News and views about the Retail sector in India

Weekly news updates on trends and happenings in the Indian Retail Industry

The competition in the food and grocery segment is heating up with retail majors opening shops within 100 mts of each other…they are differentiating themselves by taking “niche” positions. The race is on to improve metrics like bill amount per sq.feet.

- Chillibreeze Business Research Team

General trends and information
Big Players – plans and investments
Unique Formats
Support industries
Apparel & Footwear
Food & Grocery
Regional News
Government
e-Commerce

General trends and information

Apparel makers go window dressing to draw buyers

Step into a multi-brand outlet (MBO) or a department store and you are instantly hit by a barrage of brands, their boards screaming out in bold colours. As the retail space gets increasingly crowded with more brands, apparel majors are going all out to make their brands stand apart from the clutter.

And it is not just the limited space that brands have to deal with, but also the conflicting interest of MBOs and department stores that want to maintain certain internal consistency with their look and feel.

Apparel brands are trying out various combinations of innovative displays, product packaging, bright colours and special lighting to grab and hold buyers’ attention. Arvind Brands , which manages brands such as Arrow, Excalibur, Flying Machine, Lee and Wrangler, uses varied colours, fixtures, fret walls and thematic displays.

Product packaging is another area where brands try to look distinctive and carry bags become an inherent part of the brand identity. The branding initiative also extends to sales persons, who wear the company’s apparel line to be in sync with the brand. Most brands also go for seasonal looks, with the theme of the space changing with each new range of clothing.

The spending on such branding efforts is similar to an exclusive store in a mall environment. So, the next time you go shopping, watch out for the coir hangers, the red display walls and the framed trivia.

September 3, 2007
Source: Economic Times

The Franchise Connection

It’s big, it’s bursting and when it does, it will throw up bags full of money. If you’re among those who avoid the churn of the factory, but still want your own little world on the high street or at the mall, try becoming a franchisee of a large brand, or company, and sell anything from haute couture to a bodycare line, hot wheels and hamburgers.

It’s a win-win situation for both the large company and the smaller franchisee. Franchisors tend to gain from the franchisee’s local market knowledge, existing infrastructure and real estate, which they would otherwise take time to build. For an individual retailer, the cost of supply chain is very high. Franchising helps them to expand their brand name at a cheaper cost.

Some smart businessmen have made a killing out of being a franchisee. Ravi Jaipuria, the undisputed franchising king in India, who started as a Pepsi bottler, is today master franchisee for brands like Pizza Hut, KFC, Costa Coffee and Disney. And his firm, R J Corp., is a Rs 1,500-crore venture.

Consultant Ernst & Young says that the franchising industry is currently growing at 30-35%. However, this industry is still in an evolutionary stage with a market size of around Rs 10,000 crore ($2.2 billion).

For someone foraying into the business for the first time, a thorough research of the market is mandatory. Also, one needs to select a field that is of interest to him or her. To be successful as a franchisee, one needs to look into certain aspects of the business s/he is getting into — the area, the clientele, pricing, labour and miscellaneous expenditures.

September 3, 2007
Source: Economic Times

Big retail gets negligible FDI: Commerce ministry

Despite the controversy over the entry of foreign retail giants, the government has cleared foreign direct investment (FDI) worth only $3.1 million in retail between February 2006 and May 2007.

In a note prepared in response to questions raised on FDI in retail, the commerce ministry said it had cleared 17 projects of single-brand product retailing, a majority of them in the fashion and ready-to-wear business.

Most of these companies are looking at minimal investments in setting up their retail stores. For instance, Louis Vuitton, which will sell products such as pens, shoes and bags under the premium LVMH brand, will invest only Rs 3.32 crore, Moja Shoes Rs 2.6 crore for a 20 per cent stake and Grotto Rs 3.82 crore for 50 per cent.

The low level of FDI inflow is significant given the widespread opposition to big retail in general and foreign retailers in particular.

