India Retail News and Jobs

Flipkart - The Indian Amazon.com?

noreply@blogger.com (Reporter) — Wed, 28 Dec 2011 05:27:00 +0000

Flipkart Online Services, is probably India’s most exciting e-commerce company, Flipkart. Founded by Sachin Bansal & Binny Bansal with an initial investment of 4 lakh in 2007, had clocked a turnover of Rs. 25-crore in FY 10 and is expecting around Rs. 75-crore this fiscal. Sachin and Binny are erstwhile Amazon employees and have created a hugely successfully and fast growing e-commerce company in India which we think is the Amazon.com of India.

Bangalore-headquartered Flipkart, the country’s largest online bookstore selling over two-lakh books annually, now plans to extend its product portfolio by launching music, mobiles, consumer electronics and games over the next few months.

“We aim to be a $1-billion (Rs. 4,500-crore) company over the next 3-years. We are growing at a CAGR of 700% in the last two-years and hope to maintain that. We expect revenue to grow multi-fold on the back of our major expansion plan,” Flipkart’s founder and CEO, Sachin Bansal, told PTI recently.
Flipkart offers around 15-20% discount on every book and hence its revenues are mainly volume-driven. It sells 1.5-lakh books a month and has over 6-million titles listed ranging across all genre of books. It provides the pay on delivery option which is very popular with Indians.

Flipkart has managed to get VC funding. They have taken funding from Accel Partners in 2008. According to reports, the firm had raised its second round of venture funding to the tune of USD 10-million from New York-based investment firm Tiger Global Management.
Flipkart is profitable at the operational level but is still Ebitda-negative and expecting to be PAT-positive soon.

Could Flipkart be the online giant from India that someday rubs shoulders with Amazon and Google?

FDI in Retail- is it all rosy??

noreply@blogger.com (Reporter) — Wed, 28 Dec 2011 04:23:00 +0000

FDI in Retail is being touted as something that needs to be done for the good of Indian Farmers, Indian Industry and for the benefit of cunsumers.

Let us take an objective look at the benefits and disadvantages of opening up FDI in Retail for India. Let us look at the arguments made in favour of FDI: One very strong argument for FDI is to get additional investments in the supply chain infrastructure. We loose a substantial percetage of our agriculture growth due to lack of good cold storage chains and food processing units. The additional investment in retail will pump up investments in infrastructure and help remove inefficiencies in the whole supply chain. These benefits will be passed on to the consumers.

Several large industry houses have entered into Retail. As discussed in some earlier articles I believe some of the entrants in the retail were driven by the hope that they would be able to sell their retail chains at a huge premium when FDI came in. With the delay in FDI in retail we see that several of these entrants have been forced out of the retail space due to short term view and lack of committment to stay invested long term in the Retail sector. There is obviously a lot of pressure to get FDI in retail from the industry groups. It seems to be a panacea for all problems in the current economy. Disappointed by the government's decision to put foreign direct investment (FDI) in multi-brand retail on hold, India Inc on Wednesday described the move as "highly regressive". FICCI president Harsh Mariwala said "It (withdrawal of FDI in Retail) is a highly regressive move. For the growth of this vital sector of the economy, which is likely to result in strong linkages with the farm sector and for the economy as a whole, it is imperative that reforms like these should take place," .

Congress has changed the fight for FDI in retail as a conflict of interest between traders/middlemen and farmers. Rahul Gandhi is touring UP challenging that the FDI in retail would have helped the farmers get better prices for thier produce has been stopped by the opposition as they are against farmers. The politics of targeting pockets and creating segments - divide and rule - is in the works. There is a split in the interest of traders and farmers, as per the Congress advocated policy.

Now is this all the clamour true. Let us look at how organized retail has worked in other countries and evaluate the negative aspects of opening up FDI in retail in India.

Big retail in the West and elsewhere functions on a simple business model. Grow bigger and bigger till the market becomes an “oligopsony” — a situation where a small number of buyers exert power over a large number of sellers. The UK food retailing industry, for example, is now dominated by just four supermarket chains who together account for over two-thirds of retail food sales. Likewise, the top five chains in the US account for over 60 per cent of food sales. This results in the retailer exercising enormous control over their suppliers, which includes the farmers.

Farmers in the West have paid a big price, with hundreds of thousands forced to shut down their farms, due to corporatisation of the farming sector, along with corporate concentration on the purchasing side among processors and retailers. According to the US Department of Agriculture's Economic Research Service, in 1990, ranchers and farmers received 60 cents of the retail dollar spent on beef, retailers received 32.5 cents and meat companies 7.5 cents. In 2009, the numbers were reversed — retailers took 49 cents share of each dollar (up 16.5 cents) consumers spent on beef, while ranchers and farmers got 42.5 cents (reduction of 17.5 cents) and meat packers 8.5 cents. In the UK, the Royal Association of British Dairy Farmers has complained vociferously that prices paid to farmers for fresh milk are simply unsustainable, with the average farmer losing money on each litre of milk produced. This has happened even as the supermarkets' margin on fresh milk has increased steadily over the years. While it costs the consumer £1.45 to buy four pints of milk at a supermarket such as Tesco, the farmer receives just 58 pence (40 per cent) of this, causing a loss of 3 pence for every four pints. Small farmers have closed their dairy operations as a result.

The European Union paid direct farmer subsidies of €39 billion ($51 billion) in 2010 alone. Why these subsidies if the big retailers are paying the best prices to the farmers as claimed?

The point that the scenario would be different in developing countries with large populations is also flawed. Mexico signed the North American Free Trade Agreement in 1994. It has since witnessed a virtual takeover by Walmart which has gained nearly a 50 per cent share of the country's retail market. We need to be wary on the FDI we allow into retail and the controls we need to enforce.

The concentration of buying power with a few people is not going to help the economy or the people in the economy in the long term. India has more than 58 million small farmers, 12 million small retailers and 26 million small and micro enterprises representing over 450 million people that would be affected directly by opening retail to FDI.

