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.The Chillibreeze Business Research Team has writers with interest and experience in the Retail industry, will be populating this page with the updates. Retail News 21st May - 27th May 2006 For other weekly updates click: Weekly Retail Update
May 21st - 27th India Retail News: Coffee, Levi's Starbucks, Titans, Expats, New BalanceSunday, May 21, 2006 As Indians are becoming more brand-conscious and spending money trying out new products and services, international brands such as Nautica and New Balance are coming into the Indian market to cash in on this new trend. The apparel sector is estimated to grow to Rs 300 crore in the coming three years. The premium grooming segment is estimated to be worth Rs 500 crore and is growing at 45-50% each year. Nautica will be investing Rs 30 crore to set up a network of 12 stores. New Balance, a US based footwear company, is counting on this fitness and grooming trend of upwardly mobile Indians to boost its sales of running and walking shoes. The company has plans to open 50 stores by 2008. Source: Economic Times Sunday, May 21, 2006 There are an increasing number of expatriates who have landed jobs in the retail industry in India, due to their experience of large format retailing experience. Mall management is one segment that has several expats from Malaysia, South Africa, Singapore and the UAE. According to K Sudarshan, managing partner of EMA Partners International, several companies are interested in hiring ‘recently retired’ people from international retail giants such as Tesco, Debenhams and Carrefour. Interestingly, most of these expats have risen from working in the companies and do not have business school degrees. Source: The Hindu Business Line Tuesday, May 23, 2006 R Raheja group’s retail chain, Globus Stores announced that it will be soon entering tier II and tier III cities, including Vadodara, Muradabad, Bhavnager, Mohali, Lucknow, Cochin, Nagpur, Bhopal, Meerut, Ludhiana, Mysore and Jamnagar. The company plans to invest Rs 300-400 crore to cover a million sq ft of retail space in the next 3-5 years. According to Vinay Nandkarni, CEO of Globus Stores, the company will be opening around 100 stores in the country. The average store will be an estimated 8,000-10,000 sq ft in space, while the stores in smaller cities will range from 5,000-6,000 sq ft. Source: Economic Times Tuesday, May 23, 2006 The UPA government has completed two years in office and is now considering a new package of reforms for the retail and insurance sectors. There is a proposal to increase FDI in single brand retail from 51% to cover all retail trade with foreign share of 49%. Also being proposed is to allow 100% foreign ownership only in specialized retail chains. Currently, international brands such as Bulgari, Brequet, Channel, Ralph Lauren and Lladro are available in India through franchises, where foreign companies have no direct ownership. Source: The Hindu Business Line Wednesday, May 24, 2006 BK Birla group’s textile division, Century Textile & Industries announced that it will be focusing on building the retail brand of its apparel division and will open a number of exclusive stores across the country. The company manufactures premium menswear under the brand name ‘Cottons by Century’. Currently, the company has 46 outlets, which will be increased to 65 by 2006-07. The apparel division has a turnover of Rs 25 crore in 2005-06 and is aiming to double that in 2006-07. Source: Economic Times Wednesday, May 24, 2006 Smaller retailers in Pune are gearing up to compete with malls and large chain stores. Several stores are completely revamping their premises and becoming specialty stores, offering an extended variety for a limited segment. Vama, for example, has chosen to specialize in women’s and young girl’s clothes. They are also planning to develop their own in-house brands for exclusivity as well as higher profit margins. Stores in Pune’s Laxmi road are going vertical to cope with the narrow frontage that most small stores have. Split-level stores are becoming increasingly common here, giving the store a open feel that is not usually found in small retail stores. Besides revamping their stores, smaller retailers are also using the internet to build awareness of their store as well as their brands. Although sales of sarees have dropped, the value of each sale is higher with sarees becoming mostly a party wear garment, thus compensating the decrease in volume. The fastest growing segments in women’s wear are ready-mades and western wear, growing at 30-40% annually. Interestingly, most of these changes being made are due to the entry of the second generation of stores owners who are more aware of the customer’s changing tastes. Source: Economic Times Wednesday, May 24, 2006 Malls have begun to reserve a section for imported items, just as local retailers have been doing for years. Items such as Malaysian deodorants, Indonesian chocolates or shampoos made in China, the brand or quality does not matter; only the