News from the Indian Retail Sector

Weekly Retail News from India

General Plans and Information
Big players – plans and investments
International
Regional Trends
Support Industries
HR News
Unique formats
Technology
Government Policy
Sector specific

General Plans and Information

1. Chain stores to increase in India
Wal-Mart Inc said that 35% of India’s retail sales could be from chain stores by the year 2015, a radical increase from the current 2%. According to Raj Jain, president of emerging markets (excluding China and Japan), Wal-Mart International said that, "The increase for organized retailing will depend on the amount of investments made and government policies."

The US based retail giant expects to retail sales in India will be around $500 in nine years and the company is pushing the Indian government to reduce restrictions on foreign retailers to get a larger share of the expanding market. The company also plans to “connect the 12 million mom-and-pop stores in India to the mom-and-pop suppliers and farmers in the country," so that both farmers and consumers benefit.
The Wal-Mart supply chain is expected to be ready in 18 months. According to Jayesh Shroff, fund manager with SBI Funds Management, “In the next one or two years, they plan to get their supply chain right and test the Indian market with the wholesale business."
Tuesday, December 19, 2006
Source: Bloomberg News

Big players – plans and investments

1. Piramyd plans to open additional TruMart stores
With its successful TruMart experiment at the Piramyd Megastore in Nagpur, the company plans to open two more TruMart stores in Nagpur and ten stores by February 2007. TruMart is the Piramal Group’s upgraded version of a kirana store and was launched as a part of Piramyd Megastore. Its stores will offer food, home and personal care products along with food and grocery. TruMart will also have special offer points and cash discounts. New stores will be 2,500 sq ft and will stock around 6,000 brands in more than 100 products.
Friday, December 22, 2006
Source: Business Standard

2.Reliance to open its first specialty store this month
It is anticipated that Reliance Retail will be opening its first specialty store on December 28, the birth anniversary of his father, the late Dhirubhai Ambani. This will be the start of Reliance in the consumer good segment. Reliance had launched its retail stores in late November in the fresh fruits and vegetables segment.
Wednesday, December 20, 2006
Source: Business Standard

International

1. Carrefour, Landmark deal unlikely to go through
According to sources, Carrefour and Landmark are unlikely to tie up for the Indian retail market, as Carrefour would prefer to tie up with an Indian company rather than the Dubai based Landmark group. Carrefour is also conducting talks with specialty retailers for possible franchising agreements, where it has supposedly approached a well known franchiser in the apparel segment.

The company is keen on opening stores in the convenience store format, with stores ranging from 2,500-3,000 sq ft, and plans to enter the value and mass retail segments at a later stage. In this regard, Carrefour is in talks with real estate companies, possibly to set up hypermarkets.
Monday, December 18, 2006
Source: The Economic Times

2. Carrefour in talks with Wadias
Carrefour, the second largest retailer in the world, is in talks with the Wadias of Bombay Dyeing Group for a retail venture in India. Carrefour was earlier in talks with Dubai based Landmark group and has been studying the Indian retail market for the past 4 months. Reportedly talks with Landmark fell through since Carrefour wanted to tie up with an Indian company. If the deal goes through, Ness Wadia will likely be heading the new venture. The Wadias have diversified interests in textiles, airlines, FMCG and had earlier announced its interest in the retail industry.
Wednesday, December 20, 2006
Source: Financial Express

Regional Trends

1. SH Departmental Stores to open in Kolkata
Kolkata will soon have a new specialty shopping centre. Mumbai based MKP Distributors is developing the SH Departmental Stores which will be opening a ‘high end lifestyle retail chain’ dealing with all premium products such as designer jewelry, sunglasses, fragrances, cosmetics and much more. Each of these stores will range from 8,000-9,000 sq ft to 40,000-45,000 sq ft in size.

According to Naresh Gurnani, General Manager of the MKP Distributor Group, “The group’s new retail initiative for eastern India will include collaborating with speciality lifestyle boutiques and retailing through large retail format stores like Shoppers’ Stop. The initiative will enable MKP to reach out to each spectrum of its target audience.”
Tuesday, December 19, 2006
Source: The Economic Times

Support Industries

1. Future Group focusing on media
The Future Group will be creating a category for the growing media industry called Future Media, which is to be a medium through which advertisers can communicate with shoppers in the store. On the effectiveness of this method of reaching the customer, Partho Dasgupta, Chief Executive Officer, Future Media, said "You are communicating to the consumer when and where it matters — at the time of making a purchase decision." The company is considering all types of ways to reach the customer, including digital signage, audio, video and blue-tooth technology etc.
Thursday, December 21, 2006
Source: The Hindu Business Line

