracted investment from Anil Ambani’s Reliance Capital for its manufacturing arm. The brand was incorporated by the Lakhani brothers in 1987 which started an aggressive foray in retail in 1996. At present, the chain has 13 franchisees operated stores, 18 shop in shops and a network of 80 dealers. It is felt that PRIL’s withdrawal from day to day operations will slow down the rate at which Gini & Jony has been expanding operations. “It may have some repurcussions, particularly because it has plans to enter new formats in the near future,” a source pointed out. One such new format on the anvil is Chocolate, a multi-brand format which would retail other apparel brands in addition to Gini & Jony.

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

Cheap sourcing may not live long

GLOBAL retailers could soon stop procuring from low-cost sourcing bases like India and China. The Deloitte 2007 Global Powers of Retailing report says a combination of political and economic forces will increase the cost of, and reduce the access to, imports coming into the US, Japan and Europe, forcing retailers to search for higher-cost domestic sources. “China, Mexico, Brazil, India and even Vietnam are places that run large trade surpluses with the rest of the world that in the aggregate are no longer sustainable,” says the report. In a bid to keep costs down, retailers have scouted for sourcing bases across the world. China alone accounts for about $60 billion worth of goods sourced by retailers, with Wal-Mart procuring about a third of it. Indian manufacturers supplying to global retailers believe India has no cause for worry as of now. “India has barely scratched the surface. It is China which has run a huge trade surplus, driving corporations to spread their sourcing across the world. India continues to enjoy the preferred destination status,” said Orient Craft MD Sudhir Dhingra. Orient Craft is one of the leading suppliers to foreign brands like Gap and Banana Republic. In fact, Wal-Mart has been using the sourcing plank to garner support for its India entry for long. While emerging markets could stand to lose their preferred sourcing destination status in future, they would become more attractive retail destinations as consumer spending declines in developed markets, says the Deloitte report. Factors like the housing market slowdown in the US, higher interest rates in western Europe and greater political control over the industry in Russia could become areas of concern for retailers. With an ageing population, the developed markets are also expected to see a shift towards greater spending on services like health and travel, compared to goods.

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

Sunday, March 18, 2007

Adcock plans foray in Indian mkt


ADCOCK Ingram — the pharma business of South Africa’s $3-billion Tiger Brands group — is planning to enter the Indian pharmaceutical market through a joint venture with its Bangalorebased outsourcing partner Medreich Ltd. Tiger Brands has a diverse food and healthcare portfolio in South Africa.
The $500-million company with a leading position in the South African pharma market, had recently formed a JV with Medreich — a Rs 400-crore contract manufacturer with manufacturing plants in India and Europe — to source medicines for other markets. The company would eventually enter the retail pharma market in India through this joint venture, Adcock Ingram MD Dr Jonathan Louw told ET.
The Bangalore-based company already supplies to major drug MNCs and has presence in Europe, South East Asia, Australia, and New Zealand, according to Medreich CEO Rajeev Mehta. The companies would initially invest Rs 71 crore in the JV, in which Medreich’s stake would be around 50%.
The JV would also help Medreich to participate in the procurement of medicines by the South African government. Norms framed by the South African government make it mandatory for suppliers to have a local partner company which reserves a part of its work-force to local ethnic groups and and spends 1% of profit after tax on charity.
The South African government procures medicines worth about $2 billion in a calendar year. The tender business is a high-volume-low value opportunity and is highly competitive, said Mr Louw.
The joint venture with the Indian firm is part of Adcock Ingram’s expansion plans outside South Africa involving a competitive sourcing route.
courtesy:economictimes
For more on Retail India visit www.retailindia.tv

