Mx Food Ventures in expansion spree, partners franchisees

05 Nov 2008

Mx Food Ventures, as part of company’s pan-India expansion plan, will open 115 Mx Corn stores and 72 Mx Chaat Street outlets across the country by the end of current fiscal, said a top company official. Further, the Delhi-based food retailer will also partner with franchisees for the expansion.
The company will invest around Rs 100 million for this expansion and targets revenue of around Rs 250 million and Rs 80 million from Mx Corn and Mx Chaat Street stores respectively, said Kanish Saigal, assistant manager — business development — Mx Food Ventures .
Speaking to Indiaretailing, Saigal said, “Our products cater to both the masses and the classes and we will open stores in all the high streets, BPO's, cinemas and malls.”
The Mx Corn store retails sweet corns and popcorns whereas Mx Chaat Street sells the whole range of chaat. The average size of the store for Mx Corn is around 30-35 square feet and for Mx Chaat Street, it is around 75-100 square feet for the big format store and 20-36 square feet for the small format.
Currently, the company operates 74 Mx Corn and 22 Mx Chaat Street stores.

Brand chiefs mark 10 obstacles in women and kids wear business

 

Over 30 decision-makers in or related to the women and children wear business, marked and discussed 10 issues that must be addressed for betterment of the industry.
The decision-makers got together at the Nokia Images CEOs Meet at the Pure and Play conference in Delhi. The participants included Tarun Puri, MD, Nike India; Marcelo Villagran, MD, Bata India; Thorsten Allenstein, country head, Triumph; Subhash Chhabra, president, Globus; Samir Sahni, director, Ritu Wears; Anchal Jain, founder, Nun; and Aloke Banerjee, CEO, Rosebys.
Anchored by Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, and Jayant Kochar, MD, GoFish Solutions, the participants agreed that creating an ethnic brand for women is not an easy task as the category is dominated by the unorganised sector. They opined that dedicated and trained workforces in the manufacturing sector is one of the critical needs of the hour.
The chiefs also agreed that the industry needs well-researched information on various business aspects, right from studying fits and sizes to creating better shopping destinations and retail environments, to pricing and branding strategies in sync with the Indian consumers’ mindset.
Following are the issues that were marked out and discussed at the meet:

– Not enough kids and womenwear brands are present in the organised retail market in the country
– Complexities of creating ethnic womenswear brands
– Lack of adequate information on fits and sizes
– Lack of suitable retail environment for women and kids
– Lack of initiative from the retailers to understand and cater to the niche category
– There is neglect on the part of retailers towards the kidswear market
– Inadequate support from mall developers for womenswear and kidswear brands in terms of differential pricing and focus on retail space
– Not enough brand-building initiatives from the retailers
– The niche category needs to be widened to include accessories, and health and beauty products
– Lack of vision to do something ‘big’ in this niche category

Second MINC in Bengaluru

 

MINC, an eco-friendly apparel brand for women, has opened its second outlet in Bengaluru.
MINC is an upcoming brand that is backed by a unique concept of promoting eco-friendly fashion and support the use of organic cotton. The brand retails apparel made of hand-woven/spun, organic cotton and vegetable-dyed fabrics. It also focuses on traditional craft like embroidery, kalamkari and use of sequins to develop popular ethnic clothing, viz. kurtas and kimono throws.
The brand is the brainchild of Mishan Design Point’s owners – Mini Shibu and Kochery C Shibu.
According to Mini Shibu, the brand owner, MINC’s aim is to revive the beauty of the hand-spun/woven garments and infuse skills of the traditional weavers and dyers with latest trends, colours and styles to promote a ‘green’ lifestyle.
"The vision of the company is to bring eco-friendly apparel to mainstream fashion,” said Kochery C Shibu.
MINC collections are competitively priced in the range of Rs 630-Rs 1,800.
The company plans to expand through South India until 2010, and open outlets in metros by 2013.

