Buy our Omnibus edition featuring 4 reports covering the fast growing retail scene in India. Updated March 2008. The reports begin with an overview of Retail in India. Your purchase includes 3 additional reports on:
1. Grocery and Food Retail
2. Growth of Malls in India
3. Growth of Single Brand Stores in India
General Plans and Industry information
1. Malls attracting more than just customers
Its not only customers that are flocking to malls in India, marketers are all making a beeline to malls as they are the perfect connecting place to their target audiences. Banks, credit card companies, cars, and airline companies are all focusing on co-branding activities with retailers who are selling every little inch of space for signs; carry bags, end caps, trolleys or in-store TV promos.
The rush is so much that Shoppers’ Stop even has a separate department to handle in-store marketing activities. Govind Shrikhande, CEO of Shoppers’ Stop says that, “It’s an agent, not a driver of business for us. But even as we have grown 300% in the last five years, this business has grown around 600% in the same time frame.”
Pantaloon has a team of 18-20 people, with Sanjeev Agarwal, Head of marketing at the head of the team, to deal with liaisons with advertisers, marketers and brands. Barista Coffee CEO, Partha Duttagupta, adds, “With 1.2 million walk-ins a month and a target audience largely in the 19-30 years category, there are many brands that are looking to form long-term and short-term promotion-led associations with us.” Wednesday, October, 04, 2006
Source: The Economic Times
2. Retail buzzing in India
The retail segment is buzzing again with the entry of several top business houses in the sector. Top industrial houses such as Reliance, Bharti Enterprises and The Tata Group are all getting involved in the business in a big way. The most recent of the announcements was Tata’s tie up with Australian retailer Woolworths for setting up a consumer durable chain of stores called Infiniti Retail
Retail consultancy Technopak Advisors estimates the size of the retail industry in India to be $300 billion which is likely to grow to $427 billion by 2010. The Tata Group is likely to expand to other formats as the size of the industry grows. Another major tie up happened between India’s Pantaloon Group and UK based Alpha Airports Group Plc to set up travel and food stores at airports in India. Thursday, October 05, 2006
Source: The Daily Star
Big players – plans and investments
1. Lifestyle to launch 2 new brands
Dubai based Landmark Group’s department store chain; Lifestyle will be launching two new brands to increase its fashion sense. The two brands, Code and Forca will be targeted at fashion conscious men and women. While Code will have a range of apparel, knits and fashion accessories for men and women of the ages 25-35, Forca will primarily be a denim brand for men of the ages 18-25.
At present, the company has four in-house fashion brands, Zynuc & Nexus for men and Moiree and Mélange for women. After the introduction of Code, the Nexus brand will be discontinued. Lifestyle nets around 35% of its sales from private labels and both Code and Forca are expected to be high earners. Monday, October 02, 2006
Source: The Economic Times
2. Tata Group to invest Rs. 4 billion in Infiniti Retail
The Tata Group announced that it would be investing up to Rs. 4 billion in its new retail venture dealing with consumer durable products called Infiniti Retail. The company had earlier entered an agreement for technical support and sourcing services with Woolworths. R Krishna Kumar, Director at Tata Sons Ltd., said that "We are very sharply focused on retail, and the foray into consumer electronics and durables will further strengthen Tata's presence in the growing retail industry in India."
The company will be setting up 30 stores, named Croma, stocking a wide range of electronic products and brands in the first phase and 100 stores in the next few years. The first store will open in the Mumbai suburb of Juhu on October 9, 2006 and will cover 20,000 sq ft of space. In general the stores will range from 15,000-20,000 sq ft in space. Wednesday, October 04, 2006
Source: The Economic Times, Reuters
3. Pantaloon signs agreement with Alpha Airports Group
Pantaloon Retail announced that it will be forming a 50:50 joint venture with UK based Alpha Airports Group plc. to develop retail stores focusing on travel and food in airports in India. The UK based company has 150 stores in 15 countries and has an annual turnover of more than $880 million. The company has already been operating duty-free shops since 2002 at the Cochin International Airport. Tuesday, October 03, 2006
Source: The Economic Times
4. Piramyd Retail Pune expansion
When Piramyd opened its first store in Pune in 2001, Piramyd Retail changed its brand to make the city’s youngsters feel they were shopping at a trendy place. The company’s second store opened a few months ago at the ICC Towers, where most IT companies are located. Its third store opened last Friday at the Magnum mall, which is becoming into one of the hubs of the city.
