Thanks to booming economy and booming retail sector, third party logistics (3PL), is also booming. The pace of the sector is bound to receive further boost after Goods & Services Tax (G&ST) regime is introduced across the country. This will allow for free movement of goods from one place to another based economical consideration rather than artificial political and legal restrictions.

3PL companies provide multiple logistics services for its clients and customers. According to a 2007 study of the sector, most frequently outsourced services include domestic (83%) and international (79%) transportation, warehousing (69%), customs clearance and brokerage (67%), and forwarding (51%).

In India 3PL sector is currently valued at $100 billion and is expected to to touch $150 billion by 2010.

No wonder than that business conglomerates like Reliance have begun eyeing the sector and begun looking at growing through acquisitions.

Reliance Logistics Limited (RLL), a part of Mukesh Ambani-led Reliance Industries, which provides transportation, distribution, warehousing, logistics, and supply chain services, mostly to its parent company, according to a DNA report, is looking at expansion through acquisition of mid-sized 3PL companies.

Reliance Retail, which is one of the fastest growing retailers in the country, is gong to remain one of its major customers. Moreover, the logistics company is also looking at increasing its share from non-group customers, who  currently account for one-fourth of its turnover.

“RLL is looking at acquiring mid-sized companies with turnovers of Rs 100-1,000 crore and operating in the 3PL field,” said a source close to the development.

“Food gets in the traffic, it gets the topline, the revenues, it doesn’t get the bottomline. Fashion and home get you the bottomline so you need to sell a whole lot of food but you also need to sell a whole lot of fashion and home.” — Samar Sheikhawat, Vice President, Marketing, Spencer’s Retail.

Spencer’s, the flagship food & grocery retail chain of Spencer’s Retail, a part of the RPG group, is in a hurry to strike partnerships with global fashion (apparel, accessories, etc) and other brands to widen its range of products being offered at its hypermarket format stores. These will help increase the proportion of non-food business for the chain and, thus, add to it margins as these categories would offer better margins than food category.

While, two joint ventures have already been announced by the group, two more are expected to be announced in August and September, this year.

“It will augment our fashion business model and going ahead the thrust on fashion is a big piece for us because of topline and margin possibilities,” said Sheikhawat. “One is from the UK and one from the U.S,” added Sheikhawat while talking about the joint venture partners.

While, Spencer’s is currently garnering two-thirds of its revenues from low margin food category, with its new non-food initiatives, it expects to change the ratio to 50:50 between the two categories, within a period of 18-24 months. This, according to a Reuters report, will help boost company’s profits.

Spencer’s has earlier announced its joint ventures with the UK’s Woolworths Group PLC to distribute Chad Valley brand of toys in India and with the U.S.-based bakery cafe chain, Au Bon Pain. While, Chad Valley toys have begun appearing in its hypermarket format, it plans to set up around 100 Au Bon Pain cafes over the next 18 months, many of which will be located in the group’s hypermarket stores.

Spencer’s, a part of the $3.4 billion industrial conglomerate with interests in power, tyres, cables, and technology, among others, is currently operating over 400 stores across 65 cities covering a retail trading area of 2 million sq ft. and is servicing the needs of over a lakh of customers every day. Spencer’s chain operates four formats, namely, Express, Daily, Super, and Hyper. Apart from flagship Spencer’s, the group is also operating  retail chains in the verticals of books (Books & Beyond), Music (Music World), and Telecom (RPG Cellucom).

In 2007-08, retail business of RPG group incurred a loss of Rs 150 crore against revenue of Rs 820 crore. It is investing over Rs 2,500 crore to more than double its retail space to four million sq ft within a couple of years.

“There is a huge opportunity in spectacles retailing as 30% of the population in the country is using spectacles for vision correction.” –  Bhaskar Bhat, Managing Director, Titan Industries Limited (A Tata Group Company).

Titan Industries, the country’s largest maker and retailer of watches (Titan) and jewellery (Tanishq), has announced the national launch of its Titan Eye+ branded stores for spectacles and other eyewear products.

This announcement comes after carrying out successful pilot runs of the project in cities like Bangalore, Hyderabad, Chennai and Nagpur.