2. Orient Craft to raise Rs. 300 crore in capital markets
The largest garment export company in India, Orient Craft will be coming out with an IPO to raise Rs. 300 crore to fund its expansion. The company will also be implementing a textile SEZ in Gurgaon on 400 acres of land. Sudhir Dhingra, CMD of Orient Craft said that the company would raise its funds from the public and was not in talks with any retail player including Reliance Retail for its equity stake.
Thursday, December 21, 2006
Source: The Times of India

HR News

1. Vinod Sawhney to head Bharti Retail
The current joint president of enterprise services at Bharti Airtel, Vinod Sawhney will head Bharti’s retail division. In his capacity as President, he will oversee operations for hypermarkets, neighborhood stores as well as super centers across India. He joined the company in 2002 as CEO of the northern region for Bharti Airtel’s mobile operations.
Friday, December 22, 2006
Source: The Economic Times

2. Reliance Retail hires 60 expats
Reliance Retail has stepped up its hiring process and is in the process of hiring approximately 100 senior executives for its retail division. The company has already hired 50-60 expats with in the retail filed from companies such as Wal-Mart, Best Buy, Tesco, ASDA, Sainsbury and Kroger, who are already started working with Reliance. Most of these executives have been hired at salaries ranging from Rs. 10-15 million.

The company’s retail Hear Bijay Sahoo is sourcing talent heavily from South Africa and the Middle East. About 25 senior executives have joined for supply chain management and 30 have joined in operations, concept and strategy. Senior managers, Scott Edward joined from Wal-Mart and Charles Starbuck joined from a retail house in Saudi Arabia.
Friday, December 22, 2006
Source: The Economic Times

3. Santosh Desai, COO of McCann to join The Future Group
McCann Erikson’s President and COO, Santosh Desai will be joining Kishore Biyani’s Future Group as the head of Future Brands, a new company yet to be launched. Future Brands is to be a brand and marketing company, which will control 45-50% of the Future Group’s brands and will work on licensing and brand promotion.

The Future Group has a host of brands such as John Miller, Fresh and Pure and Bare. In this regard, Kishore Biyani, MD of the Future Group, said that "The campaigns for Dreamline and DJ&C will break shortly. The business model is very similar to what Martha Stewart does in the US."
Sunday, December 17, 2006
Source: The Times of India

4. Metro Cash & Carry India MD resigns
Harsh Bahadur, MD of Metro Cash & Carry India has resigned for personal reasons and is “evaluating various options” and has not decided where he will be joining next. He was with the company for 6 years and was responsible for initiating Metro’s operations in India. The resignation is effective February 28, 2007.

Metro has 2 distribution centers in Bangalore and set up its third centre in Hyderabad in November 2006. Metro has acquired land in Kolkata, where it will be opening at least 5 distribution centers.
Monday, December 18, 2006
Source: The Economic Times, Business Standard

5. Harsh Bahadur to head Reliance Retail’s cash & carry venture
The former country manager of Metro Cash & Carry India will be joining Reliance Retail as president and chief executive of its cash & carry format. Both parties have not yet commented on the development. Mr Bahadur resigned from Metro a few days ago, for personal reasons. He will complete his tenure with Metro until February 28, 2007.
Thursday, December 21, 2006
Source: The Economic Times

Unique formats

1. Nike to target women in gyms
Nike India will now be promoting its products at gyms in an effort to reach women with its fitness oriented products. In this regard, the company has tied up with Gold’s Gym and Chisel where its products will be sold. The list of products includes apparel, footwear, yoga mats, weights, gym bags, water bottles, skipping ropes, towels, resistance bands and sweat pads.

According to Sanjay Gangopadhyay, marketing director of Nike India, “This will encourage the use right kind of apparel and accessories among the fitness practitioners. Our product evangelists will periodcally conduct clinics at these fitnes centres. New products which target the health and fitness concious are displayed at the centers.” Nike is on the lookout for more partners to take this concept forward and is evaluating offers. Professionally run modern fitness centers are the preferred types of gyms.
Wednesday, December 20, 2006
Source: Business Standard

Technology

1. TCS creates interest in Wal-Mart and Target with its Personal Shopping Assistant
Wal-Mart and Target have both shown interest in a new retail technological product being developed by Tata Consultancy Services (TCS). The new product is a Personal Shopping Assistant (PSA) and is currently being tested out at the TCS retail innovation lab, with a likely rollout occurring sometime next year. K Ananth Krishnan, Chief Technology Officer at TCS, said that “TCS has worked with some of the largest retailers, including 30 of the 50 largest in the world, and retail contributes more than $200 million in revenues for the company.”

The PSA will be a scanning device with a LCD screen that is mounted on a regular shopping cart. Upon scanning the customer’s loyalty card, the screen will guide customers to special offers and discounts available in the store. Customer’s can also pay via this product as it recognizes bar codes and RFID tags.
Monday, December 18, 2006
Source: The Economic Times

Government Policy

1. Carrefour’s formal proposal yet to come
Kamal Nath, Commerce and Industry minister said that the government of India had not yet received a formal proposal by Carrefour to set up shop in India. At the sidelines of the AGM of the PHD Chamber of Commerce and Industry (PHDCCI), he added that, "They (Carrefour) keep on talking to us. They have been discussing a (business) model on India.”

