Indian Talent, Global Content
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Indian Talent, Global Content |
August 2008: 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 2nd April - 8th April 2006 For other weekly updates click: Weekly Retail Update
April 2nd – 8th India Retail News: Kids-wear, Online Shopping, Citi Style, Hugo Boss and More1. Monday, April 3, 2006 Ruchi Group’s flagship company, Ruchi Soya Industries announced that it will be entering the retail sector using ITC’s e-Chaupal model of rural retailing. The company will focus on tier II and III towns and put in an investment of Rs 20 billion, of which Rs 7.5 billion will be the initial investment. The Ruchi Group is a manufacturer of edible oils, vanaspati, bakery fats and soya foods. Its brand Nutrela is the largest seller of soya products such as granules, chunks, oils, flavors and flour, in the country. Source: Business Standard 2. Monday, April 3, 2006 The Future Group, earlier known as the Pantaloon Knowledge Group, will be putting in place a central control system that would link all of its corporate entities such as the real estate division, Kshitij, the investment consultancy division, Indivision and the home and lifestyle retail store, Home Solutions. Through this system it will be possible to get information on store displays and business alerts. Although other companies like Reliance and Hindustan Lever already have such systems in place, Pantaloon is the first retailer to set up such a system. Source: Business Standard 3. Monday, April 3, 2006 The children’s wear branded wear segment is receiving tremendous interest due to higher disposable incomes and the continuous retail blitz. According to Anil Lakhani, director of Gini & Jony, “the children’s wear market constitutes 17% of the total Rs 430 billion apparel industry, or about Rs 73.1 billion, according to a study by KSA Technopak. Of this, the organized segment is only about 7% or over Rs 5 billion.” The kids-wear segment is growing at 10% per year and is one of the fastest growing segments due to higher margins and as children’s clothes are being considered as being part of the lifestyle segment with strong emphasis on brands. Several companies are forming their own brands, while others are entering the segment with joint ventures. The Anil Dhirubhai Ambani Group bought a 22% stake in the company last year and recently, Pantaloon formed a JV with Gini & Jony, called Gini & Jony Future Fashions, which will be setting up new brand outlets. The company has planned on opening 7 new outlets in the April-June 06 quarter. The company’s closest competitor, Ruff Kids has been expanding aggressively. Raymond has also launched its own kids-wear brand called Zapp! and will be opening 12 stores in the next year. Gokuldas Images, the largest garment exporter, is upbeat on the growth of its brand, Weekender Kids. ITC is considering expanding its Wills Lifestyle brand to include kids-wear and other larger retailers such as Shopper’s Stop, Westside, Globus, Lifestyle and Landmark have increased the space allocated to kids-wear in their stores. Source: Economic Times 4. Wednesday, April 5, 2006 US based strategic retail and design company Chute Gerdeman Retail will be entering the Indian retail market. The company has worked with global giants such as Wal-Mart, Target, Victoria’s Secret, Bloomingdales and Bath and Body Works. The company has set up a marketing office in Mumbai to cater to the rush of international retailers due to the partial opening of FDI in retail. Hozefa Attari, director, India, Chute Gerdeman said that the company will provide aesthetic design solutions from the retailer’s point of view for higher productivity using intelligence-driven designs. Chute Gerdeman will be following a two-fold strategy for India, to deliver world-class store identities working with local brands and to develop retail identities for international players such as Wal-Mart by adjusting to local tastes. Both retail and food chains will be the primary focus, using “eye-level branding” process to deliver a high return on investment (RoI). Source: DNA Money 5. Wednesday, April 5, 2006 Several organized retail companies like Pantaloon have made ambitious plans to enter the e-tail market, other like Shopper’s Stop feel the market needs to mature before it enters the segment. The Internet & Online Association of India (IOAI) projects that online shopping is going to increase to Rs 23 billion by the 2007 financial year. Prashant Desai, head, investor relations for Pantaloon Retail announced that the company will enter the online retail space in June. Piramyd Retail is also making plans to enter the online retail market. Online giant eBay is showing keen interest in the Asia-Pacific region since it has declining growth rates in the US and Germany. One of the main advantages of online retailing is that customers can compare items with other stores. E-tailing also is an easy and cheap medium for additional advertising and can be used to test-market product launches. Retailers will have to deal with better customer expectations as each retailer competes for a limited number of online consumers for the present. Source: Economic Times 6. Thursday, April 06, 2006 Mohan Murjani, chairman of the Murjani Group announced that the company will