ICRIER study recommends inclusive growth for organized retail

Retailers are pulling all stops to ensure that the customer shops till she drops – with talking sensors, deep discounts and private labels. The ICRIER study indicates that small stores will be affected perhaps in a decade, but can use that time to improve and innovate. Meanwhile, shrinkage continues to hound organized retail.

Chillibreeze Business Research Team

General Plans and Information

Retailers to lure shoppers with talking sensors

The year 2008 seems to be a time of innovation in retail fraternity trying to be in sync with global trends. Talking sensors which prompt customers with lines like, “Mummy, won’t you buy a pair of diapers for me?”, at retail stores, malls and hypermarkets, is the new buzzword among Indian retail majors.

In order to kick-off this new retail concept in India, branded product manufacturers will soon look at tying up with global makers of talking sensors. “This is to catch the attention of people shopping for periods over seven minutes. It is to allow consumers to spend time in understanding the product and then make quick impulsive purchases. Currently, customers hardly spend seven minutes at certain retail outlets to buy products,” Charulata Ravi Kumar, CEO, Product of the Year India Private Ltd said.

According to Kumar, “Talking sensors are a major hit in countries such as Thailand and Europe. By implementing this in India, retail majors will be able to spur more volumes of branded products at retail shelves. This will, by and large, benefit branded manufacturers and end-consumers as well as be able to identify and offer the right product mix.”

Meanwhile, Product of the Year (POY) India, the world’s leading independent survey firm in product innovations, is currently talking to retail majors about stock-bundling offers with POY logos at retail outlets so that customers get the right product mix. POY empowers consumers worldwide to choose the best durables and FMCG products in an environment where there is information overload and the consumer has very little time to study a product.

Hypercity Retail India Ltd, constantly on the ball in evaluating new innovative retail concepts to be introduced in India, is looking at tools that will allow it to provide the quickest way of identifying the best product that can offer a sense of value-for-money and save time.

According to company officials, “Considering the growing demand for our innovative catalogue of retailing concepts in India at Hypercity stores, we are open to any new innovation, which will build the consumers’s confidence in their choice. Talking sensors seems to be a very good concept for retailers who believe in offering best the option to shoppers.”

Reliance Retail Ltd is open to introducing innovative concepts for various retail formats that include hypermarkets.

However, Rajan Malhotra, chief executive officer, Big Bazaar - part of the Future Group - said, “We currently believe in having loud speakers and live sensors (sales persons) to offer product details to customers. Hence, right now we are not looking at setting up talking sensors.”...

March 11, 2008
Source: Financial Express

Daylight robbery

Organised retailers are recognising the need to take tough steps against losses from pilfering and waste.

What is the link between baby formula, Levi’s jeans and Gillette razors? Across the world, these three are the most popular targets of retail theft. And as losses due to pilfering and fraud increase worldwide — and in India — retailers are worried that other products, too, will find favour with the wrong people.

It’s called “shrinkage” in retail lingo — when goods leave the retail store or the warehouse without a matching payment. And according to a recent study conducted by the UK-based Centre for Retail Research, shrinkage cost the world’s retailers approximately $98.6 billion — that’s more than six times the $16-billion organised retail trade in India — last year. Retail giant Wal-Mart alone is believed to have lost over $3 billion in shrinkage last year.

Considering the minuscule size of organised retail in India, you would assume shrink isn’t that big a problem here. But the global retail theft barometer survey conducted by the same agency states that Indian retail’s shrinkage woes are actually more acute, and worse in the unorganised sector. At 2.9 per cent of sales, India’s shrinkage rate is said to be the highest in 32 countries surveyed by the company.

Organised retailers agree shrinkage is a problem, but quickly add that they have kept the problem under control.
“Shrinkage exists and can’t be eradicated completely. It can only be constantly monitored and lowered. It is similar to how manufacturing companies spend on maintaining and monitoring their machinery,” says B S Nagesh, managing director, Shoppers’ Stop.

Other industry heads agree. “Shrinkage is a industry hazard. Since retail is a new business, companies are learning to adapt quickly and find ways around it,” says R Subramanian, managing director, Subhiksha Trading Services.

Before that, though, they need to digest some rather unpalatable facts. Retail theft can usually be traced to four causes: employee pilfering, shoplifting, accounting errors and vendor fraud.

And contrary to popular belief, it isn’t light-fingered customers who are walking away with unpaid goods: internal theft is the biggest cause worldwide, and in India.