Titan, according to S. Ravi Kant, Chief Operating Officer, Eyewear Division, will be investing Rs 24 crore this year, to set up the chain for optical products. In the short run it will have 80 stores located in the Metro, tier-I and tier-II cities. Eventually, the company plans to have 200-odd Eye+ stores across the country in the next three years.

The Eye+ chain of optical stores, which will deploy trained optometrists at all stores, will offer products and services in a transparent and professional manner. Apart from in-house Titan and Dash (children’s spectacle frames), Eye+ will also offer a large selection of spectacle frames of global brands like Christian Dior, Elle and Tommy Hilfiger. All the frames will carry a price tags.

Apart from offering a wide range of frames and glasses, Eye+ stores will also offer facilities for accurate testing of eyes and consultancy on style, among others.

Titan, like its other retail chains, will heavily rely on franchisee model for expansion of Eye+ chain as well. 85% of all Eye+ stores will be franchisee owned and operated.

Titan has tied up with the Chennai-based Sankara Nethralaya (Eye Hospital), to provide technical training to its personnel. While, Titan would recruit technicians, Sankara would train them in scientific ophthalmic dispensing, style consultation and optometric. Titan Industries is also setting up an integrated training facilty at Hosur in Karnataka. Currently, there is a huge shortage of eye technicians in the country.

In the organised sector, Reliance Retail is also setting up a retail chain of optical products called Vision express in partnership with the Netherlands-based Pearle Europe.

Having already rolled out five stores each of ’iStores’ and Reliance ‘Digital’ stores in India, Reliance Retail, the retail arm of Mukesh Ambani-led Reliance Group, is accelerating the pace of their opening in India.

Currently, Reliance operates iStores at Bangalore, Hyderabad, Mumbai and Jaipur and Ludhiana, and Reliance Digital stores at Hyderabad, Bangalore, Mumbai, Gurgaon and Ghaziabad.

Reliance’s ‘iStore,’ set up in collaboration with Apple Inc of the US, is a premium reseller of iconic Apple products in India. These products, among others, include the entire range of iMacs, MacBooks, iPods and over 500 Mac accessories and peripherals. Apple will also soon launch its iPhones that have taken the mobile world by storm. iStores are also equipped to provide specific training modules for different Mac applications using regular training modules.

A typical iStore is spread over 1,000-1,500 sq ft of area. The biggest iStore in India occupying 2,875 sq ft of area is located at Hyderabad.

Reliance Digital stores on the other hand offer over 4,000 consumer and professional electronic/IT products, appliances, other durables and accessories of over 150 globally known brands. Customers at these outlets can also access dedicated after sales service and troubleshooting of highest quality through an in-house service arm called ResQ.

A typical Digital store occupies 20,000 to 30,000 sq ft of space.

The company, according to Ajay Baijal, Chief Executive Officer, Reliance Digital, will roll out 50 to 60 iStores in the coming 15 to 18 months. It will also open 150 Reliance Digital stores in the next 48 months. Baijal was talking to newspersons on the occasion of opening of iStore in Ludhiana, yesterday.

“On an average, we are expecting Rs 7 crore from i store format and Rs 70 crore per annum from Reliance Digital format,” added Baijal.

Reliance Retail, which began its operations in November 2006, is among the country’s fastest growing retailers operating over 700 stores across 13 states occupying over 3.5 million Sq ft of retail space.

It was waiting to happen!

After vadapao and paan taking the retail chain route, it is now the turn of “gol-gappas,” “pani-puris” or “puchkis” to also go the retail way.

Ahmedabad-based Aravind group, which markets packaged water under the brand name of “bac-free,” has decided to foray into quick food business. The group, according to a Business-Standard report, will initially open a retail chain of pani-puri shops to be called “NRI panipuri.”

According to plans, the group will initially roll out 500 small format “NRI panipuri” retail shops. These shops entailing an investment of Rs Six crore will be based on franchisee model. Initially, the shops will be set up in Ahmedabad followed by other cities like Vadodara, Rajkot, Mehsana and Bhavnagar in Gujarat. Currently, there are no plans to extend the footprint beyond Gujarat.