be bringing luxury brand Calvin Klein to India and will be opening 4 stores by the end of 2007. The company is considering opening standalone stores for the innerwear range and accessories, brand stores for the Calvin Klein and French Connection (FCUK) and shop-in-shop format for large retail outlets. The Murjani Group was responsible for bringing Tommy Hilfiger to India and is also working to set up four Gucci and Jimmy Choo outlets by end 2007. Another brand that the company is aggressively marketing is the Build-a-Bear (BAB) brand which will be opening 50 to 100 stores in the next five years. Tumi, a luggage brand will also be launched by The Murjani Group. Source: Business Standard 7. Thursday, April 06, 2006 Speaking on the sidelines at the Opportunities in Organized Food Retailing conference in Mumbai, Limji Nanabhoy, director of Agri-Science India, said that, “The farmers will greatly benefit from the revolution in the food retail space.” As organized food retail gets entrenched in the country, retailers will be interested in sourcing products directly from the farmers, cutting out the role of the middleman. Consumers will also gain due to this arrangement as they will get better products at lower costs. Pankaj Gupta, practice head for Tata Strategic Management Group, said that “Organized food retailing business is the next sunrise industry in India and it is going to grow from about present level of Rs 25 billion to Rs 30 billion a year to $ 370 billion a year by 2015.” According to the Bombay Chamber and Ministry of Food Processing Industries, the organized food retail industry is estimated to be around Rs 25-30 billion and is likely to grow by 30% over the next five years. Source: Business Standard 8. Thursday, April 06, 2006 Reliance Industries will be investing close to Rs 40 billion in Punjab and Haryana for setting up its supply chain for its retail business. The company has had talks with the both state governments for new projects. Reliance has already purchased 900 acres of land in Punjab and was allocated 28 acres in Haryana to set up two projects with an investment of Rs 930 million. The company will be building an airstrip and purchasing cargo aircraft to transport farm and dairy products from Punjab and Haryana and fruits and vegetables from Himachal Pradesh. Reliance is also in talks with other states, especially West Bengal, to form similar arrangements with farmers. Reliance had earlier announced that it will be investing Rs 33.75 billion towards its retail division to run hypermarkets, convenience stores and supermarkets in 800 cities and towns. In the first five years, the company plans to open 775 stores. Source: Rediff Money 9. Thursday, April 06, 2006 Titan Industries jewelry brand, Tanishq plans to open 150 new stores by 2010, doubling the current number of stores. The company is looking specifically at smaller cities and towns to change the mindset that branded jewelry stores are only a metropolitan phenomenon. Tanishq is planning to open new stores in smaller cites under the brand Gold Plus, targeting budget buyers who are looking to purchase jewelry for investment. Source: Business Standard 10. Thursday, April 06, 2006 Premium home furnishings brand Portico is set to double its turnover to Rs 400 million in a year. An estimated 25% of its revenue will be from bath solutions business and the balance from its bed linen segment. Rajiv Merchant, CEO for Portico, announced that the company will be launching a new range of color coordinated solutions for the bath segment. Portico started in India in 2003 through The Creative Group, its Indian licensee. The company currently has stores in 30 cities and plans to increase it to 50 by the end of the year, targeting tier II and tier III cities such as Chandigarh, Nasik, Sholapur and Surat. Source: Business Standard 11. Friday, April 07, 2006 Reid & Taylor is diversifying into ready-to-wear garments and will now compete with premier brands such as Louis Philippe, Van Heusen, Arrow and Zodiac. Govind Mirchandani, president and CEO of the worsted suitings division of S Kumars Nationwide (SKNL) said that the brand will now offer a complete wardrobe, including shirts, trousers, blazers, suits and accessories. The company plans to add 50 stores this year to the current 22 outlets, using an Rs 250 million investment. Reid & Taylor is available at multi-brand outlets (MBOs) like Shopper’s Stop, Piramyd, Central and Ebony and the company plans on adding another 150 MBOs by end 2006. The company has registered a 30% annual growth rate and hold 15% of the market share of the Rs 13 billion worsted suitings market segment. Source: Economic Times 12. Friday, April 07, 2006 In the next five years, the organized food retailing industry is expected to grow by 30% to become an Rs 110 billion industry, according to industry experts. At a seminar of food retailing, Sanjiv Bhasin, CEO of Rabo India Finance, said “It will be the entry of big corporates in the sector, in addition to relaxation in FDI policy that will achieve the Rs 110-bn figure by ’10.” Other factors which will make an impact are the large population of young people in India, changing consumption patterns and arising standard of living. A global trend that will also impact this phenomenal growth is the emphasis on private