Gap investing big on its CSR in India

 

Gap has joined hands with the ministry of women and child development, government of India, and various state governments for the welfare of children and women in the country. The company, in association NGOs, has also taken various initiatives to solve the water crisis caused due to manufacturing of denims in India.
Speaking to Indiaretailing, Lakshmi Menon Bhatia, director, global partnerships, social responsibility, Gap Inc., said, "We will form alliances with the central and some state governments including Bihar and Andhra Pradesh, for prevention, rehabilitation and eradication of child labour and exploitation of women labour at various outsourcing factories of the company."
The company has also initiated a special rehabilitation centre for women and children in association with Delhi-based NGO Self Employed Women's Association (SEWA) in the national capital. "We have planned to invest around $200,000 (over Rs 85 lakh) to build destitute homes in and around Delhi," informed Bhatia.
Besides, the company, with assistance from various NGOs, has planned to set up water rehabilitation plants at places where its factories are located. “Denim is a thirsty fabric and its manufacturing process consumes a lot of water. Hence, we have planned to set up water rehab plants in and around our manufacturing units,” said Bhatia.

India's online population up by 27% in 1 yr

The Financial Express

New Delhi: More number of people in India are online now than earlier with the size of cyber audiences rising to over 28 million users in 2008, a growth of 27 per cent over the previous year.

Not just India, internet audiences in Asia-Pacific at home and at work, among users of 15 years and above, grew by 14 per cent to 319 million visitors in April 2008, outpacing growth of all other worldwide regions, comScore, Inc, an internet marketing research firm said in a report.

"The strongest growth occurred in India which surged by 27 per cent to more than 28 million internet users. This was followed by China with a 14 per cent growth to more than 102 million," the report titled 'The State of Global Internet with a Focus on Asia' said.

Taiwan, Malaysia and New Zealand registered a growth of 12 per cent each. Meanwhile developed nations such as Japan and Singapore showed modest gains of 3 per cent and 4 per cent respectively, it said.

Other findings stated that although Google and Yahoo! combined to capture majority of the search share in the Asia-Pacific region, five of the top 10 search properties are regional engines, including China's Baidu.com and Korea's Naver.com.

Mark Zuckerberg's Facebook.com is the leading social networking site in the world, but in the Asia-Pacific region Friendster.com is preferred.

Internet users in Hong Kong, South Korea, Singapore, Taiwan and Australia spent most time online.

Indian basmati set to enter China, Mexico

 

New Delhi: Indian basmati rice will soon be cooked in China and Mexico. Presently, basmati exports reach more than 130 countries, and the government hopes to take advantage of the Chinese and Mexican markets in a couple of years.

"In a couple of years, we hope to carve a niche for basmati rice in China and Mexico as well," A.K. Gupta, advisor, Agricultural and Processed Food Products Export Development Authority (APEDA), India's official agri-product export promotion agency. He added that China held huge prospects for Indian basmati. India had exported 54 tonnes of basmati to China in 2006-07 on a trial basis.

"India's export of basmati is increasing 20 to 30 per cent every year," said Gupta. "In terms of quality, flavour and taste, our product continues to get preference over that of the rival exporting country," he said, referring to neighbouring Pakistan. "Efforts are on to expand the market worldwide," Gupta said in a statement.

India has an approximate share of 53 per cent in the basmati rice international market and promotional events such as buyer-seller meets, sending trade representatives overseas are on, to expand the existing consumer base. Major imports of India's basmati rice are into markets of Saudi Arabia, Kuwait, the UAE, the UK, the US, Yemen, Canada, Iran, Germany, Oman, South Africa, France, Syria, Belgium, Australia and Germany.

India's export of basmati rose from 848,919 tonnes to 1.05 million tonnes in 2006-07.

Previously, 597,793 tonnes had been exported in 1998-99. Production of basmati and non-basmati rice is likely to touch 129 million tonnes by 2011-12 on a growth rate basis of 3.7 per cent along with other foodgrains. "Four years down the road, India needs to increase rice productivity by over 40 million tonnes per year, something which is feasible," said an agriculture ministry official.

"In 2006-07, consumption of rice was 88.25 million tonnes. As per the fourth advance estimates on July 19, 2007, the production of rice was over 92 million tonnes. In April 2008, rice production went up to 95.68 million tonnes," the official added.

