Indian Talent, Global Content
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Indian Talent, Global Content |
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March 2010: What's in the breeze |
News Update from the Retail Scene in India
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.
Retail News 20th August - 26th August 2006 For other weekly updates click: Weekly Retail Update
Retail News 20th August – 26th August 20061. Tuesday, August 22, 2006 ITC’s garments and accessories division, Wills Lifestyle will be doubling its stores from 50 to 100 in the next 2-3 years. The company also plans to increase its floor area to open larger stores in the future and is also looking to expand to tier II and III towns, although it expects 50% of its business still to come from the metro cities. According to Chitaranjan Dar, Divisional Chief Executive of ITC, footfalls in stores have increased by 25-30% each year. The stores will now also sell designer prêt clothing with Wills being one of the primary sponsors of the India Fashion Week. Source: The Hindu Business Line 2. Tuesday, August 22, 2006 Reliance Retail is following Wal-Mart’s business model of keeping costs to a minimum and plans to outsource its requirement of staff through a franchise-managed store model. The company plans to operate via several agencies in each area to source its front end staff, keeping only a few on their own payrolls and reducing long term costs. The company is concerned about its employees forming unions as Reliance Retail will become the largest employers of the private sector with 500,000 employees once it starts operations in full force. Source: Economic Times 3. Tuesday, August 22, 2006 Vishal Retail plans to set up another retail chain focusing on clothing and lifestyle products. The name of the stores is likely to be Vishal Fashion. The company also has a hypermarket chain called Vishal Mega Mart. RC Agarwal, MD or Vishal Retail said that the new stores will be approximately 10,000 sq ft in size and would stock all apparel and lifestyle related products. Initially the company will be setting up its lifestyle stores only in metros and mini-metros. Vishal Retail will continue to focus on its hypermarket brand, Vishal Mega Mart in 2007, launching its lifestyle brand after that. The company has also set up a new manufacturing unit in Dehradun, with a capacity of producing 500,000 pieces a month. This is the company’s second manufacturing unit after Gurgaon. Source: Business Standard 4. Wednesday, August 23, 2006 Tata Group’s retail division, Trent, is making plans to expand the Landmark chain of stores. The company plans to set up 18 new outlets in the next three years, with an investment of Rs. 800 million. Landmark is also likely to debut in a smaller sizes ranging from 400-1,000 sq ft in hotels and airports. At present there are 7 Landmark stores. The company plans to expand to tier II cities such as Coimbatore, Mangalore, Lucknow, Pune and Chandigarh. Source: Economic Times 5. Wednesday, August 23, 2006 The Aditya Birla Group, one of the country’s oldest business houses, announced that the company had plans to enter the retail industry, although it was too early to give specific details. The company is reportedly planning to invest approximately $1 billion (almost Rs. 46 billion). The company is planning to invest in other new industries as well besides retail. Source: Economic Times 6. Wednesday, August 23, 2006 US based Mary Kay Cosmetics, a $2.2 billion beauty products direct sales company, will soon be coming to India. The company is test-marketing India at present and will start local manufacturing based on the results of its tests. If successful, the company is likely to invest between $1-5 million in the next five years to set up manufacturing facilities. Mary Kay is most famous for its reward programme that offers its top performers with either a cash bonus or a custom built car by GM, a pink Cadillac. The company has already expanded to several south East Asian countries such as Philippines, Taiwan and Korea. Its China market is one of the largest revenue generators after the US market. Source: Economic Times 7. Wednesday, August 23, 2006 With the retail industry seen as the next sunrise industry after the InfoTech industry, several retail companies have collectively through business associations and chambers, asked the government to set a polity and framework for the industry so that it can reach it full potential and become a growth industry. The Indian retail industry is estimated to be worth $292 billion at present and likely to reach $350 billion by 2010 as estimated by Mckinsey. Organized retail is only 3% at present and is likely to increase to 10-15% by 2010. The Indian retail sector consists of more than 15 million outlets and provides employment to over 18 million persons, making it the largest industry employment after the agriculture sector. Source: The Times of India 8. Wednesday, August 23, 2006 According to PricewaterhouseCoopers (PwC), the rapid urbanization and growing working population in India are fueling modern retail growth. In its Asia-Pacific M&A Bulletin, it stated that the country’s retail sector was $210 billion and was growing at 5% per year and contributing 13% of the GDP. AT Kearney’s Global Retail Development Index 2006 ranked India as the world’s most attractive market for retail investments. India has the youngest population in the world, with 50% of its population under the age of 25. The World Bank ranks India as fourth in purchasing power, after the US, China and Japan. Source: The Hindu Business Line 9. Wednesday, August 23, 2006 The hypermarket chain of the Raheja Group will be opening 20 new outlets by 2009. The company will be investing Rs. 3 billion to open these stores in Mumbai, Kolkata, New Delhi, Ahmedabad, Hyderabad and Bangalore and has already acquired 20 properties across the country. According to Andrew Levermore, CEO HyperCITY, “In choosing our market positioning we decided to target the middle and upper class high income earners. Source: Daily News & Analysis 10. Thursday, August 24, 2006 Piramyd Retail’s