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News Update from the Retail Scene in India
chillibreeze writer — 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.
Feb 5th – 11th India Retail News: Organized retailing, Crossroads, Pantaloon, Woolworths and More
Parking at malls is the new money spinner
Parking charges at malls amounts to Rs 15 crore annually from the Delhi-NCR region, a profitable by-product of the retail boom in the country. According to Paramjeet Singh, operations manager of InterPark ICS, the 12 malls in the Delhi-NCR region generate from Rs. 75 lakh to Rs 150 lakh from parking services alone. ICS manages parking operations for Sahara, MGF and DLF malls in Gurgaon.
Ansal Plaza is the largest parking fee generator in Delhi while Gurgaon’s City Centre rakes in Rs 150 lakh each year. Delhi’s four malls bring in Rs 2-3 crore annually while Gurgaon generates Rs 6 crore annually from its malls reflecting the growth of its mall culture there.
Source: Economic Times (Note: Ten lakh = one million)
Tuesday, January 24, 2006
Organized retailing giving new life to new products
Organized retailing is breathing new life for several niche categories such as packaged fruit juices, hair creams, fabric bleaches, shower gels, depilatory products and convenience and health foods, all items that would not be easily found in the local kirana store.
Leading FMCG companies such as PepsiCo, Dabur Foods, Marico and Reckitt Benckiser are creating their marketing plans tailored around larger retail chains like Spencers and Big Bazaar.
PepsiCo is pushing Tropicana fruit juices, Diet Pepsi and sports drink Gatorade through organized retail outlets. Dabur Foods Real brand makes 20% of total sales only through modern retail outlets.
Source: Economic Times
Sunday, January 29, 2006
Retail boom guaranteed in India
The Indian retail sector is set to grow three times its current level, according to CRIS Infac’s Head of Research, Nagarajan Narasimhan. The increase is due to the fact that organized retailing in India accounts for a mere 3.5% of total retail sales.
Demand factors such as demographic changes and an increase in availability of cheap finance are pushing forward the sector. Supply factors such as the development of new retail formats and a substantial growth of existing ones are crucial for this growth.
The growth will not be restricted to larger cities, with an estimated 13% of growth attributed to Tier II cities, according to CRIS Infac, where there is a significant discount in lease rates.
Source: Business Today
Tuesday, January 31, 2006
India’s shopping craze
Modern format retailers are realizing the urgent need for improving the infrastructure required to handle the new breed of shoppers in India. Big Bazaar’s Sabse sasta din sale on 26th January, 2006, India’s Republic Day, received such an overwhelming response that stores and employees were unable to handle the rush.
Kishore Biyani, MD of Pantaloon Retail and Big Bazaar, plans to implement a coupon system for further sales, where a customer is given a specific time which they can spend in a Big Bazaar outlet. Billing counters will also be increased on sale days to ensure that lines don’t back up.
Across the country, Indians are discovering malls and larger format stores and enjoying this new format, regardless of these few hiccups.
Source: Economic Times
Current News
5th February – 12th February 2006
Monday February 06, 2006
Wal-Mart Senior Executive moves to India so set up India Operations
Lance Rettig, a senior executive at Wal-Mart’s headquarters in Bentonville, Arkansas will be moving to India to set up a team for its eventual entry in India’s retail market once FDI is permitted. Wal-Mart’s India office will be located in Bangalore and will conduct market research and business development operations.
Source: Economic Times
Monday, February 06, 2006
Crossroads mall to get a makeover
India’s first mall Crossroad will be getting a makeover. Owned by the Ashok Piramal group, the mall opened in 1999 and received a record number of visitors on its opening day. All retail expansion will be done under the Piramal Group’s retail venture, Piramyd Retail. Located in central Mumbai, near the historic Haji Ali mosque, Crossroads has a definite advantage of location.
Source: Economic Times
Monday, February 06, 2006
Small towns in Maharashtra emerging as retail hubs
Small towns in Maharashtra are emerging as retail hubs for large chain stores such as Pantaloon Retail. The company opened the first Big Bazaar store in Sangli, a small town in western Maharashtra and saw an over whelming response of over 20,000 people visit the store on its first day. Café Coffee Day and pizza chain Smokin’ Joe’s will also be opening outlets in the town soon. Besides Mumbai and Pune, smaller cities like Nagpur, Nasik, Aurangabad, Ahmednagar, Sholapur, Kolhapur and Amaravati will soon see the expansion of modern retail outlets as levels of disposable incomes rise.
Smaller cities like Nagpur have a large student population, while others offer low real estate costs, fewer power cuts and lower levels of attrition. Retailers need to adjust their product mix for smaller cities, as they tend to be more conservative than the metros.
Source: Business Standard
Monday, February 06, 2006
Consumers will be the winners when multi-brand FDI is permitted
India’s opening up of 51% of retail for single-brand products is causing global retail giants like Wal-Mart, Tesco, Carrefour and JCPenney to be hopeful that the government will soon open up FDI for multi-brands too. Instead of forging franchise deals, these companies are now interested in investing in their own shops so they have greater control and increased access to the market.