In Western markets, shoplifting consumers are responsible for just over 40 per cent of all pilfering losses; the figure for India is much lower — 25 per cent.

Research shows that the most common method of employee theft is to allow a friend to slip away with high-value items after charging him for other, low-value items. And if an employee gets away with it once, he is likely to repeat his actions.

Which explains why one of the first steps retail consultants recommend is creating an organisation culture that fights loss. That means protecting whistle-blowers, rewarding staff who help reduce fraud and investing in employees to create an experienced and loyal work force.

The high attrition rate in the retail industry — 40 to 60 per cent annually for floor staff — is one of the biggest reasons for internal theft, agree retailers. To combat that, they are working to creating a sense of responsibility in their employees.

It also helps if employees have a vested interest in keeping theft under control. HyperCITY, Spinach and Subhiksha all link financial incentives to shrinkage rates and reward positive behaviour. At Subhiksha, for instance, targets for shrink are set at the beginning of each month. Teams that maintain shrinkage below that level are awarded bonuses.

When Subhiksha changed from the over-the-counter model to the supermarket model, it found shrinkage increased from near-zero levels to well over 1 per cent. The company then changed from its annual stock taking to checking the stocks thrice a year, while certain high-value items like electric razors are audited twice a month. Subramanian says the always-on approach has helped bring shrinkage losses in the retail chain to under 0.25 per cent.

Others have opted for daily checks on high-value items. At Big Bazaar, mobile phones and LCD monitors are inventoried everyday. For its part, Shoppers’ Stop has divided all its products into three categories. Category A, which is checked four times a year, includes high-value and often-stolen items — jeans and dupattas, lists Nagesh.
Lesser value items are in category B and bulk and low-value items like imitation jewellery form category C, which is checked only once a year. (Incidentally, imitation jewellery is exceptionally easy to nick but most retailers shrug that loss off as an occupational hazard.)

Experts believe this feature can be used even more effectively. Rather than concealing the cameras, they advocate displaying them prominently. Large signages that mention the store is under electronic surveillance are also important. In fact, one expert recommends a display screen in the store that screens the movement of customers.

Other retailers have their own ways of minimising shoplifting. Product shelves in Subhiksha stores are under 4 feet so that customers are always visible to sales staff. Spinach has its own experiment. Most frequently pilfered items — like razors and chocolates — are placed next to the cash counter, under employee supervision.

Big Bazaar, for its part, is experimenting with dummy models of high-value products that are used for explaining features. The real product is brought out of the store only when the customer confirms purchase.

That’s not all. At HyperCITY Retail, plainclothes securitymen walk through the store, constantly monitoring activities. Spinach has a team of mystery shoppers who visit its various outlets looking out for suspicious behaviour — from customers and employees.

March 11, 2008
Source: Business Standard

'Kirana stores near big retailers to be hit first'

Kirana stores, especially those on the periphery of big super markets, will be the first ones to bear the brunt of rapid expansion of organised retail, researchers of an ICRIER study, commissioned by the government, have said.

However, these kirana stores have a lead time of 10 years which they can use, with the support of the government, to innovate and be a part of the retail revolution, they said in their report submitted to the Indian Council for Research on International Economic Relations (ICRIER).

“Structural changes in retail will surely start affecting a large number of small retailers at some stage, be it after one or two decades, especially when the overall size of the organised retail in food reaches about 25-30%,” said the report prepared by researchers of the International Food Policy Research Institute (IFPRI) and Michigan State University (MSU).

After getting a mandate from the commerce ministry last year to a conduct a study on ‘The Impact of Organised Retailing on the Unorganised Retail Sector’, ICRIER has sought help of Thomas Reardon and Ashok Gulati, co-directors of ‘Markets in Asia’ — a joint programme of IFPRI and MSU.

It said for evolving an inclusive model for organised retail, big stores can co-opt several kirana stores and hawkers drawn from the pool of traditional retailers and upgrade them with adequate infusion of capital and training.

Experts are of the view that the emerging structural transformation in retail trade would benefit the society as a whole, but noted that “the gains will accrue early to consumers and a little later to farmers”. To ensure that traditional retailers do not become losers in this revolution, they suggested that innovation was needed to co-opt.

March 10, 2008
Source: The Times of India

Organized retail set to embrace neighbourhood low-cost stores

Drummers Dharam Pal and Deepak Bhatt are the new face of advertising for Pantaloon Retail (India) Ltd. Well, almost.

