S Kumars plans to list Brandhouse Retails

S Kumars Nationwide (SKNL), the flagship of the S Kumars Group, intends to list its demerged retail entity Brandhouse Retails within three months.

The company is awaiting court approval for the demerger plan, under which shareholders are to receive one free Brandhouse share for every five shares of the company. Once approved, the demerger will become effective from January 1 this year.

“We will be rolling out 1,200 stores over the next three years. The stores will sell our group’s brands, foreign labels that we tie up with and also domestic brands that do not belong to S Kumars,” said Nitin Kasliwal, vice chairman and managing director, SKNL.

SKNL has entered into an exclusive arrangement with Dunhill, a luxury brand for menswear and accessories. Unveiling the first store today at the Shangri-La Hotel in the capital, Kasliwal said the company would roll out 10 Dunhill outlets over the next five years. Each store requires an investment of around Rs 4 crore.

Brandhouse Retails specialises in setting up and managing exclusive brand outlets for SKNL brands - Reid & Taylor, Carmichael House and Belmonte. It is also the exclusive India franchisee for international luxury brands like Dunhill and ESCADA.

The company intends to have over 400 stores by the end of this financial year. “We already have over 70 operational shops including two for ESCADA,” Kasliwal said.

In fact, another Dunhill store was coming up at DLF’s Emporio mall at Vasant Kunj, with two more stores, for which locations are being scouted, planned in north and south Mumbai, he said.

Mark Newman, regional managing director, Richemont Luxury Asia Pacific, said the company had high expectations from the Indian market. The tie up with Brandhouse Retails is for three years, extendable by a similar period of time.

Significantly, the concept store is based on the Dunhill brand’s recently revised identity. Richemont’s luxury goods interests encompass brands including Cartier, Van Cleef & Arpels, Piaget, Vacheron Constantin, Jaeger-LeCoultre, IWC, Alfred Dunhill and Montblanc.

Aditya Birla Group to go it alone in retail

Labelled 'More', first store expected in Pune in June.

Ending months of suspense over its retail plans, the Aditya Birla Group today said it would go solo in setting up a 1,000-store network that would involve an investment of Rs 9,000 crore over three years.

Significantly, the company, which entered retail by acquiring 170 stores of retail chain Trinethra Super Retail this January, will rebrand these stores “More”.

The company is looking at acquiring smaller retailers to rapidly gain share in the organised retail market that has players like Kishore Biyani’s Future Group, Reliance Retail and the proposed Bharti Wal-Mart chain.

The organised retail sector accounts for nearly 4 per cent of India’s $360 billion retail market.

Aditya Birla Group Chairman Kumar Mangalam Birla said the stores would be a mix of large hypermarkets of around 75,000 sq feet and supermarkets of 10,000 sq ft. The first store is being opened in Pune this June and will be positioned as a value-for-money outlet.

“The Indian shopping environment is underdeveloped due to the lack of economically viable real estate, a developed supply chain, trained manpower and backward linkages of suppliers. We will offer consumers more than what they expect. Hence the brand,” Birla said.

He said Aditya Birla Retail will hire between 10,000 and 15,000 employees over five years and establish direct linkages with farmers, vendors and suppliers to lower costs.

Products at the outlets, starting with food and groceries, will be a mix of private labels and brands. “The basic private label will be called More and the medium range Select,” said Aditya Birla Retail CEO Sumant Sinha.

Typhoo to hit India next year

The UK's iconic tea brand Typhoo is to be produced for Indian consumers by the start of next year. Apeejay Tea, which bought Typhoo from Premier Foods in 2005, will start production from a factory in Kolkata using tea from Assam, Nilgiris and Darjeeling. The company would not say whether this would affect future production from the UK factory in Moreton.

Diesel starts up in India with two stores

Diesel jeans will shortly arrive in India through the company's newly formed partnership with Arvind Mills, one of India's leading textile companies. Two stores will be opened this year, in Delhi and Mumbai with an extra 13 to be added by 2010. Arvind Mills also holds licensing or joint venture contracts with Tommy Hilfiger, Lee and Wrangler.

Spencer's Retail looking for international partnership

Spencer's Retail is inviting approaches from international brands to form partnerships for Indian retail opportunities. The group, which operates supermarkets, hypermarkets and music stores, is keen to establish a link with an existing lifestyle retailer or brand to capitalise on possible synergies. Talks are in progress with several international companies, the company says, but is still looking for other potential partners.

Dior investment to boost sparse Indian luxury sector

Christian Dior, the luxury fashion house, is to invest directly into India by taking control of its outlets, currently franchised, through a subsidiary company. Indian policy allows foreign companies to own up to 51% of a retail venture as long as it sells only a single brand. The move will allow Dior to invest in personnel, training and retail real estate. The company said it will invest Rs200m (£2.5m) over the next five years on operations and will sell accessories, clothing, shoes, bags and perfumes under the brand. It marks one of few moves by big name luxury brands into Indian retail to date. “At the real top-end luxury products, there's not much action yet,” Soumya Palchoudhuri, retail analyst at Ernst & Young, told The Retail Bulletin. “Gas, VF and Diesel have foreign direct investment approval, but they're really only mid-tier names.”Luxury boutiques that are present, including Louis Vuitton, Chanel and Jimmy Choo, are distributed mainly in five-star hotels. Plans for huge shopping malls in India are expected to change this however. Real estate developers are planning to build 143m sq ft of retail space in shopping malls over the next five years. The country's biggest mall, to be completed by 2010 in Bangalore, will devote its entire 695,000sq ft of retail space to luxury names.