India should only allow FDI in retail with controls and rules on profit sharing with farmers and manufacturers.

Jobs in Retail Sector

noreply@blogger.com (Reporter) — Sun, 25 Dec 2011 05:40:00 +0000

There are currently lot of job opportunities in Retail sector. The organized retail missed the much required boost due to the withdrawal of FDI in retail. However, there are approximately 22 million people currently working in India's retail sector. Experts believe that the current retail boom in India will produce an additional 8-10 million more jobs by 2015.

The jobs in the retail sector are across the spectrum from a large number of roles unique to retail sector to manage the POS machines as cashiers, store management, Store Inventory Mangement, etc. There is also an increase in the requirements for specialized skills required in organized retail such as store planners, stockists, logistics, operations, distribution, marketing, finance, human resources and IT roles.

There has never been a better time for a career in India's retail industry.

Interview Questions for a Retail sector job:: Series - Q#1

noreply@blogger.com (Reporter) — Fri, 09 Dec 2011 05:37:00 +0000

Q#1 "Why are you applying to work here?"

Retail industry is challenged by high attrition and high training costs. Retailers want to assure themselves of the objective of the perspective employee to join their chain.

Some possible answers to the question on why you are applying to work are:
•This has been one of my favorite stores for years. When I saw there was an opportunity for employment here, I was very excited at the possibility of becoming part of the team.
•I really enjoy working with people in a retail setting, helping customers, organizing stock, and changing displays.
•This seems like a really interesting place to work, with the variety of items and services that you offer, and I feel that given the opportunity, I could be an asset to the team.
•I have a lot of experience in establishments like this one, and would welcome the opportunity to learn a new business, and share my expertise in selling.

Why did some Retailers fail in India?

noreply@blogger.com (Reporter) — Wed, 05 Oct 2011 06:27:00 +0000

The reasons for failure of retailers in India can be categorized as following:

1. Lack of long term strategy: Some bsuiness houses moved into Retail without a long term strategy. They did not have any major differentiation and seemed to be just interested in getting into the hyped retail sector. These retailers never became successful and with FDI in retail being delayed never got sold off sucessfully to a partner who could make changes to the strategy and make them successful. Some retailers I would count in this space are Dabur Retail, Raymond's Be, India Bulls - Pyramid, etc.

2. Lack of proper financing of growth - IPO, Short-Term debt, etc such as Vishal Retail. Vishal Retail after the fist IPO went into a expansion spree by tking short term debt. The stock price took a major beating during the recession and the short term debt soon pulled the company into Corporate Debt Restructuring.

3. Lack of processes and IT systems to support the complex Supply Chain such as Shubhiksha Retail. Subhiksha had the right price points and were omni-present, but thier stores never had the stock that the customers really wanted. Soon they had lost most of thier customers despite the buzz created by national advertisements and exciting price points.

4. Expanding too fast across the country: Subhiksha and Vishal instead of stabilizing and consolidating themselves first in different places and then moving to newer locations, tried to be the first in every town.

5. Trying to cover the complete merchandize space without building on core competencies such as Shubhiksha Retail and Vishal Retail. Vishal retail even went into intriducing private labels in all categories without the maturity to manage so many categories.

The above issues led to huge operating costs due to large inventory (improper processes/IT systems), high rental costs and lack of strong finance options e.g. unsuccessful IPOs, wrong debt structure, etc. This situtation enhanced by the recessionary period led to the downfall of several retailers in India.

Where is Retail Industry headed?

noreply@blogger.com (Reporter) — Thu, 14 Jul 2011 08:28:00 +0000

Retail industry is linked closely to the global economy as it is driven by consumers' readiness to spend money.

The global economy has been buffeted by the big bank scams, middle east chaos, tsunami in Japan, the Greece debt crisis and the still struggling US economy on steriods of tax breaks and unstaintable government spending. However the economy has shown amazing resilence. There are pockets of high growth in the globe especially in the emerging markets of China and India. Germany, France and the Nordic countries are also powering the European economy. So there are large expectations that the economy will go on in a similar fashion in 2011 and 2012. This augurs well for retailers as the uncertainty though being poignant is not going to bring down consumer spending drastically. So i do not forecast any major unheavels in the retail space due to the economy in the near future. However retailers will start moving from their restricted areas to the hot spots in the global economy. The demographics and ecosystem of each country is different so retailers will start facing the challenges of globalization.

However, there are other things happening that will accelerate the speed of change. Twitter, Facebook, and other social networking sites are becoming palpable. The channels of marketing are merging. Customers are shooping in stores as they are checking deals and feedback on the Internet and tweeting with friends. There is a new breed of customers who are okay to shop expensive products from home, never stepping into a store. So this is an interesting new area for retailers as the skills acquired in the old world of store operations, supply chain to the stores, etc are replaced with new skills in the world of Amazon and Google. Retailers would need to move from product centric to customer centric retailing.

Retailers will move thier IT systems to the cloud. There is already an explosion of data on customers, preferences, customers, feedbacks, prices across several channels, etc that need to be analyzed to help make business decisions. So retailers will start investing more on data analytics and customer analytics.

Another interesting trend, I had commented about earlier in some other article also, is that the retailers are beginning to look more as manufacturers (private labels are becoming large brands) and manufacturers are becoming retailers (Sony, Apple, etc.). Best selling dog food is "Old Roy" a Sam's private label; President Choice has a higher brand recall than Coca Cola in Canada!!

There are tremendous improvements in data flow and analysis resulting in super efficient supply chains. However Supply Chain will still be a differentiating factor and those retailers that fail to get their Supply Chain in order will fail miserably.

I will keep adding trends as I come across them, please feel free to add your comments and help us understand what you think of how Retailing is going to evolve over the years...

