Retail News November 2007

Big players – Plans and Investments: Pantaloon to increase, Vimal to re-launch, RPG to invest Rs. 1000, Reliance Retail could be split, Titan Eye+, Metro to set up, Metro unveils, Vishal to open, Reliance enters

General Trends & Information: Indian consumers will spend, Margins soar at retail, Farmers reap benefits, India to emerge as, Festival Tunes, Small retailers embrace IT

Support Industries: Adani plans to invest Rs. 1000, Future Group forms, DLF to build 20 malls

Regional Trends: Tanishq unveils 100th store, Medicine Shoppe eyes Hyderabad

Food & Grocery: Dabur's Amit Burman, McDonald's to spread footprint

Apparel & Footwear: Samsonite plans to create, Planet Sports to separate, Levi`s to add 800 stores

Lifestyle & Luxury Retailing: UB and Prestige Group announce, Arvind Mills to set up chain, Luxury brands' wish list

Unique Formats: Catalogue retail pilot, In-flight retailing takes off, Kingfisher, PayMate tie up

Government Policy/Public Protests: TRS to intensify protest, Anti-retail protests, Small traders declare war

e-Commerce: Diwali e-shopping, eBay expects e-commerce, Bus ticket bookings, Online mart full, Online travel portals

Big players – Plans and Investments

Pantaloon to increase private label brands in Big Bazaar

The Future Group’s most valuable brand Big Bazaar will be increasing its private label products. According to Rohit Malhotra, Head of operations for South Zone, the company already has a large range of private label products in the apparel, food and electronics segments, all segments which contribute 12-14% of sales which the company hopes to increase to 25% of sales.

At present the Big Bazaar retail chain has 70 stores in major cities across India, with 22 stores in South India. According to reports, a large portion of the private labels will be taken from outsourcing. The rise of private labels has been phenomenal in the past few years, leading to a greater number of retailers opting for such as setup.

November 05, 2007
Source: The Hindu Business Line

Vimal to re-launch, expand its stores

Reliance Industries Ltd (RIL) announced that its Vimal brand will be undergoing a renovation and will be getting new showrooms. According to Anand Parekh, RIL President, Textile Business, the first of these newly designed stores was launched in Ahmedabad since it was the birthplace of the product.

New showrooms are to be opened in Mumbai, Bangalore, Chennai and Kochi, with a total of 24 new showrooms to be opened. The company will also be announcing several brand ambassadors for the Vimal brand. Founder of RIL, Dhirubhai Ambani started the Vimal brand in 1966 with just four machines and 40 men, a brand that grew to be one of the most well known brands at one time.

November 02, 2007
Source: The Economic Times

RPG to invest Rs. 1000 crore to expand its mobile and laptop retail chain

The RPG Group announced that it will be investing Rs. 1,000 crore over the next year to expand its PRG Cellucom India brand, which is a collaboration between RPG and the Dubai based Cellucom brand, for which it is the master franchisee. At present, RPG Cellucom India operates more then 100 stores in the country and will be expanding by another 400 stores by December 2008.

An estimated 150 stores will be operational by the end of the year, according to Sunil Bhagat, CEO of RPG Cellucom. The agreement between the two companies states that RPG will take care of the investment for infrastructure and Cellucom will take care of the procurement of the products as well as provide back end support. Cellucom is one of the leading retail firms of the Middle East, with a turnover of more than $350 million per year.

November 02, 2007
Source: The Economic Times

Reliance Retail to increase staff to 1 million in four years

Regardless of the fact that Reliance Fresh has faced protests in several parts of the country, the company is going all out to increase it total headcount to reach the one million mark in the next four years. According to Susan Bloch, Chief Culture Officer of Reliance Retail, "We will be having a million people working for us within the next four years. What took Wal-Mart to achieve in 30 years, Mukesh Ambani plans to do that in four years.”

Reliance Retail launched its first retail store in Hyderabad in November 2006 and has continued to expand in a fast and furious manner. So far, the company has opened 300 stores in 30 cities and continues to roll out stores at a fast pace.

November 01, 2007
Source: The Economic Times

Reliance Retail could be split into 34 companies

In an effort to streamline its businesses, Reliance Retail could undergo some rigorous restructuring and be split into 34 companies that would be independent profit and loss centers for the company. While no changes will be taking place immediately, the entire process is likely to be completed in a phased manner.

In the initial phase, some of the verticals that will be separated will be the hypermarket division Reliance Mart, the health and wellness chain Reliance Wellness, the consumer durables division, Reliance Digital, the lifestyle chain Reliance Trends and its proposed footwear division Reliance Footwear. It’s most prominent business Reliance Fresh has already been hived off into a separate company Ranger Farm.

Once separated, all companies will have their own infrastructure for supply chain management, logistics, and marketing. The move is largely anticipated to stave off the anti-Reliance Fresh feeling that has been growing in some regions of the country, by making it an altogether separate entity. These separate entities will also find it easier to create collaborations with international companies and could become growth drivers in for the company in the future.

October 31, 2007
Source: The Economic Times

Titan Eye+ to open 250 stores

Titan Industries eyewear segment Eye+, which was launched earlier this year, will be opening 250 stores spread across the country next year. Of these new stores, approximately 15 of them will be company owned stores, while the balance will be franchisee stores.

According to S. Ravi Kant, CEO of Eyewear business of Titan Industries, all showrooms will stock merchandise from famous international brands such as Christian Dior, Tommy Hilfiger, Elle etc. All showrooms will also have optometry clinics that will offer customers free “zero-error” eye testing services.

October 31, 2007
Source: The Hindu Business Line

Reliance plans makeover for shuttered stores in UP

Reliance Retail Ltd is considering reviving its mothballed grocery stores in suburbs, here, by converting the Reliance Fresh to speciality outlets other than grocery, so that it can keep the space without violating a Uttar Pradesh directive on closure.

Reliance Retail can no longer sell groceries in some 20 stores because of a state government ban on grocery stores run by organized deep-pocketed retailers.

In August, UP chief minister Mayawati asked Reliance to shut stores because their presence was, according to her, creating social tension in the state—a reference to protests by small traders opposing the entry of large corporations in India’s booming yet sensitive modern retailing. Since the ban Reliance has suspended its ambitious Rs4,000 crore retail roll-out for the state and has fired about 1,000 employees. In addition, the company is breaking rental leases for almost 100 commercial properties it signed up in seven cities in UP.

31 October, 2007
Source: livemint.com

Reliance Retail to launch 'Reliance Jewelry'

Reliance Retail, part of Reliance Industries, will make its jewellery foray with the launch of Reliance Jewelry this Diwali

Reliance will be the second corporate after the Tatas to enter the Rs 70,000 crore Indian jewellery industry, which is dominated by almost 3 lakh traditional family jewellers.