Their job is to get the floating crowd in east Delhi’s middle-class neighbourhood to step into the just-opened discount store run by the country’s largest listed retailer. At Rs450 for four hours of attention grabbing, the pair are a steal. From keeping advertising rudimentary, getting consumers to pay for plastic bags, and to running some outlets air-conditioning free, discount stores such as KB’s Fair Price are stripping out the costs from organized retailing in India as they prepare to make inroads into the neighbourhood-store format. “It’s a frugal store,” claims Damodar Mall, Pantaloon’s head of new ventures. “The whole concept of frugality connects well with the consumers.”

Value-conscious Indian consumers have, for decades, shopped at neighbourhood stores, often on credit and barely noticing the sweltering temperatures in mostly cramped and fully-crammed stores squeezed into a few hundred sq. ft. It’s a no-frills version they have been comfortable with, and while big retailers, new to the game, have mostly focused on glamourous, self-service, full display shelves, they are now starting to expand into the discount model, which essentially is a full store without the costs.

Pantaloon’s founder Kishore Biyani is of the opinion that KB’s Fair Price fits into his idea to reach out to the consumers hesitant to shop in shimmering malls they perceive as expensive propositions. Saurabh Chadha, head of KB’s Fair Price, claims prices at his stores are cheaper ranging between 8% and 25% compared with any other modern retailer. “We have customers coming in Mercedes and on cycles,” he says. “At the end of the day everyone likes to save.”

Indeed, a recent study by research group Nielsen Co. found an overwhelming 91% of Indian consumers surveyed voting for “Good Value for Money’ as the prominent factor behind selecting a grocery store. Chennai-based Subhiksha Trading Services Ltd has grown to be one of India’s biggest retailers by selling cheaper grocery products at stripped-down outlets.

Pantaloon opened a dozen of KB’s stores in northern New Delhi in August as part of a pilot project and so far opened in the city’s western and eastern parts as well. The company plans to roll out about 250 such outlets in the next two years in the New Delhi region and overall 1,500 such stores in other cities in during the same period.

Every store will have limited ‘stock keeping units’ or fewer varieties of goods, in this case around 300 products that are the “basic essentials” for daily needs. For example, the firm will stock about eight brands of toothpaste against 70 brands available in the market or only a dozen biscuit brands instead of about 150 a supermarket would stock, says Chadha. He adds the firm would stock a limited number of some of the most popular brands that it has identified through market research.

March 10, 2008
Source: Livemint.com

Lease rentals, interest costs hit retail earnings

Though the festive season gave a good opening to retail majors in the December quarter, yet it could not send their cash registers ringing. Delay in rollout of stores, skyrocketing lease rentals, higher interest and energy costs were some of the reasons that led to a slowdown in the sector’s earnings during the third quarter.

Not only has the quarter-on-quarter growth remained flat, but also the year-on-year sales growth fell drastically from 113% to 47%. Among this gloom for the established players, the new players like Vishal Retail and Koutons Retail have shown good performance.

Though things look gloomy right now, scenario would be different once expansion plans of major retailers comes on stream. Higher volumes would be the key differentiator. During the quarter, Shoppers’ Stop opened one department store and couple of other stores in other formats, Pantaloon opened three stores, and Provogue opened six new stores.

The companies are increasing their geographical presence in the wake of increasing competition. Launching new formats to tap the customer’s wallet is another aspect, which has caught up retailers’ fantasy. Shoppers’ Stop opened Arcelia, a complete store for women. Pantaloon’s launched its first office product store, Staples.

Companies are also experimenting with formats like inter-changing between large and small formats depending upon the location. This has helped to boost volumes as well as the average selling price. In case of Shoppers’ Stop, the average transaction size rose 11% for the current quarter over the same quarter in the previous year and same stores sales of 17%. Players like Provogue and Pantaloons have also witnessed the similar movement.

For organised players, the total expenses as a per cent of net sales have increased by 400 bps in this quarter to a record high 96%. Retailers have been able to better manage their inventory as turnaround days have come down. Staff cost is the only expense, which seems to be under control.

Other operating expenses like interest, energy, selling and administration cost continue to grow faster than revenues, and thus eat into the operating margins. Hence, operating margins have reduced to 3.7% of their revenues sale compared to 7.7% during the corresponding quarter last year. Many companies have already provided for the impending levy of service tax on lease rentals, even though the court ruling on the same is still awaited.

