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 Information
1. Diwali season shopping
This Diwali many retailers are rejoicing as sales have increased significantly over the past few years. RC Agarwal, CMD of Vishal Mega Mart, said his company saw sales go up by 200% this year on a national level, with gift, household and crockery items being the best sellers.
Mumbai’s 2 largest malls, Inorbit Mall in Malad and Nirmal Lifestyle Mall in Mullund saw crowds of 50,000 on Sunday, close to double of the usual footfalls, and most people did some shopping and eating instead of just browsing. Consumer durables were the mainstays of the shopping for most people and stores such as Vijay Sales say that they will comfortable meet their target of Rs. 25 billion for August-November. Tuesday, October 24, 2006
Source: The Economic Times
2. A good Diwali for retail majors
Diwali has brought good sales results for most retail majors after a slow start. Leading retail chains such as Westside, Pantaloons, Wills Lifestyle, Ebony and Landmark recorded sales figures of 40-45% higher than last year during the same period. While sales were slow to pick up after Dussehra, the traditional start of the shopping season, the last seven days saw a significant growth in sales. Tuesday, October 24, 2006
Source: The Economic Times
3. Retailers using EMI schemes
Taking advantage of younger customer’s willingness to spend, retailers in Chandigarh and Punjab are using EMI and kitty schemes to increase customer spending. The first store to use this method was Genesis Colors, which has brand such as Satya Paul and Samsara. Only a select number of invitees were allowed who can put in a maximum of Rs. 2,000.
The success of the concept has led the company to launch the scheme in Pune, Amritsar, Ludhiana and possibly Delhi. Genesis Colors CEO Nalini Gupta, explained the reason for its success, “We have seen how women, instead of saving for household things, are now keen to spend of designer wear. Also, the desire of youngsters is driving parents to come here and purchase.” Tuesday, October 24, 2006
Source: The Economic Times
4. Malls offer space to offices
Several malls in north India are offering space to offices as retail demand is not as fast. Pranay Vakil, chairman at Knight Frank India, says “This is because of the over-supply of retail space. When a mall offers space to an office, it is a sign of sickness.” Several cities such as Gurgaon are soon to have an over abundance of retail space, several of which are being converted to mixed use such as a hotel, retail and office space. Tuesday, October 24, 2006
Source: Business Standard
5. Traditional channels still a draw for major retailers
Even though malls, supermarkets and hypermarkets are the preferred formats by shoppers, manufacturers are keen on increasing their time and resources on local kirana stores, such as chemists and pan-beedi stores. Smaller trade channels are being noticed by companies who feel that modern retail cannot grow at the cost of the old and traditional retail stores.
Several companies are forming specialized and dedicated teams for trade marketing to build relationships, manage space and teach these small traders how to increase visibility and signage’s. Thursday, October 26, 2006
Source: The Economic Times
6. Rush for retail
The Indian retail sector is attracting all the big international names and is also expecting several new formats to increase its diversity. PricewaterhouseCoopers estimates that $412 billion will be coming into the market as investments by 2011, due to the country’s fast economic growth, higher disposable incomes and lavish lifestyle habits. Food and grocery retail is estimated to use up half of this investment. Thursday, October 26, 2006
Source: The Hindu Business Line
Big players – plans and investments
1. Future Group forms alliance with Travel Port
The Future Group has tied up with Travel Port a Rs. 200 million travel house, for bringing in travel in retail. The company’s first outlet opened in Pune’s Central Mall and the company plans to open 50 outlets across the country, including one at each Central Mall. Monday, October 23, 2006
Source: The Economic Times
2. Bharti to delay selecting international retail partner
Bharti Enterprises highly anticipated announcement that it will be picking an international partner for its retail venture by October end has been delayed by a month. Chairman Sunil Mittal said that talks were still taking place with “two to three possible partners” and an announcement would be made by end of November. Thursday, October 26, 2006
Source: Reuters, The Economic Times
3. Aditya Birla Group’s retail plans
The Aditya Birla Group’s retail foray is estimated to have a $2 billion investment. The company will focus on private labels manufactured by its companies, Century Textiles, Grasim and Madura Garments. Its brands such as Allen Solly, Louis Phillipe, Van Heusen, Peter England and SFJeans are expected to grow between 25-30% per year, tripling by 2010. The company is planning to have a mix of hypermarkets and departmental stores, which will be an extension of Madura Garments. Thursday, October 26, 2006
Source: NDTVprofit.com
International
1. Fendi to set up stores in India
French luxury retailer Fendi, a subsidiary of the Louis Vuiton and Moet Hennessey (LVMH) Group will be opening stores in India, under the government’s ruling of allowing FDI in single brand retailing. The company has tied up with Fun Fashion India (FFI) who will have a 49% stake in the venture.