The company will launch its first store at Bangalore and will subsequently roll out 400 outlets in the next three years. Apart from gold and diamond jewellery, the stores would offer customised services for high-end jewellery. Sources close to the development indicated that Reliance is exploring possible branding options for the jewellery collections.

Reliance Jewelry may also sell gold below market rates. The move assumes significance in light of the recent surge in gold prices, which have breached the psychological barrier of Rs 10,000 per 10 gramme.

The company has reportedly entered into a sourcing agreement with Rosy Blue, one of the largest jewellery manufacturers, for operations. The jewellery foray is part of the company’s lifestyle retail, which includes books and music, cosmetics, lifestyle accessories and home solutions.

Reliance is set to compete with Tanishq, the jewellery brand from the Tatas. Consultancy firm Technopak Advisors estimates the Indian jewellery market to grow by 15 per cent annually, while branded jewellery is expected to grow by 30 per cent.

31 October, 2007
Source: Business Standard

Metro to set up cash-and-carry shop in Mumbai

The fight between Big Retail and the strident traders’ lobby is all set to get messier. Come December, Metro, Germany’s largest retailer, is all set to launch its first store in Maharashtra in Bhandup, a relatively nondescript locality in Mumbai’s eastern suburbs.

Metro’s entry into Mumbai is timed with the Maharashtra government’s long-pending decision to amend the Agriculture Produce Marketing Committee Act, which prohibited both farmers from selling their produce directly in the open market as well retailers from buying at the APMC market yards. While the move is expected to prompt more organised retailers to source directly from farmers in the state, traders believe that they run the risk of losing their livelihood.

Spread over 1 lakh sq ft, plus 30,000 sq ft of parking space, Metro will use the same cash-and-carry model it debuted with in Bangalore back in 2003. By cutting out middlemen, Metro reckons it can offer huge savings on a majority of the 18,000 items on sale.

Since foreign retailers are not allowed to sell directly to individual buyers under the cash-and-carry format, ironically, Metro will target wholesalers and other traders who buy in bulk, the very same constituency that is now protesting against its entry.

The battlelines have already been drawn. Two weeks ago, nearly 10,000 traders and wholesalers converged in Mumbai’s Azad Maidan to protest against the entry of Big Retail. The traders had threatened to launch a nation-wide agitation and disrupt the organised retail business across the country from January next year.

The traders had three specific demands: that the model APMC Act of 2001 be scrapped, no foreign direct investment in the retail sector by multinational corporations and a complete withdrawal of all cash-and-carry licences. The protesters had specifically decided to resort to violence against the existing organised retail chains, including Metro.

But the rising tide of protests doesn’t seem to have the state government unduly worried. A top official told ET that the state government’s talks with the German superstore were in the “concluding stages.” Justifying their decision to push ahead with the Metro project, another government official said, “It’s not another mall. The Metro follows the HORECA model, that serves hotels, restaurants, caterers along with other small retailers. These customers buy at the Metro’s wholesale centers, pay in cash and transport the goods themselves.”

Of course, dealing with irate traders isn’t a new challenge for Metro. In October 2003, just before its launch, the German retailer faced protests from wholesalers and distributors in Bangalore, who claimed that the cash-and-carry wholesale business was merely a backdoor entry into retail.

At present, Metro runs three stores in Bangalore and Hyderabad. Set up in Germany in 1964 Metro Cash and Carry today has 584 wholesale centers in 29 countries and is among the 50 largest companies world-wide listed by Fortune magazine. It commenced its Indian operations in 2003 with two modern wholesale centers in Bangalore and one later at Hyderabad. After Mumbai it has plans for Kolkata and Punjab, company insiders say.

October 25, 2007
Source: Economic Times

Metro unveils private label business for mom 'n' pop shops

Global wholesaler Metro Cash & Carry is stepping up private label play in India. The German cash & carry major, part of the world’s fourth largest retail group Metro AG, is now peddling distinct private label strategies to its customers across kiranas, mom-and-pop stores, restaurants and hotels in the country.

The private label business, which generates around 10% revenue, is expected to ramp up its contribution as Metro believes that kiranas and mom-and-pop shops will lap it up in their tussle with mainstream brands and for realising better margins. Metro, which entered India through 100% FDI route, is allowed to sell only to customers with sales tax registration number.

Currently Metro has two distinct brands — ARO for smaller retailers like kiranas and mom-and-pop shops, while HoReCa is targeted at restaurants. But Metro is unleashing more private labels across food and non-food categories. This will include Metro tapping the dairy business as well, including the liquid milk segment, under a private brand. “The share of purchase by hotels in India is very low as compared to our other distribution centres globally.

However, there are over 12 million mom-and-pop stores in India, providing a good customer base to our private labels,” Metro Cash & Carry MD, Martin Dlouhy, told ET. The ramping up of some of these private labels like Active (sportswear), Authentic (apparel ), Lambertazzi (leather products) and others will depend on the response they get from the market.

Metro is set to enter Mumbai by year-end and Kolkata next year. After Mumbai and Kolkata, Punjab is likely to be on the expansion radar. Currently Metro operates two distribution centres in Bangalore and one in Hyderabad.

October 23, 2007
Source: Economic Times

Vishal to open speciality store chain for apparel, FMCG

Delhi-based Vishal retail will soon set up a chain of speciality stores to retail its apparel and FMCG range across the country, as it firms up plans to introduce private labels for consumer durables and mobile phones.

The company has also chalked out plans to launch quick service restaurants for which it is in talks with real estate developers to lease out space at prime locations including Delhi Metro stations.

"We will introduce a range of private label consumer durable items and mobile phones at the stores in next 3-4 months, and the products will be sourced from China," Vishal Retail Ltd CMD Ram Chandra Agarwal said.

He said the consumers will get a mix of both private labels and others brands at the stores. The company would also start retailing liquor at its stores before end of this year.

On the company's foray into manufacturing mobile phones he said, "The pilot launch of the two models of our Z-line mobile phones has been successful, and since the response has been good, the mass launch will be at the stores in next 3-4 months."

Vishal currently has around 65 stores across India, is focusing on developing speciality stores for apparel and FMCG items. The plan was to have a total of 90 stores March next year, of which the new ones will be a mix of both hypermarket and speciality formats.

October 21, 2007
Source: Economic Times

Reliance enters wellness format; opens outlet in Hyderabad

Reliance Retail, which began its retail initiative here by launching the Fresh outlet last year, has chosen the city again for kicking off its wellness format, a ‘one-stop-shop’ for all health and wellness needs.

The company, however, chose to keep it a low-key event, though the top brass of Reliance Retail’s Wellness vertical, including its Chief Executive Officer, was in the city on Friday as it unveiled the first Reliance Wellness outlet in the country, on Rajbhavan Road here.