Can’t buy a PC? Tatas have plans for you


TELESERVICES TATA TARGETING THE MIDDLE CLASS — THE TYPE THAT MAY NEED NET BUT WOULDN’T LIKE TO SPEND ON A PC

SURE you need to browse the Net for information. But you’re not buying a PC for that? You’ll make do with the cyber cafe facilities close by, you say? That’s just the kind of talk Tata Teleservices would love to hear, and it’s you that they’re eyeing as their next customer. After having grown their subscriber base to 16 million with a yearon year growth rate of 100% in the last two years, thanks to a focus on first-time users, Tata Teleservices is now looking at the middle class at large — the type that may need internet facilities but wouldn’t like to spend money on a PC. “It would be great if we could double figures this year too, but we’re looking at 10 million more this year,” says Darryl Green, CEO, Tata Teleservices. Speaking about the company’s latest strategies to grow the market beyond first-time users, Mr Green said, “Think of a couple teaching in school with a child who goes to high school. They’re educated, but not rich — and they would certainly want Net access to help the child in his education.” The average age of these children would be 10 to 12 years. “It’s going to take internet computing mobile — they won’t have to worry about how to get online,” Mr Green. Tata Teleservices’ target user for this is both the users of mobile GSM handsets as well as those who will be buying a cell phone for the first time. Partnering with Tata Teleservices in this area, are various cell phone manufacturers, including Samsung, LG and Motorola which are slated to bring out handsets with bigger colour screens and in-built software to make web-browsing easier. There are also a host of Chinese manufacturers that have helped in promoting Tata Indicomm’s CDMAbased services with low-priced handsets — they are the ones who will help bring the prices of the internet handsets down to attractive levels. “We’ll have one more maverick strategy this time and you can be sure we will take the market by storm this time round too,” Mr Green says. Tata Indicomm’s last ‘maverick’ plan was to announce two-year validity for one’s phone even if one didn’t recharge — that meant one could keep receiving incoming calls. “That added 1 million to our customer base right away, round October-November 2005,” Mr Green recalls. So once again, Mr Green gives the feeling that there could be a price bloodbath, even if he won’t breathe a word about the pricing.

Courtesy: EconomicTiimes

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

Retailers losing trust in cut to fit discount strategy


The Practice Of Raising Prices To Promote Discounts Shortly After Risks Damaging Brand Trust