September 3, 2007
Source: Business Standard

Food retailers go down different streets to one destination

On a quiet patch of road in the Mukund Nagar locality in Pune, Reliance Fresh, ITC’s Choupal Fresh, RPG’s Spencer’s Daily and Pyramid Retail’s Trumart are present within 100 metres of each other. Just 15 minutes away is one of 14 More branded stores from Aditya Birla Retail.

Reliance Fresh will soon scale up to 15 stores while Choupal Fresh will add nine stores by the end of the year. With Kishore Biyani-led Future Group’s Food Bazaar’s existing operations and Heritage Foods’ Fresh@ set to make an entry as well, a full-blown food war could begin in Pune.

Pune has traditionally been used as a test market for consumer products, but has characteristics that make it a good experimenting ground for retailers too. There is an excellent road network surrounding the city, making the entire supply chain more efficient. It also has a relatively younger and more affluent population than other tier-I cities.

So, how do the stores stack up? At one end, Reliance Fresh, Trumart, Food Bazaar and Spencer’s Daily are not classical food & grocery stores, each of them between 5,000-8,000 sq ft devoting no more than 20% of shelf space to fresh food. Hence, dry groceries get more shelf space. At More, which has smaller — between 1,700-2,300 sq ft — stores, fresh foods constitute approximately half the shelf space. At the other end of the spectrum, the 1,300-sq ft Choupal Fresh has exclusively focused on fresh fruits and vegetables, with a dash of the exotic, such as dates, passion fruit and kiwi.

Says S Sivakumar, chief executive (international business division), ITC: “Our insight is that purchase cycles are different in fresh food than they are for FMCG products. The latter are really once-a-month purchases, so we decided to stick with just the fresh produce.” This translates into a lower average bill size at Choupal Fresh. The store gets, on average, 900 footfalls a day and generates nearly 700 bills, each worth approximately Rs 200. By contrast, More has a slightly higher average bill size — Rs 250 per bill — and more than 700 bills a day.

The three new formats have also identified gaps in the existing market and each occupies a separate niche. Reliance Fresh has positioned itself purely as a price player, offering discounts of nearly 10-15% on food in the evenings. More positions itself on quality and convenience and their stores are largely in residential, middle to upper-middle class areas. At Choupal Fresh, the positioning is on freshness, width of choice and quality.

So who’s ahead in this race? One parameter that retailers use is sales per sq ft. Back-of-the-envelope calculations suggest Choupal Fresh gets, at Rs 107 per sq ft, more efficiency compared to More’s Rs 98 per sq ft and Reliance Fresh’s Rs 87.5 per sq ft. Customers agree that Choupal Fresh scores on quality. But each format has seemingly worked out its own niche and is happy to occupy it. As competition intensifies, one or more will have to change tack. Who will blink first?

September 1, 2007
Source: Economic Times

Big Players – plans and investments

Plaza Centers to build 50 malls

Israeli-owned property company Plaza Centers today said that it would invest Rs 5,000 crore (about $1.2 billion) over the next five to seven years to build as many as 50 shopping malls and multiplexes in the country.

Plaza Centers, a subsidiary of Elbit Medical Imaging Ltd, will tie up with local developers for these projects, some of which are already underway. The firm has been very active in central and eastern Europe over the past decade, and has now turned its attention to India. The company has undertaken projects for such international retail majors as Tesco, Carrefour, Zara and Boss.

Plaza Centers has started construction of a mall (about 5 lakh sq ft) in Koregaon Park, Pune, and has planned a bigger one (about 1 million sq ft) at Karadi also in Pune. It has picked sites also in Kochi, Hyderabad, Bangalore, Chennai, Thiruvananthapuram and some other cities.

Plaza Centers would focus on south India first and move later into the north and other markets.

September 4, 2007
Source: Business Standard

Biyani warms up to tie-up with US chain Coffee Bean

After an aborted partnership plan with premium coffee retailer Starbucks, Pantaloon Retail is brewing a fresh alliance with California-based coffee retail chain The Coffee Bean & Tea Leaf.