Reliance retail to rollout in June

Forward Bloc may oppose it tooth and nail, but Reliance Fresh outlets will start springing up in the city within a month. The company plans to set up 200 Fresh outlets in the city and suburbs within two years. And, if Bloc continues with its resistance, Mukesh Ambani's company will procure agriculture produce from outside the state. Reliance Retail will make its intention known to chief minister Buddhadeb Bhattacharjee, who's been instrumental in wooing the Rs 4,000-crore investment, by next week. Reliance already has a supporter in mayor Bikash Bhattacharya, who has resolved to hand over the KMC-run Manicktala market to Reliance Retail. "If needed, I'll attend the Left Front meeting.... I am not scared of their questioning," the mayor said on Wednesday. Industry department sources, already in the know about Reliance Retail's extreme decision, said the company was no longer buying the government's apparent helplessness in granting the mandatory licence under the Agricultural Produce Marketing Control Act, thanks to the brouhaha by Forward Bloc. Only 5% of the commodities in Fresh outlets will comprise fruits and vegetables. Reliance Retail Ltd is now gearing up to purchase these agri-products from farmers outside the state. The APMC licence would have been necessary only if the company procured the products directly from farmers in Bengal. The other major components of the outlets will be groceries and dairy products. Reliance has been desperately trying to kickstart its agri-retail chain in Bengal since the CM announced the project last year. But the venture has hit a deadlock. "It's clear from the project submitted by RRL that there's no threat to farmers or small businessmen, as alleged by Bloc," an official said. In fact, based on the statistics provided by the government's Economic Review 2004-05, RRL has calculated that the volume of business from 200 Fresh shops would only constitute 0.5% of the entire Bengal market. "At the moment, 70% of the agri-retail value is being swallowed by only a handful of middlemen. This will stop once there is competition in the market." When told of Reliance's resolution, Bloc leader and West Bengal Marketing Board chairman Naren Chatterjee said: "If Reliance is trying to make forays into Bengal in this way, then we shall have to think of new strategies."

Kewal Kiran Clothing

Kewal Kiran has posted a Q4 net profit of Rs 3.2 crore in FY07 as compared to Rs 3.96 crore, YoY. It's Q4 net sales stood at Rs 30.6 crore as against Rs 25.1 crore on a YoY basis.
Nikesh Jain, CFO at Kewal Kiran Clothing, said an aggressive advertising spend resulted in a sqeeze in margins. Going forward, they will maintain selling and distribution margins in the range of 12-14%. Their focus in the current year will be on retail expansion.

Retail makes no room for small jewellers

Neighbourhood jewellers are fighting for survival as jewellery trade in the city gets organised. For convenient shopping, people are shifting their loyalty from traditional jewellers to branded showrooms. A leading jeweller and Jaipur Chamber of Commerce & Industry secretary Ajay Kala told ET that there has been a major shift in buying tendency of customers. “Customers now want value for money as gold rates are heading north. They look for guaranteed gold items rather than fighting the fear of adulterated stuff from small-time jewellers.” Showrooms also have the advantage of offering buyback schemes and guarantying the purity of the yellow metal. Out of around 2,500 ‘proper shops’ in the city, 100-150 small-time shops have been the casualty in this highly volatile market. For instance, Ram Babu Soni, a jeweller of Malviya Nagar, had to change his trade to make both ends meet. “One-and-a-half years back, when gold prices swelled from Rs 6,500 per 10 gm to Rs 10,000 per 10 gm, I had to close shop, which was doing well till then. With no capacity to hold gold for long and business drying up, I had no option left but to start a grocery shop.” Lack of funds has forced many jewellers like him to down their shutters. Gems and jewellery expert Ashwini Durlabhji said that traditional jewellers are now concentrating more on manufacturing and supply than retailing. “Lack of funds, rising gold prices and intense competition has marked the end of jewellery kiosks, which were once the feature of jewellery trade in Jaipur. Big-time jewellers are now outsourcing their gold jewellery demands from these lesser-known goldsmiths. “Jewellers who were once retailers are now engaged in fulfilling the market demands of branded jewellery showrooms. They are being paid for their labour and dexterity while metal is being provided by the showroom owners,” said Durlabhji. Besides, trendy and light weight jewellery has made a dent in the revenue of countryside jewellers. “Gold was just a safe investment for small-town people. They used to buy heavy jewellery during the marriage season. But now they also look for genuine, trendy and designer jewellery. And for that, they are heading for branded showrooms in Jaipur leaving their neighbourhood shops stranded. As a result, many shops are on the verge of closure while others are just meeting their expenses, said Ram Lal Sarraf, a jeweller in a small town Neem Ka Thana, 175 km from here

Times Business starts retail course

retail management courses in India, Times Business Solutions has commenced a certificate course in retail management. Launched in collaboration with Lady Irwin College, the course promises to provide professionals outfitted with industry-specific qualifications. “We want to offer a course that is totally customised to industry requirements. Association with the Times Group will help us get that industry interface”, said Sushma Goel, reader, department of CRM&E, Lady Irwin College. The course of 80 hour duration will have four modules with retail space, facilities, customer relationship and brand management as the thrust area. Retailers believe that such courses will help students understand the retail sector closely and develop the insight into dynamic market segmentation. “We hope that students coming out of this course will have all the necesssary soft skills and expertise, that will help our business to grow both horizontally and vertically”, said spokesperson, Barista. According to industry experts, besides inventory management, the course must also impart a holistic knowledge of employee engagement and commitment programme. The times group already has courses in field of journalism, marketing, business solution and sales

Raymond sees Rs 11-12 bn retail revenue by FY10

Raymond Ltd expects retail revenue to rise by two-thirds in three years, as the company increases the number of its stores to 950, a top official said on Tuesday. "We want to be present in every small town in India. We intend to significantly accelerate our presence in tier two cities," Aniruddha Deshmukh, Raymond's president for retail and fast moving consumer goods, told reporters. He said Raymond expected revenue from its stores to rise to 11-12 billion rupees in 2009/10 from 7 billion in fiscal year to March 2007, while the number of stores would rise to 950 from 433. The company also plans to increase the number of its franchised stores in neighbouring South Asian countries and the Middle East to 40 from 28 over the same period, he said. Raymond's shares closed flat at 338 rupees in the Mumbai market.