Among individual retailers, Pantaloon Retail continues to outgrow the industry and recorded 63% y-o-y growth during December 2007 quarter. Although this is lower than 80% growth recorded during September quarter, yet the momentum continues to favour the company.

Overall, the profitability of the sector has seen a sharp decline. Shoppers’ Stop has seen a decline in its overall profit margins. They stand at 0.7% of Q3 sales as compared to the 8.8% in Q3FY07. Going forward, the management expects to gain from economies of scale once a sizeable number of stores become operational. Similar is the story for Provogue and Pantaloons.

March 6, 2008
Source: Economic Times

Little room for private labels as big durables brands slash prices

After the initial hype, most modern retailers are going slow on launching private labels in the Rs 22,295-crore consumer durables space. Industry observers say big durables brands are competing aggressively with private labels in the wake of a massive price erosions.

Retailers don’t expect the contribution of private labels to exceed 4% of total industry sales as against an earlier estimate of around 15-20%. Little wonder that many big organised consumer durable retailers like Reliance Digital and Croma (from the Tata-Woolworth venture) are now focusing on opening more stores that stock big-brand durables.

Reliance Retail had planned to set up a huge after-sales network for its private label consumer electronics and home appliances. Besides, it had also hoped to make after-sales service its USP by taking over the service of branded products as well. But now, company officials say they would rather focus on scaling up their existing formats before launching private labels.

What further upset the private label cart was the fact that big-brand durable marketers quickly came out with their price-warrior models and standalone local durable chains such as Vijay Sales and Sony Mony in Mumbai, Vivek’s in Chennai started offering deeper discounts, thereby blunting the private labels’ biggest competitive strength, price.

Says Manoj Kumar, chief (consumer durables & electronics), Home Solutions Retail India, a full-owned subsidiary of Pantaloon Retail; “Our private label Koryo is competitively priced and has an equally strong after-sales network, thereby getting us the scale. Koryo products are priced 20-25% cheaper than other brands like LG and Videocon. The Koryo brand sounds like a Korean brand, and that has also helped push up sales.”

The Koryo range consists of air-conditioners, flat colour televisions, home theatres, DVD players, microwave ovens and irons and will be sold through Pantaloon’s Electronics Bazaar stores.

March 5, 2008
Source: Economic Times

Big players - plans and investments

Mahindra's agri arm in talks with global giants for cash ‘n’ carry JV

The Mahindra & Mahindra group is exploring growth opportunities in the fresh produce supply chain space through its agri-business initiative — Mahindra ShubhLaabh Services (MSSL). It is close to finalising a JV with an international supply-chain heavyweight.

MSSL is already supplying fresh produce to global retailers like Carrefour and Tesco, Albert Heijn and Sainsburry’s and may consider a cash-and-carry JV with one of the players, sources said. MSSL is positioning itself as a back-end supply-chain partner for organised retail, sources said. It currently supplies fresh produce to retailers like Subhiksha, Reliance and others.

MSSL currently procures fruits and vegetables from Himachal, Punjab, Maharashtra, & Madhya Pradesh for both the domestic and export market. It has tied up with farmers for procurement. Some farmer groups have formed grower societies to sell to MSSL.

The company also provides farm services to 9,000 farmers covering about 70,000 acres. Some of these farmers provide fruit and vegetables for domestic sales and exports.

Another group company, Mahindra Logistics offers contract logistics, corporate employee transportation services and meets transportation requirements of specified projects for other companies.

The Mahindra group had recently announced plans to venture into lifestyle retailing by setting up stores to sell apparel, toys and furnishings. The entity Mahindra Retail will operate under group company Mahindra Intertrade which has the licences to distribute children’s apparel, toys and furnishings of companies such as Walt Disney, Mattel, Lego and Woolworth’s Ladybird. Company officials are also beefing up its contract farming of citrus, pomegranates, mangoes, bananas, grapes, onions, potatoes, carrots which constitute about 50% of the total fruits and vegetables production in the country.

March 11, 2008
Source: Economic Times

ITC mulls retail entry in urban, semi-urban markets

After launching its e-Choupal retail stores in rural India, ITC is now looking at new retailing opportunities in the semi-urban and urban markets. “As we have got a foothold into rural retail, there is a possibility that we could also look at urban retail. This would be at the mass-end and we would be stocking products from other companies as well,” said a senior official from ITC.