As it did in other retail formats, Reliance has come out with a very attractive interior design, which will be replicated in other parts of the country in the next few months. Sources said the company would launch about 20 stores in the next few weeks in top cities such as Delhi, Jaipur and Mumbai.

The Wellness outlet is home to some 5,000 products in different categories, including general nutrition, sports nutrition, skin and personal care, books, music and pharmaceuticals.

To attract customers, it introduces a ‘Medical Compliance Program’ for customers who are on long-term medication. “They would get reminders and alerts on the use and replenishments, if any,” a company executive said.

Some of the freebies include a free health insurance cover under RelianceOne, the customer loyalty programme. Reliance Retail has tied up with ICICI Lombard General Insurance Company to offer group personal accident insurance policy.

“If a customer buys products worth Rs 3,000 in the first three months, he would get a cashless hospitalisation benefit up to Rs 25,000. If he purchases an additional Rs 5,000 worth products in the 4-6 months period, the cover goes up to Rs 50,000,” the executive said.

October 20, 2007
Source: Hindu Businessline

Reliance Retail turns to speciality formats

Amid continuing protests against its organised neighbourhood convenience store format in several states, Reliance Retail has decided to hasten the rollout of speciality retail formats. In fact, the retail arm of Reliance Group plans to launch stand-alone speciality stores in the health and wellness segment, footwear, jewellery, home solutions, books & music and cosmetics by December.

There’s more. The company has decided to debut its mini-hypermarket format spread over 10,000-50,000 sq ft, christened Reliance Mini Mart, in Amritsar towards end-November. This will be followed with seven more stores in Gurgaon, Delhi, Mumbai, Nagpur, Pune, Hyderabad and Chennai. A total 65 outlets are in the pipeline till March 2008.

Reliance Retail honchos are busy signing up property for these stores to ensure a smooth rollout. With the exception of the health and wellness chain, each store will have a heavy mix of private labels. Sources close to the development said private labels will account for nearly 60% of the merchandise.

October 17, 2007
Source: Economic Times

Spencer's to reduce its retail formats

As part of its new branding strategy, RPG Group-owned Spencer's is working on trimming down the number of its current retail formats, while focusing on retailing food items.

Spencer's currently has 290 stores covering four retail formats, Hyper, Super, Daily and Express spread across six lakh square feet of area, which will get reduced to three formats eventually.

"We are merging two formats which are similar, to reduce the number to only three formats with one big box, small box and a range of stores in the middle range," Spencer's Retail Limited Vice-President (North) Satyaki Ghosh told media.

The company would invest up to Rs 2,500 crore on its retail expansion till March 2009 to cover an area of around 20-25 lakh square feet by September 2008. The total area across the formats will be close to 17 lakh by this year end. "We are already present in 32 cities across India and as expansion continues, we are aiming top 119 cities of the country," Ghosh said.

Spencer's Retail is one of India's fastest growing retail stores with multiple formats, retailing food, apparel, fashion, electronics, lifestyle products and books.

October 14, 2007
Source: Economic Times

Reliance Retail opens fashion apparel format ‘Trends’

Reliance Retail on Thursday marked its foray into the standalone affordable fashion apparel format, Reliance Trends.

The store, in the national capital region of Gurgaon, is spread across 30,000 sq. ft. and is the first of 100 such stores that the company plans to set up over the next three years. The second and third stores will be opened in Delhi and Mumbai shortly. In the next one year, the company plans to set up to 20-30 such stores.

Through its Reliance Trends format, the company is aiming to capture a ‘significant share of the rapidly expanding apparel industry in the country’. “The apparel industry is expected to be at around Rs 1,00,000 crore in the next three years and Reliance is targeting a fair share of the market,” said Mr Arun Sirdeshmukh, Chief Executive, Apparel and Luggage Business, Reliance Retail. The apparel industry in India is currently growing at 12-14 per cent on a year-on-year basis, he added.

Reliance Trends, besides housing a variety of international brands such as Wrangler, Reebok and Lee, will also have a number of indigenous brands John Players, Peter England, Indigo Nation and designer labels such as Anita Dongre’s AND.

However, Mr Sirdeshmukh said keeping with Reliance’s commitment towards private labels, almost 30 per cent of Trends’ collection will comprise private labels such as Sparsh (Indian women wear), Networks (formal office wear), Netplay (casual collection for an evolving workplace) and Panda (kidswear).

October 12, 2007
Source: Hindu Businessline

Mahindra joins the retail bandwagon

The Mahindra Group is the latest entrant to retail sector. Mahindra Intertrade, a fully owned subsidiary of Mahindra and Mahindra, said it would be entering the organised retail business.

The retail foray of the Rs 18,000-crore group would be through the brand name “Mahindra Retail”. Mr Raghunath Murti, Executive Vice-Chairman, Mahindra Intertrade, said, “The group believes that this is the opportune time to enter and extend its distribution business into direct retailing, when the organised retail market is expanding in India. As such, it is a natural extension of the group’s existing business,” he said.

October 11, 2007
Source: Hindu Businessline

General Trends & Information

Is our lack of infrastructure holding back the retail sector?

While the retail sector is growing by leaps and bounds, the lack of infrastructure in the country is causing international companies to re-think their plan for investing in India. The Indian consumer is just waiting for opportunities to spend money and with incomes rising and consumer spending at an all time high, it could be that the retail industry is what will lead to the poor standard of infrastructure being improved in the country.

India’s horticulture sector is the second largest in the world, but due to lack of a proper cold chain, about Rs. 60,000 crore worth of fruits and vegetables are disposed of due to lack of proper refrigeration facilities. One can only imagine the kind of potential the sector has if all the proper processes were in place.

Public-private partnerships are one of the ways to address this problem, another could be to offer tax holidays for 5-10 years, to bring this sector up to par with other sectors, as well as give a boost to the agriculture sector. The key factor is that the infrastructure and logistics issues need to be addressed with urgency; else international companies will have no alternative but to bypass the Indian retail market.

November 06, 2007
Source: The Financial Express

Indian consumers will spend $5.08 per day by 2025

According to a new study by the McKinsey Global Institute, the average Indian consumer will be spending an average of Rs. 200 or $5.08 per day by the year 2025. The main factors for this increase will be a ten-fold increase of the middle class population of the country from 50 million to 583 million, along with a three-fold rise of household incomes, leading to an aggregate consumer spending to reach Rs. 70 trillion in 2025 from Rs. 17 trillion in 2005.

The study also stated that by the year 2025, the middle class of the country would account for 40% of the population, from the current 5%, and will spearhead an increase in consumer spending. Middle class families are classified as those with a disposable income of between Rs. 1-2 lakh per year.

November 05, 2007
Source: Livemint.com

Margins soar at retail companies as shoppers loosen purse strings

Retailers in India reported increased margins this quarter despite concerns that rising rentals, salaries and the cost of adding stores would dent margins for the three months ended in September, as customers opened their wallets and splurged on more expensive goods and private labels.