Reliance Fresh launches six stores in Indore

Reliance Retail Ltd today started operations in the central India with the launch of six pilot Reliance Fresh stores here. Announcing the launch, the company's President and Chief Executive (Operations and Strategy) Raghu Pillai said the Mukesh Ambani-promoted firm will set up such stores in 70 cities across the country by the year-end. "Within six months of launch, we have 151 Reliance Fresh stores across the country covering 419,000 sq ft of space." Allaying fears of the farmers and vendors, Reliance Retail group Vice-President Farhan Ansari said: "In fact, now the farmers don't have to worry about the marketing of their produce." The farmers will now have the opportunity to get the best price for their products at one place, Ansari said. Reliance Retail is building a business that would focus on competitive offerings to Indian consumers across several verticals in diverse geographies through multiple formats. This will be built on an integrated platform with a robust supply chain, logistics and information technology infrastructure, he said. However, protesting the entry of Reliance into fresh vegetable and fruits market, the local vendors set afire an effigy of the company's Chairman and Managing Director Mukesh Ambani here.

Oak Investment plans $200m retail fund

The US-based venture fund Oak Investment Partners is entering India with a $200-million corpus for the retail sector. It is perhaps the first time that any foreign venture capitalist has shown interest to set up a dedicated fund exclusively for retail start-ups in India. Ex-Tanishq COO Jacob Kurien and the CEO of a prominent food chain are likely to join the VC fund as its top team in India which is likely to start Indian operations early next year. Oak Investment Partners is a multi-stage venture capital firm with a total of $5.8 billion in committed capital. Investments are primarily focused on growth opportunities in enterprise application and infrastructure software, communication equipment and services, outsourced services, healthcare services and retail. Sources said that Oak general partner Jerry Gallagher, who was in India recently, visited the malls of all the major metros. He also held a series of meetings with mall developers and retailers and apparently went back convinced about the retail boom in India. Oak is looking at investing primarily in start-ups which are dime a dozen. The retail bug has bitten most execs and many of them are leaving their jobs to start something of their own. Sources said that a high-profile ex CEO is planning to partner with Oak in his retail venture. Jerry has sponsored 33 Oak bricks and mortar and e-commerce investments, including Baja Fresh, Caribou Coffee, Dick’s Sporting Goods, eStyle, Filene’s Basement, Jamba Juice, Office Depot, PETsMART, P.F. Chang’s China Bistro, Potbelly Sandwich Works, 2nd Swing, Ulta Cosmetics & Salon and Whole Foods Market

Sabziwalas get a new voice in George

Attacks on the three Reliance Fresh stores here took a new twist on Monday when former defence minister George Fernandes came in support of the protesting vegetable vendors. As authorities promulgated prohibitory order in the area and beefed up security around the Reliance Fresh stores, Fernandes, who is leader of the Janata Dal (U) and has always, been an activist against multinationals, arrived and vowed to fight what he termed as "injustice" being meted out to the vendors. "I have come here to fight against injustice done with the vegetables vendors," Fernandes told reporters at Ranchi airport. "I will meet the vegetables vendors and take stock of the situation." But residents of Ranchi purchased vegetables amid heavy security at the stores of Reliance Fresh - a project promoted by Mukesh Ambani-controlled Reliance Industries. Nearly 20 personnel of the Jharkhand Armed Police (JAP), wielding batons and automatic weapons, were deployed outside each of the three stores. "It was, indeed, a different experience to buy vegetables from Reliance Fresh shops. The heavy security arrangement makes it look like we are in insurgency hit Jammu and Kashmir," said Gautam Kumar, a consumer. The consumers also blamed the police for the violence on Saturday. "The district administration failed to provide security when it was needed," said Rita Mishra, another consumer of Reliance Fresh. Thirteen people were arrested for the violence and two policemen suspended for dereliction of duty following, which prompted the Prime Minister's Office to ask the Jharkhand administration to ensure peace and calm. This was the second time in a week when vegetable vendors took out processions to protest the opening of Reliance stores. The group buys the produce directly from farmers at comparatively higher prices and since middlemen are eliminated, it retails it at much lower rates compared to roadside vendors.