Indi Mall bites the dust

noreply@blogger.com (Reporter) — Tue, 07 Jun 2011 06:38:00 +0000

Retail in India is not easy. Lot of players have jumped into the much hyped potential in the organized retail in India. The reports are not wrong, but Indian market is not easy to penetrate with huge cost pressures, huge space costs, unfavourable government policies and the omnipresent kirana stores.

Pioneer Group's two lakh sq ft hypermarket in Chennai, Indi Mall, which opened with much fanfare in 2008, is closing down. It started operations at the wrong time, when the financial meltdown had hit the retail sector, but even after things got better, Indi Mall failed to attract customers. Pioneer will close the mall by June and modify the structure to construct serviced apartments. The company is looking for private equity investment for the new venture.

This is just one of the several big names that have failed to click in the Indian markets inclusing Shubhiksha and Dabur Retail.

Exploring Spanish Retailers: Mercadona SA, Inditex (Zara), Grupo Cortefiel, Eroski, etc

noreply@blogger.com (Reporter) — Tue, 07 Jun 2011 05:04:00 +0000

Spain has been in the news in recent years due to the wrong reasons. The financial woes and high unemployment rate of Spain should not take away the fact that it has a significant role in the economy of Europe and the World.

Spain is the fifth largest retail economy in Europe, the market is characterised by some features more typically associated with immature retail economies. Spanish retail market relatively fragmented and unorganised, dominated by independent operators which lack either scale or the ability to innovate. Below is a commentary on the Spainish market and some of the important players in the Spainish organized retail market.

Spain has enjoyed a period of outstanding retail growth since 2002. It has significantly outperformed its Western European peers, delivering growth more comparable to new EU member states. Spain was the second largest contributor to EU
retail growth over the past five years, behind France.

Against a background of downturn (2009 and 2010), non-grocery retailing was the most harmed in terms of sales. Being a highly fragmented channel, the downturn fostered the trend towards concentration. In spite of the general decline, chained players, especially within electronics and appliances, DIY and furniture and furnishings continue to gain share over independent stores. The lack of financial back-up was their greatest weakness during the downturn; in 2009 about 40,000 small stores were closed down.

The grocery chain Mercadona SA from Valencia was the leader within retailing in 2009 and 2010. With a strategy focused on the supply of quality products at low prices (with a particularly strong presence of its own private label) the company focused its efforts on making the value chain more efficient so that costs could be cut. Its leadership triggered the repositioning of its main competitors such as Carrefour. Danone and Pascual who are leading manufacturers within grocery retailing to reconsider their commercial strategies in order to compete with its private label.

Carrefour S.A. is a French international hypermarket chain. Headquartered in Levallois-Perret, France, Carrefour is one of the largest hypermarket chains in the world (1395 hypermarkets at the end of 2009, the second largest retail group in the world in terms of revenue and third largest in profit after Wal-Mart and Tesco). Careefour is the largest food retailer in Spain.

Grupo Leche Pascual, S.A. engages in the production, distribution, and commercialization of milk, dairy products, juices, breakfast cereals, mineral water, egg derivatives, soft drinks, and animal feed in Spain. It also offers milk shakes, butter, cream, desserts, and yoghurt. In addition, the company involves in property asset and development, construction, e-commerce, and insurance brokerage activities. It provides its products through a sales and distribution network. Its brands include Bezoya, Essential, Funciona, MásVital, Pascual, ViveSoy, Yosport, and Zumosol.

Danone is the world’s leading producer in volume of Fresh Dairy Products apart from specialized nutrition, mineral water,etc. It has a global market share of some 27% and is present in forty countries.

El Corte Inglés S.A., headquartered in Madrid, is the biggest department store group in Europe and ranks fourth worldwide. El Corte Inglés is Spain's only remaining department store chain, as well as owner of several associated businesses, such as supermarket chains Hipercor, Supercor & Opencor, fashion chain Sfera as well as a travel agency (Viajes El Corte Ingles) and telephone provider (Telecor).

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and Rosalía Mera. Founded in 1975 by Amancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group; the fashion group also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius and Bershka. Inditex is preparing to launch a new banner store which will open in Sep 2011 in Marineda City in Galicia. The store is set to launch in Spain's newest and largest shopping center. The retailer has not yet unveiled the name of the store. However, it is known the new outlet will focus on the sale of shoes and accessories at low prices and is likely to complement the retailer's other stores, particularly Uterqüe, which is positioned in the medium to high end of the market.

Grupo Cortefiel (The Cortefiel Group) is the second largest apparel retailer in Spain through Cortefiel (traditional clothing), Springfield (contemporary and cosmopolitan look) and Women's Secret (underwear retailer). The Iberian Peninsula accounts for more than 85% of the revenues of the group. The company operates approximately 1,100 stores and is present outside Iberia through international retail formats and franchise operations (Douglas, Milano, Pedro del Hierro).

Tous is a jewelry, accessories and Spanish fashion firm. At present, the brand name has more than 400 stores in 45 countries, and in cities such as New York, Paris, Moscow, Milan and Tokyo, among others.

ALDI Einkauf GmbH & Co. oHG, doing business as ALDI, short for "Albrecht Discount", is a discount supermarket chain based in Germany. The chain is made up of two separate groups, ALDI Nord (North - operating as ALDI MARKT), headquartered in Essen, and ALDI Süd (South - operating as Aldi Süd). Aldi Nord is responsible for the markets in Belgium, the Netherlands, Luxembourg, France, Spain, Portugal and Denmark.

Lidl (generally pronounced /ˈlɪdəl/ li-dəl in English-speaking countries and pronounced /ˈliːdl/ lee-dəl in its country of origin) is a German discount supermarket chain that operates over 7200 stores across Europe, with plans to expand into North America. The company's full name is Lidl Stiftung & Co. KG. It belongs to the holding company Schwarz, which also owns the store chains Handelshof and Kaufland. Lidl is the chief competitor of the similar German discount chain Aldi. It has about 500 stores in Spain.