LVMH plans to invest Euro 5 million over the next five years in India and will first study the market to see which products will be manufactured and exported from India. Initially, Fendi will sell products under the Fendi, V, FF, FF Fendi in its Mumbai outlet. Monday, October 23, 2006
Source: The Economic Times
2. Starbucks tie up with Biyani likely
Seattle based coffee company; Starbucks is likely to tie up with Planet Retail Holdings, a subsidiary of The Future Group, to set up operations in India. Once the formalities are completed, Planet Retail will be the master franchisee for India and South Asian markets. Planet Retail already holds the master franchise for major international brands such as Guess, Marks & Spencer and The Body Shop.
Although the majority of people in the country drink tea, coffee drinking has become a trend in urban areas and current coffee chains such as Costa Coffee, Café Coffee Day and Barista target consumers between the ages of 15 and 35. The Coffee Board of India estimates that Indians consume 80,000 tons of green coffee beans and export 206,400 tons. Tuesday, October 24, 2006
Source: Forbes, The Economic Times
Regional Trends
1. Creating a rural market
At a seminar on ‘Rural empowerment – Entrepreneurial skills development’ organized by the Confederation of Indian Industry (CII) in Chennai, R Seshasayee, President of the organization said the companies must look towards the urban and rural areas of India as one unified mass, instead of separate entities as it is now.
He emphasized that rural aspirations are not different from urban ones and added that "Growth will come only from rural markets. By creating a market for products in rural areas, we can truly empower the rural masses." At the seminar, CII and Hand-in-Hand, a local NGO released a manual on helping Small and Medium Enterprises (SMEs) on setting up businesses, skill training, mentoring, accounting and maintaining records. Thursday, October 26, 2006
Source: The Hindu Business Line
2. Nagpur plans government run malls
The Nagpur Municipal Corporation (NMC) has formed an agreement with BSEL Infrastructure Realty and Unity Infraprojects to develop 6 malls that will be owned by the NMC. According to the joint venture, the companies would construct and run the malls for 30 years, when they will be handed over to the NMC. Nagpur is one of India’s fastest growing cities and seen as a good city for investments.
An initial investment of Rs. 5.45 billion will be made by both infrastructure companies. The NMC will get Rs. 272.5 million as annual premium from the malls. The city of Nagpur was the first in India to get a commitment from the Indian government of Rs. 9.5 billion to develop the National Urban Renewal Mission (NURM) programs. Saturday, October 28, 2006
Source: The Economic Times
Support Industries
1. Offshoring in retail likely to boom
The offshoring industry is seeing a boom due to the rush of international retailers heading to India, to source products as well as their core processes. At present the retail offshoring industry is worth around $500 million and is likely to double in the next 2-3 years.
Traditional back end and front office processes such as HR, finance and customer support are already being done and now core processes such as merchandising planning, training, supply chain management, loyalty programme management, store administration and customer analytics are also being sent to India by major retailers.