“We want to provide hygienic food products and will start around 500 outlet across the city,” said Rajnikant Patel, promoter, Arvind group of industries.

The promotor group is also developing a vending machine for vending gol-gappas. They are planning to soon set up such automatic vending machine at malls and multiplexes in Ahmedabad.

The promoters are floating a separate company Sindhwai Food Products Ltd. for the project. They hope to fund the project through internal sources.

“… we are focusing on the southern part of India, mainly in Bangalore, Hyderabad and Chennai, to open this bakery café chain. Later, the company would go for expansion in the northern parts of the country, followed by the eastern and western states.”

“Bangalore will be a better place for us to start our first standalone store…as the city is already familiar with the name ‘Au Bon Pain’

— Sanjiv Goenka, Vice Chairman, RPG Enterprises.

Spencer’s Retail, the retail arm of $3.2 billion RPG Group, which operates several general merchandise and speciality chains like Spencer’s (four formats), RPG Cellucom, Music World, and Books & Beyond, will soon be rolling out a chain of bakery café stores across India.

Novel Confectioners Ltd, a joint venture between Spencer’s Retail and Varin Narula, has been constituted to initially set up a chain of 100 cafe stores of around 1,200-1,500 sq ft size, across the country. Most of these stores, to be set up in the next 18 months, will be located in southern India.In the first phase, the joint venture will be investing Rs 50 crore ($12 million). The first store is slated to become operational within the next six months in Bangalore.

Varun Narula is the master franchisee of Boston (Massachusetts)-based fast-casual bakery/cafe chain ‘Au Bon Pain’ in India. ‘Au Bon Pain,’ which when translated from French means ‘With Good Bread,’ was founded thirty years ago by Louis Kane in 1978. The ‘Au Bon Pain’ chain focuses on serving coffee drinks, baked goods (with a focus on croissants and bagels), and lunch items such as soup, salads, and sandwiches. The chain is currently operating over 250 Cafes at more than 200 locations in the United States, South Korea, Taiwan, and Thailand, among others.

Au Bon Pain has attempted to differentiate itself from similar fast casual chains by emphasizing on both hospitality and the diversity as well as quality and freshness, of its menu and ingredients.

“Music World currently contributes 90% to the division’s revenues. With the expansion of Books and Beyond, we expect the proportion to change from next year.” — K Dasaratharaman, President (Speciality Retail Business Division).

RPG Enterprises, which besides operating Spencer’s Retail, is also managing two speciality chains called ‘Books & Beyond’ and ‘Music World’ is looking at investing Rs 160 crore in expanding the same, in the next two years.

K Dasaratharaman, President (speciality retail business), disclosed this while launching the group’s fifth Books & Beyond store in Hyderabad. Books & Beyond store at Hyderabad carries a stock of more than 35,000 books.

The group would be investing Rs 100 crore on Books & Beyond over the next two years to scale up its operations from 5 to 15 stores by the end of this year and and an additional 35 stores in the next year. The chain will, thus, have a ten-fold expansion in two years taking the number of stores by 2009 to a total of 50.

Books & Beyond is competing with the likes of Crossword (Shoppers’ Stop), Landmark (Tatas), The Depot (Future Group), and Reliance TimeOut (Reliance).

Likewise, the group has decided to also scale up the operations of its music chain called ‘Music World’ by investing Rs 60 crores on expansion in two years. After expansion, the retail chain which currently operates 90 stores and occupies floor space of 80,000 sq ft will occupy over 200,0000 sq ft of space.

While, some of Music World stores will converge with Books & Beyond stores, the chain will also have additional 40 exclusive stores by this year end.

With these changes, RPG’s specialty retail division, which recorded sales of Rs 150 crore last year, is hoping to register an increase of 40% by taking the same to Rs 250 crore, this year (2008-09).

“They (Pantaloon) are luring my customers by using my name in an unfair manner.” — Sandeep Mittal, Legal Counsel representing Shoppers’ Stop & Lifestyle.