tag that it was made outside of India is important. There is a high level of brand recall associated with these products, most of which are never advertised, even inside the stores. According to Vikas Gulaty, director and CEO Mallz 99, “There is a huge craze for imported products, especially in Tier II towns, where access to such products is a problem and buying options are limited. The brand does not really matter, because the general psychology is that the foreign products are superior to the domestic products”. Source: Economic Times Wednesday, May 24, 2006 Pantaloon Retail will be increasing its spending on internet and mobile marketing. According to Sanjeev Aggarwal, Head Marketing, Pantaloon Retail, "We plan to strengthen our presence in this space since this is an area which is growing rapidly. The plan is to innovate and experiment in Internet and mobile marketing initiatives." The company has done web-based advertising through hungama.com but is now looking for a partner who will handle this aspect for the long term and is keeping a substantial part of its Rs 100 crore ad budget for web operations. Currently, the company spends the bulk of its budget on advertisements in the print media. Source: The Hindu Business Line Thursday, May 25, 2006 Leading Indian watch manufacturer and retailer, Titan Industries will be launching its jewelry brand, Tanishq in the US. Currently, watches account for 60% of turnover in international locations. With the introduction of the Tanishq jewelry collection, the company expects this ratio to change to 55:45 for jewelry and watches. Titan will continue to position itself as a mid-segment brand and would like to focus on its Indian background and heritage of gold and fine jewelry. The company makes 80% of total revenue from the Asian market and is planning to increase its presence in Malaysia and Singapore. Source: Business Standard Thursday, May 25, 2006 B K Birla group’s textile divison, Century Textiles & Industries will be launching a denim segment in direct competition with the country’s leading denim manufacturer Arvind Mills. Century plans to have exclusive outlets every 5 km in large cities in India. Source: Business Standard Thursday, May 25, 2006 UK based Whitbread Plc owned Costa Coffee is planning to rapidly expand across India and offer a special Indian-ised menu. The company will be increasing its outlets from its current 13 to 300 in the next five years. Costa Coffee has been operating in India only for the last eight months. The organized retail sector has approximately 500 cafés currently and there is a huge potential for more, according to Harish Bijoor, CEO of Harish Bijoor Consultants, a Bangalore based company. Alan Parker, chief executive of Whitbread Plc, says that the company will be in all major cities in the next 2 years. Costa Coffee’s local partner is Devyani International Ltd, the same company that holds master franchises for Pizza Hut and KFC. Source: The Hindu Business Line Thursday, May 25, 2006 Levi’s Square on Brigade road in Bangalore is one of the company’s largest and is well on its way to becoming a destination store. The store had a soft launch three weeks ago and has already had 40% higher sales than Levi’s 3 other franchises, all on Brigade road, put together. A large expat population, higher buying potential of the young and IT professionals and the increasingly fashion consciousness of the city are some reasons why Levi’s new store has received such a good response. The company is offering customization and designer advice to its customers. According to Shumore Chatterjee, country manager, Levi Strauss India, Pvt Ltd, "India is clearly one of the fastest growing markets for Levi's in the world. The jeanswear market in the country is close to 50 million pairs per year and growing at 35-40 per cent per annum, much faster than other global markets." Kevin Sargison, retail operations director, Levi Strauss & Co, Asia Pacific Division, said that while the size and number of outlets in China was more, "India is vibrant and India is India." Source: The Hindu Business Line Thursday, May 25, 2006 Kolkata will have its first e-mall this year. It will be developed by Hoogly Investments Ltd, with an investment of Rs. 35 crore. The mall will stock only electrical and electronic goods and will be located in the central business area of the city, covering 80,000 sq ft of space. Additional services such as a food court, café’s and entertainment facilities will also be available. Source: The Hindu Business Line Thursday, May 25, 2006 Jindal Stainless Ltd (JSL) announced that its lifestyle products division artd’inox will be expanding and opening 25 new outlets in India and is formulating plans to increase its stores in the overseas market. The company manufactures stainless steel products such as desk accessories, kitchenware and tableware. New stores will be opening in Ludhiana, Chandigarh, Surat, Pune, Coimbatore, Kochi and Hyderabad. In the overseas market, stores are likely to be opened in Dubai and Colombo. The company