THE old adage about the implausibility of free lunches also applies to super-market promotions. Shoppers are bombarded with deals from the moment they step into a store, but they are unaware of the hidden cost — a situation highlighted last week when retail giant Tesco was accused of doubling the price of fruit before offering it at 50% off for its Fruit & Veg Pledge days later. On an average shopping trip, discounted goods account for about 25% of purchases, according to ACNielsen, and on the whole, consumers believe they are receiving a genuine discount. However, as more exposes run in the mainstream media about the way discounting is achieved, supermarkets run the risk of damaging confidence in their brands as well as their offers. Tesco denies that it has been artificially raising prices before discounting, and insists the majority of the figures quoted in the national press were incorrect. But even if Tesco had been guilty of such misleading practices, it would not have broken any laws. The only legislation on the subject relates to the discounting and sale of non-food, non-perishable goods. And in the case of non-food, retailers such as DFS and Carpetright have to feature the discounted product for 28 days in only one store at the higher price. The Trading Standards Institute, which polices pricing legislation, says artificial price increases are an integral part of retailing. “If you see a price reduction of 30%, the chances are that it is 30% off the price in a store in Edinburgh — and this is done by the bigger, more respectable companies as well as smaller ones,” says a spokesman for the body. “The trouble with the current pricing code is that has not kept pace with new marketing techniques.” Tesco raised the price of its plums from £1.48 for 500g to £2.99 three days before reducing prices by 50%. However, a spokesman insisted the accusation that the store’s pricing team worked out its price promotions to keep products at the same price was ‘insulting’. Like rivals Sainsbury’s and Asda, it insisted that the same prices run in its main supermarkets across the country. Simon Hathaway, managing director of retail specialist Saatchi & Saatchi X, says discounting has become part of the business model for many retailers, especially those in the furnishing sector. He believes that much of this is driven by retailers taking advantage of consumers’ ignorance of the price of many products. ‘If you asked 20 people the price of a pint of milk, you would get 20 different answers,’ he says. Mike Watkins, senior manager of retail services at ACNielsen, says the potential rewards of tempting shoppers with discounting are huge. “Consumers are hooked on promotions,” he says. “On average, about 80% of UK shoppers are looking for price promotions — that’s the highest in Europe. Low prices are now expected.” Retailers across a variety of sectors are becoming more adept at playing within the rules. Some have even employed teams of former Trading Standards officers to advise on the best way to negotiate legislation.
According to one former retail marketer, these teams are intended to help navigate the rules on discounting and build strong relationships with local Trading Standards officers. He also accuses the latter of taking a relaxed approach to enforcement. ‘They aren’t exactly the most proactive people in the world. If something is outside the strict letter of the law, they won’t take much notice,’ he says. One potential problem for retailers is the growing consumer trend to shop around and use aids such as price-comparison sites. Futurebrand managing director Janice Montgomery says big brands inevitably attract more interest in their business practices, so Tesco’s place as one of the UK’s most trusted brands will be harder to maintain as customers become more savvy. ‘If Tesco is (manipulating its prices as claimed), then it needs to be careful,’ she warns. ‘If the press continues to pursue this, it could become an issue.’ The supermarkets may not be able to get away with such practices for much longer, as the Department of Trade and Industry is reviewing the rules. Consumer minister Ian McCartney plans to revamp the pricing code as part of the forthcoming Unfair Commercial Practices Directive, which is due to come into effect at the end of the year. There are no indications yet as to the changes that could be implemented, nor whether the one-store 28-day rule will be altered following the review, which brackets discounting with practices such as prize-draw scams, aggressive door-to-door salesmen and bogus closing-down sales. However, it is clear that McCartney intends to stamp down on any possible misleading of the public. ‘Whether shopping in the high street or online, consumers have a right to be sold to honestly and fairly,’ he says. ‘The new protection will make life a lot tougher for the rogues and easier for legitimate businesses to operate.’ Discounting is an essential weapon in any retailer’s marketing armoury, appealing to consumers’ bargainhunting instinct. But it is not as though supermarkets are giving anything away — food prices have risen continually over the past two years, according to ACNielsen). As consumers become more savvy to the deals they are really getting, retailers may be forced to rethink how they lure them in, or risk damaging hard-earned trust in their brand.

Courtesy: EconomicTimes

For detail on Retail India vidit: www.retailindia.tv

SRK’s Badshah of liquor endorsements


Hitting The Bottle: Diageo-Radico Ropes In King Khan For Masterstroke Deluxe Whisky

UNVEILING one of the biggest endorsement deals in the alcoholic beverage industry, the recentlyfloated Diageo-Radico joint venture has roped in Bollywood Badshah Shah Rukh Khan as the brand ambassador for its first offering Masterstroke deluxe whisky. This is Shah Rukh’s first endorsement deal in the liquordom after he emerged on top of Bollywood. The equal JV company, Diageo Radico Distilleries Pvt Ltd, is expected to pour out around Rs 20 crore including Mr Khan’s endorsement fee, sources said. “We are confident that this will be the biggest brand roll out in the Indian spirits industry in recent times. We will be supporting the endorsement deal with enough resources for leveraging Shah Rukh on multiple platforms,” said Radico Khaitan MD Abhishek Khaitan. For the record, the ban on liquor advertising would see Shah Rukh endorsing Masterstoke CDs. Masterstroke, priced between stablished whiskies like Royal Challenge and Royal Stag, marks the global drink’s giant Diageo’s return to the Indian Made Foreign Liquor (IMFL) market. The brand is being rolled out under the supervision of Johnnie Walker master distiller Peter Warren. Diageo India MD Asif Adil said the decision to bring in Shah Rukh was backed by commissioned independent market research. “Shah Rukh is a masterstroke just like our brand. He represents a new India, full of hope. We hope he will help us to connect with today’s India,” he added. He said the brand in its initial days has evoked a good response, especially in terms of the reaction to the blend, and the national roll out would be completed over a three-month period. The deal for Masterstroke with Shah Rukh Khan was finalised in association with Carving Dreams Entertainment Pvt Ltd headed by Mr Bunty Bahl. As brand ambassador, the celebrated actor will play a key role in brand and product communication on television, in print and outdoor media. In context, it must be mentioned that market leader United Spirits has used Bollywood stars over the years in developing some of its iconic brands, especially Bagpiper. This brand has seen endorsements from the likes of Dharmendra, Akshay Kumar and Ajay Devgan.