Considering ITC has already made a foray at the top-end of the retailing spectrum with its Wills Lifestyle stores, scaling it down with more mass products especially in the FMCG space in urban and semi-urban markets is a possibility currently being explored by the retail and consumer products company. “The urban retail stores would be similar to the existing e-Choupal stores. These would be mega-stores and we would be stocking products from different companies including our own,” stated the official.

Convincing modern day retailers with the track record of its existing brands in the foods business, ITC is leveraging the strength of its food brands to gain a foothold with its new personal products range.

Besides partnering with retailers to give them added incentives will also be initiated by the company. According to the company, new FMCG businesses have clocked 68 per cent growth during 2006-07.

March 11, 2008
Source: The Hindu Business Line

Retail biggies bet on high-end in-store labels

Call it the second act of the Indian retailer’s private label story. After consolidating their presence with private labels which were competing with mainline brands on value and cost parameters, some leading chains are now planning to create a second line of premium private labels.

RPG Retail, Future Group, Shopper’s Stop and ITC’s Wills Lifestyle, among others, have or intend to create a high-end line of in-store brands which, in turn, will enhance their store image as well. Yet others like Reliance Retail and the Aditya Birla Group too, want to enter the game at a later stage, claim industry sources.

All this comes at a time when retailers’ private labels in categories like apparel, accessories, personal care, FMCG and food products have found steady acceptance from India consumers. Private labels account for around 15-20% of the topline for some big Indian retailers, nearly half that of their global counterparts such as Wal-Mart and Tesco.

Wills Lifestyle forayed last year into the ‘special occasionwear’ segment, featuring topline Indian designers. “That already contributes 15-20% towards our revenues,” ITC’s lifestyle retail business division VP (sales and marketing) Atul Chand said. Future Group too has recently rolled out a portfolio of premium in-store brands such as Lombard and Urbana.

RPG Retail is contemplating a premium positioning for an assortment of products such as ready-to-eat Indian and international items. “Indian consumers are looking at products which they can indulge in. Such premium labels may not necessarily have a premium pricing but can feature product innovations,” said RPG Retail CEO Sumantra Banerjee.

Future Group CEO Kishore Biyani believes a premium private label needs to have a superior product quality to gain the attention of the Indian consumer.

However, a section of the industry believes it is too early to launch top-end private labels. “It will take at least another five years for the market to mature enough to accept retailers’ in-store premium brands. Reliance Retail too has plans but only after we have a strong national presence to provide the necessary scale,” Reliance Retail president & chief executive (lifestyle) Bijou Kurien said.

Westside claims that it is not keen to create higher price points just to improve its imagery. Neeti Chopra, head, marketing adds that they are offering more value-added products at the top end under existing labels. “We have launched a premium menswear line called Ascot, as a shop-in-shop concept, keeping in mind that men are more brand conscious. But this was done to create a differentiation from the existing offerings.”

March 10, 2008
Source: Economic Times

Aditya Birla Retail plans to have 500 stores

Aiming to corner a major chunk of the multi-billion retail market, Aditya Birla Retail plans to have 500 supermarkets across the country by March-end. Aditya Birla Group Chairman Kumar Mangalam Birla said after the Group forayed into the retail sector a year ago, it has rolled out over 400 outlets of its retail brand 'more'. Birla was talking to reporters after launching the company's first 'more' store here.

He said the retail venture was well positioned with presence in metros and mini-metros like Vadodara, Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Mangalore, Pune, Mysore, Vizag and Vijaywada.

He said Aditya Birla Retail was started with a simple mission - "to change the way India shops". It launched its first supermarket in Pune in May 2007 and since then the number has grown to 430 and would touch 500 by the month-end, Birla said.

The growth of multi-chain stores is yet to reach its desired level in the country, he said. Of an estimated retail market size of $300 billion, supermarkets and hyper markets have less than four per cent market share, Birla said.

The Group has identified various sites and work is in different stages of development, Birla said. Megastore is a one-stop shop for the entire family offering 60,000 products catering to every need of a household, Birla said.

March 5, 2008
Source: Economic Times

Regional

Reliance Jewels plans more stores

Reliance Retail, which recently forayed into jewellery retailing, will simultaneously take the franchise route to open 300 Reliance Jewels stores in the country by 2011-12.

“Of the 300, at least 100 would be franchises,” Mr Bijou Kurien, President and Chief Executive of Reliance Retail’s lifestyle arm, said.