The Cabinet Committee on Prices (CCP) March 31 increased maximum export price (MEP) for basmati rice to US$ 1200 per tonne though is less likely to impact the export of basmati rice. Basmati and non-basmati rice are staple sources of foreign currency revenue for India. The government had earlier exported basmati worth about US$ 4.61 billion and non-basmati rice worth US$ 6.79 billion during April-December 2006.

APEDA data shows basmati rice exports to Saudi Arabia were 499,584 tonnes, 104,998 tonnes to the UAE and 109,067 tonnes to Kuwait in 2006-07. Indian basmati rice lovers include Uganda, Angola, Congo, Botswana, Fiji, Ghana, Cameroon, Chile, Romania, Zambia and Surinam.

GAP and Nike address ‘quality challenges’ at Pure and Play

 

The first session of Day III at Pure and Play saw Lakshmi Menon Bhatia, director, global partnerships, social responsibility, Gap Inc., and Tarun Puri, MD, Nike India, speak about the 'challenge of quality' in the business of retail.
Defining quality, Bhatia said, "Creating a right product at a right time with right pricing speaks about the quality of the brand." Puri insisted, "Quality is in getting the consumer back, and not the product. A brand should focus on judging its quality through its consumers and not make its own assumptions."
Highlighting their CSR activities, Bhatia said that Gap has been fighting against human trafficking worldwide. For Delhi, the brand has introduced a new technique of manufacturing denims wherein less quantity of water is required.
The next session saw Saloni Nangia, VP, Technopak, discussing the scope and opportunities of brand extension in women's categories. According to her, this segment of retail in India has a long way to go and is still untapped in many parts of the country.
Addressing the topic 'Scope in new emerging formats', experts including Arvind Nair, MD, DLF Retail; V Ramnath, director retail, Nokia; Andreas Gellner, MD, Adidas India; and Pranay Sinha, retail real estate consultant, discussed new possibilities of boosting the business of retailing women's and kids' wear in the country. The session was anchored by Anchal Jain, founder, Nun, who said that speciality stores for women in India are not growing, and that developers and retailers should work in sync to bring in innovations in the sector.
Speaking on the same issue, Nair said, "The evolution of mall space and mall development in India has just begun, and it will soon see new innovations being introduced to it." According to Sinha, shopping centres should focus on providing convenient shopping environment to women and children consumers.

CARREFOUR staff in China jailed for taking bribes

 

According to reports in the Chinese state media this morning, a Beijing court has sentenced eight local employees of Carrefour to prison terms of between one and five years for taking kickbacks from suppliers. The court was told the staff took payments from suppliers between May 2005 and July 2007 in exchange for buying their products or for displaying them prominently. The company said earlier that it would strengthen its efforts to combat corruption in its ranks and raise the "professional level" of its staff.

Blue Green, a route to Subhiksha’s consumer durables entry

 

The acquisition of 40 per cent stake in Blue Green Constructions and Investments, a non-banking finance company (NBFC) listed on the Madras Stock Exchange (MSE), provides the right platform for Subhiksha to enter the consumer durables space.
"We want to enter the consumer durables space in a big way, and Blue Green also had similar plans. Though they have not opened any outlets, they have identified some properties and built initial systems. They needed funds, and we thought that it was a good strategy to buy them,'' R Subramanian, managing director of Subhiksha, told media.
Subramanian said Subhiksha would invest Rs 800 crore in FY09 to expand its network and add consumer durables to its product portfolio. "It will also enhance value for our stakeholders and help us achieve our objective of becoming a $5 billion company," he added.

DLF might bring Boggi to India

DLF is believed to be in talks with the Italian fashion and lifestyle brand Boggi for a tie-up and introducing the latter’s shops in India.
Boggi has a considerable retail presence across Europe and the Middle East, and is likely to have a majority stake in the joint venture with DLF.
Boggi offers a wide range of men’s formal and informal clothing along with shoes, watches, fragrances and other accessories.
A DLF spokesperson declined comment on the likely tie-up.
Boggi is controlled by three Zaccardi brothers – Carlo, Caludio and Roberto – who also run multi-brand retail chain Brian & Barry. The firm owns and operates around 70 stores spread across Europe and the Middle East under Boggi and Brian & Barry brand names.