The deal has been signed with the coffee chain through its joint venture company Blue Foods. This will be the master franchisee for the coffee retailer. The Coffee Bean & Tea Leaf is owned and operated by International Coffee & Tea and is one of the oldest and largest privately-held chain of specialty coffee and tea stores. Coffee Bean stores differ from other chains, such as Starbucks, in their broad selection of tea.

Blue Foods was formed in 2006 to set up food courts and specialty restaurants across the country. The portfolio of Coffee Beans would be customised to suit Indian tastes, and the first Coffee Beans outlets will come up in Noida, Hyderabad and several other premium locations.

Coffee Bean operates and franchises more than 390 shops under The Coffee Bean & Tea Leaf. The outlets, found mostly in California and in about a dozen foreign countries, feature a variety of fresh roasted coffees and specialty teas, along with baked goods and blended ice drinks.

September 3, 2007
Source: Economic Times

Infiniti to open 40 stores, invest Rs 900 crore

Infiniti Retail, a wholly-owned subsidiary of Tata Sons, plans to rollout 40 mega and small electronics stores by March 2008 in eight major cities of the country. The company, an electronic appliances and consumer goods retail chain, plans to take this number to over 100 stores by 2010.

According to reports, the company will invest close to Rs 900 crore over the next three years and will be funded by Rs 400 crore equity contribution by Tata Sons to open 40 stores this fiscal.

Infiniti Retail has two formats, the mega store being called Croma ranging in size of 10,000 to 30,000 sq.ft and Croma Zip in the size of 850 sq ft. The company will launch small as well as mega stores in places such as Delhi, Bangalore, Chennai, Hyderabad, Surat, Nashik, Baroda, New Mumbai and Pune.

September 3, 2007
Source: Economic Times

Trent plans Rs 65-crore capex

The Tata group company Trent, well-known for its Westside chain of stores, has announced a capex of Rs 65 crore for the next year and Rs 250 crore for the next three years. The firm plans to add add four to five Westside stores in 2006-07 and increase the floor space to 3,30,000 sq ft in the next 15 months.

Apart from the metro cities, Westside will also come up in tier-II cities. Two stores of 24,000 sq ft are set to come up in Pune, two in Hyderabad and one in Navi Mumbai. Of the 27 stores in 18 cities, 24 are leased upto a period of 21 years, while three are company-owned.

The company will add 1,75,000 sq ft of floor space in Star India Bazaar, the hypermarket in Ahmedabad. Three hypermarkets will be launched , two in Mumbai and one in Bangalore, said Mr Neon Tata, Managing director, Trent.

August 29, 2007
Source: Hindu Businessline

Unique Formats

Titan’s new viral marketing initiative involves employees

Titan Industries has announced a new viral marketing initiative — Titan’s Day Out — involving its employees.

On September 1, the ‘Titan viral marketing brigade’ consisting of Titan employees across eight cities (including Bangalore, Mumbai, Delhi, Chennai and Pune) will communicate the company’s latest exchange offer (old watches can be exchanged for new watches with a 25 per cent discount) to anybody outside the Titan family.

Each member of the viral marketing team has to contact at least 10 people to tell them about the exchange offer. They also have to undertake any activity of their choice to spread awareness of the offer.

Titan hopes to involve the viral marketing team in its future promotions as well.

Meanwhile, close to 4.5 lakh watches have been exchanged all over India till now as part of the ongoing Titan exchange offer, which began on August 10. Mr Bhat is certain that 7 lakh watches would have been exchanged by September 9 when the offer closes.

“Sales during the 20-day period (from August 10-30) have tripled compared to the previous years, when 1.5-2 lakh watches are normally sold,” said Mr Bhat.

September 1, 2007
Source: Hindu Businessline

Support industries

Gazeley plans India foray thru partnership route

Wal-Mart subsidiary Gazeley Ltd is scouting for an Indian partner for its proposed foray into India. The UK-based logistic space (warehousing and others) provider plans to set up shop in Gurgaon in the next couple of weeks.