“It was a pure marketing initiative. Why so much fuss about it? ustomers own multiple loyalty cards but they still have the right to choose wherever they want to shop.” — Rajesh Seth, Vice President (Maketing), Central.

Shoppers’ Stop and Lifestyle have dragged their rival Pantaloon to court as they were miffed with an advertisement issued by the flagship company of Kishore Biyani owned Future Group that offered 10% extra discount to their loyal customers vide an advertisement issued in The Times of India, New Delhi, dated 28th June, 2008. The complainant retailers have accused Pantaloon of trademark violations and unfair business practices, says a Live Mint report. All the three parties operate department store format store chains in lifestyle segment.

Even Westside has taken objection to the ad saying, “We have sent a notice to them to which they have not responded,” said Smeeta Neogi, Head (Marketing) Westside.

Pantaloon’s ‘Central’ mall at Gurgaon had offered 30% discounts to its customers over the weekend. Loyalty card holders of competing retailers like Shopper’s Stop, Lifestyle and Westside, were lured by Pantaloon by offering an additional 10% discount on select brands of apparel. The advertisement asked such customers to: ”Present your membership card to avail this offer.”

Loyalty cardholders are mainstay of business for most retailers. Shoppers’ Stop has a highly popular loyalty card programme branded “First Citizen.” According to analysts, more than two-thirds of Shoppers’ Stop’s apparel business is accounted for by its loyal customers.

“They (Pantaloon) are luring my customers by using my name in an unfair manner,” said Sandeep Mittal, the lawyer representing for both the petitioners.

The Honourable Delhi high court has issued an injunction restraining Pantaloon from using names of its rivals in the ads until the next hearing in the matter fixed for 31st July.

Taking potshots at these competitors is not new for Pantaloon. Last year, its Big Bazaar chain had put up hoardings, asking customers to “Keep West-aSide,” “Shoppers! Stop” and “Change Your Lifestyle. Make a Smart Choice.”

“We have decided to close all our outlets and it is a strategic decision taken by the company.” — Adish Oswal, Managing Director, Oswal Retail.

Oswal Retail Pvt Ltd (ORPL), a Ludhiana-based textiles major, which had decided to set up a retail chain of innerwear garments under the brand name of ‘Sensa’ (later on changed to ‘Straps’), has decided to wind up this business, according to a PTI report.

ORPL, based on a study made by retail consultancy Technopak, wanted to grab 5% of the growing undergarments market valued at around Rs 2,200 crore. The consultancy had predicted the market size to grow to Rs. 4,000 crore by 2009.

According to original plans drawn by ORPL in 2004, the company was to set up a total of 120 stores at an investment of Rs 60 crore by 2009. So far the company has opened a total of 22 stores, most of which are located in the North India.

The company was quite serious about its retail business is evident from the fact that it had expected retail to contribute as much as 25% of its total turnover by 2010. It had even tied up with several premium foreign innerwear brands, including Parah, Rene Rofe, Wonder Bra, Body Line and Moon Dance. These were sold through ORPL retail outlets.

Panasonic, the iconic global brand electronic products brand, owned by Japan-based Matsushita Electric Company, is planning to invest US$200 million (over Rs 850 cr) to strengthen its presence in India. The amount to be invested, over a period of three years, will be utilised for augmenting the company’s manufacturing and marketing set up in India.

“We will invest 200 million dollar (over Rs 850 crore) in the next three years in the country to position our brand very firmly in the market,” said Aso Hidenori Chairman Panasonic Sales and Services in India. “We are targeting 20-25% growth in this fiscal from our current revenue of $350 million. We expect it to triple in the next three years,” added Hidenori, while speaking to PTI.

To strengthen its sales, Panasonic will set up 200 brand stores.

Panasonic, founded about 90 years ago in 1918 by Konosuke Matsushita by inventing a two-socket light fixture, now known worldwide for electronic products, employs over 3 lakh persons and earns revenue of over $77 billion. In India, Panasonic has manufacturing facilities at Noida (CRT and LCD monitors), Chennai (Small Appliances and Dry Batteries) and Vadodara (Dry Batteries). It currently imports plasma TVs, washing machines, and air-conditioners from its facilities in Japan and Thailand.