“People had been upgrading their cars, houses or airlines but the range of brands for clothes had remained limited for more than a decade,” said Govind Shrikhande, chief operating officer of Shoppers’ Stop Ltd. “Over the last year, as we have seen premium brands such as Calvin Klein FCUK, Esprit and Tommy Hilfiger become available, we are seeing a shift.”

At Vishal Retail Ltd, a newly listed discount store chain, margins rose too. Operating margins for the six months ended September were 11.5%, compared with 11.1% for the year ended March. Profits rose as the company launched new private label products for water, flour, spices, appliances among other products. “Typically private labels get us 3-5% higher margins,” said Ram Aggarwal, managing director of Vishal Retail.

Retailers also said they are controlling costs better, which is helping keep up profitability. While salaries in the sector have been going up by 50-60% a year over the last few years as large, new players such as the Aditya Birla Group, Reliance Industries Ltd and Wal-Mart Stores Inc. enter the sector, retailers are also working to curtail employee costs and keeping employees from leaving.

At Pantaloon, while employee costs rose 41% for the quarter ended in September, compared with the same quarter last year, they had more than doubled for the year ended June, compared with the year before. The company is working to increase staff productivity, Kishore Biyani, Pantaloon’s managing director had said in a post-result phone interview with Mint.

At Shoppers’ Stop, employee costs were up 56% for the quarter ended September, compared with the same quarter last year. The cost of renting premises also went up 57.16% for the quarter, compared with the same quarter last year.

October 31, 2007
Source: livemint.com

Farmers reap benefits from organized retail

Murukesh, a worker in the Kannan Devan Hill Produce Co.’s tea estate at Munnar, Kerala, grows carrots, cabbage and cauliflower on a little piece of 3,500 sq. ft land. For years, this has been an additional source of income for Murukesh, who uses only one name. He used to sell his produce to local vegetable vendors or agents (where the latter were involved, he would pay a commission of 15-30% of the value of the transaction). He claims that the weighing machines used by the agents were not always perfectly calibrated and that the money due to him would come in instalments.

Since June, things have changed for Murukesh. Once a week, staff from Reliance Retail come to his field to take delivery of his vegetables. The price offered is at least Re1 more (per kg) than what Murukesh used to get; he pays no commission because no agent is involved; the produce is weighed electronically; and the payment is made immediately.

Even as opposition to organized or formal retailing grows across the country, farmers such as Murukesh are benefiting from the entry of firms such as Reliance Retail Ltd into the business. At Munnar alone, there are more than 200 farmers who either take their produce to a Reliance Retail collection centre or, like Murukesh, have the staff come over to their fields and pick up their produce.

Reliance Retail, which began its collection operations in Kerala in June, runs four collection centres at Kurupanthara near Kottayam, Muvattupuzha in Ernakulam, Kozhinjampara in Palakkad and Sultan Bathery in Wayanad.

From tapioca and yam to cowpea and cucumber, Reliance Retail sources fruit and vegetables from around 2,000 farmers in Kerala. These are sold through the 12 Reliance stores within the state and 318 stores across India. In the past four months, the firm has sourced around 1,000 tonnes of vegetables from the state.

A.V. Jayaraj, who once ran a farmers’ cooperative venture called Sangha Maitri and now plays a pivotal role in coordinating vegetable and fruit collections at Wayanad for Reliance Retail, says the firm is also looking at bulk purchases of pepper, the harvest of which is expected to begin in a few months.

Farmers have even started taking land on lease to cultivate vegetables. With paddy cultivation becoming unviable on account of high costs and lack of labourers for harvest, several fields are being converted into vegetable farms.

The promise of an assured market for the produce may encourage more people to take up vegetable cultivation. People familiar with the development who did not wish to be identified say that Reliance Retail is considering encouraging people to start vegetable gardens on terraces.

October 29, 2007
Source: livemint.com

India to emerge as sourcing hub for global retailers: Report

The Indian textile and apparel industry is poised to emerge as a sourcing hub for global retailers, given the abundant supply of fibre, well established production base and cost competitiveness, a CII-E&Y study has said.

The sourcing market is projected to grow to $35-37 billion by 2011 from the current $22-25 billion, the CII - Ernst and Young Textile and Apparel Report said.

Identifying sourcing as a huge opportunity for India, the report said phasing out of the Multi-Fibre Agreement triggered growth in the quantum of sourcing of top global retailers for the country.

"India has several advantages in terms of abundant supply of cotton and man-made fiber, well-established production base, cheap and skilled labour and good design capabilities," the report said.

Besides, government incentives to exporters and entry of foreign retailers into the domestic market would also boost retail sourcing from India.

The report further predicts that the Indian textile and apparel market would grow annually at 6.5 per cent, driven by a favourable domestic environment of rising household incomes, increasing consumerism and rapid growth in organised retail.

Exports would also grow annually by 12 per cent with international retailers looking at India as a viable alternative to China for sourcing of apparel.

October 26, 2007
Source: Economic Times

Festival Tunes: Retailers to spend Rs 100 cr on promotion

Even while big consumer goods marketers rely less and less on festival season sales, that kicks off around August-end with Onam in Kerala and goes right up to January with Tamil new year, compared to previous years, big retailers such RPG Group’s Spencer’s, Reliance Retail, Tata’s Croma, Subhiksha and Future Group’s Big Bazaar are grabbing the opportunity this festival season with both hands.

At Rs 50,000-crore, under 4% of the entire retail sales in the country, organised retail see festival season as big opportunity to build consumer traction and footfalls. They even find this season a good time to open new stores given Indian businesses’ fixation with ‘auspicious timing’ to kick start any new endeavour.

According to the Retailers Association of India’s (RAI) CEO Gibson G Vedamani, festival season accounts for almost 70% of retail sales in the country. RAI represents over 50 big organised retailers in the country. With such heavy seasonal dependence, no wonder RAI members, like Tata’s Infiniti Retail and RPG’s Spencer’s, are so gung-ho on their festival season promotions. Industry estimates peg the promotional spends by organised retailers this festive season at over Rs 100 crore.

Ajit Joshi, chief executive officer & managing director, Infiniti Retail, which runs nine-store strong consumer durable & electronics chain, Croma, says his company’s focus this festival season will be on rewarding its loyal customers and attracting new ones.

“During the festival period, that will run till December, we do not want to recommend brands to consumers. We want them to make value-based purchase that give them extra besides their purchase.” Croma will be offering 5% cash-back, besides running a promo for big spenders (over Rs 25,000) with all expenses-paid holiday packages to Switzerland and necklace worth Rs 1 lakh for winners. The company is also adding one store each in Bangalore and Delhi in the next month or so.