Gazeley’s entry closely follows Wal-Mart’s formal entry to India.

In India, the company plans logistic development and light industrial development projects in areas where there is an element of processing or manufacturing. The company is already looking to recruit and plans to maintain low headcount initially.

Gazeley holds 12 per cent share of the UK logistic space market and will be the second global logistic player to enter the Indian market following Pro Logis of the US. The latter is a major player in supply chain distribution services.

The proposed entry to India is in line with Gazeley’s plans to have presence in the emerging markets and follows the company’s recent foray in China.

September 1, 2007
Source: Hindu Businessline

Garment-on-hanger providers save costs, lend better display for retailers

Garment-on-hanger (GOH) providers are banking on the rising number of retail chains in the country. They deliver garments on hangers ready for display at the shop, which retains crease and saves ironing costs.

Earlier, shops used labour at their own expense. Now retailers can specify particular hangers or hanger characteristics to suppliers for a visually pleasing uniformity on their sales floors.

GOH plays a major role in visual merchandising. According to Mr Sajeev Kumar, CEO, Mainetti India, a service provider, Indian ethnic wear needs to be supported by a GOH theme different from that employed for Western outfits.

August 31, 2007
Source: Hindu Businessline

Apparel & Footwear

Foreign lingerie makers plan to tap Indian market

Global lingerie brands like Benetton and Etam have chalked out plans to tap the Rs 3,800-crore Indian market, which is currently growing at 12 per cent and is expected to touch Rs 6,700 crore by 2011.

To cater to the changing needs of the fashion conscious Indian damsels, Benetton will shortly launch its inner wear brand Undercolours - in the country with the opening of its stores.

"The market estimates indicate that the premium lingerie segment will do well in the urban areas. Our Undercolours range will comprise innerwear, nightwear and swimwear for women," Benetton India Managing Director Sanjeev Mohanty said.

He said since Benetton has been in the country for over 16 years now, it has an advantage of cornering strategic retail spaces for the brand. The promotion campaign would focus on visual merchandising and large format retail stores.

According to Technopak estimates, the current market size stands at Rs 3,800 crore, is growing at a rate 12per cent by which it is expected to touch Rs 6,700 crore by 2011.

The market is largely dominated by domestic players like Sonari, Goversons, Vajolet, Red Rose, Underlines, Chic, Daisy Dee. International brands currently present in India includes Jockey, Lovable, Triumph, Vanity Fair, Liberti and Bodyline.

Straps which has around 20 stores in India, of which 11 are located in Delhi and NCR, is planning to double the number of stores by March next year. Also, French lingerie brand Etam, which recently opened its 12th store in India in association with Future Group's Pantaloon Retail, expects to open 43 points of sale by the year end.

September 2, 2007
Source: Economic Times

Italian brand Tod’s plans to enter India

Italian accessories brand Tod’s, which is known for its high-end leather shoes, is planning to enter India through a 51:49 joint venture with Bhukhanvala Holding Pvt Ltd.

The joint venture company, Tod’s Retail India, has approached the Foreign Investment Promotion Board for retail trading under single brand, sources said. The permission is being sought for Tod’s Hong Kong and its affiliate Tod’s International BV to acquire 51 per cent of shareholding in Tod’s Retail India amounting to Rs 5.7 crore.The proposal would come up for discussion on Friday.

The acquisition would enable Tod’s to bring its range of products to India. The Tod’s group sells shoes and luxury leather goods under the brands Tod’s and Hogen and also deals in casual wear under the brand name Fay.

Tod’s recently reported consolidated sales of €316.4 million in the first six months of 2007, an increase of 15.7 per cent compared to the same period of 2006. The company’s products are made in the group’s own factories, a total of seven for shoes and two for leather goods, and in a limited number of specialised laboratories.

August 31, 2007
Source: Hindu Businessline

Food & Grocery

Indians consuming 3 million pizzas a month

Call it junk food if you like, but people across the country are consuming over three million pizzas a month currently, and the monthly sales figures are projected to double in the next four years.

