No FDI in retail sector yet – Kamal Nath

News and views about the Retail sector in India

Organized retail is focusing more than ever on inclusive growth – this week has news of ITC and Reliance having launched projects to recruit street hawkers. Bharti has opened its chain, Easy Day, along similar lines.

-Chillibreeze Business Research Team

General Plans and Information

Retail war could get messy

Many of the family-owned stores have been at the vanguard of the durable retail revolution in India. Viveks pioneered the New Year Sale in Chennai as far back as 1977, offering unprecedented discounts around what was a lean period of the year. According to its chairman & managing director, BA Kodandaraman Setty, the sale “is bigger than Diwali; people used to queue up to get in.” It was an initiative that kickstarted a city-wide opportunity, with other categories leaping on to the bandwagon. And though Nilesh Gupta, managing partner, Vijay Sales, downplays his company’s role as an innovator, its One Day sales have generated buzz and excitement. Other stores like Vasanth & Co have offered gold coins to customers purchasing particular items, or whose bill exceeds a certain amount.

The total consumer durables and techled industry is valued at Rs 35,000 crore; all the organised players, including some of the smaller ones, contribute only a little over Rs 2,500 crore, according to industry estimates. The official line from retailers on both the family-owned and ‘corporate’ side of the fence is that the market has enough bandwidth to support all formats.

The growth is coming from many consumers who enter this sector for the first time. We are years away from any significant penetration which will slow sales.” Vijay Sales’ Gupta adds, “We no longer see the corporate firms as competitors but supporters. We had nobody to look up to, and there are best practices we can learn from them — although no such thing has happened so far.

On the downside, the profitability will get hit. Competitive pricing will bring down margins. But if the volumes grow, it can be compensated.” However, Nabankur Gupta, consultant, points out that corporate retail has already become a benchmark for family-run stores: “One has seen over time what they used to be when they were still small chains and what they are now.”

Large players like Viveks and Vijay Sales are beginning to expand, and Nabankur Gupta observes, “They’ve moved in a systematic manner where each market leads to the next. You don’t see Vijay Sales in Nagpur, for instance. They are so popular and visible in Mumbai that all markets influenced by this one will be influenced by the brand.”

Vijay Sales’ Gupta admits, “After thinking of it for the last four or five years, we realise now that it’s high time we move not just out of Mumbai but out of Maharashtra ,” alluding to the chain’s first store in Surat. Viveks intends establishing a strong presence through south India. Setty explains, “Wherever we go, we need volume and market share. Thirty-nine percent of the country’s durable business happens in the south.”

One of the major hurdles is real estate — there are only so many properties that support the size these stores require. It’s a situation skewed in favour of the traditional retailers for the moment; players who purchased real estate when prices were low.

At firms like Croma and Reliance, on the other hand, these could be as high as 30%, says consultant Nabankur Gupta, particularly in high street areas: “These are points of bleeding since they won’t make money for a very long time until footfalls increase and conversions are sharper.”

Price is an area where the corporate-backed stores have an edge. Vivek Sharma, chief marketing officer , Indian subcontinent, Philips, says “Size matters, but potential size matters as much if not more. When someone like Reliance or Next says they’ll have 200 stores in the next year, it’s a big incentive as there’s no reason to disbelieve their ability to execute and deliver.” Homegrown players like Vijay Sales argue that price can only be pushed so far before diseconomies of scale kick in.

Players both corporate and homegrown are struggling to find a differentiated offering. Particularly difficult since many former differentiators are table stakes now — well-maintained stores and varieties of brands, for instance. Firms are eagerly looking for and investing in niches they hope will give a lasting advantage. Viveks has opted for the platform of superior service, spearheaded by Vijay Setty: “Consumer durable retailers generally see the customer once a year or once in eight months.

Croma, on the other hand, is keen on claiming the family store positioning. Through this summer, the store has cookery demonstrations and iPod workshops, even visiting hairdressers to prove that the store is more than just menand-their-toystore set up, says Ajit Joshi, CEO & MD, Infiniti Retail. An area that both Croma and Viveks are claiming first-mover status on is extended warranty — an upfront payment built into the product’s price that provides for a longer warranty and replacement; a cheaper alternative to an annual maintenance contract.