Spencer’s Retail vice-president marketing Samar Sheikhawat says: “Due to proliferation of organised retail, the power has shifted from marketers to retailers. During festival season, we’re expecting a 25% growth in sales.” The RPG Group retailer, which runs around 300 stores currently, is giving away Indigo Marina, 200 LCD TV and 500 domestic holiday packages as part of its promotions to push sales by a third in the next two to three months and is spending around 2% of its sales on such promotions.

There are freebies galore: whilst Croma has tied up with ICICI Bank for cash-back offer and holiday packages, Reliance Retail has tied-up with Kohinoor basmati rice and Snickers chocolate for consumer gift-packs. Express Retail Services, that runs 65 Big Apple stores in Delhi, is offering consumers sops such as foreign holiday and cars.

Shopper’s Stop, which runs 22 stores currently and is adding one more by Diwali, has virtually borrowed a leaf straight out of consumer durable marketer’s assured purchase-linked gift offer of yesteryears. The retailer is offering its high-spending consumers (over Rs 30,000) an assured gift of Kenneth Cole watch and a diamond necklace set for consumers spending over Rs 1 lakh. “In our promotion, nothing is left to chance,” says Shopper’s Stop general manager marketing Sheetal Choksi.

Rajan Malhotra, chief executive officer, Big Bazaar, says that with an investment of Rs 25 crore on advertising & promotion, he expects festival season sales to quadruple. Reliance Retail has chalked out a special promotion plan for each of its formats.

Reliance Fresh neighbourhood convenience stores will give away dry-fruit gift packs, special ranges of international chocolate and discounts in staple food range.

October 19, 2007
Source: Economic Times

Small retailers embrace IT to boost operations

After domestic retail biggies, mid-to-small retail chains are queuing up to embrace IT solutions to spruce up their operations. With the sector getting crowded by financially strong corporate houses and the likes of Wal-Mart, these players are concentrating on building their IT infrastructure.

Apparently, emerging retailers are increasingly adopting IT solutions for merchandising and supply chain needs, multi-channel requirements, store-level innovations and planning as well as for business intelligence solutions. Interestingly, even mom-and-pop stores are starting to invest in tech infrastructure.

So much so that IBM has identified the mid-to-small chains to drive its retail business vertical in India. The company has set up a business development team in India to deploy its own solutions as well as those developed by its ecosystem partners like SAP and Oracle.

October 12, 2007
Source: Economic Times

Support Industries

Adani plans to invest Rs. 1000 crore to create supply chain

Adani Agrifresh announced that it would be investing Rs. 1,000 crore to set up a supply chain, bringing fruits and vegetables from farmers to retailers. According to Ravindra Jain, the company will be investing heavily to set up a cold chain, pack houses, distributions centers and expanding is present facilities.

Adani Agrifresh is the subsidiary of Adani Enterprises, which had earlier invested Rs. 200 crore to set up cold stores, grading and packing houses in Himachal Pradesh. The rise in the amount of fruit that passes though its centers has risen dramatically already, with apples increasing from 5,000 tonnes to 18,000 tonnes in just a year.

According to Jain, "Volume is the most critical factor in this business where investment is high and margin is low." The company will be working to create a distribution network spread across the country supplying fresh fruits and vegetables throughout the year. The company has also tied up with several wholesalers in 20 cities and also supplies to Reliance Fresh among other retailers, such as Mother Dairy, Food Bazaar, Big Apple Choupal Fresh, Trinethra and Namdhari.

November 05, 2007
Source: The Economic Times

Future Group forms JV for logistics arm

The Kishore Biyani-owned Future Group is adding logistics muscle to its retail business. It has struck an agreement with Aeroterm Logistics, a Mauritius-based logistics company, to float a new joint venture entity in India.

According to sources, the new entity — Realterm Logistics — will have a 50:50 equity contribution from both companies and is expected to play an advisory role for developing logistics support for Future Group’s retail footprint in India.

Realterm Logistics will provide investment and other advisory services relating to logistics, warehousing facilities and related infrastructure in India and also various warehouse management services. A senior Future group official confirmed the development, but declined to share further details. “Realterm Logistics has been formed, and we have outlined the basic working area of the company. But details like actual operations and people heading the operations have still got to be tied up,” said the official.

The move is significant to Future Group’s retail venture, the success of which rests entirely on an efficient supply chain. But the underlining intent behind this present arrangement seems unclear as the group already has a logistics entity in its fold — Future Logistics — which had kick-started its operations earlier this year.

October 16, 2007
Source: Economic Times

DLF to build 20 malls for Rs 16,000 crore

Buoyed by the success of organised retail in the country, real estate industry leader DLF plans to invest Rs 16,000 crore over four years to develop about 20 large shopping malls across the country.

"Going forward, shopping malls will be an area of important focus for DLF. This will help us to make the maximum leverage of the retail boom in India," DLF Retail managing director Arvind Nair said.

He, however, did not divulge investment to be made in development of 22 million sq ft of shopping mall space. According to a company source, DLF is planning to develop around 20 large shopping malls in the next three-four years, which would entail an investment of Rs 16,000 crore.

October 15, 2007
Source: The Times of India

Regional Trends

Tanishq unveils 100th store at Patna

Tanishq, the largest jewellery retailer in the country, reached the century mark, with the unveiling of its 100th store in Patna.

The Bangalore-headquartered Tanishq Jewellery, ventured into jewellery retailing in 1996 through exclusive stores, both company owned and franchisee outlets. A Tata Group company Tanishq has presence in 70 cities across the country and has registered a turnover of Rs 1,250 crore last fiscal.

Following more than 40 per cent growth in operations last year, Tanishq will invest extensively during 2008 in marketing and retail initiatives to further develop the market. It will build new logistics centres and upgrade existing ones.

October 26, 2007
Source: Economic Times

Medicine Shoppe eyes Hyderabad, Pune markets

The Medicine Shoppe, a branded retail pharmacy chain of Dublin-based Cardinal Health, is looking beyond Mumbai and is planning to launch operations in Pune and Hyderabad. “Though I do not wish to give any timeframe, Pune and Hyderabad are our priority locations after Mumbai to start ‘Sehat’ model of retail pharmacy stores targeted at the urban poor,” Mr Viraj Gandhi, Managing Director and CEO, Medicine Shoppe, told Business Line here.

The target was to set up over 500 pharmacies-cum-clinics over the next three to five years. “Out of this, about 100 could be in Mumbai while the rest of them will come up in other cities,” he added.

October 22, 2007
Source: Hindu Businessline

Food & Grocery

Dabur's Amit Burman forays into food retailing

To tap the rapidly growing Rs 23,000-crore food and beverages retailing space, Dabur India Vice-Chairman Amit Burman, along with two other promoters, has set up a new venture - Lite Bite Concepts.