Caprabo is a leading supermarket company in Spain, with supermarkets and hypermarkets in Mainland Spain, the Balearic Islands and the Canary Islands. It operates an online shopping and delivery service in Spain.

Dia is a Spanish international hard-discount supermarket chain which since 2000 is part of the Carrefour Group but since 13 May 2011 has begun a legal process of separation as a listed company on the Madrid stockmarket. The independent company will be headed by Venezuelan-born Ana María Llopis, making it the largest Spanish company to be headed by a woman.

Dinosol is currently owned by several banks including Bank of Scotland Plc, Caja Madrid and Societe Generale SA. It was previously owned by Permira, a private equity firm, and Ahold.
DinoSol operate the following stores:
HiperDino Express A chain of convenience stores and small supermarkets operating in the Canary Islands
HiperDino A chain of supermarkets and hypermarkets operating in the Canary Islands
SuperSol A chain of supermarkets and hypermarkets operating in mainland Spain
CashDiplo A chain of Cash and Carry stores operating in mainland Spain and the Canary Islands

Hipercor S.A. is an up-scale chain of hypermarkets in Spain, belonging to the same group as El Corte Inglés. It has its head office in the El Corte Inglés head office building in Madrid. Hipercor generally stocks a wide-range of household and food products across large floorspaces (1 or 2 storeys) and are usually located as part of the same building complexes (styled as centro commercial) as the El Corte Ingles department store.

Plus is a German supermarket chain founded in 1972. It operates 2,840 stores in Germany with an approximate 27,000 employees and about 1,200 stores in several other European countries. The Edeka Group and the Tengelmann Group entered a joint venture to own Plus supermarket chain on November 16, 2007, which resulted in 70% of Plus supermarket being owned by the Edeka Group and 30% being owned by the Tengelmann Group. It has about 240 supermarkets in Spain.

Spar (trademarked as SPAR), also called Eurospar has approximately 14000 stores in 35countries worldwide. Spar was founded in the Netherlands in 1932 by retailer Adriaan Van Well and now, through its affiliate organisations, operates through most European countries, parts of Africa, Asia and Australia. It has its headquarters in Amsterdam. It has over 1500 stores in Spain.

Eroski is a Spanish supermarket chain with nearly 1,000 outlets spread across Spain excluding franchises). It is run as a worker-consumer hybrid co-operative within the Mondragón Corporation group. The establishments vary in size from the largest hypermarkets, simply named 'Eroski' (of which there are 75 stores, including 40 with petrol stations), down to smaller 'Eroski Center' stores (473, including 2 petrol stations), 219 'Eroski City' outlets and 234 'Eroski Viajes' travel agent centres.

SABECO is a Spanish supermarket chain. It was formed in 1960 in Zaragoza. The first name of the company was Supermercados Aragoneses S.A. SABECO became the company's official name a few years later. SABECO was the first to establish self-service supermarkets in Spain. After the Zaragoza shop had become a success, the company began establishing supermarkets in the urban areas of Spain's largest cities. SABECO operates 130+ supermarkets and hypermarkets, along with petrol stations and Aro Rojo associated establishments

Internat Sales on the Rise- Amazon starts a new exclusive site - myhabit.com

noreply@blogger.com (Reporter) — Wed, 04 May 2011 04:59:00 +0000

Amazon is debuting a brand new private sales site, featuring fashion items straight from designers and boutique brands. myhabit.com from Amazon is a private sales site.

Shoppers can join the new site for free and have access to limited-time sales, free four-day shipping, and free returns for women’s, men’s, and children’s clothing. The membership-only website, MyHabit.com, will offer daily events featuring up to 60 percent off a selection of styles.

The site will have to compete against Google’s Boutiques.com, eBay’s fashion store, and dedicated private sales sites like Vente Privée, HauteLook, Beyond The Rack and Gilt.

Differentiating itself from sites such as Rue La La, Gilt, HauteLook, and ideeli, Amazon’s site features 360-degree videos of the clothing on live models. Product returns are redeemable for credit at myhabit.com, Amazon.com and Endless.com. The site will feature high-quality photos and videos of the clothing on live models. The site features free four-day shipping shipping and returns.

This new initiative builds from Amazon’s purchase of BuyVIP in October 2010, a European membership-only private buying site. MyHabit.com will be led by president Maria Renz, former VP of Shoes, Jewelry & Watches at Amazon.

Vishal Retail - What went wrong?

noreply@blogger.com (Reporter) — Wed, 03 Feb 2010 07:04:00 +0000

With a humble beginning in 1986 from Kolkata, Vishal retail grew to 178 retail stores across the country. Vishal's retail outlets catered to almost all price ranges and offer over 70,000 product categories. Vishal retail under RC Agarwal was fast becoming a force to reckon. However this retailer of aam aadmi ran into tough times like Subhiksha Retail had earlier. Vishal moved quickly from being the fastest growing retail groups in India to one on distress sell.

The company started the third quarter of the financial year 2008-09 with a very positive note after posting a net profit of Rs 40.76 million by the end of the second quarter. In the second quarter ended on September 30, 2008, the total income of the company stayed at Rs 3607.55 million while the total expenditure stood at Rs 3276.51 million. At that time, the company had 154 stores across 97 cities covering a retail space of approximately 27.10 lakh square feet. Surprisingly, after considerable sales happenings during the quarter backed by festivities, the company found the third-quarter profit dropped 86 per cent to Rs 2.15 crore. There was news that the promoters of the company who hold around 63.93 per cent stake in Vishal Retail are evaluating options to sell the stakes and the retailer’s shares fell to lows of Rs 50 by end of 2008 from a peak of Rs 1,001 on January 15, 2008.