According to S Sabyashchi, senior director at Bangalore based consultancy neoIT, “Retail offshoring will create an entirely new cadre of workforce, who will have the relevant skill sets and knowledge about retail processes as adopted by global retail giants. Indian retailers can then leverage these skill sets and process knowledge to further their cause.” Thursday, October 26, 2006
Source: The Economic Times
HR News
1. Future Group hires Anshuman Singh
The current CEO of Welspun India, Anshuman Singh has joined the Future Group as head of a new venture that is being planned for the value fashion segment and will join on the 1st of November, 2006. At Welspun, he was responsible for the company’s retail outlets, Spaces and the Welspun factory outlets. Prior to joining Welspun, he was head of supply chain and logistics at Pantaloon Retail, which has now been renamed as the Future Group. Thursday, October 26, 2006
Source: The Economic Times
Unique formats
1. Food mall opening in Kolkata
India’s first food mall is slated to open in Kolkata. Haldiram will be opening a 60,000 sq ft mall specifically for confectionaries, coffee, pav bhaji, channa bhatura etc, called Haldiram Food City. There will be a 300 seater food court with designated areas for holding kitty and birthday parties. Wednesday, October 25, 2006
Source: Business Standard
2. Retailers keen on setting up shop at airports
Indian retailers are keen to be part of the modernization of airports in the country and are busy working on strategies on how to become a part of the emerging business of airport retail. Most companies can do so on two formats, either independently or through international partners.
The Future Group and Shoppers’ Stop have both formed JV agreements; other retailers like Landmark and Ebony are still exploring their options. Himanshu Chakrawarti, CEO of Landmark, said that the company was “….currently finalizing our business plan. Spread over some 1,000-5,000 square feet, the stores will have a merchandise mix like travel-related books, maps, light fiction, self-help books as well as management books.” Thursday, October 26, 2006
Source: The Economic Times
Sector specific:
Apparel & Footwear
1. Kids market is hot
The market in India is said to be one of the largest kids segments with a variety of sectors such as apparel, FMCG’s, games and toys. The kids market is estimated to be worth Rs. 200 billion and is likely to grow at 25% per year. CII will be organizing Kidex’06, from December 22-24, 2006 in Chennai to highlight the potential for growth in the market. Thursday, October 26, 2006
Source: The Economic Times
2. Oswal Retail plans to open 120 lingerie stores
The Oswal Group’s retail subsidiary, Oswal Retail Private Limited, announced that it will be opening 120 exclusive lingerie stores in the country by 2009, with an investment of Rs. 600 million. The company hopes to capture at least 5% of the organized retail market for lingerie by 2010. In this regard, Oswal has tied up with several premium international brands such as Rene Rofe, Wonder Bra and America’s Women Secret. Thursday, October 26, 2006
Source: The Hindu Business Line
3. Gavel Fashions plans to open 60 stores
Essel Group’s retail division, Gavel Fashions Ltd announced that it will be opening 60 stores and targeting a turnover of Rs. 3 billion over the next three years. The company’s first store will open in Delhi next month. Other cities where Gavel will open stores are Mumbai, Bangalore, Kolkata, Hyderabad, Chandigarh and Ludhiana.
Gavel Fashions will focus on the luxury retail segment, especially on international apparel and fashion accessories. In this regard, the company will also be bringing in 20 global brands to India, of which agreements for 2 menswear brands from Italy have already been signed. Friday, October 27, 2006
Source: The Economic Times
4. Benetton launches Sisley brand in India
Italy’s Benetton launched its Sisley brand with a new exclusive store in Delhi. Luciano Benetton said that Indian retailers had shown a lot of interest to bringing the brand to India, so the company decided to launch the brand themselves. The new store is spread over 400 sq mt and in two levels and has been set up with a franchise partner. Saturday, October 28, 2006
Source: Daily News & Analysis
Home Furnishings
1. Pantaloon Retail to invest Rs. 300 million in Home Solutions
Pantaloon Retail India Ltd (PRIL) announced that it the company board has approved a Rs. 300 million ($6.6 million) investment in its home furnishings division, Home Solutions. The investment will be done through warrants and via a sale of 6% of its Home Solutions equity to India Growth Fund of the Kotak Group. Friday, October 27, 2006
Source: Reuters
Bookstores
1. Crossword aims to enter new markets
Crossword Bookstores Ltd plans to set up stores across the country, opening 7 stores by the end of this financial year, to reach a total of 45 stores. The company plans to have 100 stores by the end of the next financial year. Crossword operates on three formats; corner stores, brand stores ranging form 3,000-8,000 sq ft and flagship stores of over 8,000 sq ft.
