IndiaRetailBiz

“We intend to be the best in the Rs 600-crore luxury watch segment with clear positioning in design, wear, comfort and standard.” — Peter Kaisit, Vice President (Sales).

Rado, one of the most copied swiss premium watch brand, is embarking on an aggressive expansion drive that will witness doubling of its exclusive stores in India from eight at present to 15 by 2011. Rado is also looking at growing rapidly in other existing retail channels comprising  exclusive franchisee outlets, shop-in-shops and multi-brand outlets.

Betting big on India, Rado is drawing up plans to make the country as its third largest market across the world in the next three years. Currently, India is ranked eighth on its sales rankings.

Growing at a healthy 30% per annum for the past five years in India, the iconic watch maker wants to become the country’s top premium watch seller in the next three years. According to Peter Kaisit, Vice President (Sales), Rado is already among the top two premiunm brands selling in India.

While new exclusive outlets are planned among others for Ahmedabad, Chandigarh and Bangalore, it is looking at tier-II cities like Jalandhar and Ludhiana for setting up three new shop-in-shops. Currently, Rado operates five outlets in this format. Rado watches are also sold through 155 multi-brand outlets. Six more of such outlets in emerging small cities like Moradabad and Rajkot have been planned by the company with a view to cater to to the demand from middle-income customers.

Rado will soon be launching three models of Ceramica Colour Watches in the price range of Rs 1.59 lakh and Rs 9.95 lakh.

Rado, known for its scratch proof worldwide, began making watches half a century ago in 1957. Today, it makes over half a million watches every year with the help of only 300 workers.

“Till the time business is restricted to manufacturing, the product is simply treated as a commodity. So, we decided to add some brand value and get into retailing of apparel also.” — Yash Birla, Group Chairman.

Birla Cotsyn, a textiles company of the Rs 2,300 crore Yash Birla group, is foraying into apparel retailing across India. Having already begun research on branding and positioning of its retail initiative, the group is hoping to launch its retail initiative by early next year, reports DNA. Initially, the group is looking at investing Rs 33 crore to set up 20 stores in the mid-price segment. The products would also be made available through multi-brand outlets.

The group is also looking at options to introduce products in other price segments.

“A particular brand can be made available at different price levels and in different formats. Take Armani, for example,” said Yash Birla.

The move to create a brand and retail has been taken with a view to improve margins as branded apparel offer hefty margins ranging between 40% and 200%. The move will also help the group to integrate and consolidate all its textiles related businesses.

“If one is not present in the complete chain, then the business is not very profitable and so we have decided to enter in branding and retailing as well. Our new facility will be able to manufacture one lakh pieces a month,” said K K Baheti, President and CEO, Birla Cotsyn, while explaining the rationale of foraying into retail.

The group has also initiated the exercise of integrating its health and wellness ventures under one brand. The group has decided to also expand its presence in the education space.

The organised retail has begun to flex its muscle, as never before!

This became evident when Anand Kripalu, Managing Director of Cadbury India, the Indian subsidiary of the global confectionery giant, decided to call on Kishore Biyani, Chief Executive Officer of Future Group, with his team of executives to sort out perceived differences between the two groups on terms of supply of Cadbury’s chocolates and other products to Future’s retail chains operating under several formats.

As reported earlier, Future group CEO had ordered his retail chains (Big Bazaar, Food Bazaar, among others) to remove Cadbury’s brands from their shelves as the multi-national giant was offering more favourable commercial terms to international chains like Shoprite of South Africa and Metro C&C of Germany that are operating within India. He had gone on to even mention that the global major was treating his companies like ‘paanwalahs.’

Although, perceived anomalies in trading terms, according to an ET report, are still to be sorted out, Kishore Biyani has agreed to call off the boycott of his companies of Cadbury’s products in their retail chains, as a gesture of goodwill.

Although Cadbury officials rejected allegations made by Future Group maintaining that their deals were linked to the contribution made by a retailer to local sales, they were clearly unprepared for the stand taken by Future group. India is an important market for Cadbury both in terms of its market share and future growth prospects, as despite increased competition it still commands over 70% of domestic market. Emerging market are also important as they now contribute around one third of its global sales and offer growth opportunities.

Operating with wafer-thin margins and rising realty costs, organised Indian retailers have begun to demand higher margins and better trade terms as regards fill rates and level of inventories. Many of the modern retailers have also begun to patronise foreign brands like Mars and Snickers, which are growing at a faster pace than indigenously produced brands owned by well-known companies like Cadbury and Nestle.

Even Future group is trying to launch its own “Tasty Treats” brand of chocolates

According to Samar Singh Sheikhawat, Vice-President (Marketing), Spencer’s Retail, as reported in Business Standard, “Sales of imported chocolates has become equal in value to that of the domestic brands put together. Whereas the imported chocolates sales are growing at 100 per cent, made-in-India brands are growing at around 25 to 30 per cent.”