Addressing a press conference here on Friday, he said the company would pick existing players in the jewellery business and also those who have experience in retailing as franchisees. He was here in connection with the opening of Reliance Jewel’s second outlet (the first one was opened in Bangalore) here. “We will open 12 stores in Andhra Pradesh,” he said.

Stating that the size of the jewellery market in India was put at Rs 80,000 crore, he said only three per cent was in the organised sector, while 20 per cent was in the hands of regional and local brands.

March 8, 2008
Source: The Hindu Business Line

Reliance iStore opens in Hyderabad

Introducing iStore – its latest retail format in Andhra Pradesh, Reliance Retail has announced that the company is planning to open 50-60 such stores across the country in the next 18 months.

Addressing a press conference here on Wednesday, Mr Ajay Baijal, President and Chief Executive (Consumer Durable IT and Telecom), said the company would open 150 Digital format stores in tier-I and II cities.

While iStores would sell the complete range of Apple products, Reliance Digital outlets will sell a wide gamut of electronic consumer goods. Stating that there was a huge demand for Apple products in India, he said there was no outlet for consumers to get access to the complete range. In Andhra Pradesh, iStores would come up at Visakhapatnam and Vijayawada in the next few months.

March 6, 2008
Source: The Hindu Business Line

Consumer Durables

Reliance Retail unveils largest consumer electronic store

Under the successful format of “Reliance digital” that serves customers with consumer electronics, Reliance Retail announces the launch of its new store at Gurgaon which succeeds the stores in Delhi, Mumbai and Bangalore. The new destination of “Reliance digital” is at S-218, IInd Floor, Ambiance Mall, Gurgaon.

“Reliance digital” is a unique store concept built around Reliance Retail’s core philosophy – customer centricity and a hassle free store experience. Reliance digital is a one stop shop for all technology solutions in the field of consumer electronics,home appliances, information technology and telecommunications. The store covers an area of more than 42,000 sq. ft thus being the largest consumer durable store in India and will offer over 5,000 products spread across more than 150 brands along with countless solution bundles recommended to meet the diverse customer needs.

The store has 95 highly skilled and trained staff who can counsel and guide customers to buy product that exactly cater to their spelled out needs. The store will remain open seven days a week from 10:00 a.m. to 10:00 p.m.

Pioneering a service trend in the country, Reliance digital introduces “RelianceresQ”, an end to end solution related to all your technology products. RelianceresQ, through a network of in-house service centers will provide the consumers with pre sales and post sales support services.

Reliance digital will continue to offer all its customers RelianceOne, a common membership and loyalty program across all its formats, which follows the philosophy of ‘Earn Anywhere, Spend Anywhere’. Reliance digital will also provide easy and attractive finance options for your purchases.

Reliance digital will be large format stores spread across 15,000 to 35,000 sq. ft. and will come up in 70 cities across India.

March 8, 2008
Source: Economic Times

Support Services

Reliance plans flexi finance service at retail outlets

After rolling out 11 formats ranging from footwear to jewels, Reliance Retail now plans to offer flexible financing options for its customers.The retail arm of corporate major Reliance Industries plans to launch MFT or Membership Financial Services and Travel at all its formats.

“The idea is to offer flexible payment options to our customers visiting a variety of our retail stores. This will help the customers to distribute the financial burden over a period of time and pay through EMIs (equated monthly instalments),” a Reliance Retail executive told Business Line.

Initially, employees of Reliance Industries would be offered this service. It is likely to be extended to select customers before being offered to all customers subsequently.

MFT staff will explain the features of the financial assistance to customers at the various retail formats, the executive said.

March 10, 2008
Source: Hindu Business Line

e-Commerce

Pre-paid cash cards for train tickets gaining in popularity

More and more people are now using pre-paid cash cards such as Itzcash cards, Done cards and Icash cards to book online train tickets against the earlier days when primarily credit and debit cards were used.

This shows that increasingly people (who do not own credit cards) are now going to the Internet to book their tickets, though there may be a small proportion of people who have taken to using prepaid cards for security purposes. The prepaid cash cards, available for wide ranging denominations (starting from as low as Rs 100), can be used to pay bills for multiple products and services.

According to data on online payment methods adopted for online train ticket booking, the share of cash cards has been steadily increasing over the last one year, while the share of credit cards has been slowly declining.

March 7, 2008
Source: Hindu Business Line