The retailer was desperately looking for alternatives to compete with the rule of the game. Besides adopting franchisee-owned-franchisee operated model and shop-in-shop formats, it has identified resizing and relocation of existing stores as a viable alternative to compete with the situation. Further, in a major development, the company brought the property owners on the table sometimes in February this year for renegotiation of rentals and came out quite successfully getting the job done. The approach turned quite successful and the company managed to reduce rentals by about 25 per cent across 40 stores nationally.
Unfortunately this was not enough. Vishal retail soon found itself in a Rs 736 crore loan and had to go into a debt restructuring process in November 2009 after multiple loan defaults.

Reasons for the failure:
1. Vishal had raised Rs 110 crore from an IPO in June 2007 when it had 50 stores. The company sought to expand aggressively using short term debt. The idea was business will pay itself and volumes will drive down cost. The financing was not very well planned and in 2008, following an economic slowdown in the West, consumer sentiment took a hit and sales slowed. In early 2009, Vishal Retail started defaulting on bank loans even as sales did not pick up.

2. Vishal did not have a strong merchandising and supply chain. Vishal's distribution centre‐led model failed as it could not build an IT network in‐turn meaning buying at the warehouses was not aligned to customer needs and it ended with dead inventory.

3. Vishal's private label venture in every single category was a complete disaster as it neither had the competence nor the scale. The higher margins in private label was a good driver to get into private labels. But the scorching pace of expanding across the country and categories without strong processes in place to gauge customer sentiment and manage inventory soon becoming too complicated to manage.

To survive the lows in a business cycle, the retailer should have focused on its core strengths in terms of its product offers and formats. The retailers should have had a grip on the performance of various product categories and pruned down the non-performing categories.

Finally, Vishal, which had Rs7.3bn in debt, was sold for Rs700m to TPG and the Shriram Group in a distress sale. Under the plan approved by the corporate debt restructuring (CDR) committee, Vishal Retail will carried out a 'slump sale' of most of its assets and liabilities to two new companies funded by PE firm Texas Pacific Group. One will be a wholesale, or cash and carry, company, while another, funded by an Indian associate of TPG, will be a retail company.

Vishal Retail joined the line of unsuccessful retail giants under a debt of Rs 730cr; Subhiksha has already closed all their 1600 outlets; Wadhawan Retail's ambitious retail chain, Spinach, ran out of steam in this competitive retail scenario; and Raymond's Be: Home, a home furnishings retail format, was already a thing of past. Dabur Retail has changed its format and trying to survive.

Reliance Digital in lines of Tata Zip

noreply@blogger.com (Reporter) — Sun, 19 Jul 2009 06:57:00 +0000

Small is beautiful during recession...

The first small store electronics store from Reliance Retail christened Reliance Digital launched in Tamil Nadu.

Ajay Baijal, president and chief executive, said the Reliance private label will be introduced within six months to study the market and then the segment will be ramped up by next year. The private label of Reliance will include accessories, IT products, consumer electronics and home appliances. Baijal also mentioned that there are inventory risks and expenditure in the form of after-sales infrastructure for private labels. “But there are also gaps in product specification and market price. Hence, there are ample opportunities to differentiate,” he noted.

The two-year-old company has also started two small-format stores called Reliance Express at Ghaziabad and Bangalore a month earlier. The stores are an average of 2,000 sq ft in size and primarily sell IT and imaging products. “We are in the experimental stage, to know the viability of such stores and will expand after getting the input,” said Baijal.

Reliance Digital’s foray into small format stores follows the Tata Group’s Croma’s launch of such stores under the name Zip. Croma also has its own brand of private labels and has recently planned to ramp up the product categories in the segment.

When will Indian Retail Sector open up to FDI?

noreply@blogger.com (Reporter) — Sun, 19 Jul 2009 06:31:00 +0000

India's retail trade sector might not be opening up in the near future. "The government is fully committed to securing the legitimate interests of all stakeholders engaged in the retail business," said Minister of State for Commerce Jyotiraditya Scindia.

I hope our change leaders, the youth leaders of India are talking this tone for the benefit of their constituencies and not what they actually think. Logically nothing tells that the organized Retail Sector would change the trend of it being one of the largest employing sectors in the country. In US though retail is mostly organized it is the largest employer in US. Why would it be different in India?

FDI will bring in new ways of handling supply chain. Reduce wastes due to goods spoiling on the way to the market, take benefits to the farmers removing the few middlemen who make money without adding much value, bring new experiences to customers and new products to Indians. Why can’t we create a Dubai in India and get people from all over the globe to shop in India?

I hope our youth leaders look beyond baseless words and take steps like the current PM did about 10 years back to get India beyond the Hindu Rate of GDP growth and dire marco-economic situation.

Retailing of brnaded wood products - Jacsons

noreply@blogger.com (Reporter) — Sun, 12 Jul 2009 07:05:00 +0000

Sliced decorative wood veneers maker Jacsons, which has been in the wood products business in the trade domain, has entered the branded retail space with concept stores that will offer one-stop solution for all wood-based product requirements.

Jacsons group managing director Thommen Jacob said the concept stores would be opened across all south Indian states, with the intention of "getting closer to customers and introducing globally benchmarked products and services under one roof". The first of the concept stores has been opened here.

The Rs 50-crore group, which has manufacturing units at Kochi and Chennai, has plans to introduce fire-rated doors and sound-proof doors for use in high-rise buildings, star hotels, operation theatres and recording studios based on international standards, and has also finalized plans to enter the office furniture segment in both domestic and international markets in a big way.

Company officials said the domestic market for decorative wood products continued to be strong even as international markets were taking a hit owing to the global financial crunch. They said this presented an opportunity for the Indian decorative wood segment, which could tap the benefit of more competitive raw material prices worldwide to serve the domestic industry requirements through finished products.

They said the Indian import duty of 5% on logs was "reasonable" compared to duties of about 20% in many western countries. Roughly 50% of Jacsons' raw material is imported.