Pure and Play: News on the sidelines (Day II)

– Central and Lifestyle tie up with Isabelle
Isabelle, the Delhi-based kidswear brand, has tied up with multi-brand retailers Central and Lifestyle.
Confirming the news to Indiaretailing, Vikas Khanna, owner of the brand, said, "We have tied up with Lifestyle and Central, who will stock our apparel range. We are also in talks with Brand Factory, and if everything goes well, we will soon be seen in other leading retail outlets in the country."
Speaking about the brand, Khanna said, "We source products from designers based in Italy and some other European countries. Our brand has been getting a good response at the expo and we feel that we are going to be at par with other leading brands in the category.
Discussing about their target consumers, Khanna said, "We are primarily targeting the upper middle-class and have priced our collections at Rs 750 and onwards.”
Speaking about the competition in the market, Khanna said that India still has a lot of scope in this niche category, as there are only a handful of brands in the country. According to Khanna, joining hands with more established retailers can help kidswear brands emerge more forcefully.
– Taurus to open standalone outlets

Taurus, the Delhi-based traditional womenswear brand, has planned to open its exclusive outlets and is looking for retail space across the country.

Speaking to Indiaretailing on the sidelines of Pure and Play, Dhruv Gupta, the owner of the brand, said, "We have finalised a couple of spaces in the NCR and are looking for several other options." We have planned to open an outlet in New Delhi and another in Gurgaon, by January 2009. These will be our flagship stores in the country."
At present, the brand retails through its shop-in-shops at Big Jo's, Ritu Wears, Gyans, Moksha, Neeru's and Mebaz. The brand has its presence in Delhi, Mumbai, Hyderabad, Chandigarh and Chennai, among others.
Speaking about this niche segment, Gupta said that there is a huge opportunity in this sector and the market can be tapped very easily. "But, for that, we require a more dedicated workforce to help us," said Gupta.
– W targeting 100 new outlets
Womenswear brand W is planning to open 100 new stores in the next three years. TCNS Cloting, the company behind the brand, will invest about Rs 60 crore for these expansions.
"We are planning to open 100 new stores in the next three years. Each of these stores will be opened with an average investment of Rs 60 lakh," TCNS Clothing Pvt. Ltd CEO Vijay Mishra said on the sidelines of Pure and Play. "We will also increase the size of our outlets by up to 1,500 square feet," he added.
TCNS is also looking to foray into jewellery and other fashion accessories segment, and is presently talking to various players. 
– Titan aiming to be a billion-dollar company
Backed by major expansion plans for its jewellery, watches and eyewear divisions in India, Titan Industries is aiming to become a billion-dollar company by the end of this fiscal year. Besides, the company is also planning to enter the US market with the Tanishq brand of jewellery by next month.
"Last year we had turnover of Rs 3,000 crore, and this fiscal we are looking at crossing the Rs 4,000-crore mark. By then, we would have become a billion-dollar company," V Govind Raj, vice-president, retail and marketing, Titan Industries, told media on the sidelines of Pure and Play.
Sharing expansion plans for this fiscal, he said that about 40 new Tanishq jewellery stores will be opened. "In the watches segment, we are increasing the number to 300 stores from the existing 240, while in the eyewear segment we are increasing the number of stores to 60 by the end of this fiscal, from the present 20," Raj said.