Mandis go corporate as pvt firms pitch in

AFTER retail revolution, it is time to corporatise the mandi, the wholesale market for agricultural produce. Companies such as Mukesh Ambani-owned Reliance Industries, Bharat Hotels, NCDEX, DCL Shriram group, Zoom Developers and RK Foodlabs are in the fray to become developer and operator of the country’s first private terminal market in Chandigarh.
A terminal market is usually a central site, or a hub, often in a metropolitan area, that serves as an assembly and trading place for agricultural commodities. The markets are linked to a number of collection centres, or spokes, and provide state-of-the-art facilities for grading, transportation , storage, domestic marketing and export.
Under the new proposal, the government has asked states to invite private participation in terminal markets to provide a state-of-the-art linkage to farmers for selling their produce at a better price. This would be the first big initiative of the government to tap private money for creation of modern agricultural infrastructure in rural areas.
The first such terminal market would be developed at Chandigarh, where the area authorities are set to open financial bids next month. Other locations for terminal markets include Hyderabad, Tirupati, Patna, Punea, Nashik, Nagpur, Bhopal, Indore, Jabalpur, Ludhiana, Jaipur, Chennai, Howrah and Kharagpur.
“We have received six proposals from corporates for setting up of terminal market in Chandigarh. Financial bids are likely to be opened on June 7 and final agreements are expected to be signed with the selected party by July. Other states are also in the process of lining up private partners and identification of land,” a government source said.
The commodities that would be traded at the terminal markets are fruit, vegetables, flowers, aromatics, herbs, meat and poultry. The markets would provide transparent auctions of commodities through electronic auction system. It is proposed to set up cold storage at each market with 2,000-15,000 million tonnes capacity.
“In order to facilitate backward-forward linkage in the commodities sector - which is quite poor right now - a minimum of 20 collection centres would be set up near farms. This way, the farmers will have alternative options to link with the supply chains, processing and export of commodities . The farmer would also be provided with an alternative option of taking his produce to terminal markets,” an official said.
According to sources, farmers’ share in consumer price of commodities would increase by 50-70 per cent by participating in the terminal market. At present, the share varies between 30 and 50 per cent for perishables depending on the location, season’s demand and supply.

Chain reaction

The Happy Supplier Organised retail boom is not just about business for a handful of retailers and mall developers. Perhaps, the biggest, and the most prominent beneficiary of the retail story is the huge number of suppliers involved in the process. Worldwide, retailers source entire range of products from boutique suppliers and sell them by extending their private labels (retailer’s brand) to them. Internationally, the major chunk of margins for chains such as Wal-Mart, Tesco and Carrefour come from private labels. Indian retailers, including Reliance and Pantaloon, are already bullish about the concept of private labels and are sourcing heavily from small and mid-sized manufacturers, across categories such as food and grocery, personnel care and apparel. Says Deepak Seth, chairman, House of Pearl Fashions, a Gurgaon-based textile manufacturer, “Obviously, with the ongoing retail boom, a huge opportunity awaits the manufacturing sector domestically. The growing demand has many add-on benefits as well. In the process, many employment avenues will be generated, in the skilled as well as unskilled areas. At the same time, people with larger capacities like us, will also look for simultaneous opportunities in brands and retail.” Mr Seth’s company, which got listed recently, is exploring options in retail as well and has plans to set up a chain of 50-odd exclusive apparel stores in the next couple of years. Nikhil Nanda, the young promoter of Delhi based JHS, a manufacturer and supplier of dental care products to some leading FMCG and retail companies, has built the entire foundation of his business on the anticipation of an impending retail boom. Already a supplier to some big names in the global retailing arena, Mr Nanda is now equally bullish on the prospects of the retail boom in India. There’s, however, a flip side to the supplier story, and not every manufacturer is keen on the prospects domestic retail may have on offer. “Payment cycles are really weird and at times retailers even squeeze you with margins,” says P K Saxena, chairman of a Gurgaon-based small-cap Craftos. Why Not Your Own Brand? Perhaps, this is why the retail saga does not excite some of the bigger names in the manufacturing world. Says Orient Craft managing director Sudhir Dhingra, “In the near future, the export market will continue to remain our focus. On the domestic front, our priority will be on consolidating our own brand through various multi-brand retail outlets or even exclusive stores. Contract manufacturing for a private label is not on the radar yet.”

Triumph scaling up operations in India

Triumph, Switzerland-headquartered lingerie brand, hopes to set up flagship stores across six major cities by the end of this fiscal. “We are closely monitoring the market for setting up flagship stores and will soon enter the tier I cities, starting with metros like Mumbai, Hyderabad and Bangalore,” Thorsten Allenstein, country head & GM, Triumph International, told Indiaretailing.com. It is also learnt that the company is in final talks with retail players in Bangalore and Hyderabad for setting up its flagship stores.

The company’s new manufacturing facility in Chennai is underway, and is expected to commence commercial production by this November. At an investment of $30 million, the plant is expected to have a capacity to sew 20 million pieces a year. Raw materials got from Germany, France, Italy and Japan will be sewn at this 14-acre assembling unit in Maraimalai Nagar, in the suburbs of Chennai.

Triumph is available in 55 cities in India through 500 points of purchase including leading department stores, lingerie retailers and multibrand outlets. It also has exclusive franchisee outlets in Mumbai, Kolkata and Bangalore.

Triumph's India requirements are being met by a production centre in Chennai through Intimate Fashion – a company set up in joint venture with Bangalore-based MAST Industries, the makers of Victoria’s Secret. Triumph has 27 production centres across the world.

Raymond may launch low-priced apparel brand

Raymond Ltd is planning to add one more brand in its fold. The company is planning to come out with a low-priced apparel brand. Sources close to the development say that the company is looking at the prospect of launching a new low-priced apparel brand, but nothing can be said for certain.

Raymond Apparel Ltd makes brands like Park Avenue, Parx, Raymond and ColorPlus. Recently, the company made public its plans to roll out The Raymond Store (TRS) and other exclusive brand outlets (EBOs)."

Retail Space

Retailers in India are the most aggressive in Asia in expanding their businesses, thus creating a huge demand for real estate. Their preferred means of expansion is to increase the number of their outlets in a city, and also expand to other regions, revealed the Jones Lang LaSalle third annual Retailer Sentiment Survey-Asia.

