ICFAI Business School (IBS) Student Community

[pramit (basu)]

Hello Eveybody,
We all know that retailing in India is booming and all the major players are flexing their muscles to be the number one player in this segment. Being a student of Retailing, I felt it is important to start a new topic under marketing that is Retail News Of The Day.

It is my request to all the members that to post every day one retail news which they come across so that at the end of day we have a handful and in the process keep us updated with the Retail Industry as a whole. Please avoid duplicacy in the news as i request all the members to go through previous news before posting.

Thanks and Regards
Pramit Basu

[pramit (basu)]

After Rs. 1,000 crore in Spencer’s, RPG decides to put in Rs. 300 crore for smaller retail chains

Posted: 22 Jul 2007 08:47 PM CDT

Having already announced investment of about Rs 1,000 crore in its flagship retail venture Spencer’s, RPG is going to further invest Rs 300-odd crore to expand its smaller retail chains operating under the brand names of RPG Cellucom, Music World and Books and Beyond. This was revealed by RPG Enterprises Chairman Harsh Goenka to PTI in Mumbai.

RPG Cellucom, the telecom products retail chain of the group, which currently operates 50 shops, will expand ten-fold to 500 shops by March, 2008. Apart from selling mobile phones and accessories, these shops also stock laptops and related products.

The group has no plans to aggressively expand its music retailing business further as the music industry has matured. Music World, its music products chain, which sells music and music related equipment like Ipods, DVDs, WorldSpace and accessories through 280 customer touch points, may as such grow only at 10 to 20%. Music World’s major business come from the sale of music produced under “Sa Re Ga Ma” label (originally HMV) by another group company. Sa Re Ga Ma, owns a rich library of Indian film and other music. It accounts for 72% share of all music produced in the country. Goenka described “Sa Re Ga Ma” as the “custodian of Indian heritage”

Books and Beyond, the books and leisure chain of the group, which primarily sells books, would have eight shops by the year end.

[abhishek1711 (shah)]

RIL,Bharti,Coke & Pepsi eye big bite of dairy cake

Good old milk certainly seems to be the flavour of the season, and in fact, many seasons to come. The dairy sector in India with billion-dollar GCMMF’s Amul and NDDB’s Mother Dairy, besides a spate of milk co-operatives, is set to witness a dramatic change in market dynamics.

Some big names in India Inc, such as Reliance, Bharti, Coca-Cola and PepsiCo, are silently working on a big gulp of the country’s Rs 227,340-crore milk industry. That’s hardly surprising for a country that happens to be the world’s largest producer of milk. India’s milk production touched 100 million tonnes last year.

“There are many companies, in sectors such as retail and food-processing, which want to get into the milk business in India. The list includes some MNCs as well. The sector will see a lot of action in the coming times and the government is also considering necessary incentives,” said union food processing minister Subodh Kant Sahay.

Cola majors, Coca-Cola and Pepsi, are keenly eyeing the dairy business in India, especially with the increasing shift away from carbonated soft drinks to healthier beverages.

Existing players in the dairy sector are, meanwhile, gearing up to meet the challenge. Amul, which has emerged as a billion-dollar entity with a turnover of close to Rs 4,300 crore during fiscal 2006-07, has projected a target of Rs 10,000 crore within the next three years. Says Amul’s GM R S Sondhi: ”Any new entrant in the diary sector will have to invest in procurement, processing, and production for at least 20-30 years before reaping the benefits. Dairy business is not like selling, say soaps, which required only manufacturing and branding.’’

Nestle India, meanwhile, has planned a spate of new product launches, capacity expansion and acquisitions. Said Mayank Trivedi, general manager, Nestle’s dairy division, “The dairy division has been growing at a healthy 20%, and we are bullish on this sector.” For the record, the company has been growing at 10-11%. The value of the dairy sector will more than double to Rs 520,780 crore by 2011. While the organised industry’s share of total milk will go up, smaller players will see their share dip.