With each store opening, the company has upgraded its look to stay in touch with its customers, increase its browsing space and incorporate trendier interiors. The city will have ten stores by the end of the year, a testament to the city’s high growth plan for the company. Pune also is the largest growth centre for its loyalty club, Piramyd Power Club, with over 50,000 active members. Wednesday, October 04, 2006
Source: The Hindu Business Line
5. Reliance Retail getting ready to open shop
Reliance Retail will be opening its first store in Hyderabad on October 18th. The new store will be a food and grocery format store. There will be 30 new stores opened in Hyderabad over the next few months in the same format. Chennai will see store openings a month later.
According to sources, Hyderabad was chosen as a launch pad due to its low cost of rentals and ease of finding properties. The company plans to open stores in 6 clusters in Andhra Pradesh focusing on the main cities which will be developed as retail hubs.
Reliance Retail’s hypermarket chain Reliance Mart kicks off in Ahmedabad in December 2006 and the company plans to have a total of 20 hypermarkets running within a year. Its hypermarkets are being positioned as ‘value shopping’ offering discount prices. Thursday, October 05, 2006
Source: The Hindu Business Line
6. Reliance to utilize SEZs as hubs for retail venture
Reliance Retail is planning to use the Special Economic Zones (SEZs) it will be developing as distribution and stocking hubs for its upcoming retail business. According to sources, each of the SEZs will function as a hub for different commodities, so that these centers would not be taxed, a significant advantage to other locations.
Using the SEZs as a hub will also lead to increased coordination and integration of the supply chain due to the availability of efficient logistics and IT infrastructure. The company’s SEZ in Haryana will have an international container depot, providing linkages to remote areas, via the Western Freight corridor, which would also connect SEZs in Jamnagar and Mumbai. Friday, October 06, 2006
Source: The Economic Times
7. Lee Cooper signs JV with Pantaloon Retail
Lee Cooper and Indus League, a subsidiary of Pantaloon Retail have entered into a 50:50 joint venture for an exclusive license to market Lee Cooper’s denim clothing and accessories in India. This new venture will be called Lee Cooper India Limited and will handle brand management, franchising, wholesale and retail business in the country.
Michael Capper, CEO (Asia Pacific) Lee Cooper Group Limited, said, "Pantaloon is the largest retail organization in India and Indus League has a superlative reputation for apparel brand management. We are delighted to partner with them and look forward to growing and developing the Lee Cooper brand in India." Thursday, October 05, 2006
Source: Yahoo News
International
1. Starbucks aggressive strategy for India
Starbucks and its local partner RPG Enterprises will be opening its stores in India in mid 2007. According to sources, Starbucks will reportedly hold a 51% stake in the venture while RPG will hold 49% and also be the master franchisee. The first stores are likely to come up in Delhi and Mumbai, with around 100 stores opening each year for the next 5 years.
The coffee culture in India has been growing at a fast pace and chains such as Barista, UK based Costa Coffee, Café Coffee Day and US based Barnie’s are all on a expansion drive and constantly adding value added products and services to their menu. Starbucks tie up with the RPG Group is likely to be very helpful due to its expertise and knowledge of the Indian market and due to its strength in the entertainment and real estate fields. Monday, October 02, 2006
Source: SeekingAlpha
2. Tesco sees India as a growth area
UK based Tesco is likely to become the first international company that has made a breakthrough in India’s grocery sector, with Sir Terry Leahy’s determined plan to enter the Indian market. The company has been conducting talks with Bharti Enterprises regarding a joint venture, which could be signed even this week itself.