The company plans to focus on the South with new stores coming up in Bangalore, Coimbatore, Kochi and Hyderabad. In the north, Chandigarh and Nagpur will have new stores opening soon. Rather than just selling books, Crossword aims to become a part of the community, organizing cultural and social events for authors and book lovers. Wednesday, October 25, 2006
Source: The Hindu Business Line
2. Landmark Group plans expansion
The Landmark Group has planned its expansion in anticipation of international retail giants such as Wal-Mart and Tesco likely to enter the Indian market. The company plans to increase its base of its existing retail formats, Lifestyle, Home Centre and Max as well as form agreements with international brands for apparel and footwear brands.
Sundar Raman, Indian operations president (Finance) added that the company is also looking to launching hypermarket format as well as concept stores for high fashion apparel, children and footwear segments. The company will be investing an estimated Rs. 7.75 billion by March 2009, of which Rs. 4.50 billion will be for expanding Lifestyle and Home Centre and Rs. 1.50 billion for Max Retail, its newest retail venture.
Landmark currently has 9 Lifestyle stores, 2 Home Centre outlets and 4 Max Retail stores, which it plans to increase to 25, 9 and 35, respectively. Lifestyle stores will be spread over 60,000 sq ft, Home Centre stores will range from 20,000-40,000 and Max Retail will cover close to 20,000 sq ft of space.
A new retail venture the company is working on is called Splash, a high fashion apparel chain, which will be spread over 15,000 sq ft and have a mix of private labels. Splash will target up-market consumers in metros such as Mumbai, Delhi and Bangalore. Landmark’s is also the franchisee for Kappa and Bossini, both international sportswear and casualwear brands. Friday, October 27, 2006
Source: The Economic Times
Consumer Durables
1. Digital retailers on the upswing
Indian and Asian consumers are buying gadgets and gizmos at an increasing rate. Ten years back, only 11% of rich Asians had laptops, while in 2006 an estimated 35.7% own laptops. According to a survey conducted by market research company Synovate, an increasing number of respondents will be purchasing computer related merchandise in the next 12 months.
Steve Garton, Global Head of Media for Synovate, said, “The survey shows how digital has taken off - and taken a firm hold - among the affluent population.” The mobile phone ownership has moved from 46.8% to 86.3% over 10 years (a rise of 84%), and is much higher in some of the markets surveyed. Singapore’s mobile phone ownership is 95% and Hong Kong, Sydney, Bangkok, Kuala Lumpur, Seoul and Taipei all have over 90% ownership.” Saturday, October 28, 2006
Source: The Economic Times
Food & Grocery
1. Cadbury’s ties up with Café Coffee Day
Cadbury India and Café Coffee Day have tied up to combine chocolate and coffee treats. According to Sudipta Sengupta, senior general manager of marketing for Café Coffee Day, “We were looking at launching a new category — chocolate drinks - and the tie-up with Cadbury fits the bill since the company is synonymous with chocolates.”
Cadbury will be supplying chocolates in regular bar forms and Café Coffee Day will innovate with it, combining coffee and other ingredients. The company will be charging Cadbury a branding fee for promoting its brand and will pay Cadbury a bulk rate based on per unit of chocolate purchased. Wednesday, October 25, 2006
Source: Daily News & Analysis
FMCG & Pharmaceuticals
1. LifeKen buys Pill & Powder
LifeKen is the largest branded drug chain in Bangalore with its purchase of Pill & Powder’s 11 stores. According to MC Kini, CEO, Co-promoter and Director of Lifetime Healthcare Ltd, the decision to purchase Pill & Powder "… is an important milestone in our journey towards expanding to 200 stores over the next one year and 700 stores in the next three years."
The company is yet to decide whether to keep the ‘Pill & Powder’ brand or change it. With the acquisition, the company is expecting its Rs. 180 million turnover to climb to Rs. 800 million-1 billion. Friday, October 27, 2006
Source: The Hindu Business Line
Jewellery & Watches
1. Oyzterbay and Rajesh Exports tie up
Branded jewelry manufacturer Oyzterbay has tied up with traditional jeweler Laabh Jewelers of Rajesh Exports to set up a new retail chain to sell branded gold jewelry. Laabh jewelers will hold majority stake in the venture. The domestic gold jewelry market is estimated to be around Rs. 607,000 billion and is receiving an upswing with several new branded entrants such as Tanishq giving a new view of the segment to consumers. Friday, October 27, 2006
Source: The Hindu Business Line
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