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






Beauty’s Bet: JCB plans to set up shop in India

THERE’S beauty in beauty. Given half a chance, that’s what international salon chains would dub the Indian beauty services industry, largely unorganised and pegged at around Rs 15,000 crore. The organised segment, say industry insiders, could stand firm at Rs 2,000 crore, growing at 25%-30% year-on-year. Enthused by the potential and growth in the Indian market, international beauty salon chain Jean-Claude Biguine (JCB) is setting up shop in the country. Perhaps the first MNC salon to set foot in India, it has trained its sights on Mumbai and Delhi initially. The Paris-based salon chain is patronised by some top names from the world of glamour. In 2007-08, they plan to roll out eight salons (four in each city) with the help of their fully-owned Indian subsidiary, JCB Salons India Pvt Ltd. With 20,000 dedicated clients and 350 stores globally, they’re eyeing India for more reasons than one. According to Dharmendra Manwani, director, JCB Salons India, 70% of the beauty services industry is shared between Delhi and Mumbai. And with growth in organised retail, there’s every scope for the beauty trade to prosper. “We’ll have three to four salons each in Mumbai and Delhi by 2007-08 and peg our prices in the aspirational zone, which is 20% higher than established salons,” says Mr Manwani. Scouting for retail space, JCB’s plans in India span two formats — spa and standalone salons. “In the first couple of years, we’ll operate our salons ourselves. We may then look at the franchisee model,” points out Mr Manwani. The investment per store is pegged at Rs 2.5 crore. He expects a break even of around 8-24 months. Among the organised players which are already there in the market, there’s Lakme Beauty Salon, VLCC, Shahnaz Husain Herbals, Keune, Marico’s Kaya Skin Clinic, Jawed Habib Hair & Beauty, besides others. This is where international salon chains like JCB would like to make a dent. Post FIPB clearance, JCB is all set to open its first pa-cumsalon in Mumbai. India is their third stop in the Orient after Japan and Korea. “We’ve studied the Chinese market and feel an acute lack of awareness among the gentry there for luxury goods and services,” points out Richard Wagner, another director with JCB India. The company is readying for 45-50 stores in the next four years in India, where it sees a host of high-end MNC salons such as Franck Provost and Jacques Dessange slugging it out for that good hair day.

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

Hyundai hikes car prices by up to Rs 2,816

Hyundai Motor India Ltd (HMIL) on Friday increased prices of all its car models in range of Rs 362 to Rs 2,816 on account of the increased cess announced in this year’s budget. Post increase, the company’s flagship hatchback Santro would become costlier by Rs 362 to Rs 562. At present HMIL sells Santro’s base model at Rs 2,69,999 (ex-showroom Delhi). It’s premium hatchback Getz, being sold at Rs 3,99,999 (ex-showroom Delhi), would become costlier in a range of Rs 753-Rs 923 across different variants. The company said after the price hike its sedan Accent would be dearer by Rs 999 while the newlylaunched Verna would become expensive in a range of Rs 1,183 to Rs 1,420. The base model of Accent is priced at Rs 5,31,187 and that of Verna is available for Rs 6,24,999 (ex-showroom Delhi). In the premium luxury segment Sonata Embera would be costlier between Rs 2,470 and Rs 2,816. Sonata Embera is being presently sold at Rs 12,95,000. The company, however, said it will not tinker the prices of its SUV Tuscon. The price hike on its car models follows the increased cess announced in this year’s budget.

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