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News Update from the Retail Scene in India
chillibreeze writer — The Chillibreeze Business Research Team
The retail industry could see a sea change with the Government of India considering Foreign Direct Investment. With this in view, Chillibreeze plans to bring you periodical updates on the retail scene in India.
The Chillibreeze Business Research Team has writers with interest and experience in the Retail industry, will be populating this page with the updates.
1. Baskin Robbins plans to open large format stores
US based ice cream company Baskin Robbins will be opening large format stores in the next 2 years, investing Rs. 100 million. According to Pankaj Chaturvedi, CEO of Baskin Robbins, "The new outlets would sport a funky and vibrant look to attract young people, though maintaining our original colours." At present the company has 160 outlets with sales of Rs. 260 million.
Sunday, August 27, 2006
Source: Business Standard
2. Retail chains team up with Varanasi weavers
Eight retailers and textile companies have tied up with weavers in Varanasi to give a boost textile clusters. Some of the retail chains that have signed up are Pantaloons, Big Bazaar, Fab India, Calico, Advantage Shilpi and UP Exporters. The tie up has been facilitated by Entrepreneurship Development Institute of India (EDI) through its Integrated Handloom Cluster Development Programme.
Through this agreement, retailers purchase a specified quantity of raw material from weavers on a regular basis. Varanasi is one of the largest clusters in the country, with over 75,000 weavers.
Monday, August 28, 2006
Source: Business Standard
3. Retail boom puts focus on customer loyalty programs
The retail boom of India is making retailers aware of having incentives and programs to entice customers back to their stores. Retail chains such as Big Bazaar, Pantaloon, Spencer’s, Shoppers’ Stop, Lifestyle and Westside all have loyalty programs that keep track of reward points earned on purchases.
Monday, August 28, 2006
Source: Gulf Times
4. Birla’s appoint McKinsey for its retail foray
The Aditya Birla Group announced that it had appointed consulting firm McKinsey as advisors to its retail plans. The consulting group will be responsible for the company’s entry as well as on the various formats which will be launched. McKinsey also works with The Future Group (formerly known as Pantaloon Group) and KSA Technopak works with Reliance Retail.
The Birla Group has already started hiring people for their retail venture and has brought in Vijay Kashyap, Head HR of Shoppers’ Stop and Sanjay Badhe, Head Operations. The group’s retail foray will be spearheaded by its apparel and textile division, Madura Garments, which owns and retails brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England.
Tuesday, August 29, 2006
Source: Economic Times
5. HLL and kiranas team up again larger retailers
Kirana stores have an ally on their side in their fight to compete with large stores and malls. Hindustan Lever Ltd. has tied up with almost 175 local kirana stores in Ahmedabad to make them as ‘Super Value Stores’ (SVS), that offer products that come with free gifts just like large stores do.
The growth of malls and modern format stores has severely cut into the profit margins of FMCG companies and has also drastically reduced the number of customers in kirana stores. With this tie up, both stand to gain with lower prices, higher discounts and several promotional discounts.
Tuesday, August 29, 2006
Source: Daily News & Analysis
6. Reliance Retail plans take shape
Reliance Retail has purchased about 40,000 sq ft of space at Star City Mall in New Delhi’s Mayur Vihar, which will become the anchor tenant for the mall, which is being developed by Mahatta Towers Pvt. Ltd. According to sources, the space will be used as a food and grocery supermarket.
Another location chosen by the company was in a mall developed by Omaxe Constructions in Greater Noida which has been leased and will be developed as a hypermarket format store. In Ahmedabad, the company has purchased 200,000 sq ft of space in the Iskon Mall, which will be developed as a hypermarket. The company has also purchased space in Jamnagar and Rajkot.
Tuesday, August 29, 2006
Source: Business Standard
7. Van Heusen aims for Rs. 5 billion turnover
Menswear brand Van Heusen is aiming to reach a turnover of Rs. 5 billion in the next 3-5 years. According to Kedar Apshankar, Brand Head for Van Heusen, “Van Heusen has the track record of having achieved 30 per cent growth rate for the last three years and the same is expected in the current fiscal.” The company also plans to open 50 new store in the next 2-3 years, which is likely to increase to 100 over 5 years. The company currently owns 22 stores.
Wednesday, August 30, 2006
Source: Business Standard
8. Hamleys keen to enter Indian market
UK based toy company Hamleys has appointed Ernst & Young to chalk out a strategy for it to enter the Indian market. Hamleys is owned by an Icelandic investment firm called Baugur Group HF and sells several brands of toys. There are 10 stores in the UK and 3 in Denmark. Since multi-brand retail is not yet permitted, the company is likely to come through the franchisee model.