According to industry data, of the total branded quick service restaurant market of over Rs 1,200 crore, the pizza chains contribute around 50 per cent of the sales. In fact, the two pizza chains that currently dominate the branded pizza quick service restaurant market — Domino’s and Pizza Hut — together account for over 75 per cent share.

Pizza Hut has 134 restaurants across 34 cities in India and has 30 per cent share of the branded eating out market.

Pizza Hut’s close competition, Domino’s, too has grand plans for expanding its operations in India. Currently with 150 outlets and selling over a million pizzas a month, the company plans to sell over five million pizzas through 500 outlets across 50 cities by 2011.

September 3, 2007
Source: Hindu Businessline

Dominoes focus on dine-in model

Dominoes India, the pizza chain, plans to focus its energies on setting up more dine-in model restaurants in the country. “Based on consumer insight, we realised the importance of having a dine-in model. So, our strategy for the next four years will be to focus equally on both delivery and dine-in models,” said Mr Ajay Kaul, CEO, Dominoes Pizza India Ltd.

Among the 150 stores, the last 50-60 outlets set up were all dine-ins, with seating capacities of around 80. The Rs 500-crore organised pizza quick-service format is growing at 50-60 per cent every year. By the end of the current fiscal, Dominoes plans to add 50-60 outlets at an investment of Rs 80 lakh per store. The company has also set a vision for itself till 2011 by when it plans to open a total of 500 outlets, both delivery and dine-in, and become a Rs 1,000-crore entity in the country.

September 1, 2007
Source: Hindu Businessline

Regional News

More coffee breaks in Punjab

The people of Punjab, known as the largest consumers of milk and milk products, are now drifting towards coffee beverages. In the high streets of the important towns of Punjab like Ludhiana, Jalandhar, Amritsar, Patiala and Chandigarh one can spot more than one national coffee retail chain.

In the past four years almost all the national players like Barista, Cafe Coffee Day and Mr Bean put up their shops. Another player Coffee Costa Coffee entered the Punjab market last week.

The expansion of corporate sector, especially financial services and information technology, in Punjab contributed immensely to the growth of coffee consumption in the region. There has also been an increase in the number of female visitors in the urban centres due to increasing number of working women.

The enthusiasm of Cafe Coffee Day can be gauged from the fact that the company plans to double its presence in Punjab from existing 10 outlets to 20 outlets. According to company officials, they were scouting for new locations and would be through with expansion in the state by the end of the financial year.

Inspired by promising returns of the retail coffee chain business, a Ludhiana-based entrepreneur Mandip Grewal of Bakes and Beans diversified from the steel business to the retail coffee chain.

The boom in the shopping malls in Punjab would further accelerate the growth of coffee outlets. Costa Coffee plans to open 15 new outlets in high streets and shopping malls in the region by the next financial year.

September 3, 2007
Source: Business Standard

It is raining malls, multiplexes in Chennai

A mall and multiplex wave is set to sweep across Chennai, with over 20 malls planned in the next three years. The city, where India’s first mall, Spencer Plaza, was set up in 1975, is expected to absorb over Rs 3,000 crore in the coming years.

Realty majors such as Prestige Group, Shriram Properties and DLF are in the forefront of mall development in the city and beyond. Bangalore-based Prestige is drawing up plans for a second Forum mall in the city’s artery, Mount Road, while completing the first Rs 350-crore Forum mall at Vadapalani in Chennai, in collaboration with Vijaya Group.

The Vadapalani mall, spread over 17 lakh square feet, will feature a seven-screen multiplex, over 100 shops, two departmental stores, a 1,40,000 square feet hypermarket. The mall is expected to become operational in the first quarter of 2010. 

August 31, 2007
Source: Business Standard

New ‘Crocodile’ outlets at Salem, Coimbatore

The integrated garment company, S.P. Apparels, today inaugurated two more ‘Crocodile’ retail outlets in Salem and Coimbatore, its seventh and eighth company-owned outlets.