Pure and Play: News on the sidelines

– Triumph to launch Hom and Valisere brands
Triumph has planned to introduce its high-end labels – Hom and Valisere – by end of this year, in India.
Speaking to Indiaretailing, Thorsten Allenstein, country head, Triumph, said, "The demand for our products in India has been growing, hence we are planning to launch two of our high-end brands in the country very soon."
Sharing plans about the expansion of Triumph stores in India, Allenstein said, "We have planned to open around 100 Triumph stores by next year." The company has already identified locations, and each store will be spread across 800 to 1,000 square feet.
Besides, the company is planning to partner other multi-brand retailers and is in talks with many companies. "We have spoken to many retailers to stock our products and are going to finalise our partner by end of this week," informed Allenstein.
– Around 70 new outlets from Vishal; loyalty card for women
Vishal Retail said it would open 70 more stores at a cost of around Rs 700 crore by the end of this year, taking the total number to 190, while playing down the chances of high inflation dampening its expansion plans.
"Inflation has made no impact on our growth plan. We are going to open 70 more stores by the end of the current year, and will invest Rs 700 crore for the purpose," Vishal Retail Chairman Ram Chandra Agarwal told reporters on the sidelines of Pure and Play.
The company is also looking to raise Rs 200 crore through a private equity investment for the expansion plans, while the remaining fund will be arranged through debt. "In order to fund our expansion plans, we are looking at a debt equity ratio of 2:1," Agarwal said. Vishal Retail is also planning to launch loyalty cards to attract customers, particularly women, besides introducing new brands in the womenswear category.

– Niknish to add 50 stores
Kolkata-based Niknish Retail plans to increase the number of its outlets to 65, from the present 15.
"In the next 18 months we plan to increase the number of stores to 65," Niknish Retail Vice-President Thomas Yasuda said on the sidelines of Pure and Play.

The company will operate through two major formats: the large ones, with an area of 10,000 square feet and above, and the smaller ones with an area of around 2,000 square feet.

– Proposed Rs 350 crore investment from Globus
Globus will invest Rs 350 crore for opening 74 new stores in the next 30 months, across India.
"Seeing the growth in the organised retail industry, we have planned to increase the number of outlets to 100 from the current 26 stores, in the next two-and-a-half years. This can entail an investment up to Rs 350 crore," Globus President Subhash Chhabra said on the sidelines of Pure and Play.
The entire investment will be funded through internal accruals, he added. To start with, Chhabra said, the company will add 15 stores in the current fiscal in tier I and II cities, including Nagpur, Kochi, Rajkot and Surat. All stores will be company-managed and open in shopping malls.

Thirty million cases of shoplifting go undiscovered: EHI study 18 Jun, 2008

You are here  »  Home  »  The World

Thirty million cases of shoplifting go undiscovered: EHI study

18 Jun, 2008

Inventory discrepancies in the German retail sector as a whole add up to four billion euros annually, EHI observes in its current survey. Dishonest customers account for slightly less than 1.9 billion euros of the amount; retailers' employees are blamed for losses of around one billion euros. Statistically, each year each German household continues to steal goods valued at over 50 euros from retailers. To visualise, this means that about every 200th shopping trolley passes the checkout without being paid for. The state loses around 400 million euros in VAT revenues annually as a result.
Protecting merchandise costs dearly
To reduce so-called inventory losses, annually the retail industry invests an average of almost 0.3 per cent of its sales revenues, or around one billion euros. The cost of inventory discrepancies and their avoidance thus amounts to about five billion euros annually, which retailers have to include in their selling prices, like all other costs. Retailers continue to estimate the general crime threat as medium to high, with a rising tendency because companies anticipate an increase in crime in almost all areas next year.
‘Organised’ shoplifting is considered the biggest problem by chain store operators. In general, however, ‘ordinary’ customer theft is still the main problem. The further intensification of preventive measures will, therefore, be necessary.
No easing in sight
According to the official crime statistics of the German police for 2007, the number of cases of simple shoplifting reported to the authorities declined another 6.6 per cent from 428,553 to now 400,183. But retail's assessment of the current crime situation and the unchanged, high level of inventory losses indicate that there has been no easing of the situation on the shoplifting and theft front. Longer business hours, reduced staffing, reduced presence of detectives during retail opening hours are conducive to undiscovered shoplifting. An estimated 30 million cases of shoplifting involving goods worth an average 60 euros go undetected and unreported every year. Comparing 2007 with 2006, the inventory discrepancies in German retailing as a whole, averaging all sectors, remained on a constant level. An average inventory discrepancy of easily one per cent -- valued at selling prices and placed in relation to gross sales -- continues to reduce profit margins in retailing significantly.
Efficient theft prevention
The current offence rates substantiate the importance and necessity of the use of detectives and camera surveillance in the retail sector. At companies which employ detectives, even if only at selected outlets or only on a part-time basis, 71 per cent of all customer offences exposed are detected and reported by detectives. Although most companies do not have cameras throughout their stores, slightly less than 40 per cent of the offences discovered are discovered with the help of camera systems and image recording.
Taking part in the latest EHI study on the topic of inventory discrepancies were 122 companies with more than 12,000 outlets in all, representing estimated total sales of around 47 billion euros. The study was supported by HDE, the German Central Retail Association.