There have been reports in the media that Carrefour was considering tying up with Bombay Dyeing to enter the retail sector in India, although neither side has confirmed the deal. Kamal Nath also said that, "We would welcome investment in the back-end. We do not need foreign investment that displaces traditional retailers."
Wednesday, December 20, 2006
Source: The Economic Times

Sector specific

Apparel & Footwear

1. Koutons to launch own brand of shoes, children’s and women’s wear
Koutons announced that it will be expanding its product portfolio to launch its own brand of shoes, children’s and women’s western wear by 2008. The company will be increasing its store size from 3,500 to 5,000-6,000 sq ft once it launches its new products. The company is also looking to enter the international market, specifically the SAARC and Gulf countries.
Wednesday, December 20, 2006
Source: Business Standard

Consumer Durables

1. Khaitan hopeful to supply fans to Wal-Mart
Khaitan Electricals Ltd is hopeful about a deal with Wal-Mart, where it would supply the company with fans. According the sources, the deal is expected to go through in the next 6-8 months. Negotiations are being conducted and specifications of the fans have been sent to Wal-Mart for approval. Khaitan Electricals is also keen on exporting its products to the UK, France and South Africa.
Tuesday, December 19, 2006
Source: Business Standard

Rural retail

1. ITC to open 54 Choupal Fresh horticulture stores
ITC Chairman YC Deveshwar announced that it will be expanding its wholesale business from just fruits and vegetables to open 54 outlets in select metros. At present, ITC’s first Choupal Fresh store opened in Hyderabad in August 2006 and in total has 3-4 Choupal Fresh stores operating in Hyderabad and Pune.

The company has set up a complete cold chain that ensures fruits and vegetables are fresh when they reach the consumer, and the emphasis of these stores will be on improving the quality and productivity of horticulture products from the domestic field rather than relying on importing products.

ITC also has plans to increase is rural hypermarkets, Choupal Sagars by nine within the next six months. Choupal Sagars provide a place for farmers to bypass intermediaries and sell their produce directly to the company. At present, there are 11 Choupal Sagars in Maharashtra, Uttar Pradesh and Madhya Pradesh.
Tuesday, December 19, 2006
Source: The Economic Times

2. DCM Shriram expanding its rural retail chain
The DCM Shriram Consolidated Ltd (DSCL) announced that it will be expanding its Hariyali Kisan Bazaar (HKB) network and opening 150 new stores by March 2008. At present, there are 60 HKB stores in five states. The company will also be entering new markets such as Madhya Pradesh and Andhra Pradesh.

The company hopes to expand its distribution and infrastructure network to be able to support the requirements of international chains that are entering the country. Rajiv Sinha, deputy MD of DSCL told The Economic Times that “We have recently, started procurement of fresh vegetables and fruits for Indian retailers such as Food Baazar as we see a huge potential in the sourcing space.”
Thursday, December 21, 2006
Source: The Economic Times

Jewellery & Watches

1. Gitanjali Gems purchases US jeweler
Gitanjali Gems Ltd has purchased a 97% stake in US based Samuels Jewelers for Rs. 200 crore. With this acquisition, the company will be able to sell its brands in the US, the largest market for diamond jewelry, roughly 35% of the world’s jewelry market. Gitanjali owns brands such as Asmi, Gili, Ginatti, D’damas and Nakshatra. Samuels is the eight largest jewelry retailer in the US and focuses on middle and upper class consumers. The company has three formats, Samuels, Schuback and Samuel Diamonds.
Thursday, December 21, 2006
Source: The Economic Times, Business Standard

Luxury and Lifestyle

1. Shoppers’ Stop gears up for luxury retail
In an effort to consolidate its luxury retail business, Shoppers’ Stop has brought in over 40 international brands and will be investing Rs. 500 crore in its venture. According to sources, the company has hired an expatriate to head and set up the new business. The company has been conducting talks with major brands such as Louis Vuiton, Gucci, YSL, Zegna, Hugo Boss, Christian Dior, Moschino, Roberto Cavalli, Prada, Dolce & Gabbana, Armani, La Perla, Ralph Loren, Diesel and many more to be a part of its luxury retail space.

Although the company has neither confirmed nor denied these developments, it is believed to have set aside over space between 120,000-150,000 sq ft for this venture. Shoppers’ has reportedly selected property in Delhi and Mumbai and is negotiating a deal in Bangalore.

Luxury retail is estimated to be only 1% of the total retail business and is expected to grow by 50% every year for the next 10 years. Shoppers’ Stop is the only Indian retailer to be a member of the International Group of Department Stores.
Wednesday, December 20, 2006
Source: Business Standard