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 12th March - 18th March 2006 For other weekly updates click: Weekly Retail Update
March 12th – 18th India Retail News: Hidesign, Birla Lifestyle, Marks & Spencer’s, ING Group and More1. Monday, March 13, 2006 Sriram Srinavasan, founder of Indus-League Clothing, will join Reliance Retail to head its apparel division. Indus-League Clothing owns the Indigo Nation and Scullers brands. Srinavasan created Indus-League in April 1999 with seven of his colleagues, whom he led out of Madura Garments. He built the company through venture capital and used an outsourcing model with most parts of the business was contracted out. Source: Times of India 2. Monday, March 13, 2006 Reliance Infocomm plans to provide information kiosks and public tele-information centers (PTICs) with high-speed internet access at block headquarters and in villages with a population of over 2,000. Each kiosk will consist of a multimedia personal computer with an internet connection and will be owned by rural entrepreneurs, which will ensure quality customer interaction. The project is estimated to cover nearly 48% of the total rural population of India and will cover 100,000 villages in the next three years. The Union Budget has directed banks to increase flow of credit to rural India which will increase the demand for the kiosks and information centers. Source: Business Standard 3. Monday, March 13, 2006 Pantaloon has hired Goldman Sachs executive director and analyst Roopa Purushothaman, co-author of the BRIC report on India’s resurgence for its new division, Future Group-India Tomorrow. The new division will plan, design, organize and review all businesses of the group which include retail, brands, property & mall management, future capital, future media and future logistics. Source: Economic Times 4. Tuesday, March 14, 2006 Pantaloon Retail’s open offer to minority shareholders of Galaxy Entertainment Corporation has been halted. The company had proposed to acquire 2,542,400 shares of Galaxy at Rs 51 last April, but did not manage to acquire any additional shares. Pantaloon’s shareholding in Galaxy remains at 15.73% or 200,000 shares which the company acquired in March 2005. Pantaloon planned to enter the entertainment and leisure sector through Galaxy, which owns and operates a bowling alley company, Rain and the Sports Bar in Mumbai. Source: Business Standard 5. Tuesday, March 14, 2006 Pondicherry based leather brand Hidesign plans to branch out into the apparel market in India. The company is particularly interested in overseas markets like China and recently opened its first store in China at the Hong Kong airport while its next outlet will be opening in Shanghai. The company is considering the option of forming a JV for investment purposes and is interested in partnering with an international luxury retailer. Source: Hindu Business Line 6. Tuesday, March 14, 2006 There is speculation over the expected job boom created by the surge in domestic retailing will increase dramatically if FDI is opened up. Wal-Mart recently opened a market research office in Bangalore, leading to several other retailers showing interest in the sector. Currently, India has the largest number of retailers in the world, at 12 million retail outlets, although only 2% can be classified under organized retail. Source: psfk.com 7. Tuesday, March 14, 2006 South India’s leading consumer durable retailer, Vivek is planning to expand operations by adding 100 new stores. The company is also planning to establish its presence in north India. Vivek will be investing Rs 1250 million for its 100 new stores which will be opening from April 2006 to March 2009. Senior management has also visited stores in China, Thailand and Singapore for sourcing arrangements. Source: Business Standard 8. Tuesday, March 14, 2006 The newly formed division of the Yash Birla group, Birla Lifestyle, will be focusing of wellness and a variety of retail ventures. The company plans to open 19 spas in the metros by early 2007 under the name Raih and is also planning to open a grooming and lifestyle school in Mumbai. In a separate venture, the company is planning to open a mall concentrating on all home needs such as interiors and hardware. Other retail ventures will include an art gallery called Birla Art Lifestyle and a home accessories store called Me. Source: Business Standard 9. Wednesday, March 15, 2006 The Bharti Group has begun the groundwork to enter food retailing with Tesco, the world’s second largest retailer. According to sources, Tesco will be helping Bharti in supply chain management and infrastructure knowledge. Bharti already has a JV with EL Rothschild Group for FieldFresh Foods Pvt. Ltd. The Rothschild Group also has a substantial equity in Tesco. Source: Economic Times 10. Thursday, March, 16, 2006 Nikhil Chaturvedi, managing director of Provogue, announced that the company will be setting up 6 megastores in the metros, with the first one in Kolkata opening by August. Each megastore will have an investment of approximately Rs 10 million. The company is also planning to open regular 100 stores by end 2006, of which 25-30 will be in metros and the balance in Tier II cities. Source: Business Standard 11. Thursday, March, 16, 2006 The UK based Marks & Spencer’s has launched socks and t-shirts made from cotton produced by farmers in Gujarat for all of its 36 stores in the UK. The company guarantees a fair price to the farmers and aims to highlight the dilemma of farmers in developing countries who are exploited by middlemen and receive an unfair