Kishore Biyani-led Future Group, which owns books, music and gifts chain Depot is setting up a new chain called Foto Depot.

The new concept, which currently is being tried out at three outlets on a pilot basis in Mumbai, allows customers to either get photographed or bring pictures of their choice on a variety of digital media like memory stick, digital camera, cell phone, CDs, and even on analogue media like film negatives, to get the same printed on a variety of objects like T-shirts, Mugs, and Wallpapers within 10 minutes.

Foto Depot, which plans to set up 75 such stores within the next 12 months, has sourced printing technology and equipment for the purpose from HP– a global giant in the area of image processing and printing.

The Foto Depot stores, according to a BS report, will typically occupy 500 sq ft and garner an annual revenue of Rs 12,000 per sq ft. or Rs 6 million per outlet.

The Depot, which is currently active through 117 outlets (111 Big Bazaar and 6 standalone), is looking at expanding its footprint to  156 outlets (146 Big Bazaar and 10 standalone) within a year. This will help the chain to double its current turnover of Rs 50 crore to Rs 100 crore in the next twelve months.

“We believe event management for middle-class homes has huge business potential; today, every household with kids wants to host a birthday party.” Vikram Waghray, Partner, Sphinx Adonis Sphinx.

Next time you want to hold an event, say a birthday party for your child, you would be able to do so just visiting a corner store. This store will make appropriate arrangements for the event suiting your pocket. Yes, Event Organising is now also going the retail way!

Sphinx Adonis Sphinx, a Pune-based event management firm owned by Vikram and Dheeraj Waghray, has decided to launch 100 ‘events management retail stores.’ These stores to be branded as “Eventwala” will help organise and manage events that among others could include birthday parties, anniversary get-togethers and weddings. Waghrays have over a decade’s experience in organising such events.

While, prospective customers would be able to buy theme-based party accessories off-the-shelf from the stores, they would be able to hire bigger accessories on rent.

While, the first 100 stores are slated to come up in Maharashtra over a period of one year, 1,000 stores have planned across the country in the coming years. These stores will occupy 500 sq ft. and stock theme-based party accessories for off-the-shelf sale, while bigger accessories will be available on rent.

The promoters are also looking at providing consultancy services and creating a software that will help customers to visualise event arrangements.

Also on the cards is the setting up of an ”event management academy.” This, according to an ET report, will be set up in association with the Maratha Chamber of Commerce, Agriculture and Industry.

Close on heels of the clearance of its proposal to invest in  single brand front-end retail in India, the Netherlands-based Pearle Europe, is ready to soon unveil a retail chain of eyewear and other optical products stores.

The company’s proposal to bring in FDI (Foreign Direct Investment) was among the 28 such proposal cleared by the Union Finance Minister P Chidambaram on 4th July.

These stores  to be called “Vision Express” will be set up as a part of understanding between Pearle Europe and Reliance Retail– the Mukesh Ambani-led retail arm of Reliance Industries Limited. The two had signed an agreement to create a 50:50 joint venture in March, 2008.

The joint venture will set up world class retail optical stores in India, which among others will offer a range of private label frames, lenses, sunglasses, contact lenses and solutions.

The first independent optical store is expected to be unveiled by Septembember this year.

Giving indication of the format and size, Bijou Kurien, President and Chief Executive (Lifestyle), Reliance Retail said that, while the first store will be opened by September, its size will be smaller than the jewellery stores set up by the group. The first store is slated to come up in Bangalore.

Reliance Retail has set up or is setting up independent retail chains with foreign partners like Apple (iStore), Marks & Spencer (M&S), Pearle Europe (Vision Express), Avery Dennison and Office Depot, among others.

Reliance is currently operating over 700 stores comprising 13 general and speciality formats across India.

Pearle Europe– a subsidiary of HAL Investments, a global investment company based in the Netherlands, operates 2,200 optical retail stores in 21 countries across Europe and the Middle East. It earned a revenue of over $1.7 billion in 2006.

HAL Investments also owns a number of optical retail chains in emerging markets, such as China, Russia, Turkey and Brazil.