“Religare wants to go a step beyond its competitors.”

Flush with cash after selling the entire promoters’ stake in Ranbaxy– the country’s largest pharmaceuticals company, the Singh family led by Malvinder Singh and Shivender Singh, is believed to be now focusing on accelerating the pace of growth of Religare Enterprises– the group’s integrated financial services company.

Religare, according to an ET report, will set up a chain of multi-product, multi-brand, one-stop financial services  retail stores called “Finmart.” These stores will offer offer financial services to individual customers. According to sources, Religare may set up around 200 Finmart retail store across the country at an investment of Rs. 100 crore in the next one year.

These retail stores, occupying around 300 to 400 sqft of space, will offer personal financial services mainly in the area of investments, insurance and loans to individual customers. A significant amount of funds has been set aside for promotion of the brand.

Incidentally, Anil Ambani-led Reliance Capital is already offering similar services across the country under the brand name of “Reliance Money.”

Although, Religare has refused to offer details on the retail initiative, the company has not only hired the management team, but has also recruited staff of about around 1,000 peopleto assist in the operations.

The first “Finmart” store is expected to be launched in New Delhi, within a week.

The Singh family is also engaged in setting up another retail chain in the area of healthcare. The retail chain of pharmacies has already begun setting up retail stores under the brand name of “Fortis Healthworld” across the country.

Kishore Biyani-led Future group, is launching a residential learning programme called “Future Learning and Development,” to provide training to in-house employees of the group reports PTI. The programme meant for shop-floor to store management level employees will initially be lauched at three centres from September this year. Ahmedabad, Kolkata and Bangalore are the first three locations chosen for the purpose, each of which would have the provision to train around 600 students.

Over a period of time, the group may consider extending the programme to employees of other companies and at other centres including New Delhi. Later on the programme may also be upgraded to include higher level employees as well.

“We would focus on transfer of knowledge within the organisation and also beyond,” said Kripesh Hariharan, Chief Human Resources Officer, (New Initiative), Pantaloon Retail (India) Limited. “With the retail sector facing a shortage in skilled personnel, it was very important to impart training,” added Hariharan.

“We have tied up with Apple for stocking a whole range of products in shop-in-shop format in Music World, including iPods and accessories.” –  Subrata Chowdhury, President (Books and Music), Spencer’s Retail.

Music World, the music retail chain of RPG group owned Spencer’s Retail, has tied-up with the US-based Apple Inc. — a personal computer and consumer electronic behemoth to sell its products in its stores. This, according to a Business Standard report, marks Apple’s first shop-in-shop tie-up in India.

Apple, in the past few years, has stormed the consumer electronics space with its iconic iPod and iPhone products. Apart from computing products like iMac and iBook, Apples is also among the biggest retailers of music under the iconic iTunes brand.

According to the accord, Apple employees will train Music World employees who in turn will assist our consumers on usage of different Apple products.

Reliance Retail, incidentally, also has agreement with Apple Inc to operate an independent retail chain of Apple’s iconic iStores in India.

Meanwhile, Music World has also decided not only to go in for image makeover of its stores, but expansion of the chain as well.

Not only it will redesign its stores and add new products to offer a complete range of personal entertainment products, but the new touch-and-feel look of the stores will also ensure 20% more space for display of products in the stores. The posters in the stores will also be replaced by hi-tech LCD display screens. These screens will showcase its product range. The changes are expected to become visible by the next month.

Recognising that the consumers now want complete personal entertainment, it is also adding new product categories like shirts and gadgets. In short, the chain is looking beyond selling just music and video.

“We are in the process of tying up with various brands for selling their shirts and disco wear through our Music World stores,” added Chowdhury.

Music World is also expanding from 249 stores at present to around 300 stores by adding 40,000 sq ft to the existing 80,000 sq ft of space, this year.

Alarmed with entry of the corporate sector in the retail of pharmaceuticals, the Chemists and Druggists Association of Krishna District in Andhra Pradesh, has sough immediate intervention of the concerned authorities to check the dangerous trend of playing havoc with the public health system.

The Association represented by its president V Venkata Rao and General Secretary P S Patnaik, who were speaking to media persons, has alleged that in order to lure customers, these new retail pharmacies are also offering discounts and concessions without adhering to business norms, reports PTI.

Such pharmacies are spoiling the business of the sector in the state by forming an unholy syndicate. In the Krishna district itself, 2,500 pharmacists are facing financial problems due to the “bad practice” encouraged by the corporate sector companies, said Patnaik.

The new retailers are adopting innovative methods to publicize various schemes like discounts and additional concessions to retired people, offering membership cards to members, and sending their staff to doorsteps of customers to attract business, added Patnaik.

Patnaik lamented that the traditional retail pharmacists are badly hit by the misdeeds of these new retailers who are also acting in gross violation of the MRTPC Act.

“We plan to have an all-India presence through our upcoming brands. Our immediate investment will be funded through internal accruals and banks, but going forward, we will think of private equity or IPO around 2010.” – Kailash Gupta, Managing Director, Liverpool Retail India.