For further reading http://economictimes.indiatimes.com/RIL_Bharti_Coke__Pepsi_eye_big_bite_of_dairy_cake/articleshow/2225644.cms

http://www.thehindubusinessline.com/2007/07/17/stories/2007071751080500.htm

[pramit (basu)]

Chennai-based furniture retailer restrained from using Carrefour name; High Court uphelds French retailers plea


In an interesting trademark related judgment, that in future could have far reaching consequences, the Honourable Madras High Court has agreed with the prayer of French retailer Carrefour that it is the legal owner of the registered trademark ‘CARREFOUR’ and that the public could be deceived into believing that products offered by others with similar name have a connection with the former.

Founded in 1960, the €94 billion, Carrefour, is the world’s second biggest and Europe’s biggest retailer. Apart operating in France, the retail chain operates a total of about 7,000 outlets across the world. Carrefour in French incidentally means “crossroad.”

[/i]

[sharohere (-=hidden=-)]

THe first hypermarket of Reliance Retail, to be called ‘Reliance Mart,’ is ready to go on stream in Ahmedabad by 15th August, 2007.

Occupying 2,50,000 square feet of space, 90,000 of which will be on the ground floor itself, in the Iskcon Mega Mall, on S.G. Highway of the city, the new large store format of the retail arm of the group, expects to attract daily foot fall of 10,000 persons on week days and 15,000 persons on week ends.

This was revealed by Neeta Ambani, Chairperson, Dhirubhai Ambani Foundation and Chief Mentor Reliance Retail, who among others is entrusted in the retail venture with the responsibilities of communication, branding, interior design, and architecture.

[pramit (basu)]

Walmart CEO on Bharti and IndiaWal-Mart, the world’s biggest retailer, has recently entered into a 50:50 partnership for cash ‘n’ carry business with the nation’s biggest telecom player Bharti Enterprises. It has also signed a franchise agreement with Bharti’s retail arm Bharti Retail for providing back-end technical and training services for its front-end retail stores.

Raj Jain, CEO, Wal-Mart India spoke to Hindu Business Line, among others, on cash ‘n’ carry business and on relationship with Bharti.

Given below is a gist of some of the interesting observatios made by Jain during the interview:

Bharti was chosen as a partner because it has a deep understanding of India and its market as it has a base of 40 million mobile customers. Bharti also has a better understanding of the realty. This would help us to move faster on the real estate and cut down the learning cycle in a new market.
Our franchise agreement with Bharti Retail includes extending technical know-how and processes, information technology, best practices and staff training. For this, Bharti will pay us cost and charges and expenses incurred.
The question of charging royalty will arise only if our brand name is used for products. We will decide on royalty percentage only after the decision on branding is taken.
Tier II and III cities have been chosen for setting up cash ‘n’ carry stores as kiranas and small businesses in these areas are under served, while metros have been left out as distribution channels there are more evolved.
Our stores will sell merchandise through membership cards. Membership cards will be issued to those customers, who have sales tax registration or have a certificate of affiliation with any local business group or mandi.
We would invite shopkeepers, restaurant owners and all other target customers so that they can see for themselves before making their decision.
Not only will we make these customers aware of the quality of merchandise available but other factors such as best prices, convenience of shopping for everything under one roof and also easy availability of difficult-to-get items.
We will pass on benefits of back-end channel efficiencies to our consumers.
Ours will be an alternative channel for small entrepreneurs to source merchandise and raw material. In fact, what we are doing through our cash and carry business is very small compared to the size and the demand in the market. There is no question of our replacing the mandis.
Each of our cash ‘n’ carry outlet occupying 50,000 to 100,000 square feet of space is expected to serve the needs of customers in a radius of 10-12 km. The number of people they can reach out will, however, depend on the geographic, demographic and social set-up of the regions.
We along with partners would help farmers in improving crop yields in terms of both quality and quantity. Currently, no one is giving feedback to the farmers on consumer demand; we would like to do that.
Supply chain efficiencies could help in reducing the wastage of perishable farm produce by half. Currently, 30% to 40% of such produce gets wasted in the country.