The role of the influencer or intermediary — either the in-shop demonstrator or a close friend — gains prominence. This is a potential advantage that the traditional chains have to realise. They have intimate knowledge of the needs and preferences of consumers in their catchment, and often develop good relations over time. They need to convert this knowledge into a potential marketing advantage.” Vijay Sales’ Gupta intends further underscoring trust by initiating a loyalty programme in six months: “It makes sense for our category now. 40 years back, we were just selling sewing machines and radios. Today the frequency of visit and purchase has gone up.”

Vijay Sales’ Gupta believes a key weakness among the corporate-owned stores is their huge upfront investments: “Today the focus is on increasing the footprint and not profitability. The mandate is marketshare at any cost. Seeing the current trend, getting money out of retail will be difficult.” What makes the brewing standoff between the family chains and the corporate chains engaging is that one side’s edge is offset by another aspect of strength on the other side. Whenever it begins in ernest, it promises to be a close fight.

April 30, 2008
Source: Economic Times

The Easy way to push big retail

Big retail is fine tuning its strategy to win over critics and corporate social responsibility drives are providing it with the means. ITC and Reliance have already launched projects to recruit street hawkers, the main adversaries of big retail. And now Bharti Mittal has opened a retail innings of its chain, Easy Day, in Ludhiana with something similar.

Bharti Retail Limited, a wholly owned subsidiary of Bharti Enterprises, recently launched its first three EasyDay neighbourhood outlets at Ludhiana in Punjab and the people selling the wares are virtually people from the neighbourhood. The chain has hired meat sellers, fruits and vegetable vendors, housewives, retired people, rural population, physically challenged individuals and youth as part of their sales team.

A spokesman for Bharti Retail said the company was committed to inclusive growth where ever its stores operate so that members of the community where the company operates, benefit from this business.

The company is also imparting intensive and structured education on retail industry not only to physically challenged individuals at the Bharti Academy of Retail, but also training people thus far considered outside the range of employability.

The spokesman added Bharti Retail would initially focus on Punjab as the company would consolidate its presence in one market, before expanding to another region. He added Bharti retail has earmarked an investment close to Rs 200-250 crore by 2015 for its pan-India operations.
Dharmender Kumar, director, India FDI Watch, says the recruitment of a handful of handicapped persons or street vendors was only an eyewash, unless the retail industry discloses the percentage of people it employs from these categories. Just one of 1,000 workers would be a street vendor or a retired person, but organisations try to get the maximum publicity for this. The idea is just to make opposition ineffective and not to save street vendors from unemployment, he adds.

Last year, ITC launched its model of inclusive retail with 150 pushcarts given to street vendors under its Choupal Fresh retail scheme.The strategy was to get headload vendors to sell items on-push carts provided by the company with finance and produce coming from ITC. The scheme also had frachisee provisions.

"ITC had to withdraw the scheme the project after a few weeks. If the companies are really honest about helping hawkers or other marginalised sections, then they should come out with the exact number of such people working in their stores," says Kumar. ITC officials refused to comment on the matter, while admitting that the scheme was no longer in existence.

April 30, 2008
Source: Business Standard

“FDI in retail sector will not be allowed”

Union Commerce and Industry Minister Kamal Nath said on Tuesday no foreign direct investment (FDI) would be allowed in the retail sector and that the government was open to reviewing the Special Economic Zones (SEZ) Act if the need arose.

He said India would not succumb to pressure from the West during World Trade Organisation (WTO) trade talks and the government was committed to safeguarding the interests of farmers, industry and other sectors.

Replying to a discussion in the Rajya Sabha on the functioning of the Ministry of Commerce and Industry, Mr. Nath said the government was cautious on the issue of FDI in the retail sector and had cautiously decided not allow it. Almost 97 per cent of the retail business was in the unorganised sector and nothing would be done that could lead to job loss or have an adverse impact on those involved in this sector.

April 29, 2008
Source: Hindu

Big players - plans and investments

V-Mart Retail to open 24 new stores in this fiscal

V-Mart Retail today said it will open 24 new stores across the country with an investment of Rs 50 crore, targeting to double its turnover post expansion in this fiscal.

The retail chain plans to achieve a turnover of Rs 250 crore in 2008-09, compared to Rs 101 crore in last fiscal.

"As part of our plans to achieve pan India presence, we will be opening 24 new stores during this year and our main focus will be on tier II and tier III cities like Ambala, Moradabad, and Moga in order to penetrate into the market," V-Mart Retail Vice-President Abhishek Jetia told reporters here today.