India’s grocery segment is estimated to be worth £125 billion and several global giants are trying to enter the market, where the government does not permit foreign investment for multiple brands. As per regulations, foreign companies may invest 51% for single brand retail only. Sunday, October 01, 2006
Source: Sunday Herald
3. Carrefour in talks with Landmark group for franchise deal
French retailer Carrefour is reportedly in talks with Dubai based Landmark Group to set up 200 stores in India under a franchise agreement. The companies are still only in an early phase of talks which could conclude in November, according to Landmark Chief Executive Micky Jagtiani. Tuesday, October 03
Source: Reuters
4. VF Arvind keen to expand to non-apparel segments
The new joint venture between the Vanity Fair Corporation and Arvind Brands, VF Arvind is looking to expand its expertise beyond apparel. The Chairman of VF Arvind Brands and President of the VF Corporation Eric Wiseman, said, "We have made an entry at a perfect time since the Indian retail market is poised to change in the next 10 years. Indian consumers are gradually moving towards international brands."
The new company has recently announced that it would be launching three new brands, Nautica, Jansport and Kipling. The company’s two other brands, Lee and Wrangler, were available in India before the joint venture. Wiseman added that the company would be focusing on “…strengthening and consolidating the five brands -- three new and existing two. The idea is to create a critical mass for the five brands before introducing other brands."
The Nautica brand will offer a range of home products such as sofa sets, crockery and other home furnishing items. It will also have a selection of eyewear, perfumes and executive bags. Kipling will stock a variety of luggage items from backpacks, shoulder bags, laptop bags and wallets.
The company will be focusing on six markets, Mumbai, Delhi, Bangalore, Pune, Chennai and Hyderabad to strengthen its brand and image. Its business is currently worth $40 million in India and is likely to grow by more than 25% this financial year itself. Thursday, October 05, 2006
Source: Rediff Money
5. Max Retail’s expansion plans for India
Dubai based Landmark Group’s subsidiary, Max Retail opened its fourth store in the country in Delhi. At present there are stores in Indore, Ahmedabad and Bangalore. The company plans to open 50 stores in India over the next four years with an investment of Rs. 1-1.2 billion. According to Vasanth Kumar, Executive Director of Max, stores will only be located in malls. Max Retail caters to the mid-market segment with apparel for men, women and children, along with a selection of fashion accessories and footwear, with most prices in the Rs. 99-599 range. Thursday, October 05, 2006
Source: The Economic Times
6. Starbucks sees growth in Russia, India
Seattle based coffee giant, Starbucks will be opening stores in countries like Brazil, Russia, India and Egypt in 2007, to create its presence in countries outside the US. Marin Coles, President of Starbucks Coffee International, said, "Our international growth strategy balances accelerated development in line with the long-term retail potential of existing countries, while entering several promising new markets."
The company will be opening stores in Sao Paolo, Brazil by 2006 end as it is the largest market in Latin America, already accustomed to the coffee and espresso culture. Starbucks opens its first African location in Cairo, Egypt in 2006 end through a joint venture with MH Alshaya. The company will open its first store in Moscow by October 2007, again with a joint venture with MH Alshaya. In India, the company has tied up with the Raheja Group and will be opening in early 2007. Friday, October 06, 2006
Source: AFP
7. Tommy Hilfiger to expand base in India
Tommy Hilfiger will be expanding to new locations to expand its base in India. The company plans to open 20-25 stores in an effort to reach its target of Rs. 1.5 billion in two years. Besides opening its own stores, the company is also considering expanding with department stores such as Pantaloon and Shoppers’ Stop.
At present, there are 9 stores in India, at Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad and Chandigarh and next on the list are Pune, Ahmedabad and Kochi. According to Shailesh Chaturvedi, CEO of Tommy Hilfiger India, "The company is evaluating the possibility of launching its range of work-wear in India. It is also looking to strengthen its kids' apparel line and denim wear range in the country." Saturday, October 07, 2006
Source: The Hindu Business Line
8. Lladro gets permission to enter Indian retail market
Spanish porcelain manufacturer Lladro has been approved by the Foreign Investment Promotion Board (FIPB) to enter in the Indian market. The company has set up a joint venture with Spa Agencies to open retail stores in India. Lladro will hold a 24% stake in the venture with an option to increase it to 49% by 2009. The new company will be called Lladro India and its parent company will invest Rs. 225 million to establish its stores. Friday, October 06, 2006
Source: The Telegraph
Support Industries
1. KSA Technopak expands operations
Retail consultancy Technopak Advisors is expanding its portfolio of services by acquiring equity stake in retail projects. A company official at Technopak Advisors said that “We would like to apply our knowledge of the market, along with some of our retail partners. The most likely way of doing it is by way of picking an equity stake in a retail venture. As far as funding is considered, money can be easily raised from the market. There is a lot of untapped potential in Indian retail market and we would like to utilize it.”