Aditya Birla Retail - "More" Revamp their IT

noreply@blogger.com (Reporter) — Thu, 09 Apr 2009 04:54:00 +0000

The Group’s foray into the retail sector began in 2006, when it acquired Trinethra, the south-India based chain of stores. May 2007 saw Aditya Birla Retail Limited (ABRL), launching their own brand of stores MORE.

Trinethra Superretail Limited was a leading supermarket and convenience chain with over 170 stores under the Trinethra and Fabmall brands. Its operations span across the four states of Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. Trinethra has around 2500 employees and enjoys a strong consumer franchise in all the states in which it operates.

Mahindra Retail rides recession with "Mom and Me" stores

noreply@blogger.com (Reporter) — Thu, 09 Apr 2009 04:29:00 +0000

The Mahindra Group is one of the latest entrant to retail sector. Mahindra Intertrade, a fully owned subsidiary of Mahindra and Mahindra, has entered the organised retail business. The retail foray of the Rs 18,000-crore group is through the brand name “Mahindra Retail”.

Despite the recession and the global gloom, 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.

Mahindra Retail plans to invest up to 1 billion rupees during the financial year ending March 2010 to open stores for mother and child products, a company official said on Wednesday.

Mahindra’s entry into retail will likely not attract the kind of opposition the other companies have because of the kind of products it wishes to sell: toys, apparel, and other such products.

The group, which also has interests in automobiles and real estate, has a majority stake in the retail venture, while private equity firm ICICI Ventures will hold 26 percent stake, he said.

The company has so far opened speciality stores for mother and children's products in Ludhiana, Pune and Ahmedabad, said Venkataraman, who inagurated the company's store in Delhi called 'Mom and Me'.

" We will shortly open such stories in Mumbai, Bangalore and other major tier I and II cities," he said.

Apart from distributing toys, games and apparel under licenses from international brands like LEGO, Disney and Mattel, Mom and Me stores will offer products of Mahindra and other Indian companies, he said.

According to industry estimates, India has an organised retail market for mother and child products worth 70 billion rupees, growing at a substantial rate annually, he said.

"There have been some good advantages of the downturn in our segment," he added, pointing out that economic slowdown, which has pulled down rents and costs of products has benefitted the retail sector. " Indian market in the long term is very promising. We need to take it by step by step," he said while declining to provide details about expansion plans or revenue targets for the year.

Dabur Retail hit by recession

noreply@blogger.com (Reporter) — Fri, 20 Mar 2009 18:35:00 +0000

Blame it on the recession!! Dabur NEW U stores that started operations early last year are on SALE.

Dabur, the Delhi-based FMCG company, has mandated Grant Thornton to get a buyer for its retail venture, people familiar with the matter said. They said Dabur has lost interest in the chain as the economic downturn has made the environment tough for the company to pursue its retail plans.

The venture had a struggling existence marked by slow growth — there are just 11 ‘new-u’ stores — and exits of CEO Peter Baker and merchandise head Graham Fraser a couple of months ago. A Dabur spokesman denied any plans to sell the chain. “In fact, we plan to set up 12 additional stores this year.”

Several retailers in India are facing a tough time with Subhiksha doing down under, and several new entrants having put a hold to thier expansion plans. The redeeming factor is that most of the organised retailers are backed by companies with deep pockets like the Tatas and the Birlas. But we need to keep a close watch as some other retailers might be in silent talks to get out of thier retail businesses.

Subhiksha Debacle

noreply@blogger.com (Reporter) — Wed, 11 Feb 2009 04:13:00 +0000

"There cannot be smoke without Fire"

For a long time we have been hearing news of Subhiksha not making timely payments to vendors, having empty shelves as vendors have put Subhiksha in lower priority, reports of people looking out trying to jump the sinking ship, and so on. With the employees PF not being paid (Subhiksha has some 5 Crores of PF dues!) and the Satyam story fresh in everyone's eyes this time things are more in the open.

R Subramanian has been in denial mode for several months has now come out in the open. With empty shelves and deserted showrooms, Subhiksha is sinking and needs "Rs 300 crore immediately'' to re-start operations, the company's founder chairman R Subramanian said. "We got into trouble during the second half of last year, when we were unable to tie up funds for our ongoing operations. That slowly started choking and has lead to paralysis of operations completely now,'' he said.

Detailing his outstandings, Subramanian said that his company owed Rs 45 crore to suppliers, Rs 20 crore to employees as salaries and another Rs 24 crore as rentals for various stores. "Our outstandings are only so much, upon getting Rs 300 crore debt, we will then look at restarting operations'' he added.

Subhikhsa is now on the block available for grabs. Not the best time for Subhiksha to be in the market for sale as valutions for all retailers are pretty low. The contenders are Reliance Retail, Aditya Birla Retail, etc.

Reliance Retail to sell Apple Inc products at "i stores"

noreply@blogger.com (Reporter) — Sat, 31 Jan 2009 05:47:00 +0000

Days of looking at the cool products from the Apple stable over the Internet are over. Relaince Retail is going to bring Apple products closer home.

Mukesh Ambani promoted Reliance Retail Ltd plans to open 50-60 'i store' across the country within the next one and half years and 150 Reliance Digital stores by 2011-12.

"We have plans to open 50-60 i stores by next 15-18 months while first targeting top cities of the country and we also plan to open 150 Reliance Digital stores by 2011-12," Reliance Digital Chief Executive Officer Ajay Baijal said in Ludhiana.

Reliance Digital is a consumer durable and IT arm of Reliance Retail Ltd, which offers home appliance, consumer electronics, IT and telecom products. While i store is a Apple Premium Reseller store, which exclusively deals with Apple products.

On being asked about the earnings, he said, "On an average, we are expecting Rs 7 crore from i store format and Rs 70 crore per annum from Reliance digital."

The company is looking to have 1,000-1,200 square feet of area under i store and 20,000-30,000 square feet under Reliance Digital, he said.