exports almost 70% of its products to Canada, the UK, the US and Australia. Source: The Hindu Business Line Friday, May 26, 2006 Piramyd will be an anchor in Gujrat’s Arc Mall, being developed by the Dev Group. The mall will cover 350,000 sq ft, with 51,000 sq ft of space being allotted to Piramyd. Other retailers in the mall include, Magnet hypermarket and Cinemax multiplex. Source: Business Standard Friday, May 26, 2006 The brand conscious city of Chandigarh will soon be having global brands setting up shop in the city. Chandigarh also has the highest per capita income in the country, followed by the National Capital Region of Delhi, Gurgaon and NOIDA. The city’s location is also a draw, as it has access to markets of Punjab, Haryana, Himachal Pradesh and Jammu and Kashmir. Likely brands opening in Chandigarh are Nautica, Mango and Louis Vuitton. Nautica has already found a 4,000 sq ft store location and will be operational by September 2006. Tommy Hilfiger has also decided to open a store in the city due to its cosmopolitan outlook, spending on clothing and accessories and global consumers. Source: Business Standard Friday, May 26, 2006 Following the global trend made famous by Wal-Mart, Indian retailers such as Pantaloon, Piramyd and Vishal Mega Mart are making space for service providers such as money exchangers, travel agents, stock brokers, telecom service providers, hair and beauty salons and home designers in stores. Pantaloon is reportedly conduction talks with MoneyGram and Western Union to be a part of their stores. Rural retailers such as Godrej Aadhar and DCM’s Hariyali Bazaar are already providing services such as agri-consultancy and finance to farmers. Source: Economic Times Friday, May 26, 2006 Consumer durable companies such as LG, Sony, Samsung, Phillips and Whirlpool are ensuring that their products look good to appeal to customers. Surveys reveal that consumers appraise products for cosmetic appeal before deciding on their purchase. Whirlpool India restyles its entire product line each year using designers from the National Institute of Fashion Technology (NIFT). Source: Business Standard Friday, May 26, 2006 US based Lucera has tied up with Renaissance Retail Venture Pvt. Ltd. (RRVPL), a subsidiary of Renaissance Jewelry Ltd. and will be opening 25 outlets in the next 18 months. According to Sumit Shah, managing director of Renaissance Jewelry Ltd. the company will be investing Rs. 17 crore in the first phase. Source: DNA Business Friday, May 26, 2006 Seattle based Starbucks Coffee Company, has made a concrete agenda to enter the Indian market in the next 18 months. An official spokesperson said "We are excited about the great opportunities that India presents to the company. We are looking forward to offering the finest coffee in the world, handcrafted beverages, the unique Starbucks experience... to customers in this country within the next 18 months." The company is reportedly in talks with a Mumbai-based real estate company to enter metros such as Mumbai and Delhi, where the bulk of the target audience is. Starbucks is on a global expansion spree, making plans for expansion to Russia, Italy and Brazil, besides India. Currently, the domestic market is dominated by Café Coffee Day and Barista and has had global companies such as Costa Coffee and Gloria JeansCoffees recently announcing their intentions to expand operations in India. Source: The Hindu Business Line Friday, May 26, 2006 Local chain store Triveni Khushali Bazar (TKB) has tied up with Max New York Life (MNYL) to sell its insurance policies. TKB has 11 rural malls at present and will be setting up 2-3 new malls each month, reaching a total of 45 by March 2007. According to Gary Bennet, managing director and CEO of MNYL, the tie up will strengthen the company’s presence in rural areas like West Uttar Pradesh and that "Given the huge size of the rural market and the increasing propensity to save, the potential that exists in the rural market is enormous". Source: The Hindu Business Line Saturday, May 27, 2006 Pantaloon Retail will be launching its online portal in the first week of June giving competition to e-commerce sites such as eBay, Indiatimes, Sify, Fabmall and Rediff. The site will be called futurebazaar and will let consumers trade a variety of in-house products as well as other brands. The site will be retailing 14 categories of products online, including apparel, books, music, electronics and consumer durables. Source: Financial Express Saturday, May 27, 2006 The Indian government is readying a plan to allow multi-brand retail. There are a few concerns that the government wants to ensure will be taken care of before it gives permission. The three main issues are employment, upgradation of technology and increasing production capacities. Ensuring employment is the primary concern of the government, who wants to make certain that additional employment is generated, while not displacing current shop owners and businessmen. Source: Economic Times
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