Assocham’s President Anil K. Aggarwal feels that permitting multi-brand retailers to enter India will not affect kirana shops adversely and will instead benefit the average consumer by increasing competition. Retailers are very positive for growth, regardless of which method international companies enter by. The rush at the Big Bazaar Republic Day sale proves that consumers are hungry for products and the more choice available to them, the more they will spend.
Source: Mumbai Mirror
Wednesday, February 08, 2006
Pantaloon January sales almost double
Retail sales for Pantaloon Retail nearly doubled over last years figures, up Rs 200 crore from last year’s Rs 102 crore. Sales at Pantaloon’s grocery and hypermarket stores, Food Bazaar and Big Bazaar increased from Rs 56 crore last year to Rs 129 crore this year.
Pantaloon department store sales increased 54%, from Rs 46 crore last year to Rs 71 crore this year.
Source: Economic Times
Friday, February 10, 2006
Separate companies for multi-brands to enter India
The Indian government is likely to permit multi-brand international retailers to set up separate companies, with 51% stake, to enter single-brand retailing. According to senior government officials, these rules might be expected as early as next week.
This will enable companies like Adidas to set up individual companies to sell its brands, Adidas, Rockport and Reebok.
Source: The Times of India
Friday, February 10, 2006
Woolworths of Australia to enter durables market in India
Woolworths is planning to enter India through its durables retail chain, Dick Smith Electronics which has entered into a Joint Venture with Tatas and has formed sourcing agreements with LG, Samsung and Philips. The first store is likely to be located in Mumbai and is expected to open by April 2006.
According to sources, the company feels that once this business model is successful, Woolworths will eventually open other retail brands. Woolworths major brands include Safeway, Food For Less, Woolworths Metro, Woolworths HomeShop, Woolworths Liquor, Tandy Electronics, BWS, First Estate, Dan Murphy’s, Plus Petrol, BIG W and GreenGrocer.
Source: Economic Times
Friday, February10, 2006
Ishanya plans a specialty mall
A specialty mall focusing on home and office design will be opening in Pune in July 2006. The Ishanya Mall is being promoted by Deepak Fertiliser and Petrochemical (DFPCL) will cover 5.5 lakh sq ft. With an investment of Rs 120 crore, Ishanya is bringing in single brand retailers from overseas for whom FDI is permitted. Ishanya will offer seven categories from the DIY (do-it-yourself) segment, with two or three brands for every category for design and price variations.
Source: Economic Times
Friday, February 10, 2006
India’s retail sector buzzing with global labels entering
Several international brands are making serious enquiries and plans on entering India since the government has permitted 51% FDI in single brand products. Some of the likely entrants are:
A S Watson, a health and beauty chain from Hong Kong, which is part of the Hutchinson Whampoa group, is likely to operate a cash and carry retail format.
Jean Claude Biguine, a beauty salon chain from France who has tie ups with L’Oreal, Elle, Bache, Pevonie, Philips and Eugene Perma, will be investing Rs 200 crore in India over the next two years. The company is planning to open 500 outlets, 60% of which will be in tier 2 cities.
Costa, an Italian coffee brand, is planning to initially invest Rs 100 crore in India.
Verigold, a jewelry brand which already has manufacturing facilities in the country, will be investing Rs 100 crore in the next year. The company is also planning to enter the home furnishings market in two formats, a one-stop shop for home improvement and building materials and an electronics store. Kolkata, Bangalore and Pune will have the first stores.
Analysts caution that not all investment plans will translate into actual business, as several companies are still in the scouting mode, although an investment of $200-$500 million is likely within the next few months.
Source: Business Standard
Saturday, February 11, 2006
Pantaloon to launch Miss India range of clothing
Pantaloon Retail will be launching a Miss India range of clothing that will be designed by Anita Dongre and Rocky S. The collections will be launched in two stages, Anita Dongre’s collection comprising of western casual wear and targeting women between 20 and 30, will be launched on February 14, 2006. The second collection, by Rocky S, will be launched during the Miss India finale on March 18, 2006 and will consist of formal wear.
Pantaloon Retail’s President (Marketing) Sanjiv Aggarwal said that the move was to “strengthen our fashion imagery” and to promote the brand’s image as fashion forward.
Source: The Hindu Business Line
Saturday, February 11, 2006
Apparel retailers reducing advertising budgets
The best advertisement for a retailer in recent times is to be located on the high street or mall and is leading for advertising spending to drop significantly. Apparel brands in India are following the winning model of Spanish brand Zara, by spending more on opening their stores in high traffic areas and reducing advertising spending. Zara currently spends approximately 1-2% of its revenues on advertising, while the international benchmark is 3-4%.
Benetton India reduced its advertising spend from 8-9% to 2.5-3% in the last two years. The company feels very strongly about building its brand through retail assets and is currently working on a 12,500 sq ft store in Bangalore, while the 6,500 sq ft store at South Extension in New Delhi and 7,500 sq ft store on Bandra’s Linking Road Mumbai have recently opened.
Source: Economic Times
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