The company currently operates 22 stores across 17 cities in northern and western region, including Delhi, Punjab, Ajmer, Mumbai, Bhopal, Rajkot, Vadodara, Kohlapur and covers 3.25 lakh sqft of the retail space.

"The organised retail sector in India is still in its state of infancy and we foresee a tremendous growth potential in the industry especially in small cities," he said.

The company has also decided to launch 'V-Galz' -fashionable studios for ladies, which would showcase apparels and accessories for them.

"We have plans to open 100 such stores in this year which will be on franchise basis," he said.

April 29, 2008
Source: Economic Times

RPG to tie-up with global brands in retail sector

Business conglomerate RPG group today said it will tie up with global retail brands. "We will soon announce a few tie-ups with foreign brands in a few verticals for both single standalone retail chains and in-house shops in Spencers'," CESC Vice-Chairman Sanjiv Goenka said.

Spencer's Retail Ltd is now a part of private power utility, CESC Ltd. Among the verticals, coffee and apparel would be part of the brand tie-ups. Goenka declined to provide details of the tie-ups saying, "it will be announced when we sign the agreement." He said the combined group retail revenue during 2007-08 was over Rs 1,000 crore and he aimed to take it to Rs 1,800 crore in 2008-09.

Each tie-up with global brand would be promoted by separate subsidiary of Spencers Retail.

April 28, 2008
Source: Economic Times

Marks & Spener may terminate agreement with Planet Retail

UK-based clothing and food retailer, Marks and Spencer (M&S), which recently inked a joint venture with Reliance Retail, is likely to terminate its existing franchise agreement with Planet Retail over a period of time, sources said.

"For the time being, we will continue with our existing agreement, but as and when we have a bigger store in the same city, we will call off the deal with Planet Retail," the source told reporters here on strict condition of anonymity.

M&S would offer employees the option of joining the bigger stores from the smaller stores the option of joining the bigger stores, M&S Chief Executive Stuart Rose said on his visit to India but declined to give further details on the issue. However, the source too declined to give an exact time-frame for the process.

Presently, the UK retail giant has 14 franchisee stores with Planet Retail. The franchisee stores are around 3,000 sq ft except for one store in Delhi which is of around 20,000 sq ft, he said.

"With Reliance Retail, we are planning to have stores of around 20,000 sq ft each," M&S's CEO, India, Mark Ashman said and added that "over time, as we come up with bigger stores in locations near to our franchisee stores, we will absorb the employees in our new stores."

The company's strategy will be such that it does not disappoint either its employees or its customers, he said.

April 27, 2008
Source: Economic Times

Shoppers Stop to invest Rs 1,500 cr to double stores in 3 years

Leading fashion and lifestyle retail department store Shoppers Stop will be investing around Rs 1,500 crore over the next three years to double its outlets to 48, a top company official said.

"We are planning to invest Rs 1,500 crore in the next three years. Of this, Rs 500 crore will be raised through equity and warrants, Rs 500 crore through internal accruals and the rest through debt," Shoppers Stop Managing Director B S Nagesh told reporters here.

The company, which has filed a letter of offer with stock market regulator SEBI for its rights issue, expects to receive final observations by June, Shoppers Stop CEO Govind Shrikhande said.

At present, there are 24 Shoppers Stop stores in the country which will be doubled in the next three years, Nagesh said. "We are planning to have at least 48 stores by 2011-12 and the present 1.5 million sq ft area of operation of Shoppers Stop will touch 3.5 million sq ft," Shrikhande said.

The per store area, currently about 40,000-45,000 sq ft, will be increased to around 75,000-85,000 sq feet, he added. "We are looking at having bigger formats of Shoppers Stop," he said.

The company will get into a number of new Tier-II cities like Ahmedabad, Jalandhar, Ludhiana, Amritsar, Vijayawada and Mangalore, Nagesh said.

On challenges before the retail industry, Nagesh said the high cost of operation still remains a concern while there was a hype surrounding the business. Its time the retailers focused on performance, he said. "We will continue to focus on premium category and also on luxury and have high-end brands like Espirit, Mac, Tommy Hilfiger and Lancome," Shrikhande said.

Shoppers Stop unveiled its new logo, which has an international look along with their own anthem, at a press conference here yesterday. The company has also launched its own in-store radio format and tied-up with music content company Blue Frog, which would update customers on new fashion, homeware and others, he said.