price of their produce. Source: Business Standard 12. Thursday, March 16, 2006 According to a report in Fitch Ratings, several new companies are planning to enter the country’s fast growing insurance sector in the next 1 to 3 years, particularly if the FDI limit is increased. Source: Indiadaily.com 13. Thursday, March, 16, 2006 Rajesh Exports Ltd will be acquiring the OyzterBay chain of branded jewelry for Rs 110 million. The company will also be setting up a subsidiary for gold jewelry retailing with an investment of Rs 1 billion. OyzterBay currently has 36 stores in the country. Source: Economic Times 14. Thursday, March, 16, 2006 Reliance Retail is looking to Bangalore to locate its apparel business due to advantages of a skilled work force and large manufacturing base. The apparel division is estimated to account for 20-25% of the total turnover, estimated at Rs 900 billion in the next 4-5 years, making Reliance Retail the largest apparel player in Asia. Source: Economic Times 15. Friday, March 17, 2006 The City of London will open a representative office in Mumbai; it’s first in India and third in Asia, after Beijing and Shanghai. The City of London is the area within the Square Mile encompassing international and financial business centers. The Lord Mayor of the City of London is responsible for promoting UK based financial services overseas and has chosen Mumbai as it is the commercial hub of the country. Source: dnaindia.com 16. Friday, March 17, 2006 The German based luxury car maker announced that it would be launching its premium classic small car Mini Cooper in the country in 2009. The car is likely to be introduced at around Rs 1.8 million, while it sells at 21,000 Euros in Europe. The company is also planning to re-launch its motorbikes within the next five years. BMW had launched the F650 in 1996 in collaborating with Hero Motors but sales failed to take off. Source: Financial Express 17. Friday, March 17, 2006 Michael Tilmant, ING Group chairman said it was bullish in its outlook on India and that the country was an important growth destination for the long term during a press meet. He specified that there would be three “waves of growth” for the region in:
ING Bank has recently introduced automated branches in India, a concept that is already popular in Europe. Source: Financial Express 18. Friday, March 17, 2006 One of three famous bulge bracket banks along with Merrill Lynch and Morgan Stanley, Goldman Sachs will be investing US$1 billion in the country. The company plans to invest in investment banking, securities business, asset management, private equity, public markets investment and real estate. Source: Economic Times 19. Friday, March 17, 2006 Titan’s chief operating officer (COO), Bijou Kurien will be joining Reliance Retail to head its lifestyle division end April or early May 2006. The division is likely to include cosmetics, fragrances, pens, watches and jewelry etc. Source: Economic Times 20. Friday, March 17, 2006 The premier mattress company, King Koil will be entering India through a subsidiary King Koil Sleep Systems, which will be responsible for the manufacturing and marketing the King Koil brand of sleep products across the country. The Indian mattress market is estimated to be Rs 6-7 billion, with spring mattresses comprising only Rs 200 million of the market. Other spring mattress manufacturers are Spring Well and Springer. The bulk of the mattress market is still dominated by coir brands. Source: sify.com 21. Friday, March 17, 2006 Hyper City, the Raheja Group’s entry into big-box retailing, will open in 6-8 weeks in the suburb of Malad in Mumbai. The hypermarket will cover nearly 100,000 sq ft floor space and will stock everything such as food, apparel and consumer electronics, and will offer sizable discounts. Hyper City will be India’s fourth major hypermarket to be launched, after Pantaloon’s Big Bazaar, Trent’s Star India Bazaar and RPG Retail’s Spencer hypermarket. Reliance Retail’s launch in the hypermarket is expected in the middle of the year. Malad is fast emerging as a retail hub with Inorbit Mall, the country’s largest mall located there and Hyper City soon opening next to it. At present there are 20 malls being developed in the western suburbs from Lokhandwala to Borivili, with 4 new malls in the 10km stretch around Inorbit Mall. Source: Economic Times 22. Friday, March 17, 2006 McDonalds has announced that it will increase its outlets in southern India. It recently opened its second outlet in Bangalore and now plans to open 6-7 more in the southern region. According to Amit Jatia, joint venture partner and MD McDonalds (Western Region), the company will be investing Rs 30 million per outlet with an additional cost of real estate. The company expects a growth rate of 50% this year from its core business, but has also added other services such as home delivery and setting up kiosks to sell its ice creams. Source: Hindu Business Line 23. Friday, March 17, 2006 Arun Bajoria’s The Hoogly Enterprises has acquired Magnet House in downtown Kolkata and will be opening an electronics mall. The company is investing Rs 1.5 billion for the reconstruction of the inside of the building, while the outside remains the same. The mall will be spread over 80,000 sq ft of space covering 3 floors and 200 stores selling consumer durables. Source: Business Standard 24. Friday, March 17, 2006 Michael Duke, vice chairman and head of international operations, said the company “would help modernize India’s inefficient supply chain and provide quality jobs if it were permitted to open stores