Deutsche Bank's research report on 'Building up India' says India's burgeoning middle class will drive up nominal retail sales through 2010 by 10 per cent per annum. The country may have 600 new shopping centres by 2010.

Polo talks with Tatas for India splash

American fashion icon Ralph Lauren has set its sights on India. Informed sources said a business development team from the NYSE-listed Polo Ralph Lauren has held exploratory talks with leading Indian business houses, including the Tatas. Sources said Polo Ralph Lauren is in the midst of drawing up its Asia plans, with a regional team being formed in Hong Kong.

The company’s initial parleys featured prominent names such as the Tata-owned retail chain Trent, Arvind Mills, Madura Garments of the AV Birla Group and the Murjanis, who brought Tommy Hilfiger into the country. However, sources said the Tatas could well be the front-runner at this juncture, as its retail operations under Trent have been looking at sealing alliances in the super premium/luxury lifestyle space. Unconfirmed reports have linked another US luxury brand, Coach, to the Tata Group company. "

Olympus eyes $20 mn top-line from India

Digital imaging company Olympus on Monday said it plans to invest Rs50 crore in India to set up six exclusive showrooms in major metropolitan cities, as it targets to double revenues from the country to $20 million this fiscal.

'We closed the last fiscal in India with a top-line of $10 million and with the double digit growth in the market coupled with new launches, we anticipate our revenues to double to $20 million in the current fiscal,' Olympus General Manager (Asia-Middle East Business group) Yoshitomo Nagashima told reporters here.

He said Olympus would sell its entire portfolio of products, including digital cameras, voice recorders and binoculars in India through its exclusive showrooms.

'The company would invest Rs50 crore in opening six showrooms in the country. These showrooms would be owned by the company but would be managed by its authorised distributors,' he said.

Olympus exclusive showrooms would come up in cities including Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad.

The company on Monday launched its range of water-proof, shock-proof digital cameras priced between Rs15,995 to Rs41,995.

Olympus' products are present in over 2,000 multi-brand outlets which the company plans to increase to 3,500 in the next six months.

The company operates in India through a subsidiary - Olympus India Pvt India - and has tied up with three distributors to market the products."

Big Apple to open 100 retail stores by August

Big Apple, the Indian version of the popular US retail chain 7-Eleven, plans to open 100 convenience stores in the national capital and surrounding areas by August to cater to the urban consumers.

With shopping becoming another casualty of long working hours, Express Retail Services Pvt Ltd is rapidly expanding its Big Apple chain of convenience stores with 25 stores already merchandising 2,500 products including FMCG, grocery, fruits and vegetables, company managing director Munish Hemrajani said told PTI here.

"I have a kitty of Rs 100 crore which I have to exhaust by March 31, 2008," he said. "We just opened our 25th store in Delhi and by August we will be 100 stores."

The stores will remain open from 7:am to 11:pm.

After August, Big Apple will expand into cities adjoining the national capital to double the number of stores to 200.

In the second phase, expansion is planned in Karnataka and Gujarat, he said.

The company's stores are doing an average sales of Rs 16 lakh per day and it is just six-month away from break- even. "We are just two per cent away from break-even."

A typical Big Apple store is 1,500 to 1,800 sq feet and stores over 2,500 product merchandise, he said and claimed it was way ahead of competition from Reliance Retail's neighbourhood stores and Subhiksha. "We change product line every 90 days based on customer acceptance and demand."

The Rs 40 crore company has a direct tie-up with farmers in Haryana, Rajasthan, Himachal Pradesh and Uttar Pradesh.

Brickbats in Ranchi for Reliance Fresh

In the first attack of its kind on a retail chain, several hundred vegetable vendors, brandishing bamboo sticks, today vandalised three of the four outlets of Reliance Fresh, which were launched here in March.

Shouting Anil Ambani hai hai (although the chain belongs to Mukesh Ambani group) and Madhu Koda hai hai (Down with Anil Ambani and Koda), the vendors, a large number of whom were women and young men, marched down the street, targeting one outlet after another.

Although the outlets are at a distance of around 2 km from each other and the protesters were moving on their feet, police failed to stop the belligerent mob.

The demonstrators were upset at finding the outlet closed. After half an hour of brickbatting, they moved towards Circular Road, where too they found the outlet shut down. The mob grew even more belligerent when they later reached the outlet near the Tagore Hill and found that too closed.

Senior police officers were busy playing a “friendly” cricket match and by the time they arrived at Morabadi, the mob had broken open the outlet near Tagore Hill and started looting the shop. Police had to resort to caning to disperse the mob. They also arrested 13 of the demonstrators. City SP Richard Lakra claimed that police were caught unawares because the vendors changed their route at the last moment.

Confirming that today’s incident at Ranchi is the first the company has faced, Reliance Fresh spokesperson Manu Kapoor pointed out that there are already 157 outlets spread across 18 states of the country. Monday, he said, will see Madhya Pradesh added to the list.

The solitary outlet spared by the demonstrators reopened on Saturday evening and was thronged by shoppers. The company’s state mentor, Prabhat Sinha, informed that the two other outlets too will re-open on Sunday morning. The Morhabadi outlet, however, cannot reopen immediately, he said, because the miscreants “took away everything”.

Uday Shankar Ojha of the Jharkhand Vikas Morcha (P), who led the procession of vendors, passed the blame to the police. The vendors, he said, had given advance notice of their plan. Processionists, he claimed, went out of control but policemen were just not there to control the situation.