The company has launched environment-friendly recyclable bags and distributed 1.5 lakh neem seed sachets.

April 24, 2008
Source: Economic Times

Regional News

Delhi hot favourite retail destination in India

With the Indian retail industry poised to become a $637 billion sector by 2015, the capital city is emerging as the largest consumer market in the country consisting of a booming middle class.

Delhi has the highest concentration of households with an annual income of $110,000 and per capita income more than double the national average.

"Delhi is a destination for shopping across India besides its own consumption appetite. It is the principal business and commercial centre in northern India, well complemented by industrial areas in the National Capital Region," Minister of State for Industry Ashwani Kumar said at a symposium organised by the Confederation of Indian Industry (CII) here. Being the biggest consumption zone in northern India, Delhi has also emerged as a distinguished centre for trade, he said.

"A family in Delhi spends Rs 210,000 per annum on an average, while it saves Rs 50,000. As people prosper further, the savings will further go up, which will result in bigger retail industry," the minister said underlining the importance of the industry in creating employment opportunities.

April 25, 2008
Source: Economic Times

Telecom Retailing

Subhiksha outlines plans to enter Kolkata and Kerala telecom retail

Retail chain and mobile phone retailer Subhikshahas has announced its move to enter the mobile retail markets of Kolkata and Kerala.

Subhiksha already has 700 mobile stores across the country, and is opening more stores to further consolidate its position in the India's dynamic and fast growing telecom market.
Subhiksha competes on price, and offer some of the best prices on various brands of mobiles and accessories, while offering offers to exchange customer's existing handsets as well.

With four additional Subhiksha mobile stores operational in Kolkata, and over 70 new stores slated to open over the next 3-4 weeks, Subhiksha is aiming to shake up the Kolkata market.

Kerala has around 11 Subhiksha mobile stores operational, in cities like Kochi, Trissur and Calicut. Subhiksha plans to open another 51 stores during the year, across  various towns in the state, to strengthen its presence in telecom retailing through its stand alone stores and the inclusive shop-in-shop model in its own supermarkets.

R Subramanian, managing director, Subhiksha Trading Services says, ''Our entry into Kolkata and Kerala telecom retail markets is part of our commitment to bring greater value to consumers across the country. Consumers will benefit hugely from the best prices and the range of products offered at Subhiksha Mobile stores''.

Telecom retailing in Kolkata and Kerala is an extension of the company's product range of groceries, fruits and vegetables, fast moving consumer goods (FMCG supermarkets) and pharmacy.  Retail chain and mobile phone retailer Subhikshahas has announced its move to enter the mobile retail markets of Kolkata and Kerala.

Subhiksha already has 700 mobile stores across the country, and is opening more stores to further consolidate its position in the India's dynamic and fast growing telecom market. Subhiksha competes on price, and offer some of the best prices on various brands of mobiles and accessories, while offering offers to exchange customer's existing handsets as well.

April 26, 2008
Source: Domain-b

Consumer Durables

One-stop shops claim bigger durable pie in metros

With organised retail chains drawing up expansion plans for the domestic market, standalone dealers are now a worried lot.

With retail chains mushrooming all over the country, durable majors are increasingly betting on them to push sales. With chains like Reliance Digital, Croma, Next and e-zone drawing up big expansion plans for the domestic market, standalone dealers are now a worried lot.

"We have already started to see lower footfalls. People prefer to go to malls and shop. We have lost some of our regular customers. It will be difficult to sustain ourselves in the coming years," said Rahul Das, owner of Delhi-based Das Electronics.

Till recently, the Indian consumer electronics market, currently estimated at around Rs 25,000 crore per annum, was totally in the hands of standalone dealers like Das. With the entry of organised retail chain, this is set to change. Already, these chains have recorded sales of about Rs 2,000 crore — eight per cent of the market.

This share will grow rapidly in the days to come — most chains are growing at 40 per cent per annum, while the overall market is growing at around 7 per cent. Large manufacturers of consumer electronic goods said that 5-10 per cent of their overall sales came from the large format stores and this share is likely to increase to 20-25 per cent in the coming two years.

Small dealers said they were being undone by the lower prices offered by these chains.
"We are selling a high-end branded digital camera in our shop at Rs 22,000, while at these modern retail outlets you can purchase the same product in the range of Rs 16,000 to 18,000," said a Delhi-based dealer and added: "Almost all durable majors are giving these new formats better margins. It is natural that a customer would rather buy it from them than come to us."