Wednesday, August 30, 2006
Source: Business Standard
9. Metro has a $384.9 million expansion plan
German retail giant Metro announced that the company will be investing $384.9 million to expand operations in India to 33 cities. Metro operates in 30 countries and has over 250,000 employees. In India, the company has 2 distribution centers in Bangalore and plans to expand to Hyderabad, Kolkata, Chennai and Mumbai.
Wednesday, August 30, 2006
Source: Financial Express
10. Australian Foods plan to expand ‘Cookie Man’ brand
The Cookie Man brand is being expanded by Australian Foods India Pvt. Ltd. in a Rs. 250 million infusion to increase the business in the next three years. Cookie Man has been brought to India through a tip up between Australian Foods India Pvt. Ltd., Australian company Cookie Man Pty, US based Paracor, a private investment firm and Mr. Pattabhi Rama Rao.
All 20 Cookie Man stores are franchisees. According to Pattabhi Rao, “Cookie Man intends to be present in shopping malls, where the company does not have to "attract footfalls." In India, about 300 shopping malls have been proposed to be built.”
Thursday, August 31, 2006
Source: The Hindu Business Line
11. HLL and ITC look to rural markets to win customers
FMCG major, Hindustan Lever Ltd. (HLL) is planning to soon launch ‘Project Shakti’, its rural initiative in Bihar and Jharkand. With this project, the company plans to cover 500,000 villages with 100,000 women entrepreneurs or Shakti Ammas over the next two years. ITC is setting up 50 of its rural supermarkets called Choupal Sagars by the March 2007.
Thursday, August 31, 2006
Source: Financial Express
12. MTV focusing on retailing its merchandise
MTV India will soon be launching its own merchandise through its consumer products division by opening 30 exclusive stores in 20 cities by end 2006. These stores will carry the entire product line of MTV apparel and accessories. The first of these stores will open in Mumbai, which will be followed by Delhi and Bangalore.
Thursday, August 31, 2006
Source: Economic Times
13. Adidas sees future growth from exclusive stores
At the opening of Adidas’ Sports Performance Centre (SPC) in Chennai, Andreas Gellner, Managing Director of Adidas India marketing said that the company was seeing the growth of the brand more from its exclusive stores such as the SPC’s. These new stores are the company’s large format stores and use a sports and performance inspired design.
According to Andreas Gellner, “The SPCs are an important communication platform - we can showcase the breadth and depth of our brand offering. We make products for more sports than any other brand and this store demonstrates that.” The company will be setting up these stores in tier I and II cities such as Mumbai, Delhi, Hyderabad and Kolkata.
Thursday, August 31, 2006
Source: The Hindu Business Line
14. Home furnishings manufacturer, Alok Industries plans exclusive stores
Home textiles and furnishings manufacturer, Alok Industries will be adding to its 2 Homes and Apparels stores to open more stores later this year. New stores will be opened in Mumbai, Pune, Bangalore, Thane and Vapi. Alok Industries exports to several high profile international companies such as Gap, Macy’s and JC Penney.
Thursday, August 31, 2006
Source: The Hindu Business Line
15. Godrej targets Rs. 3 billion turnover for its retail division
Godrej & Boyce Manufacturing Co Ltd., owners of the Lifespace brand expect turnover to reach Rs. 3 billion by 2010 and have 90 stores. The company will be spending Rs. 75 million on staff and training, Rs. 160 million on advertising and Rs. 125 million on new stores over the next 2-3 years.
Besides soft home furnishings, the company is also adding products such as electronics, children’s toys, wall furnishings and crystal-ware to its portfolio. There are a total of 42 stores in the country at present, with 9 in the north, 14 in the west, 13 in the south and 6 in the east.
Thursday, August 31, 2006
Source: The Hindu Business Line
16. Aerens Gold Souk on an expansion spree
Aerens Gold Souk Group announced that the company will be expanding and opening new stores in 6 Madhya Pradesh towns using an investment of Rs. 2 billion. The towns that will see new stores opening are Bhopal, Indore, Jabapur, Ratlam, Dewas and Gwalior. The Aerens Gold Souk’s specialize in selling a variety of traditional Indian jewelry in an international setting.
Thursday, August 31, 2006
Source: Business Standard
17. Future Group pushing top in-house brands to a national level
The Future Group is planning to give a national level push to its top in-house brands such as John Miller and Bare and retail them in independent exclusive stores. According to Kishore Biyani, MD of Future Group, “While plans to take some of these high-selling private labels national through separate format stores of 1,500-2,000 square feet have already been finalised, we are toying with the possibility of hiving off these brands into a separate division or a company.”
The company has already identified 7 high performing labels that can be branded exclusively. Besides John Miller and Bare, the other brands are Rig, Ajile, DJMC, Knighthood and Pink & Blue.