The Salem outlet is located at the up-market Saradha College Road and the company has located its Coimbatore showroom at the busy Cross-Cut road area.

The ‘Crocodile’ men’s stores will showcase a new range of fashion wears such as T-shirts, shirts, accessories and will include a new trouser collection. Its product mix consists of formals, casuals/smart casuals to cater to various target groups and in different price ranges, according to a press release from the company.

August 29, 2007
Source: Hindu Businessline

Lifestyle & Luxury Retailing

HCL’s Chennai digital lifestyle store

HCL Infosystems today inaugurated the HCL DIGILIFE store in the city. This is the company’s 40th store across the country and fourth in Tamil Nadu.

HCL plans to take the chain to 100 by the end of the calendar year. Of the 40 stores, 5 are company owned outlets. The company plans to offer a comprehensive range of digital lifestyle products from digital cameras to music players, computers, LCD TVs, camcorders, gaming consoles, gaming PCs and so on. The company is targeting Tier II towns for better reach. Industry estimates peg the current potential of digital lifestyle market at over Rs 2,500 crore. It is estimated to touch Rs 10,000 crore by 2010.

September 1, 2007
Source: Hindu Businessline

Government

Farmers seek reopening of retail chains in UP

Nearly 3,000 farmers Sunday formed a human chain on the main thoroughfare of Lucknow, demanding the reopening of grain and vegetable retail stores including those of Reliance Fresh that were closed following an order by the Uttar Pradesh government last month.

Farmers sought the revival of the Mayawati government's earlier farm policy that aimed at boosting the agriculture sector by facilitating entry of corporate houses into direct procurement of agricultural produce from farmers through introduction of contract farming.

The chief minister had justified her order to close down retail chains, saying farmers were opposed to the entry of retail giants and had held violent protests. However, the memorandum noted: "It was the state's misfortune that some undesirable people managed to convince the government that both farmers and common public were not in favour of the new policy."

September 2, 2007
Source: Economic Times

Big retail seeking farmers’ help in UP

Corporate retail chains are trying to garner the support of consumers and farmers to pressure the UP government to reverse its decision to ban corporate retail.

As part of the exercise, executives of one of the retail chains will undertake a series of road shows in 7-8 large districts of the state to mobilise opinion among consumers and farmers in favour of organised retail.

Though the UP government is expected to display some leniency towards retailers and allow them to run stores (of course with some riders), retail companies say it does not serve their purpose.

In fact, in the wake of recent developments in UP, some retailers, such as Reliance, have decided to go slow on their roll out plans even in some other states.

August 31, 2007
Source: Economic Times

Left, Reliance keep mum on retail row in West Bengal

Reliance Retail officials as well as the Forward Bloc (FB), one of the ruling Left Front partners in West Bengal that is opposed to Reliance Fresh outlets, chose to keep mum on Wednesday, a day after the state government assured security to the firm's retail stores.

The RRL proposal to enter the retail scenario in West Bengal created a rift between the Communist Party of India-Marxist (CPI-M) spearheaded by reformist Chief Minister Buddhadeb Bhattacharya and the party's ally FB.

Mukesh Ambani-led Reliance Industries Ltd (RIL) has received clearance from West Bengal's Food Processing and Horticulture Department for its agro-retail business in the state. The company plans to set up six national distribution-cum-processing centres (NDCs) in Kolkata, Siliguri, Malda, Haldia, Kharagpur and Asansol.

According to a proposal given by RRL, Reliance Town Centres (RTCs) to be set up in West Bengal districts would be a mix of hyper/super-markets, convenience stores, entertainment parks, multiplexes and other public utilities.

These centres would procure fruits and vegetables and distribute them to Reliance Fresh outlets. Most of these outlets, covering 2,000 to 5,000 sq ft of area, would be set up on rented premises in and around Kolkata.