Presently, the company has i store in Bangalore, Hyderabad, Mumbai and Jaipur and Reliance Digital stores in Hyderabad, Bangalore, Mumbai, Gurgaon and Ghaziabad.

The company today announced to open fifth i store in Ludhiana and the first in Punjab.

The new i store at Ludhiana spread over 1363 sq ft, will offer entire range of Apple products, including iMac consumer desktop computers, iPods and the entire suite of Mac software along with over 500 accessories and peripherals complementing Apple products.

Reliance Retail Ltd (RRL) operates over 600 stores in over 57 cities, spanning 13 states with over 3.5 million Sq ft.

Giorgio Armani enters India

noreply@blogger.com (Reporter) — Fri, 17 Oct 2008 05:03:00 +0000

After the entry of high-end international brands like Christian Dior, Louis Vuitton, Dunhill and others into the Indian market, fashion luxury brand Giorgio Armani Thursday launched its flagship boutique and a store in the capital on 15th Oct 2008.

Both are located at the upmarket Emporio Mall at Vasant Kunj in south Delhi. "I am truly excited to finally have a presence in India. This country, which perfectly mixes the spirit of adventure, the sense of mystery and majesty with the principles of elegance, sophistication and modernity, has long been a wonderful source of inspiration to my collections," Giorgio Armani said in a statement.

The Giorgio Armani boutique covers over 277 square metres on one floor of the mall as against the Emporio Armani store that covers an area of over 210 square metres. The boutique's interior is entirely dedicated to Giorgio Armani's signature women's and men's apparel and accessory prêt-a-porter collections.

Rosebys, UK’s leading home décor retailer to enter India

noreply@blogger.com (Reporter) — Mon, 29 Sep 2008 04:49:00 +0000

Rosebys, UK’s leading home décor retailer, is all set to launch their operations in India from October 14th with their first outlet in Calcutta. This will be followed by more outlets in Punjab, Haryana, Gujarat and Karnataka.

Rosebys has been in the news for all the wrong things recently. Rosebys is another victim of the credit crunch on the high street consumed by the crumbling housing market. The home textile retailer has collapsed into administration. The Yorkshire-based firm, which has an annual turnover of £100m, has called in administrators KPMG. KPMG said it was looking for offers for the whole or parts of the business.

In face of these difficult conditions Rosebys is still trying to stand up and redefine thier business. Aloke Banerjee, CEO of Rosebys Interiors India Ltd told Commodity Online on the sidelines of FRO2008, a leading franchising and retail event, that Rosebys which was acquired by Gujarat based GHCL in 2006 will henceforth be following the franchising route for expansion as opposed to having its own outlets as was the practice with its 320 odd outlets in England. Rosebys would also start newer outlets in England based on the Franchising model.

Among the newer markets identified for expansion include Poland, Romania and Vietnam. Commenting on the agitation against large retail malls in different parts of the country, Aloke Banerjee said that retail franchising was the perfect answer to such allegations of small retail being threatened by invasion of corporates into the sector.

“Through franchising we are providing an option for the local entrepreneur in different cities and towns to be part of the retail boom that is taking place in the country. It is a most democratic arrangement. The franchisee has the local market intelligence and visibility while we have the brand to support him,” Aloke Banerjee said.

A study on Luxury Retailers: LVMH, Gucci, Hermes, Richemont

noreply@blogger.com (Reporter) — Wed, 10 Sep 2008 05:01:00 +0000

The luxury goods market is notoriously difficult to put a size to, in fact it is hard even to find any consensus concerning what comprises luxury. Brands such as Tommy Hilfiger and Polo Ralph Lauren, which by European standards might well be perceived as having a casual focus, represent a significant part of the luxury end of the spectrum in the US market, which does not have a history of couture.

The top three luxury operators by turnover including the major ‘multi-branded’ players LVMH, Richemont and the Gucci Group. Shiseido and L’Oréal also feature in our top seven although they have large mass-market operations. However in the case of L’Oréal after the aquisition of YSL Beauté (part of the Gucci Group)in April 2008 there is a clear luxury focus within L’Oréal. Shiseido does not split out luxury and mass market separately.

Some other luxury players including Burberry, Hermès, Tiffany & Co and Swatch. Most luxury retailers such as Hermes, GUcci, Burberry apart from having their own stores also act as suppliers to other stores such as DFS (Duty Free Shops) which is a part of the LVMH chain.

Luxury market is driven by low volumes and huge vendor/brand power. The pure retailers of luxury products have very less bargaining power in the suppply chain.

RFID saga continues....

noreply@blogger.com (Reporter) — Sat, 16 Aug 2008 13:39:00 +0000

RFID is Retailers dream of having complete control over the supply chain, but it is still not a reality. Walmart's push has helped the technology get lot of visibility but not much of actual spread in use of the technology.

the $3.8 billion Jones Apparel Group became the latest retailer to launch an RFID item-level trial, albeit a conservative one, testing it at "a couple" of the 221 stores it operates under the Nine West name, said Norm Veit, executive VP of Management Information Services at Jones.

But Jones, which also sells clothes under a wide range of other well-known brands, including Anne Klein, Evan-Picone, Gloria Vanderbilt, Joan & David and Jones New York, is far from alone in conducting such a trial.

Dozens have been staged in the last two years with major retailers globally—200-store Turkish chain LCWaikiki threw its tagged hat into the ring just last week—but only one (British retailer Marks & Spencer) has confirmed it's making the deployment leap.

IDC analyst Peter Abell said a retailer has to justify the cost of moving to implementation and that's proven to be a massive hurdle.

"Fundamentally, it boils down to 'How can I justify it?'" Abell said. "It's a fair amount of investment that's going on that people are still concerned about, so they can't make that leap of just going forward."

The lure of item-level RFID is legendary, but to make it work requires deep penetration into quite a few systems. To be precise, it can certainly function without such extensive integration. But the system wouldn't be able to deliver the promising magical ROI without it.