Ojha justified the demonstration and said, “It is a question of the survival of thousands of street vendors and they are not likely to listen to anyone.”

Taking a serious view of the lapses by the police, Koda ordered an inquiry and by evening the Ranchi senior superintendent of police Manvinder Singh Bhatia had placed two ASIs under suspension. Ojha was also arrested later in the evening.

The outlets had been shut down as a precautionary measure, prompting the irate vendors to give vent to their anger by brickbatting. Two-wheelers parked outside the outlets were trampled upon and damaged, a basement restaurant ransacked and the buildings stoned, breaking the glass panes in the process.

The vendors have been protesting against the outlets for the past fortnight. Claiming that the chain is driving the vendors out of the market by selling vegetables at lower prices, they have been clamouring for a ban on the entry of corporates into retailing farm products.

The chain has set up two procurement centres on the outskirts of the state capital and, as a policy, has been paying farmers prices higher than in the wholesale markets, while selling the products at rates cheaper than what is charged here by the vendors.

Mobiles for Rural India

Mobile phone usage is rising faster in India than anywhere else in the world, with some six million customers added every month. Large cities and many medium-sized towns are already blanketed with retail outlets, and competition among manufacturers and carriers is fierce.

Rural India has become the next frontier for the industry's biggest players. About 70 percent of India's 1.1 billion population, 770 million people, live in villages and rural areas....Phone manufacturers have begun introducing new products that will be targeted at rural markets.

On Thursday, Reliance, the Indian mobile phone service provider, said it would sell a Chinese-made phone that would retail for 777 rupees, or $19. Nokia also unveiled seven new models last week targeted at emerging markets to be priced at $45 to $120. In November, Motorola introduced the ultra-low-cost Motofone in India, costing about $40.

Mukesh Ambani’s new kirana gharana

Mukesh Ambani’s Reliance is opening up fruits-vegetables-grocery outlet storescalled Reliance Fresh , all over in India, in Punjab, Rajasthan, Gujarat, Jharkhand, and several others. So far, West Bengal has opposed Reliance Fresh expanding into that state, but that opposition, too, will slowly fade.

So what if some big billionnaire wants to sell us vegetables and fruits? The shops promise to be fresher, cleaner, and cheaper. Reliance, like Walmart, will probably buy directly from the farmers, cutting a lot of middlemen and that kind of organized retailing should be able to pass on a lot of benefits and discounts to the consumers. After all, doesn’t or shouldn’t competition bring about the best in everyone? What’s wrong if the local vegetable vendors bring down the prices, wash their fruits and vegetables, and clean up their act?

Here’s the issue. In Ranchi yesterday, vegetable vendors attacked the Reliance Fresh outlet, protesting the retail juggernaut’s new business foray into retail business. “…if Reliance sells vegetables, then what we will do? Sell mobile phones and petrol…”, remarked one vegetable vendor.

One of the reasons Reliance is rushing into this, is that Walmart has been knocking at India’s doors for a while, now, threatening to crush the rest of the retail businesses with its mighty giant force. By entering into this arena a little earlier, Reliance is setting itself up either as an established takeover candidate, or a palatable desi alternative that cannot be overlooked in the wake of a foreign tidal wave.

India’s retail grocery stores will somehow find a way to fit into the Reliance model, but for the smaller vendors, it is time to pack their bags and go home. Or, they can do what they did in Ranchi yesterday - attack the Reliance Fresh stores and get beaten by the cops.

Retail cos may buy fresh from fields

Private companies such as Reliance Fresh, Subhiksha and Bharti Field Fresh are all set to get a shot in the arm with the Punjab government expressing its willingness to allow the companies direct procurement of vegetables and fruits from farmers. This will cut the role of middlemen and enable increased profit margins for the company as well as farmers. But neighbouring Haryana is not too keen on the proposal.
Confirming this, Punjab finance minister Manpreet Singh Badal said: “The produce can be lifted by anybody. This goes in favour of farmers and we will allow companies to procure directly from them.” Agri experts feel that this will help the farmers in crop diversification. Reliance Retail at present will be getting produce from Himachal Pradesh, the NCR region and Agra, besides Punjab.
However, the Haryana government will not be encouraging companies for direct procurement. “Mandis will loose their purpose if we allow direct procurement by private companies. Moreover, market fee is a great source of revenue for the state exchequer,” said Haryana finance minister Birender Singh. After witnessing a phenomenal response in Andhra Pradesh, Tamil Nadu, Karnataka, Gujarat and Maharastra, Reliance has started its retail operations in Punjab.
Talking to ET, Mr Sanjeev Asthana, president of Agri & Food Supply Chain, Reliance Retail, said: “Doing our own farming will not make sense. We intend to provide technical know-how to farmers and we will make them part of the global supply chain. This will not happen at the cost of middlemen , rather we will be taking everyone along right from the middlemen to push cart vendors. It is an inclusive model” .
Initially, Reliance will be roping in almost 2,000 farmers across the state. Looking at Punjab’s agrarian economy, the companies have earmarked a heavy budget for the state. Reliance has earmarked a budget of Rs 25,000 crore across the nation. “I cannot give the figures but we will have dominant and significant part of the budget for Punjab, as it is an agrarian state,” added Mr Asthana.
With agri-retail boom on the anvil, the demand for agri experts have already risen considerably. Companies like Reliance and ITC have already started recruiting B.Sc. graduates from Punjab Agriculture University (PAU) and horticulture universities across the nation. Punjab will be the second state in the region to allow direct procurement of vegetables and fruits from farmers. Till date, the state government had only allowed sorting, grading and storing of the produce from the mandis.
Interestingly, the Punjab government is also planning to set up a modern mandi at Ladowal, sprawled around 200 acres. “This will be a joint venture of the state government and private players in 51:49 ratio, respectively,” said Ajmer Singh Lakhowal, chairman of Punjab Mandi Board and BKU president.