[pramit (basu)]

Kisore Biyani announces entery into small format

Kishore Biyani-promoted Future Group, whose flagship Pantaloon Retail is country’s largest listed retail chain, has announced setting up over the next two years of a new format 1,500 shops retail chain to be called KB’s Fair Price Shops, in top eight markets of the country, says a PTI report.

The new chain, as reported earlier, will signify the group’s entry into small format, last-mile retail space. The group, which owns famous retail brands like Big Bazaar, Food Bazaar, Pantaloon, Home Town, Central, and e-Zone, has since its inception been active only in the large format stores space.

“Our target is to provide essential items cheaper than the market price and we are looking at a 20% market share of the neighbourhood retail market,” said Narendra Baheti, Managing Director, Pantaloons Foods. Positioned as no-frills, fair price shops chain, with a tag line of “sare jahan se sasta,” the new retail chain would alter a few rules of the trade in India, added Baheti.

The new non-air conditioned, no-frills, retail chain, with each shop measuring an average of 2,000 square feet retail space, will be based on neighbourhood, convenience, stores concept. Stocking only a limited variety of items required to meet daily needs of its customers, the chain proposes to offer merchandise at 10% lower prices than market for national brands and up to 20% lower than market prices for local brands.

Beginning with Mumbai and Delhi on a pilot basis, the chain plans to later on spread out to other metro and mega markets of Kolkata, Ahmedabad, Hyderabad, Bangalore, Pune and Chennai.

KB’s Fair Price Shops, will bring the group into direct competition with no-frills, small format player Subhiksha, which has already set up over 780 stores, and is well on its way to achieve the target of 1,200 stores by March, 2008. This will also put KB’s fair price shops into competition among others with Ambani’s Reliance ‘Fresh,’ RPG’s Spencer’s Daily Express, Birla’s More, Piramal’s Trumart, and Wadhwan’s Spinach, which are also active in neighbourhood, convenience space, albeit wit more glitzy presentation.

The cost of setting up KB’s fair price shops, which are initially to be owned by the group, according to Baheti, would be around Rs 280 a sq ft against Rs 2,000 a sq ft required for a modern super market store.

[Bidisha (Bidisha Chakraborty)]

The UK-based retailer Marks & Spencer is keen to increase the volume and value of sourcing from suppliers in India and boost its commitment to “fair trade.”

As part of the company’s £200-million five-year project ‘Plan A’, M&S is working with some suppliers who work with farmers in Gujarat producing cotton certified by the UK-based Fairtrade organisation — i.e. cotton meeting international Fairtrade standards for production of seed cotton (such as responsible farming using less chemicals, and non-usage of genetically modified seeds). The ‘Fairtrade’ mark in return ensures that the farmers get a fair price and the ‘Fairtrade’ premium is invested by them in community development projects.

M&S’ range of clothing launched last March was produced by 50 Fairtrade cotton farmers in Gujarat. According to the company Web site, it is working with over 600 Fairtrade cotton farmers in Cameroon, Mali, Senegal and India.

Globally, M&S is keen to bring more farmers into this initiative and shift more to fair trade suppliers. M&S target is to convert 20 million garments to Fairtrade cotton by year-end, said Mr Venu Nair, Regional Head, South Asia Offices, Marks & Spencer, on the sidelines of the inauguration of the Fabrics & Accessories Trade Show in the city.

Currently, Marks & Spencer is sourcing from 22 suppliers in the country, said Mr Nair. “About 85 per cent of what is sourced here is clothing, the rest is footwear. We would like to increase the volume sourced from these suppliers in India. Last couple of years, the business from sourcing has grown by about 100 per cent. It will continue to maintain this healthy growth rate.”

According to the Web site, M&S’ stores stock “nearly 70 different items and our range currently accounts for one third of the world’s Fairtrade cotton. Customer response has been encouraging with sales of Fairtrade cotton totalling £630,000 during the Fairtrade Fortnight (Feb/Mar 2007).”