supermarket chain, TruMart is changing its business model from a hub-an-spoke model to having standard store sizes. Piramyd had earlier organized the stores based on shoppers monthly shopping needs and top-up shopping needs, but have now seen that shoppers are not differentiating between the two. The company will now offer their entire product range at all stores, which will range from 3,000-5,000 sq ft. The company is working to position itself as a good alternative to local kirana stores by offering its loyalty programme and personalizing product offerings and sales promotions to consumer’s preferences. Source: Business Standard 11. Thursday, August 24, 2006 Pantaloon Retail announced its plans to raise Rs. 9.6 billion ($206 million) to fund its expansion by selling part of its stake in its subsidiaries. The company also plans to raise Rs. 2.6 billion by selling shares or equity-related bonds. According to Kishore Biyani, MD of Pantaloon Retail, “Nothing has been finalized yet. There are several funds interested in being part of the group’s ambitious growth plans. The valuation exercise is aimed at arriving at the worth of the companies.” Source: Reuters 12. Thursday, August 24, 2006 The Indian Retail Industry is looking to create an independent regulatory control mechanism similar to SEBI, IRDA and TRAI. Several important players in the industry are reportedly planning to seek nominations to the consumer affairs department, through industry associations. The new body will deal with retail related matters. Source: Economic Times 13. Thursday, August 24, 2006 Malls that received notices by the legal metrology department regarding consumer complaints about smudged price labels and other discrepancies, have denied any wrong doing on their part. The malls feel that as they simply provide space for retailers to display and sell their products and have nothing to do with the actual products themselves. According to Yogesh Samat, CEO of Inorbit, “We are space providers, and the responsibility for goods being sold in the space is not ours, but that of the retailer.” Source: Economic Times 14. Thursday, August 24, 2006 The Maharashtra government has filed over 101 cases against 9 malls in Mumbai, after it received several complaints about smudged price labels, other pricing discrepancies and incorrect packaging. The state followed through with raids at Shoppers’ Stop, Infinity, HyperCITY and Inorbit and seized goods worth Rs. 2.25 million. According to Andrew Levermore, CEO of HyperCITY, “It was purely a technical error on our part which we intend to rectify immediately. I do agree that one or two of such products tend to make an entire shelf guilty. But we believe that consumers are always right and intend to set more stringent standards.” Source: Economic Times 15. Friday, August 25, 2006 Bombay Dyeing announced that it had tied up with Sabyasachi Mukherjee for designing a line of home textile products. The new line will be called the Bombay Dyeing Sabyasachi Signature Line and will debut at the New York Fashion Week. Source: The Hindu Business Line 16. Friday, August 25, 2006 Pantaloon Retail India Ltd. announced that it will be opening 6-8 stores in the next 10 months in the Delhi NCR region. According to Mayur Toshniwal, Head Northern Region for PRIL, the company felt that Delhi and the NCR area were becoming more significant for their business in the north zone. Of its 22 stores in India, only 3 are located in Delhi at present. Source: The Hindu Business Line 17. Friday, August 25, 2006 With several high profile companies such as Reliance and the Birla Group making an entry into the retail industry, the need for a better supply chain management (SCM) is higher than ever before. According to Gibson Vedamani, CEO of the Retailers Association of India (RAI) says “Modern retailers, represented by about 120 companies now, are adopting robust packages for ensuring information-integrated supply chain management. Wastage of time, money, manpower and materials has been reduced and some are even contemplating deploying radio frequency identification tags (RFID).” Gartner predicts that the global requirement for SCM is likely to grow to $6, 358.8 million by the year 2010, from $4,676 million in 2004. AT Kearney estimates that the Indian retail market is worth approximately $350 billion and SCM is showing a 13% growth rate. Source: Business Standard 18. Friday, August 25, 2006 The ITC Group has planned a mega launch of its fresh food retail chain, Choupal Fresh, using its ties that it has built with farmers and supply chain companies while running its rural focused Choupal Saagar’s. According to S Sivakumar, chief executive of ITC, “Choupal Fresh will operate as a wholesale-cum-retail store.” The company has started working on a 2,500 sq ft store in Hyderabad, which has a warehouse and cold storage facility of 7,500 sq ft. Other cities on the company’s radar are Pune, Chandigarh and Kolkata. Choupal Fresh stores will open at 5am for conducting wholesale business, while during the rest of the day would focus on retail business. Source: Economic Times 19. Friday, August 25, 2006 One of India’s best known department store chains, Shoppers’ Stop, and its subsidiary Crossword are on a nationwide expansion spree, investing Rs. 10 billion. The company recently signed a MoU with Swiss based Nuance Group that allows it to enter the Indian airport retail market. The company plans to open 24 Shoppers’ Stop outlets, 45 new Crossword outlets, 4 new Home Stop outlets, 20 HyperCITY outlets and 40 MotherCare outlets spread across 10 cities. Mumbai and Gujarat will have the maximum number of new outlets. Source: Business Standard 20. Friday, August 25, 2006 Emami Ltd. announced that the company was planning a chain of ayurvedic and herbal spas and clinics for the domestic as well as the international market. The company will be tying up with partners to manage the alliance and currently is in negotiations with companies in Indonesia, Thailand and the UK. The company is likely to open its first spa clinic in a year. Source: Rediff Money
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