Arvind Singhal, CEO of Technopak Advisors, added that while there are no current plans of buying stake in a retail company, the consultancy would like to explore the idea. Its top priority right now is advising the retail pharma segment, for which it has tied up with leading healthcare consultants. Tuesday, October 03, 2006
Source: The Economic Times
Unique formats
1. Wonder Leisure opens family entertainment mall
Pune got a new destination with the opening of the Wonder Funkey mall, a family entertainment mall brought by Wonder Leisure & Entertainment Pvt. Ltd. According to Satish Mittal, managing director of Wonder Leisure, the mall is spread over 55,000 sq ft of space, in three floors and offers families a range of entertainment options.
The company already has plans to open one more Wonder Funkey mall either in Pune or in the close-by region. Besides gaming and entertainment area, there will be restaurants, theme eateries, banquet halls and conference rooms in the mall. Friday, October 06, 2006
Source: Business Standard
Sector specific:
Apparel & Footwear
1. Hidesign plans for franchises
Pondicherry based design firm Hidesign has made plans for operation through franchises. So far the company has been retailing only through its own managed stores. The announcement was made by Kunal Sachdev CEO of Hidesign, who said that the company had signed its first franchise agreement for a store in Dehradun, which will be opening in November 2006.
Another franchised store is likely to open in Guwahati, for which talks are currently taking place. Hidesign plans to open 6 franchise stores within the next six to eight months, with an investment of Rs. 3.5-4 million per store. In total, 25 stores are expected to be opened in India and 30 in the International market in the next three years. Tuesday, October 03, 2006
Source: Daily News & Analysis
2. Koutons to open 100 new outlets on Friday, 5th October, 2006
Menswear retailer Koutons announced that it will be opening 100 stores for its youth brand, Charlie Outlaw simultaneously on Friday, 5th October 2006. All stores will be in North western region of India. DPS Kohli, Chairman of Koutons Retail India said, "The opening of more than 100 stores in a day is not just a characteristic of the corporate culture of this company but also a reflection of the spirit of young India stepping into the 21st century and the Charlie outlaw brand has taken this spirit as its USP." The brand will target high school, college students as well as young professionals. Thursday, October 05, 2006
Source: The Hindu Business Line
3. Lakshmi Mills enters apparel retailing
Textile manufacturing company, Lakshmi Mills Co. Ltd. announced its entry to the apparel retail segment by launching its brand, ‘Tyche Life’, a casual wear western brand, targeting mid and upper middle segment of western wear for men, women and children. This new brand will also be exported to US and European markets and will be available in approximately 800 stores by the end of the 2007 financial year. Thursday, October 05, 2006
Source: The Economic Times
4. Monte Carlo plans to produce kids’ apparel
Oswal Woolen Mills (OWM) owned brand Monte Carlo, will soon be made for children too. According to sources, Australian Wool Innovation (AWI) is consulting with OWM to design and produce kids’ apparel, clothes that would be able to undergo tough handling and stains. A range of clothing for kids by Monte Carlo will be entering the market by November 2007.
AWI is a marketing and research and development body that provides manufacturers with the technology to design and manufacture woolen garments. As they represent the Australian wool growers and are a non- profit organization, the AWI does not charge its clients anything for these services. At present the organization is consulting with Raymond, Malwa Industries, Jayshree Mills, Wills Lifestyle, Reid & Taylor and Color Plus. Friday, October 06, 2006
Source: The Economic Times
Bookstores
1. Reliance to enter book retail segment
Reliance Industries Ltd. is getting set to enter the book retailing segment with its tie up with Roli Books, a Delhi based publication house and is also in talks with Prabhat Prakashan, a publishing house for Hindi and English books. This new venture is part of its retail initiative and will offer a wide range of products, with books being only one of them. Other products such as home videos, multimedia music and gift items are also likely to be stocked.