A Model to Turn a New Leaf in Indian Retailing - 3

India is one of the fastest growing economies in the world today. The country’s luxury market is the 12th largest in the world. The country’s retail sector must orient itself to meet the needs of this new mass-affluent market.
India can follow Emaar’s model of aligning mall developments with the emerging lifestyle communities. There are several master-planned communities being developed across the towns and cities of India, and these demand world-class shopping and leisure options for the residents.
Diversification in shopping malls is as important as diversification in the product industry. The Dubai Mall has redefined the horizons of shopping malls by navigating away from the traditional outlook towards shopping. In due time, this approach will be the true benchmark for the global retailing industry. India can take the lesson early.

A Model to Turn a New Leaf in Indian Retailing

In this scenario, the concept of neighbourhood retailing as promoted by Emaar Retail will become more significant. Emaar’s retail ethos is driven by one key philosophy: Deliver residents in its master-planned communities the services and products they need in a friendly ambience, and back it up with amenities such as parking and leisure choices.
There are several striking parallels between the retail sectors of India and Dubai. For one, the retail sector of Dubai was predominantly led by Indian traders – an association that goes back to several centuries. The evolution of Dubai’s retail sector as a truly world-class shopping destination was swift and phenomenal, and in this growth, shopping malls have played a key role.
Dubai’s shopping malls have removed the dichotomy of shopping and leisure, and created a perfect blend of retail and entertainment that appealed to families – both residents and visitors. The integrated lifestyle approach that drives the development of The Dubai Mall, the flagship development by Emaar Malls Group, can also serve as a referral point for India’s retail sector.
Emaar Malls Group – a subsidiary of Emaar Properties PJSC, which through a joint venture with MGF Land Development is the largest foreign direct investor in India’s real estate sector – has helped transform the look and feel of shopping malls. The operational philosophy of Emaar Malls Group is to design shopping malls as vibrant retail and leisure destinations.
The Dubai Mall, for example, is redefining the shopping and leisure experience with its rich array of components including the world’s largest indoor Gold Souk; one of the world’s largest aquariums featuring 33,000 living animals; an Olympic-size ice rink; an entertainment section including the region’s first SEGA indoor theme park; and KidZania®, an 80,000 square feet children’s ‘edu-tainment’ centre.
The Gold Souk is designed to reflect the rich Arabic heritage blended with the modern features of The Dubai Mall, and will showcase a collection of over 220 of the region’s most trusted gold and jewellery retailers. At the souk, gold and jewellery can be readily purchased or tailor-crafted. The aquarium, at 51m x 20m x 11m, will feature the world’s largest viewing panel measuring 32.8m in width x 8.3m in height. With the capacity to hold 10 million litres of water, the aquarium will illuminate the marvels of the ocean floor and showcase a diverse collection of marine life worldwide.
Other entertainment components at The Dubai Mall will include KidZania® and SEGA Republic. Kidzania is an award-winning children’s ‘edu-tainment’ concept that will be introduced to the region for the first time. It will be an 80,000 square feet interactive mini-city that combines play with learning. SEGA Republic is to be an indoor theme park focused on action, adventure, and entertainment. The two-level, 76,000 square feet adventure is being developed by Emaar Malls Group in partnership with SEGA Corporation.
This integrated approach works for India, too, especially given its current socio-economic shift. The growing middle-class population with high purchasing power continues to drive the retail sector in India. For them, shopping malls are becoming destinations for leisure – places where they meet with friends and families. Indian retail sector must take a cue from The Dubai Mall and create integrated shopping destinations.