Liverpool Retail, an Ahmedabad-based garments and fashion accessories company, which already operates an apparels retail chain under the brand name of “Liverpool,” claims to have made a world record, when it launched 151 retail stores for another apparel brand called “BARCELONA.” Interestingly, all the stores were launched on the same day and at the same time across the country.

In fact the achievement has already been included in the Limca Book of Records, according to Limca’s representatives who were present on the occasion.

While, ‘Liverpool’ brand of apparel cater to the premium segment, ’Barcelona’, brand of clothes cater to the needs of mid-income customers. Barcelona clothes for men and women would be priced between Rs 400 and Rs 2000.

Liverpool Retail India has decided to invest Rs 500 crore with a view to become the top garment retailer of the country. This investment to be made over a period of next two years, would take the number of Liverpool’s stores to 600 stores by March 2009 and 1000 stores by March 2010. A part of the investment will also go into creation of new manufacturing capacities and adding new brands to the range.

Liverpool is also planning to enter the children’s apparel category.

The company is planning to open a chain of designer boutique stores that will cater to the needs of designer clothes for premium customers. To create such clothes it will seek help of some of the major designers in the country.

To mark the occasion, Liverpool also organised a fashion show at Ahmedabad. The show was led by the famous Bollywood actor Tanushree Dutta.

These are troubling times for the ruling UPA coalition in general and Congress party in particular, as consumers (the ubiquitous aam aadmi) reels under the presure of rising prices.

On the one hand, while the Left combine which so far has been supporting the government from outside, has threatened to withdraw support if it takes the next step of operationalising  the contentious Indo-US Civil Nuclear Deal to its logical conclusion, on the other, it is facing one of the worst economic nightmares during its tenure in the office.

This Friday, the weekly Wholesale Price Index (WPI), touched 11.05%– an all time high in the last 13 years. This has sent shockwaves among ruling political parties particularly when they are preparing to face general elections in less than a year. While, the CPI has already demanded dismissal of the Finance Minister, CPM has held the Prime Minister solely responsible for rising inflation.

Fearful of political fallout, the Congress party which leads the coalition and holds all major finance related portfolios now appears to have decided to sacrifice economic growth at the altar of inflation. It has appealed its government to contain the prices even if it means affecting the growth.

It is noteworthy that the Indian economy for the past few has been growing at a rapid pace. Its enjoys second highest rate of growth among major nations of the world.

“It (increase in inflation) is most unfortunate. We appeal to the government to take appropriate fiscal and monetary measures, even if they hurt growth,” said M Veerappa Moily, Chairman AICC Media department, according to a PTI report.

“Certain segments of growth may be harmed and there could be a slump in employment generation and the steps could harm the housing programme. But we now require some rigorous measures,” he added.

While the impact of unabated rise in the world oil and commodity prices is being felt for quite some time, it has also begun hurting certain manufacturing sectors as well.

On retail side, many discretionary products and services, the purchases of which can be postponed by customers, are likely to be hit most. These among others may include products like consumer electronics, home improvement items, and housing.

“Entry level products in every category are likely to witness a slow down demand due to inflation, ” says V Ramachandran, Director Sales and Marketing, LG India.

In the long run, purchases of even daily consumption items are also likely to be adversely affected as slowdown in the economy coupled with increased interest rates would result in lower disposable incomes in the hands of consumers.

“This (high inflation) is criminal… This is going to put a lot of pressure on everything,” says Ajay Seth, CFO, Maruti Suzuki India.

“We are in discussion with major retail chains to explore possibilities of a foreign and domestic collaboration for setting up various retail formats in India,” Pradeep Jain, Chairman, Parsvnath Developers.

Parsvnath Developers, the Delhi-based real estate developer, which for some time has been in the news about its diversification plans, has incorporated a subsidiary called ‘Parsvnath Retail Ltd’ to leverage on its real estate strength to foray into booming retail business. The group already has control over a whopping 5.5 million sq ft of land bank, across the country.

Having recently obtained a telecom service provider licence from the government, the group is also soon venturing into the fast growing mobile telephony business.

“We are in discussion with major retail chains to explore possibilities of a foreign and domestic collaboration for setting up various retail formats in India,” said Jain, while speaking to media persons in New Delhi on Friday, about his company’s retail plans. “By the end of this financial year, you will see 5-10 retail stores operational,” added Jain.

According to Jain, first retail stores of the group would be set up in Delhi and Mumbai. The stores, according to him, will be in various formats, including hypermarkets, large formats, convenience stores, and food joints (coffee shops and eateries). The group, however, will not enter into ’cash and carry’ format.

The company according to Jain could enter into tie ups with different players for different formats. He hoped to soon make an announcement about the same.

Parsvnath is believed to have entered into discussions for tie-ups with global retailers like Carrefour and Groupe Casino.

Source: PTI