August 29, 2007
Source: Economic Times

e-Commerce

Future Group to tie up with Cleartrip

Kishore Biyani’s Future Group is in talks with portal Cleartrip to roll out travel retail outlets across 60-odd malls and hypermarket chains in the country over 12-15 months. To start with, four Cleartrip branded outlets have come up at Big Bazaars in Mumbai to gauge consumer reaction for buying travel-related products and services in a hypermarket environment.

When contacted, Cleartrip COO Stuart Crighton told ET that test-marketing of the retail model is currently on. “We may look at ramping up our presence to over 66 retail outlets by 2008-end,” Mr Crighton said.

This would give Cleartrip physical presence in 40 cities across the country, including several tier-II and III cities which are experiencing major growth in domestic travel.

Plans include exclusive product offerings through its retail outlets. Given the high footfalls in hypermarkets, the firm’s biggest challenge would be to convert footfalls into sales. According to Mr. Crighton, the cost of acquisition of a customer through a retail format is likely to be substantially less than in the case of the online model.

Cleartrip was launched in July 2006 with the backing of a host of venture capital funds, including Kleiner Perkins Caufield & Byers and Sherpalo Ventures, having raised around $11million through two rounds of funding. The Indian online travel space is estimated to be worth around $2 billion in 2007, with booking of air tickets accounting for around 80% of the business.

August 31, 2007
Source: Economic Times

Celebrating festivals, the e-commerce way

A recent promotion campaign on ebay lured brothers to shop online for rakhi gifts and get something free in return. The items on offer were cricket memorabilia or even a signed autobiography of Sachin Tendulkar. E-commerce retailers were also aggressive in wooing women to shop online for rachis.

Individual sellers such as Ghasitaram’s ran promotion campaigns offering deals and bargains where on buying rakhis women could get free mithai and tika packets. They could also buy a rakhi hamper which comes bundled with flowers, dry fruits and rakhis and other such combinations. All this is available at Rs 200 upwards and with a promise of assured delivery within four days of placing order or on Rakshabandhan day itself.

Needless to say, the promotion campaigns have been a huge success.

Rakhi is the most important gifting event for online retailers followed by Diwali, Christmas and Valentine Day. Rakhi sales have seen a growth of over 35 per cent compared with last year. It accounts for a 100 per cent increase in total sales, whereas during Diwali the increase is 40-50 per cent. Interestingly, most of the orders come from the domestic market.

The growing popularity of e-commerce sites is not difficult to comprehend. Consumers mostly come online looking for value deals or merchandise that is not easily available. With online players promoting major festivals aggressively by offering great deals to customers along with service guarantee such as 100 per cent money-back offer and free gifts, anytime delivery, customised messages on gift items among others, customers can savour the experience of shopping while at home.

August 29, 2007
Source: Business Standard

E-ticketing yet to catch on with A-I, Kingfisher scores a perfect 100%

Air-India (A-I) comes last among Indian full-service carriers in selling tickets through the Internet. According to the International Air Transport Association (IATA), the carrier sells 7 per cent of its tickets through the Internet.

The IATA, which has more than 270 members in 140 countries, aims to make every member switch to 100 per cent e-ticketing by May next year as part of its “simplifying the business” (StB) programme. Indian Airlines is, however, far ahead of A-I and sells 64 per cent of its tickets through the Internet.

Among the private carriers, Kingfisher has achieved 100 per cent e-ticketing, while Jet Airways sells 84 per cent of its tickets through the Internet. Cumulative figure for airlines in India is 78 per cent.

E-ticketing is a process through which the ticketing agents (or travel portals) have access to the central reservation system of the airlines. This helps a carrier save on printing charges, transportation and storage charges, and costs of setting up an establishment.

According to industry estimates, the amount saved comes to Rs 200-400 per ticket. Air-India, which sold around 5 million tickets last year, could have saved Rs 100 crore to Rs 200 crore.

Globally, e-ticketing operations have seen a growth from 16 per cent in June 2004 to 84 per cent in August 2007. Most American and European carriers sell more than 90 per cent tickets through the Internet. However, some carriers like Malaysia Airlines and Saudi Airways are still lagging.

August 29, 2007
Source: Business Standard