The promoters plan to invest Rs 200 crore in the next two-three years for setting up a chain of quick service restaurants and food courts. Targeting a Rs 1,000 crore turnover in next two years, the new venture will open around 200 outlets spread across the country - in malls, office complexes, high way locations, Metros and other high footfall locations.

"Food and beverages retailing is a very attractive segment and with Lite Bite Concepts we are targeting Rs 1,000 crore sales in a couple of years with around 200 outlets," said, Burman.

He said the company has tied up with Dubai-based Hot Brands International, which operates in multi-cuisines like Shamiana, Magic Wok, Santinos, Sala Thai and others, while it is also scouting for several new tie-ups with leading local and international brands.

He said the company's own brand will be 'Rapps' which is a wrap-based sandwich roll concept to be available across formats, ranging from quick service restaurants, Casual Dining (CDR), express outlets and food courts.

With a focus on NCR, tier II and select tier III cities, the company is expecting to launch its first outlet next month

October 28, 2007
Source: Economic Times

McDonald's to spread footprint in South

McDonald’s is rapidly moving southwards. Having established a significant presence in the north, McDonald’s is now expanding its footprint in Bangalore and Hyderabad.

The quick-service restaurant chain is also entering Chennai by the year-end. McDonald’s rapid expansion plan in south stems from the fact that the per capita chicken consumption in the south stands at around 2 kg against 1.2 kg in the north.

According to the Indian Food Intake Survey (2006) by Mumbai-based Protein Foods & Nutrition Development Association of India, 80% of the population in the south is non-vegetarian, in contrast to 56% in the north.

October 18, 2007
Source: Economic Times

Apparel & Footwear

Samsonite plans to create line of travel clothing

World-renowned luggage manufacturer Samsonite’s Indian subsidiary, Samsonite South Asia Pvt. Ltd. announced that the company would be creating a line of travel clothing to go along with its luggage and travel accessories. The company had earlier announced its plans of creating lines of fashion accessories such as watches, eyewear and shoes.

According to Subrata Dutta, CEO of Samsonite South Asia Pvt. Ltd., this new travel-clothing segment will offer solutions to people traveling to different parts of the country and the world. At present, Samsonite has 150 stores in the country and will be increasing these to 175 by the end of next year. The company will also be launching its Black Level luggage brand in Ahmedabad by spring next year.

November 05, 2007
Source: Business Standard

Planet Sports to separate its sports and fashion business

Planet Sports announced that it would be launching separate entities for its sports and fashion businesses, to keep a more focused approach to both segments. The company is a joint venture between Pantaloon Retail and Planet Retail Holdings. Planet Sports will also be launching new categories such as cricket equipment and apparel by late 2008 and will increase its stores to 5000 by 2010, a move for which the company is committing Rs. 250 crore.

According to Ravdeep Singh, CEO of Planet Sports, "We have two different lines of business, one fashion and another sports, so the aim is to create separate entities to manage them. A proposal will be put forward to the boards of both Pantaloon Retail and Planet Retail for approval at their annual general meetings to make the two businesses." The partnership between both companies will be continuing for its new entities as well.

November 06, 2007
Source: The Economic Times

Levi`s to add 800 stores in India by 2011

International jeans brand Levi’s Strauss is planning to add 800 stores across India by 2011, a top company official has said.

“Presently, we have around 160 stores and we will double the number every year for the next three to four years,” Levi’s Strauss (India) Director (Marketing) Shyam Sukhramani told PTI on the sidelines of Lakme Fashion Week.

The company launched four collections for the show - Levi’s Collectibles, Blue, Vintage Clothing and Red. Sukhramani said Levi’s Collectibles hold a lot of inspiration from the time jeans came into existence around 150 years back.

Levi’s is also sponsoring a project called Gen next, “We will go to the best fashion schools in India and select around 12 designers, out of which the best will design for the company for the 2008 fashion show,” he said.

Presently, Levi’s has around 14 flagship stores in India and the plan is to add another 10 by next year, including one in Mumbai in December this year, Sukhramani said.

The company also plans to expand the Icon stores. “Presently we have one Icon store in Bangalore and we plan to have another four to five stores in metros by next year,” he said.

October 16, 2007
Source: Business Standard

Lifestyle & Luxury Retailing

UB and Prestige Group announce luxury retail destination

UB City-The Collection is the new initiative between the United Brewery Group and the Prestige Group that will offer luxury retail space in the city of Bangalore. The UB City initiative will require an investment of Rs. 300 crore and will cater to some of the most famous and prestigious international and domestic brands.

According to Shashikanth, the CEO of the UB City project, The Collection has already signed up with several leading brands such as Louis Vuitton, Gucci, Mont Blanc and Dunhill to open branches of their stores there. A total of 38 stores and 23 brands will be in The Collection, which is expected to open in the first quarter of 2008.

The UB City project will itself be a grand project and will be spread over 1.5 million sq ft of space, offering the most luxurious of environments for discerning shoppers. So far the project is only for the city of Bangalore, but it could be replicated to other cities as well.

November 06, 2007
Source: The Economic Times

Arvind Mills to set up chain of lifestyle retail formats

Betting big on organised retail, branded textiles heavyweight, Arvind Mills, has drawn up a blueprint to set up a chain of lifestyle formats straddling the entire spectrum of value retail, premium and luxury retail.

The retail venture will be undertaken through the company’s brand and retail division, Arvind Brands, which is likely to be spun off into a separate entity and eventually listed on the bourses with Arvind as the holding company, it is reliably learnt.

Arvind Brands manages various brands such as Flying Machine, Newport, Ruf & Tuf, Excalibur and has a licensing arrangement with international brands like Arrow, Lee, Wrangler, Tommy Hilfiger and Diesel. The group is investing over Rs 400 crore in the first phase. The lifestyle formats will offer luggage, accessories and personal electronics in addition to branded garments.

October 19, 2007
Source: Economic Times

Luxury brands' wish list

According to an industry estimate, no less than 200-300 international luxury brands are trying to make an entry into India...handbags from Louis Vuitton and Prada, perfumes from Bvlgari, sunglasses from Gucci, shoes from Sergio Rossi, Tod’s and Jimmy Choo, or designer outfits from Armani, Versace and Condici...the list goes on and on.

Luxury product and service houses are bringing with them one of the most import ingredients for their success – their brand. They are also usually ready to pitch in with media and marketing initiatives, leaning on their global experiences. However, they are waiting for some local commitment too.

When asked what he thinks India lacks in terms of luxury retail, Francoise Montenay, resident Chanel SAS and chairman, Comité Colbert, suggests that India lacks retail space with a complete luxury environment and services. Being top-end products, when they do set up shop in the country, luxury brands are quite unlikely to be content to put up in the midst of run-of-the-mill retail outlets whose merchandise and services are within the reach of most comfortably off consumers.