That's the other key problem with an item-level trial. The nature of a technology trial is to test the package in close-to-battlefield conditions, to go beyond what can be learned with lab tests, demos and getting the answers to tons of questions from vendor representatives.

But most limited trials—by virtue of the fact they are indeed limited—don't test the parts of the RFID item-level promises that are most likely to fail. To craft a meaningful test would require interactions with supply chain, CRM, POS (including self-checkout) and possibly even digital signage. That's asking an awful lot for a limited trial.

M&S has been one success story. Raghu Das, CEO of IDTechEX, shared the view that successful deployment at Marks & Spencer was mostly because of its closed system. He said that when retailers with an open system try and implement item-level tagging, they're going to have to apply tags as the products are going into stores instead of during the manufacturing process, which can be costly.

It would be interesting to see how the scene unfolds in future....

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JDA Software Group to Acquire i2 Technologies

noreply@blogger.com (Reporter) — Tue, 12 Aug 2008 02:55:00 +0000

JDA and i2 announced the signing of a definitive merger agreement for JDA Software to acquire i2 Technologies, Inc., a leading global provider of supply chain solutions, for an enterprise value of approximately $346 million in cash. The combination of the two companies creates a global leader in the supply chain planning and optimization market. On a pro-forma trailing 12-month basis, the combined company has annual revenues of $635 million, including nearly $300 million of annual maintenance and recurring subscription fees.

According to JDA Chief Executive Officer Hamish Brewer, the i2 acquisition completes the picture for JDA in the supply chain planning and optimization market.

"By acquiring i2 we double our addressable market in manufacturing to include discrete manufacturing, complementing our current market leadership in process manufacturing and strengthening our retail and transportation management presence. A major player in the supply chain space for more than 20 years, i2's world-class customers and employees are the perfect match for JDA. With the experience gained from the successful acquisition of Manugistics in 2006, the addition of i2 is comparatively an incremental and logical step for JDA," commented Brewer. "We are confident in our abilities to execute and deliver on projected synergies creating significant incremental shareholder value."

"In an industry that continues to consolidate, scale matters. In that regard, the combination of these two companies will create one of the world's strongest, best-of-breed software solution providers focused on the global supply chain," commented Dr. Pallab Chatterjee, i2 Chief Executive Officer. "The combination of i2 and JDA increases the opportunity for expanded expertise, accelerated innovation and even greater value delivery through the joining of some of the best solutions and brightest minds in the industry."

This acquisition strengthens JDA Market Position with More Than 6,000 Customers, Offering Unparalleled Supply Chain Optimization Solutions Spanning From the Global Manufacturer to Consumer. This helps expand JDA's Addressable Market to Include Discrete Manufacturers.

JDA is a partner with peoplesoft. So rumours have been on for some time that JDA would be acquired by Oracle. SAP with its hug investments in the inhouse planning tool APO might not find acquiring JDA/Manguistics/i2 combination attractive. But JDA acquisition could help SAP build inroads into the Oracle market via JDA-Peoplesoft partnership.

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Hariyali Kissan Bazaar

noreply@blogger.com (Reporter) — Wed, 16 Jul 2008 04:33:00 +0000

DCM Shriram Consolidated Ltd. (DSCL), in 2004, capitalising its over 35 years of experience in the agri-input markets setup a chain of centres aimed at providing end-to-end ground level support to the Indian farmer & thereby improving his "profitability" & "productivity" via a chain of Retail Stores.

So far, over 160 "Hariyali" outlets as on 31st march 08 have been set up in different states across India which DCM plans to scale up to 300 by March 09 under Vikram S Shriram.

The stores currently offer goods under two broad categories - agricultural inputs and FMCG. DCM Shriram Consolidated Limited (DSCL) has finalised plans to source a large number of items, both raw material and finished products, from China. Items currently sourced from China for the Hariyali Kisan Bazar shops include bags, toys, plastic furniture, rain-coats, cosmetics and various items of day-to-day domestic use.

The company has also started buying back the produce of the farmers, for which inputs from these shops are used.

Online Retailing in India - Do we expect Amazon, Ebay to take over Indian Retail space?

noreply@blogger.com (Reporter) — Thu, 03 Jul 2008 04:32:00 +0000

Conventional wisdom says that online retailing in India would not be successful due to several reasons. Some of them are: Low penetration of internet, high cost of internet bandwidth, fear of credit card faurds, perception of lack of control and poor quality.

But then are these fears soon to disappear. Banks are seeing an increase in use of the internet banking, a lot of the share market trading has moved online, even credit card companies are seeing a lot of people moving to online payments for the air tickets and film tickets. The paradoxical Lalu Prasad Yadav, who has his ears to the ground, has moved even railway bookings to the Internet.

If we look a little further to our cousin across the border, China, we find that China also has similar cultural and infrastructure challenges to India. To quote a study done at China: “In interviews the China Market Research Group (CMR) has conducted with 500 young adults between the ages of 18 and 32 in six cities across China, nearly 80 percent of respondents said they had made an online purchase in the last six months. The vast majority expected to buy something again in the next quarter. Seventy percent said they weren’t putting aside any money in savings accounts and that they would use a credit card for online purchases if they had one,” the story said, adding that the study “suggests it is a lack of credit cards and other payment options, rather than a cultural aversion to buying online, that has curtailed the growth of e-commerce in China. But the problem of payment is resolving itself. Credit card use is booming as domestic banks like Bank of China and China Merchants Bank roll out services targeting consumers in China’s smaller cities. We expect the number of credit cards in China to increase fivefold, from 56 million at the end of 2006 to 250 million by the end of 2013.”

So things mostly look about to change in the two big retail markets of the world. Maybe the revolution will be lead by established players like Amazon and Ebay or it might be led by a small wave of Internet presence by "mom and pop" stores cumilating into a huge wave.