Consumer durable companies have a different story to tell. "The traditional channel is strong especially in tier 2 and 3 markets. Modern retail helps us capture only the urban set-up but we also have to look at the sales in other markets. Hence we offer the same margins to both," said Sunil Mehta, director (sales and marketing), Videocon Industries Ltd.

V Ramchandran, vice-president (marketing), LG India, added: "Each channel has its positives and negatives and LG does not preferentially focus on either. I think there is equal opportunity for both the formats in the coming five years since the durables sector is witnessing robust growth."
According to industry experts, only those traditional dealers who constantly upgrade themselves have a good chance of surviving. With modern retail setting new benchmarks, the traditional retailer needs to constantly innovate to be able to sustain his business.
Factors like proximity to micro markets and more personalised services have so far helped the traditional retailer grow. But with more and more people headed for the malls, these factors may no longer provide an edge to the traditional retailer.
For some dealers, such factors will continue to be their key strength to take on the new wave of competition.

April 30, 2008
Source: Business Standard

Food & Grocery

Barista expanding footprints in domestic, overseas markets

With the coffee chain business becoming highly competitive, Barista Coffee is brewing strategies to expand footprints in the overseas and domestic markets. Seen as a popular hang-out zone among youngsters, the coffee brand is looking to consolidate its presence in the Indian market.

“We will open 80 new outlets with an investment of Rs 30-35 crore during the current fiscal. This would take the number of our outlets to 300. Of this, 20 would be opened in towns and cities where the company does not have any presence,” Mr Partha Dattagupta, CEO, Barista Coffee, said on the sidelines of an industry function.

The company which has presence in West Asia, UAE, and Oman is looking to open two of its café outlets in Bangladesh.

Speaking on the company, Mr Dattagupta said the business has moved forward since its takeover by Italian coffee major Luigi Lavazza SpA, with the company registering a 30 per cent growth. “We hope to break-even by the end of current fiscal”.

According to the Coffee Board, a Government body, coffee retailing is witnessing a boom in the country and is estimated to grow by about 30-40 per cent annually.
Noting that food and beverage is a high investment business, he said the company operates in three models — high street outlets, corporate and company owned stores.
He said the company would add 10 more exclusive outlets to the existing 11. It will adopt a three-tier pricing strategy depending on the location of the outlet.

The company, which takes an overview of its stores on an annual basis and had shut down 10 outlets last year as these were not profitable, would close 10 more this fiscal
On entering the merchandise business, Mr Dattagupta said less than three per cent of its sales came from the merchandise. He said the company is, however, not making it the core focus.

April 29, 2008
Source: Hindu Business Line

Support Functions

Retail training on a roll

With 30-35% growth in the organised retail sector, cos are opening academies to meet their manpower needs. In an attempt to tide over the shortage of trained manpower, India's nascent organised retail sector is investing in training academies.

Recently, two companies — Bharti Retail and Vishal Retail — announced the launch of retail training academies in Ludhiana and Delhi respectively. The two facilities are expected to churn around 5,000 trained persons every year.

"Talent crunch is one of the grave impediments in the progress of Indian retail sector. To address the problem, we have planned to come up with our own institutes," said Manmohan Agarwal, chief executive officer, Vishal Retail Ltd. The training institute run by the company is called the Institute of Management Excellence (IME).

Opened some months ago, Bharti Academy of Retail, meanwhile, has already trained about 1,800 local people from diverse sections of society. "The training module has been designed exclusively for Bharti Retail whose projected manpower requirement by 2015 is 50,000," said a company official, adding that since the academy was set up to make the local community more employable in their retail stores, no fees are being charged from the students.

To be sure, the new schools are in addition to the existing academies including Spencer's Pragati, Subhiksha Retail Institutes in Mumbai, Delhi, Bangalore and Hyderabad, and Future Learning and Development Academies in Ahmedabad, Bangalore and Kolkata. Encouraged by the response, the academies are planning to expand and open more branches in the months to come. Reliance Retail has already announced plans to set up a retail university, which will come up later this year.

With the sector's projected manpower requirement set to touch 500,000 by 2010, experts claim that the problem demands immediate attention, lest it affect the growth of the industry.