here.” The country remains as the retailer’s top priorities for international growth, with its 56 million strong middle class and an additional 220 million in the aspirational class earning $2,000-$4,400 per year. With organized retail only accounting for 3% of the market, there is enormous room for growth of a chain store. Commenting on how there have been many objections on large retailers destroying small players, Duke said that the consumer is the decision maker and “India is becoming a consumer economy. It is the consumer that ends up voting." He also said that local kirana stores will survive as they provide convenience and services that a large retailer might not offer. These stores might even benefit from lower prices if Wal-Mart successfully improves the supply chain efficiency. With an estimated 40% of farm produce spoilt before it reaches consumers, Wal-Mart wants to put an efficient cold chain in place and buy produce directly from farmers instead of the six or seven intermediaries it goes through now. The company recently opened a market research office in Bangalore to study consumer habits and is hopeful that the government will permit FDI in retail. Source: Reuters 25. Friday, March 17, 2006 India is Wal-Mart’s fastest growing market for sourcing according to Michael Duke, vice chairman and head of Wal-Mart International. In 2006, the company plans to buy $630 million worth of products such as apparel, home furnishings, textiles, shoes and jewelry directly from Indian factories, an increase of 40% from last year. The company is looking for a 35% growth rate for the next few years, according to S Ramesh, general manager for global procurement. Indirect purchases amount to $1.2 billion from India already. Source: Reuters 26. Saturday, March 18, 2006 Alpha Buildtech whose first project was a residential complex in Gurgaon in 2004 is back with a new name, Alpha G:Corp. The company has been granted mega-project status with automatic license facilitation and tax waivers by the Punjab Chief Minister, Amarinder Singh. The company is constructing its first integrated township in Karnal called Alpha International City for Rs 5 billion on 250 acres of land. Another project is the Alpha One retail project in Amritsar, which is being developed on 25 acres of land, to build a 6,00,000 sq ft city centre project. The city’s proximity to Pakistan and the Wagah border entry point is will make the project a destination center for visitors from Pakistan. Major retailers like Shopper’s Stop, Arvind, Provouge, Pepe and Kapa have been signed with Fun Republic as the multiplex partner. Source: Business Standard 27. Saturday, March 18, 2006 The Indian government cleared Rs 1 trillion (Rs 1000 billion) of investment in special economic zones, covering 40,000 hectares and creating jobs for 500,000 people. The Board of Approval cleared 148 projects including those of Reliance Infrastructure, Biocon, Satyam Computers and DLF Universal. Source: Business Standard 28. Saturday, March 18, 2006 Reliance Industries will be leasing thousands of acres of land to use latest technologies for increasing agricultural productivity. These farms will form an integral part of the company’s backward integration of its distribution chain for its retail venture. The company has successfully conducted preliminary tests at its refinery in Jamnagar and will be replicate the procedure. Food retailing will account for approximately 40% of Reliance Retail operations of 800 stores and the company hopes to sell fruits and vegetables grown on its own land at these outlets. Source: Business Standard 29. Saturday, March 18, 2006 Besides receiving huge pay packets, the top executives of Reliance Retail will be getting Reliance shares as an incentive to retain professionals within the company. The company which has till now had an informal share allotment will switch to formal share schemes for management of Reliance’s new retail venture. Source: Economic Times 30. Saturday, March 18, 2006 The Wal-Mart team has been informally informed that the government will not be taking up the decision to allow foreign direct investment (FDI) till the elections in West Bengal, Tamil Nadu, Kerala and Assam are completed. Since retail FDI is unlikely to be permitted until all political parties come to a consensus, the issue has been deferred for now. In an interview to Economic Times, Wal-Mart International’s chief Michael Duke said the company was hopeful that the government would permit FDI in food and grocery retailing in the near future. The company has set a target of $630 million worth of sourcing from India this year, which will create 100,000 jobs in the manufacturing sector. Source: Economic Times 31. Saturday, March 18, 2006 One of India’s first shopping malls and Mumbai landmark may soon be acquired by the Pantaloon Group owned Kshitij Real Estate Fund (KVC Fund) and a foreign private equity fund for Rs 3.5-4 billion. There is speculation that the mall will be converted to a consumer durables outlet. Source: Economic Times 32. Saturday, March 18, 2006 Reid & Taylor, the lifestyle suiting brand owned by S Kumars Nationwide (SKNL) will be expanding its ready-to-wear segments across the country. The company plans to add 50 exclusive stores each year for the next three years. Currently, there are 22 standalone stores in addition to being sold at department stores such as Shopper’s Stop, Central, Ebony and Piramyd. Of the 150 new stores, 50 will be company owned while the rest will be franchises. Source: Economic Times
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