Indians prefer chicken over red meat, eggs: NSSO

India appears to be turning more and more health conscious with people preferring chicken, fruits and vegetables over red meat and eggs. While the per capita monthly consumption has come down from 0.11 kg to 0.07 kg in 2004-05 in urban India, said the 61st consumption conducted by the National Sample Survey Organisation.

The decline was also observed in case of eggs with per capita consumption in urban India falling from 2.06 eggs per month in 1999-00 to 1.72 eggs in 2004-05. In the fruits segment, increase in per capita consumption was witnessed in four fresh fruits bananas, coconuts, apples and mangoes.

Also, the per capital consumption of groundnuts increased significantly in rural and urban areas during the 11-year period.

The survey also revealed that while per capita consumption of brinjal declined distinctly, the per capita consumption of many other vegetables has risen significantly. Largest increase was witnessed in consumption of onions in both rural and urban areas over the 11-year period.

Consumption of tomatoes per person per m 50 gm per month between 1993-94 to 2004-05, the survey revealed.

Tesco wants to ride Hero for retail foray

UK-based grocery biggie Tesco is learnt to be in preliminary talks with the Munjals of Hero Group for a joint foray into the retail sector. The Hero Group has recently announced its interest in getting into retail as part of a larger diversification move that includes four-wheelers.
When contacted by ET, Hero Honda MD Pawan Kant Munjal said, “On behalf of the Hero Group, all I would like to say is that we are looking at various new businesses and retail happens to be one of them. And when you are looking at new businesses, you could be talking to a whole lot of people.”

Tesco has been in talks with several players, including the Tata Group and earlier Bharti Enterprises, to enter the estimated $300-billion retail market in India. Bharti chairman Sunil Mittal has since formed a joint venture with US-based retail giant Wal-Mart, even as Tesco continues to hold talks for its India partner. With FDI not allowed in the retail sector, it is possible that Tesco is looking at a Bharti-Wal-Mart type of entry model.

It is understood that the British retailer may prefer to rope in a “not-so-aggressive” partner for the India venture. The company is known to have taken a conservative approach to the Indian market and does not intend to do things in a hurry. Analysts say it is, perhaps, this approach that resulted in its negotiations with Bharti coming unstuck, given that Mr Mittal is known for the speed at which he takes up and implements new ventures.

Although the retail industry in India is estimated to be worth $300 billion, organised retail is worth only $12 billion. With group revenue in excess of £46 billion, Tesco employs more than 450,000 people worldwide and intends to create a further 25,000 jobs this year, including in the US.

It’s the largest grocery supermarket brand in the UK by sales and currently enjoys 31% marketshare, more than the combined shares of its closest rivals Asda (a Wal-Mart subsidiary) and Sainsbury. The retail rush in India has attracted top names, including Wal-Mart, Tesco and French retailer Carrefour.

Carrefour has recently decided to back off on its India plans while Tesco has been talking to several potential partners. Retail is red hot in India with revenues expected to more than double to $637 billion in 2015.

Tesco started out with exporting its formula in 1994 and now has stores in 12 countries outside Britain, including China, Thailand and Hungary. It plans to add 47 outlets this fiscal in South Korea. Apart from India, its emerging market thrust includes China and Turkey in 2007.

IT in Indian Retail Industry

IT revenue from the Indian retail segment measured US$ 253 million in 2006 and is expected to grow to US$1.07 billion by 2010, with a compound annual growth rate (CAGR) of 44%. This was announced by Springboard Research, in the results of its research report detailing IT spending and market trends in the Indian retail industry.

The Indian retail industry, estimated at US $325 billion in 2006, is one of the fastest growing sectors of the Indian economy. Traditionally dominated by small, family-owned retail shops, the industry is making a move to a more modern and organized retail industry structure. Thanks to a healthy economy and rising household incomes, organized retail is emerging as a rapid growth industry in India.

Nilotpal Chakravarti, Market Analyst for Springboard Research, said, "As the current economic boom in India spreads to Tier II and Tier III cities and towns, reaching out to prospective consumers in these cities is high on the agenda of most retail companies. Retailers consider market presence in these cities and towns key to their growth and profitability. As such, many retail companies are investing in technology that will help support their expansion into these new markets."

In its report, "India's Retail Industry: IT Market Trends and Opportunities, 2006-2010," Springboard Research concludes that after real estate and human resources, IT is the highest investment area for most large- and medium-sized retailers.

Report data also showed that retailers consider supply chain management (SCM) and inventory management their top strategic focus areas.

Springboard also found that retail firms consider strong service and support and price as key factors in IT vendor selection, followed by strength in a particular solution area, knowledge of the retail business and knowledge of the retail industry.

SAP was identified as the leading primary influencer in terms of solutions investments, followed by Microsoft. Local vendors also had a significant response. The local vendors' focus on providing customized and industry-specific retail solutions has helped them create a niche for themselves in the market.

Indian retail to reach USD430 bn by 2010

Indian retail, with the coming in of conglomerates like Bharti Enterprises, Reliance and some foreign players, is set to generate business worth $430 billion by 2010, says a report by a leading industry lobby.