Before setting up their own schools, the retail majors tried overcoming the trained manpower crunch problem by tying up with various institutes that offer courses in retail management. For instance, Pantaloon Retail India Ltd (PRIL) tied-up with 14 institutes including the Wellingkar Institute of Management, Mumbai, before setting up its own training institute.

Interestingly, Sanjay Jog, head (HR) at Pantaloon Retail does not believe that there is a manpower shortage in retail. "By starting these institutes, companies are merely fulfilling the responsibility of creating their own resources."
Nihar Ranjan Ghosh, senior vice-president (HR) at RPG Retail sector said that a majority of fresh recruits have no experience and need to be trained in the retail processes. To facilitate this and to upgrade the skills of existing employees, Spencers set up Pragati, where newcomers undergo two months' training.

According to experts, with the organised retail sector projected to grow at 30-35 per cent annually for the next few years, the institutes will readily churn out store operators as well people for HR functions, , store management, distribution and logistics, information technology and store layout, store design, supply chain, visual merchandising and marketing.

April 27, 2008
Source: Business Standard

Unique Formats

Shopping through the Dish

As a child one wanted to buy a Cadbury’s chocolate bar right when it was being advertised on television. Today with technology advancement, it may actually be possible to do so.

What if you could buy advertised products through your television remote and a direct-to-home (DTH) service provider such as Tata Sky or Dish TV?

Currently there are two ways one can shop from home — either through the Internet or by placing orders for TV-advertised products via post or phone. Channels would sell items that were then bought by calling the numbers displayed on screen and paid for either by VPP or cash on delivery.

However, with TV emerging as the number one source of entertainment and with the emergence of new technology, the next round of integration is just a step away.

Shopping on DTH: How does it work? DTH encompasses services including pay-per-view, on-demand viewing and interactive features. These interactive services support the possibility of developing shopping carts for individuals. Based on the kinds of products on sale, one can categorise them into groups such as grocery, personal care, food and beverages, music and books.

The TV remote control can be enabled for use as a tool to navigate and select required products through the interactive screen. A final list of products along with individual prices can be displayed and payments can be effected through credit/ debit card gateways routed through the DTH provider.

Unlike the Internet, secure transaction can be guaranteed as DTH in general is available in encrypted form for every user. Plus, each channel is beamed directly from the satellite to the receptor dish in one’s home. As the signals are strong with clear quality, there is no scope for data loss during transmission of one’s credit card details.

The logic for DTH shopping is similar to that of Internet shopping as far as the merchandise to be sold is concerned. Any item that is standardised – either by brand name such as electronics (Nokia, Sony Ericsson, Apple) or by retail chains themselves such as Reliance Fresh (groceries, personal care items) – can be sold through DTH, provided the service provider gets all the stakeholders into the loop. These include retail outlets, movie theatres, railways, airlines, credit and debit card companies, banks and logistics firms (for product delivery).

However, there are some challenges to be overcome for this model to be implemented. Evident ones include

• Real time interaction and updates – with retail chain inventories, tickets

• Providing encryption for payments

• Delivery and logistics

The best way to mitigate these challenges is to collaborate with organisations already providing these services. For airline tickets companies like Yatra.com or makemytrip.com can be partners. For retail chains, it will lead to sharing of their real time inventory management systems.

What DTH players have to realise is that they do not have to provide any of the physical services themselves. They would merely provide a gateway to these services via the dish.

Who is the real beneficiary of these services? Of course, organisations providing the products on sale would benefit, as would banks and credit card companies. But undoubtedly the real beneficiary would be the customer and a DTH provider for who this service would be a new revenue stream.

Sitting in the comfort of his house a customer can shop, thereby saving valuable time and effort. Also things would be much cheaper when sold through this medium, as retailers would not have to stock items and display them in the retail format. Instead, they would be stocked in a warehouse or in some cases purchased only after the order has been placed. These savings in cost can be passed on to the customer in order them to encourage him to shop on the DTH.

Retail chains can save critical retail space for items that cannot be bought over DTH such a fresh fruits and vegetables or clothes. Additionally, their cost of merchandising is much lower. Customers would pay for the purchase before delivery and hence the retailers can work on the concept of ‘negative working capital’ that will keep their cash flows flexible.
The computer and Internet still have low penetration in India. But television is a medium most consumers are comfortable with. Also the reach of DTH is expected to far exceed that of the Internet coverage in the country. Hence, it would be a better bet to go shopping on the dish for all the stakeholders.

April 24, 2008
Source: Hindu Business Line