labels to get higher gross margins as well as control on key issues such as price and quality. Source: Economic Times 13. Friday, April 07, 2006 Kolkata headquarted fashion chain store, Citi Style announced that it will be increasing its stores across the country. Currently, the stores are located in Kolkata and Jamshedpur and Varanasi is to be set up soon. Focusing on affordability, Citi Style offers apparel for men, women and children. Source: Business Standard 14. Friday, April 07, 2006 Asian Leather has been selected by Wal-Mart as the “International supplier of the year 2005” for supplying the best quality merchandise, on-time shipment and day-to-day support to Wal-Mart. The award was presented to Nari Kalwani, managing director and Divya Kalwani, director at Wal-Mart’s global supplier event in Shenzhen, China. Source: Business Standard 15. Friday, April 07, 2006 Whirlpool India announced that it will invest $15-20 million in the next 12 to 18 months to expand its product range. The company manufactures 1.5 million units a year and is aiming to achieve a 20% growth this year. Arvind Uppal, managing director for Whirlpool, said that the new products will be launched using a multi-media campaign including brand ambassadors, marketing tie-ups, in-store displays, promotions, direct marketing, demonstrations and workshops. Source: Business Standard 16. Friday, April 07, 2006 The bottom line of ReTechCon was that technology will play a larger role in the retail industry as it develops in an organized manner. The main topic of discussion at ReTechCon was Intelligent Retailing-Efficiency through Technology. According to Ganesh Natarajan, deputy chairman and managing director at Zensar Technologies, non-IT companies were finding it difficult to develop IT functions and outsourcing these functions to external parties would offer great potential. BS Nagesh, managing director and CEO of Shopper’s Stop said that IT companies “need to look beyond the big five retailers at the second level of companies which could drive the industry's growth”. Gibson Vedamani, CEO, Retailers Association of India (RAI) said that “retail IT has emerged as the backbone of the industry and the idea behind ReTechCon is to provide a platform for the retailers and technology service providers”. Source: Rediff Money 17. Friday, April 07, 2006 German fashion retailer, Hugo Boss is positive about its plans on entering India although it has not changed its format and will enter the country using the franchise route even though single-brand retailing is permitted. The company opened its fourth store in India in Bangalore through Bin Hendi Enterprises, a Dubai based company. Source: Hindu Business Line 18. Saturday, April 08, 2006 Delhi and Mumbai will soon have their own versions of London’s Bond Street, Los Angeles’ Rodeo Drive, Shanghai’s Plaza 66 and Thailand’s Emporio, when more than 6 retail development projects are completed. DLF’s Emporio in Delhi and Mumbai and The New Delhi Dome are two large retail projects which will open their doors to luxury brands from across the globe. DLF Emporio in Delhi is set to open by end 2006 and will open in Mumbai by 2008. Source: Economic Times 19. Saturday, April 08, 2006 Taking advantage of high consumer spending, Pantaloon Retail has planned to expand in South India in 2006 by setting up 10 stores in the region. According to Vishnu Prasad, president, operations, south zone, the company will open 3-4 Big Bazaar stores in Bangalore and a mix of Big Bazaar and Pantaloon stores in other metro cities in the south. Next year the company will focus on setting up stores in smaller cities such as Belgaum, Hubli, Dharwad and Mysore. Source: Economic Times 20. Saturday, April 08, 2006 The Knowledge Company, a division of KSA Technopak brought out India Luxury Trends 2006, which estimates that the luxury market is worth Rs 640 billion, including items such as jewelry, apparel, fragrances, footwear and accessories. There are 1.6 million households with annual incomes of over $100,000, who spend an average of Rs 400,000 per year on luxury brands. The Cap Gemini-Merrill Lynch ‘World Wealth Report 2005’ says there are almost 70,000 High Net Worth Individuals in India, having a minimum of $1 million in financial assets easily bypassing other countries in the region such as 49,000 in Singapore, 67,000 in Hong Kong and 53,000 in the UAE. Elisabeth Ponsolle Des Portes, Comite Colbert’s president & CEO, says that “the lack of appropriate retail outside star hotels is also one of the major impediments to the growth of luxury business in India”. Euromonitor estimates that the global luxury goods market is already $166 billion and the industry is focusing on the Asia-Pacific region for further growth. Merrill-Lynch estimates that 13% of Louis Vuitton sales are in Russia, China and India. Source: Economic Times 21. Saturday, April 08, 2006 Several Swiss watch brands such as Cartier, Rado, Tissot, Omega, Chopard, Harry Winston, and Vacheron Constatin are considering opening exclusive stores in India. Considerable interest has been generated since the government permitted 51% FDI in single-brand retailing. Currently, most of these brands are available through multi-brand showrooms in the metros. Source: ibef.org
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