These brands are looking to house themselves on high streets or luxury malls that do not boast of footfalls aplenty but rather select clientele who have the capacity and panache to spend.

October 12, 2007
Source: Economic Times

Unique Formats

Catalogue retail pilot at Shoppers' Stop

Shoppers' Stop Ltd's brand new offering the HyperCity Argos catalogue is all set to be launched in a few weeks
"It will be a pilot for the suburban Mumbai market. It requires minimum two catalogue seasons which take us one year to establish the model and then begin the rollout," said B S Nagesh, customer care associate, MD and CEO, Shoppers' Stop.

The HyperCity Argos catalogue is expected to match the prices of its existing brick-and-mortar retail format Hypercity, which currently has a single store in Mumbai.

The pilot is expected to be launched in Thane before rolling it out in other suburbs of Mulund, Vashi and Airoli and then entering Pune. In India, HyperCity Argos is expected to have display centres, online and call and collect counters that would cater to customers of a particular region. The company envisages a national rollout of HyperCity Argos in a few years.

Earlier this year, UK-based catalogue retailer Home Retail Group Plc signed an MoU with Shoppers Stop and HyperCity Retail to develop the company's catalogue retailing format in India.

October 25, 2007
Source: sify.com

In-flight retailing takes off with no air pockets

As protests dodge the organised retail industry in the country, in-flight retailing is picking up with no air pockets so far.

As government mulls addition of more domestic carriers and expansion of the aviation sector, this nascent retail sector is set to touch new heights.

"There is phenomenal growth in the retail market as now every company plans to jump into this sector. But we have brought in a novel concept of in-flight retailing which has shown a emphatic growth rate of 50-60 per cent," says Anil Sharma, Managing Director, AVA Merchandising.

AVA, which pioneered its in-flight retail venture in domestic aviation last year with the help of Air Deccan and Go Air, is now targeting 200 crore worth business in the coming fiscal.

Skymall and UK's Alpha group, a premier company active in in-flight catering and airport shopping, are among numerous others expected to enter this lucrative business, says Sharma.

AVA merchandising has already set up outlets at 25 airports across the country and Jetlite, formerly owned by Sahara group, is also slated to introduce in-flight retailing in their carriers shortly.

"The practice of shopping during flights has seen an exciting response from customers as it offers them a new experience of buying products at very low prices."

"The whole idea is to offer the customer the best products in most competitive and affordable rates," adds Sharma whose company has recently launched 'In-flight-bidding,' a concept comparable to an auction in which the customers are given a chance to buy products cheaper. "The bidding also entertains customers in their monotonous journey at 30,000 feet," he says.

Meanwhile, this parallel retailing as it is being termed, offers lucrative revenues to the airlines companies too.

October 14, 2007
Source: Economic Times

Kingfisher, PayMate tie up for SMS-based ticketing service

Now you can search, book and buy your airline tickets via SMS. Kingfisher Airlines has tied up with PayMate to introduce a SMS-based service that will allow customers to search, book and pay for tickets on the mobile without any manual intervention.

The ‘FlyBuySms’ service will not require a registration, or the downloading of any application. The service will work on any handset model and operator. The customer will incur premium SMS charges of about Rs 2-Rs 3 for the service, said Mr Ajay Adiseshann, Managing Director and Founder, PayMate.

In order to make booking of tickets a simple process, the airline has resorted to online selling, home delivery of tickets, selling through bank ATMs and Reliance Web Worlds. “FlyBuySms is a first-of-its-kind service in India through which a Kingfisher Airlines ticket can be booked anywhere, anytime. This will enable guests to access Kingfisher Airlines at their own convenience and in real-time,” said Mr Vikram Malhotra, Head-Marketing, Kingfisher Airlines.

October 12, 2007
Source: Hindu Businessline

Government Policy/Public Protests

TRS to intensify protest against Reliance Fresh

The Telengana Rashtriya Samity (TRS) will be increasing its protest against Reliance Fresh outlets in the Telengana region. According to K Chandrashekar Rao, the party will continue its fight against the company as it hurts the business of small traders and farmers. The TRS is the first of the political parties to vocalize its protests against the retail giant.

November 02, 2007
Source: The Economic Times

Anti-retail protests mainly target Reliance Retail

In a market where many companies are bullish on retail and investing huge amounts into the sector, Reliance Retail has been a target of much of the protest action against organised retail.

“Reliance is our no.1 enemy followed by Wal-Mart and Bharti, because they are partnering with Wal-Mart,” said Mr Dharmendra Kumar of the India FDI Watch, at the recently held anti-retail protest meet at the Azad Maidan here.

“I find it very interesting that there are other organised retailers who continue to operate in these areas,” Mr Gunender Kapur, CEO Reliance Retail, told in an interview to a television channel. Reliance Fresh outlets have come under attack in States like Uttar Pradesh (where the State Government has banned its outlets while those of other retailers like Food Bazaar continue to operate), Kerala, West Bengal and Jharkhand.

According to some protestors, Reliance is procuring from the farmers and selling to the end-consumer at a price that is cheaper than what the alternative distribution channel involving five crore middle-men are able to do.

Reliance opened 15 outlets in a single day alarming the small players and middle-men, said Mr Dharmendra. “Also, they are opening small neighbourhood shops, directly competing with the small kiranas, affecting their business,” he added.

Analysts are of the opinion that the company is being made the scapegoat because of its image of a conglomerate. “Reliance in India represents what Wal-Mart does in the US and so it is intimidating the small players,” said Mr Hemant Kalbag, AT Kearney, adding that the company is actually changing the paradigm in retail by making products cheaper.

According to Mr Harish Bijoor, consultant, there is an incumbency factor at play. “Reliance has the image of a big player in the market and the protestors are drumming up support against the company by mobilising large numbers of people to rally from the fruits and vegetables businesses, which are the lowest common denominators.”

Speaking to Business Line earlier, Mr R. Subramaniam of Subhiksha said that Reliance was being perceived as a soft target as they have a lot at stake. Commenting on why some retailers were being hit, he said that announcements of contract farming and several crores of investments have directed their anger against a particular entity.

October 17, 2007
Source: Hindu Businessline

Small traders declare war on big retail

Thousands braved the muggy Mumbai October heat to protest against organised retail, FDI and the APMC Model Act at Azad Maidan on Wednesday. Nearly 6,000 traders, mathadi workers, hamaals, hawkers and farmers — every conceivable group that believed it would be hit by organised retail — turned up to declare a war on FDI in retail, cash-and-carry malls and contract farming. The meet was organised by the Federation of Associations in Maharashtra (FAM).