The optical products market in India is highly fragmented and almost entirely controlled by small family owned unorganised retail players.

Only recently, Tatas owned Titan Industries, known for watches and jewllery, has begun to roll-out a retail chain of prescription eyewear products under the brand name of ”Titan Eye+” Titan has planned to to set up a chain of 300 Titan Eye+ stores and is targeting a turnover of Rs 450 crore in the next five years.

“Organised retail is growing at a rate of 8-10 per cent per annum, which so far represents only about four per cent of the total retail market. We are planning to open about 1,000 stores by this December across various cities of the country.” — S Shashikanth President (Manpower) Subhiksha.

Subhiksha, the no-frills, food, grocery, pharmacy and telecom, retail chain is looking at setting up new small format, convenience stores in tier II and III cities across India. Many of the 1,000 new stores to be set up this year (2008) will be located in the East and Madhya Pradesh. This was revealed by S Shashikanth, while speaking at the symposium on retail organised by FICCI Ladies Organisation in New Delhi.

All the new stores of the retail chain, like the existing ones, will also be company owned as Subhiksha has not followed franchisee managed stores business model, said Shashikanth.

The average size of the outlets would be about 1,500 sq ft, he added.

Subhiksha is currently operating over 1,500 store outlets across the country, employing over 25,000 persons.

When asked about the company’s plans to raise funds from the capital market, Shashikanth said, “Yes, we definitely have plans to get listed.” Subhiksha, as reported earlier, has acquired 40% equity at par by investing Rs two crore in the Chennai-based Blue Green Constructions. Subhiksha is looking at getting listed at BSE NSE and MSE through this aquisition.

“The opening of the store was delayed by a few days due to apprehension by hawkers, but we do not compete with them as our customer profile is different from theirs.” Pravin Dalal, Vice President (Operations), Spencer’s.

“The demonstration was orchestrated by misinformed people. There was no real threat to small traders as organised retail formed only about 3-4 % of the total food and grocery retail opportunity in India.” — Company Statement.

Sanjeev Goenka, Vice Chairman, RPG Enterprises, last Friday, was forced to go back without inaugurating Spencer’s Hypermarket –the group’s second large format store in Kolkata, as street hawkers were opposed to opening of the store saying it will adversely affect livelihood of 6,000-odd hawkers operating in the area.

The store has now been allowed to start the operations after reaching an agreement with the Gariahat Hawkers’ Sangram Samiti and National Hawkers’ Federation, who were sperheading the hawkers’ agitation.

While, Shaktiman Ghosh, General Secretary of the National Hawkers’ Federation and Debashish Kumar, local councillor, represented the interests of the Hawkers’ Sangram Samiti, Dilip Sen, Executive Director, CESC, which owns Spencer’s Retail, represented the management. Bikash Ranjan Bhattacharya, Mayor of Kolkata, also participated in the discussions.

The agitators were demanding that Spencer’s should sell all products of common consumption at one rupee or more higher than the prices charged by the hawkers. Among other demands, they were insisting on Spencer’s to shun from selling all kinds of hosiery products and garments below the price of Rs 300 per piece. The also wanted minimum quantity restriction of six kg for sell of potatoes and onions and three kg for sell of other vegetables. Similarly, they wanted organised retailers to confine themselves to branded edible oils and rice.

Interestingly, the demands of the Sangharsh Samiti were not confined merely to Spencer’s but extended to all other organised retailers like Food Bazaar.

“Spencers has agreed not to sell less than three kg of vegetables, six kg of potatoes and onions, less than one litre of oil and 500 gm of masala and only branded and packaged rice and pulses,” said Debashish Kumar, local councillor and one of the leaders of the hawkers association, after brokering the deal.

“They have also agreed to offer local employment. We have therefore decided to allow them to open the store,” added Kumar.

Large retailers dealing in farm products in Kolkata and Howrah are required to obtain a licence under the Agriculture Produce Marketing Regulatory Act, as the Agriculture Marketing Board, controlled by the Forward Bloc, has extended the jurisdiction of the Act to these areas.