The share of organised retail is estimated to go up to 20-22 percent to become a $90 billion industry while the unorganised sector is set to touch $340 billion in the next three years, according to the Federation of India Chambers of Commerce and Industry (FICCI).

This exponential growth is expected to generate 18 million jobs, thereby becoming the second largest employment-generating sector after agriculture.

Get ready for the lifestyle brand binge

All those style savvy Indians hungry for a taste of international lifestyle brands, fill up your wallets and prepare yourselves to go on a shopping binge. The year is expected to be big for these global brands vying for a piece of the Indian action.

As the India story continues to grow from strength to strength, Indian consumers have never had it so good and things are poised to only get better. Sample this - in the last one month we have seen French Connection, Calvin Klien and Gas, roll out their retail presence, in an attempt to be a part of the ongoing action, and there are a dozen others waiting in the pipeline. So if you thought, its only the Wal-Marts and the Tesco’s which will fuel the retail growth in India, think again, the top of the pyramid is stepping up the ante’, too.

“The middle of the retail pyramid has in certain ways matured in India with the likes of Nike and Adidas having been around for a while but it’s the bottom and top of the structure that is starting to hot up now,” says Darshan Mehta, VF-Arvind Brands, CEO. The textile major has partnered with brands such as Tommy Hilfiger, Nautica, Kipling and is now in the process of bringing Diesel into India. “Indian consumers are absolutely ready for this rush of brand but unprecended real estate prices, postponement of setting up of luxury malls and quality manpower is a challenge at this point,” Mehta adds.

Besides, Arvind Mills, another group that has been actively bringing in international brands into the country are the New York- based Murjanis. Infact, the Murjanis are partnering with Gucci, Jimmy Choo, Build- a- Bear and Tumi besides French Connection and Calvin Klein as a franchisee to launch these brands in India. The first retail presence for both Calvin Klein and French Connection came up in the form of shop-in-shop appearances in Mumbai. Besides, the group is expected to launch Gucci by the year end, say sources. Infact, according to these sources, they have already made an application with the government to carry out retail trade of these brands through a clutch of subsidiaries. So what started off as a trickle with lifestyle brands such as Marks & Spencers, Esprit, Dunhill, Escada, Salvatore Serragamo, Guess, Valentino, Hugo Boss, Stephen Brothers has now gathered substantial momentum. Some brands such as Lacoste and Benetton have, however, had an early movers advantage.

With brands vying for retail space, most industry watchers say that the lack of quality real-estate will be a major roadblock for the premium brands to etch their map in the country. “ There will be a flurry of brands once the luxury malls start to show up. Most of the brands are ready to put in the investments only if they see the right retail space being made available,” says Arvind Singhal, Chairman of Technopak Advisors, a retail consultancy firm. The actual floodgates will open in the fall of 2008 when these brands will be seen on the retail front as well. And the interest in the Indian market is not only restricted to selling goods. The world’s largest luxury brand marketer, Paris-based $17-billion Moët Hennessy Louis Vuitton (LVMH) is said to be in the process of picking a 20% equity stake in Pondicherry-based leather goods manufacturer, Hidesign.

Indian street vendors attack retail chain's stores

Indian street vendors armed with iron rods and sticks attacked three stores owned by Reliance Industries Ltd. on Saturday, injuring around a dozen people in a protest against the large food retailer.
It was one of the most serious cases of unrest linked to the entrance of large, glitzy retail chains into India's fragmented $200 billion food and grocery sector, which small shop owners see as a threat to their customers.
About a dozen vendors and Reliance customers were hurt in the eastern city of Ranchi when around 1,000 vegetable sellers smashed the windows of three of the chain's stores and damaged customers' vehicles.
Police used bamboo canes to chase the protesters away.
'The vegetable vendors are agitated because Reliance outlets are selling vegetables at prices which are much lower than the market price and are driving away their customers,' said local government official Dipankar Panda.
Reliance Retail Ltd., a subsidiary of Reliance Industries, is investing $5.6 billion in hundreds of stores. Officials of the firm were not immediately available for comment.

KM Birla may buy Piramyd Retail

Size matters in the fresh wave of Indian retail boom and the easiest way for big boys like Kumar Mangalam Birla to add shelves, floors and stores is to step up the gas on the buyout route.

Sources have told NDTV that Piramyd retail, the retail venture of the Piramal group run by the Ashok Piramal is up for grabs. An informal move has been made by Birlas who picked up Trinetra earlier this year.

Pyramid makes sense on valuations with its market capitalisation of Rs 132 crore compared to its peers Pantaloon Retail's valuation of Rs 5,713 crore, Shopper Stop at Rs 2,065 crore and Tata's controlled Trent valued at Rs 1,350 crore.

There are enough reasons why the Piramal group company is up for sale. It has failed to scale up at a time when Reliance, Biyani and the Tatas garnered retail muscle. On the top of it they are also short of good retail expertise, since the big retailers have snapped up most of the talent.

Big boys of retail

Right now Piramyd retail operates five Piramyd Megastores in the lifestyle segment and eight true marts in the food and grocery segment but its expansion has been sluggish when compared to the big boys of retail.

At present Piramyd occupies a retail space of 25,000 square feet while Shoppers' stop has an expansion plan of 1-5 million square feet by 2010. Kishore Biyani controlled Future Group has expansion Plan s between 4-30 million square feet by 2011 while Trent has plans to expand from 1-2million square feet.

For Birlas it makes sense to pick up companies on its way. Trent in the past also indicated that it is looking for acquisitions in the food and grocery space after landmark. If the stock performance is anything to go by Piramyd is by far the best performer with the Birla buzz.