Retail biggies, multinational as well as domestic, like Wal-Mart, Bharti, Spencer’s, Reliance Fresh, Big Bazaar, Subhiksha, More and Foodland came under fire from a coalition called the Vyapar Rojgar Suraksha Kruti Samiti, comprising several organisations from different parts of the country.

Previously dormant bodies like the Mumbai Mewa and Masala Trading Association and the Metals and Stainless Steel Merchants’ Association also made their presence felt. Most had shut their shops for the entire day to show their solidarity with the cause. Very few farmers, however, attended the rally, and absolutely nobody from the farming community spoke up against organised retail or mandi reforms.

The message that the speakers at the rally, who represented a range of associations, wanted the retail giants and the government to hear was loud and clear: shut the big retail shops, food parks, and malls, or face Uttar Pradesh-like consequences.

The protesters’ message to Reliances, Bhartis and Big Bazaars was to leave food and grocery retailing alone and stick to apparel, electronics and so on. The lives, they claimed, of nearly 10 crore people depend on food and grocery businesses.

October 11, 2007
Source: Economic Times

e-Commerce

Diwali e-shopping rising

E-shopping sales for Diwali this year has already registered a growth of 40 per cent, and is expected to register a growth of 130 per cent during the festive season.

Consumer goods industry sold products worth Rs 250 crore this time last year through e-shopping, in which nearly 18-20 lakh consumers used the Internet as medium for executing their sales orders in large cities including metros, an Assocham release said here. "As per estimates, this year's Diwali is likely to witness over 30 lakh consumers taking advantage of the Internet for e-shopping as it offers convenience and easier accessibility," it added.

October 29, 2007
Source: Hindu Businessline

eBay expects e-commerce users in Gujarat to double

Recognising the rapid growth of e-commerce entrepreneurship in Gujarat’s tier II and tier III cities, eBay India has decided to focus on the state as a global sourcing hub for diamonds, apparel, furnishings and handicraft.

As per company estimates, the Indian e-commerce market is likely to be worth Rs 1105 crore in 2007-08, when the company aims to have a 34 per cent market share.

The top cities from Gujarat involved in e-commerce through eBay are Ahmedabad, Surat, Sibhor, Rajkot, Vadodara and Bhavnagar.

The products are believed to be popular among traders and customers in the US, UK, Germany, France, Italy, Canada and Australia.

Gujarat currently makes up 5 per cent of the total two million users in India. eBay expects the numbers to double by year end.

October 26, 2007
Source: Business Standard

Bus ticket bookings take real-time route

Online surface transport Web site, Ticketvala.com, was formally launched on Tuesday. The site will enable travelers to book bus tickets from the comfort of their home in real-time and at no extra cost.

“The effort is aimed at revolutionising road travel which, compared to rail and air transport, is the most fragmented sector,” says the President and CEO of Ticketvala.com, Mr Haranath Lokanadham. Mr Lokanadham has signed up with 30 bus operators across the country to offer this facility.

Ticketvala, he pointed out, is not restricted to the Web interface as a good number of people are yet to gain Net connectivity. “We operate a call centre to facilitate the reach,” he said.

According to him, the basic issue in bus services is access to information. “There is no information guide, but with roads getting better by the day, the passenger road traffic is bound to rise. The point-to-point road connectivity is amazing,” he said.

Ticketvala is located in Mumbai, but plans to spread its wings across every region soon.

October 25, 2007
Source: Hindu Businessline

Online mart full of shoppers this Diwali

The virtual shopping streets are on a blast even before the Diwali crackers are set alight. Marketers of online shopping portals have lined up exciting offers for consumers to tap the pre-diwali sales bonanza. Offers such as gift vouchers and up to 22% cashback offers are all set to double the online sales this Diwali over the previous year. Gadgets which are expected to be the best sellers as customers are increasingly lapping up products such as LCD TVs, microwaves, MP3 players and digital cameras.

“Diwali is the biggest shopping season in India and one can have access to unlimited gifting options at e-shops. Since every brand runs a promotion during high purchase period, it creates a lot of confusion in the mind of the buyers and leads to an inefficiency in the market. Internet cures this by providing complete information just at the click of a mouse,” said an Indiatimes.com official.

Currently, Indiatimes.com is running a promotion where buyers are getting 22% cashback on all purchases. Similarly, Indiaplaza.in is running a promotion where a buyer would get a chance to win an e-scratch card that either offers Rs 5,000 cashback or a jewellery gift voucher of a similar amount on purchases of Rs 5,000. Another shopping portal Futurebazaar.com is also going to roll out its promotion in the coming week.

This Diwali, over 30 lakh people are likely to go shopping online, according to industry body Assocham, and the total e-shopping business is expected to more than double to Rs 5,500 crore mark this year against Rs 2,200 crore in 2006-07. The two weeks leading to Diwali are likely to contribute almost 15% of this.

Online shopping portals are not just getting orders from large cities in India. “Only 30% of orders come from the top eight cities and the rest come from small towns and cities. Close to 20% of the orders come from abroad,” said Mr Vaitheeswaran. Futurebazaar.com has so far received 50-55% of orders from top six big cities.

October 23, 2007
Source: Economic Times

Online travel portals going in for brick and mortar stores

Personal touch in any service seems to be working better with Indian customers as opposed to the virtual medium, especially in the tier-II and-III cities. Travel portals like Yatra.com and Cleartrip.com along with other players in online travel space are looking to do just that.

Yatra is planning to reach out to around 22 cities through its retail outlets by end-2008. Kicking off with four outlets in Delhi, Gurgaon, Mumbai and Bangalore, with an overall investment of Rs 2 crore by end-2007, the online travel company will hit ground in 18 tier-II and -III cities next year.

Yatra’s CEO and Co-Founder, Mr Dhruv Shringi, told Business Line on the sidelines of a press conference here, “While this year is focussed on metros, next year we would be looking at State capitals and other important cities in tier-II and -III cities space.”

On reasons for diversifying the core business of online travel, the Marketing Head of Yatra.com, Mr Nikhil Rungta, said: “In some services like booking a holiday package customers prefer a face-to-face interaction as they need to know the exact details of their product.” “It also adds credibility to the brand as the customers have the assurance that they can approach us in case of any queries,” he added.

Another reason for going in for physical stores is slow penetration of broadband and Internet facilities in the country, say experts from both companies. To tackle the issue, Cleartrip has started kiosks in five Big Bazaars in Mumbai as part of a tie-up with the Kishore Biyani-owned Future Group.

The customers can make bookings for their air tickets, holiday packages and other offerings and also have the option to pay through extended monthly instalments with Future Money providing finances for the same.

“Starting with five kiosks in Mumbai, we would take the facility to other Big Bazaar outlets in tier-II cities such as Jaipur, Goa, Ahmedabad and other metros by the end of this month,” said Mr Stuart Crighton, COO, Cleartrip.com

October 11, 2007
Source: Hindu Businessline