Regarding showcasing books, Kapil Kapoor, marketing head of Roli Books said, “We have been witnessing a serious lack of shelf space for displaying books. The entry of Reliance would provide us more space for display as well as supermarket and hypermarket formats would bring in better sales for the publishers.” With the entry and expansion of several other retailers such as Pantaloon’s Depot, Landmark, Crossword in the books category is seeing a lot of excitement. Tuesday, October 03, 2006
Source: The Economic Times
Consumer Durables
1. Havell’s to open 200 outlets in 3 years
Electrical goods company Havell’s announced that it will be significantly increasing its exclusive stores from its current 6 to 200 over the next three years. Anil Gupta, joint managing director of Havell’s said, "We propose to increase the number of retail stores to 30 by the end of this fiscal, and to 200 in the next three years." The company will also be investing approximately Rs. 1.25 billion in improving and updating its manufacturing facilities. Monday, October 02, 2006
Source: Business Standard
2. Technology retail is booming
Retailers in India are pushing for stores keeping high stocks of gadgets and tech toys like phones, data storage devices, digital cameras, MP3 players, gaming consoles etc. The market for these products is estimated to be worth around $250 million annually and is growing at 100%, leading to retailers pushing for stocking these products.
The Tata Group announced it will be opening Croma to cater to all brands of products such as computers, communication devices, music, gaming and appliances. Pantaloon has also opened its own store for electronic items called e-Zones which has a wide selection of technical toys and gadgets. Thursday, October 05, 2006
Source: The Economic Times
3. Tata-Woolworths partnership gives boost to consumer durable retail
Tata’s partnership with Australian company Woolworths has already given a boost to the retailing of consumer durables and electronics in India, even before its first store opens in Mumbai. The new venture titled Croma will be launched later this month and is likely to set the standard of service in the sector.
Croma will offer 6,000 products in eight categories, much larger than current retailers such as Vijay Sales, Viveks and Sumaria. Bipin Gurnani, CEO of Piramyd Mega Store said, "The Tata's Woolworths venture is expected to create new zones and categories within durable retailing. New categories such as mobile, telecom, accessories are not the categories which the traditional retailers have.” The challenge, however, is to get customers to move out of their comfort zone of traditional city favorites. Thursday, October 05, 2006
Source: The Hindu Business Line
Food & Grocery
1. Food retail is the segment of choice in India
With several industry heavyweights entering the food retail segment, agri-retail is the latest hot sector. Companies such as Reliance, Bharti, Mahindra & Mahindra, Godrej, Ballarpur Industries, DSCL, Tata Group and Bharti’s FieldFresh have all made mega plans for the segment. Global giants Wal-Mart, Carrefour and Tesco are also extremely keen to enter this food retail segment, which is estimated to be worth approximately Rs. 9900 billion, of which the organized food segment is estimated to be worth Rs. 100 billion.
With FDI regulations requiring global retailer’s entry only in single brand retail, the available options are either a cash-and-carry model or a franchise agreement. While companies such as Shoprite and Magnet have entered into franchise agreements, Metro operated via a cash-and-carry system and Carrefour announced last week that it will also be entering the Indian market using this system.
Bharti invested Rs. 25 billion to supply fresh vegetables for export to Europe and West Asia from its 4,200 acres of leased land in Punjab. Reliance has reportedly invested Rs. 40 billion to set up its agri-business plan in Punjab and Haryana, leasing more than 900 acres of land in Punjab alone. The company is also creating similar systems in West Bengal and Maharashtra.
Pantaloon’s Big Bazaar and RPG’s Spencers’ are both creating such systems to source products such as fresh fruits and vegetables, food grains and processed foods directly from farmers. Rakesh Mittal, Vice-Chairman of Bharti Enterprises emphasizes the potential of the sector, adds “This opportunity in agriculture is an opportunity which is larger than telecom, which is larger than IT.” Tuesday, October 03, 2006
Source: The Telegraph
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