Friday, September 01, 2006
Source: Economic Times
18. Marico to sell its low-margin brands
FMCG margins are known to be thin and with the growth of modern retail, the pressure from larger retailers to reduce these margins even more is constantly increasing. Marico has decided to focus on its top performing brands such as Parachute hair oil, Saffola edible oil, Sweekar edible oil, Hair & Care, Nihar, Shanti, Mediker, Revive, Sundari and the Kaya skincare clinics.
Friday, September 01, 2006
Source: Daily News & Analysis
19. Future Group’s Kshitij to develop a 2 million sq ft mall in Chennai
The real estate venture of the retail division of the Future Group, Kshitij Venture Capital has tied up with an equal joint venture partner, Atul Ruia of Mumbai and Sharyans Resources of Chennai to develop a plot in Velachery into a 2 million sq ft mall. The company is planning to develop it as a mixed use retail, possibly including a hotel.
Friday, September 01, 2006
Source: The Hindu Business Line
20. Globus set to open store in Lucknow
The Rajan Raheja Group’s lifestyle retail chain, Globus will soon be opening its first store in Lucknow. The company has 13 stores in India at present, mostly in the metros. Future store opening will take place in Varanasi, Hyderabad and Noida. According to Vinay Nadkarni, CEO of Globus Stores, “Fashion For A Changing World” the philosophy behind the brand, will capture the youth and their mind set through alliances, innovative media presence and through events and activities at store level, all of which will be focused on them.”
Friday, September 01, 2006
Source: Business Standard
21. Levi’s exiting multi-brand outlets to build exclusive factor
Levi’s Strauss & Co. is planning to retail exclusively from its own stores instead of multi-brand-outlets (MBOs) to be able to make the brand more exclusive. The company has already begun to phase out many of its 460 MBOs and is gearing up to increase its exclusive stores from 110 to 250 by end 2007 across the country.
According to Shumone Jaya Chatterjee, Managing Director of Levi Strauss & Co., “Levi’s is positioned as an aspirational brand, and distributing it through multi-brand outlets, has eroded the brand equity. The feed-back from consumers is that an MBO approach does not deliver Levi’s feel and experience.”
Friday, September 01, 2006
Source: Economic Times
22. Department store growth stagnating
The traditional format of organized retailing, department stores are not growing anymore and will have to struggle to be overcome this stagnation. Global consultancy firm, AT Kearney revealed this prediction to Economic Times, that in the next 4-5 years, specialized formats which are also known as ‘category killers’ and discount stores will be the main drivers of the retail business, sidelining department stores.
According to Raman Mangalorkar, principal at AT Kearney, “The present situation in India is comparable to that in the US a couple of decades ago. With the emergence of more specialized formats, termed category killers in industry parlance, department stores subsequently died out.”
Saturday, September 02, 2006
Source: Economic Times
23. Pantaloon looks to having 40,000 stores by 2010
Pantaloon Retail India Ltd. (PRIL) is planning a Rs. 20 billion expansion and has acquired 4 million sq ft of land in various locations in the country and will soon be acquiring another 46 million sq ft of land by 2010. The company plans to have 40,000 stores in 90 cities in formats such as eZone, Collection I, Furniture Bazaar, Big Bazaar, Central Mall and Electronic Bazaar, targeting Rs. 300 billion as turnover.
PRIL plans to open 22 Central malls, more than 100 Furniture Bazaars, 85 eZones and 130 Electronic Bazaars. The company’s home furnishings division, Home Town will open in Noida in November this year, with stores in Pune and Bangalore early next year.
Saturday, September 02, 2006
Source: Economic Times
24. Chinese goods overtaking Indian market
Visit any modern format store and you’ll see that a substantial part of the products are made in China. HyperCITY has nearly 30% of its goods from China, while Magnet and Big Bazaar have 20% each. Most of the products from China fall into the non-food categories such as toys, electronics, crockery, appliances etc. and this amount is expected to rise to 50% in the future.
According to Andrew Levermore, CEO of HyperCITY, “Electronic goods sourced from China could be up to 30% cheaper than branded electronic goods.” Ashok Maheshwari, MD of HomeCare Solutions, which manages Magnet hypermarket states, “Not only are Chinese goods much cheaper, they’re also far ahead of local goods in design and innovation.”
Saturday, September 02, 2006
Source: Economic Times
New Store Openings
Saturday, September 02, 2006
@home, the retail division of the Nilkamal Group opens a new store in Bangalore; its 7th store in India. The company plans to have 12 stores by end 2006 and 35 by 2009.
Source: The Hindu Business Line
Spencer opened its 5th Spencer’s Daily store in Kochi. There will be 10 new stores opening in Thiruvananthapuram, Thrissur, Palakkad and Kottyam.
Source: The Hindu Business Line
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