A Model to Turn a New Leaf in Indian Retailing

A metaphor close enough to describe the dynamism of the Indian retail sector would be that of the Big Bang theory. Triggered by giant collision courses involving several thousand unorganised retailers occasionally rubbing shoulders against smart supermarkets, the Indian retail sector, following the years of heating and cooling, has evolved into a strong all-encompassing mass.
Today, topping the Global Retail Development Index for the third consecutive year as the most attractive market for retail investment, India has one of the most vibrant retail sectors in the world, where huge malls and supermarket chains co-exist with below-the-line traders.
Currently, there are 12 million retail outlets in India, which is estimated to triple by 2015. The 25 per cent projected increase in retail growth illustrates the strong fundamentals of the sector, which is expected to contribute to 22 per cent of India’s GDP by 2010. The fastest growing segments in retail are, not surprisingly, wholesale cash-and-carry stores, supermarkets, and hypermarkets. Shopping malls are another growth segment, with over 100 malls in the country now and over 600 malls under construction – mostly in Mumbai, Delhi and other A1-class cities.
One of the key challenges of the Indian market is to build organised retail. Concepts like franchising are only now gaining currency, and I recall the tremendous effort that had to be put in even in the late ‘90s to build a fashion retail chain through international franchises.
The mindset of the typical Indian customer, however, has shifted over the years. Today, global brands have high visibility and awareness among urban customers, who drive the organised retail sector.
This change was relatively slow and has only hastened now with the economy gaining momentum. Reports show that the retail sector grew from US$198 billion in 2001 to US$226 billion in 2005 – a modest 14 per cent growth. However, the organised retail sector grew by 93 per cent from US$3.96 billion to US$7.68 billion in the same period, though its share of the total grew modestly from 2 per cent to 3.4 per cent.
A paradigm shift is projected for the organised retail sector, which is one of the areas where Emaar’s retail expertise will make a difference. Emaar’s approach to retailing is not limited to developing big malls – as has been proven with The Dubai Mall, one of the world’s largest shopping and entertainment destinations.
Emaar’s approach to retailing, centred on its communities, will gain more currency in India with the numbers in the consuming class increasing. The high disposable income, gained from economic growth, has pushed the total number of households in the consuming class from 26.5 million in 2001-02 to 40.8 million in 2006-07. These are the consumers, who are also the end-users of the master-planned communities and residential colonies in India.
It is estimated that in the next three years, over US$560 million will be invested in retail sector expansion in the country – resulting in 50 hypermarkets, 305 large department stores, 1,500 supermarkets and 10,000 exclusive retail showrooms. At least one-third of the multi-brand outlets are projected to be converted to exclusive outlets.

INFLATION HAS US FIRMS RETHINKING MADE IN CHINA

From southeast China to the California ports, a seemingly endless fleet of container ships has carried more and more cut-price merchandise to bargain-hungry US consumers.

But the flow is now slowing as soaring costs for food, fuel and a host of other raw materials drive up prices inside China, making its exports more expensive too. The result is higher prices at US stores like Wal-Mart and Target that have increasingly filled their shelves with Chinese-made goods.

It may also mean thinner profit margins for a wide swathe of Corporate America, which for years looked to China to drive down costs. And it is beginning to spur a global treasure hunt for the world's next low-cost factory.

The price pressure comes at a delicate time for a US economy still limping through a housing slump now in its third year. Homeowners are feeling poorer, and that has cut into consumer spending, making it harder for companies to raise prices to keep up with inflation.

"It has been China that held down (U.S.) inflation, and I think that's what we're going to lose," said Jerry Hausman, an economics professor at the Massachusetts Institute of Technology who has studied Wal-Mart's impact on inflation. "Not only is China exporting inflation, but China .. is a reason for a lot of the commodities inflation. They're both cause and effect of the inflation," he said.

As China's fast-growing economy gobbles up a greater portion of the world's resources, pushing up inflation, its export machine is starting to choke on the higher prices. The rest of the world is feeling the pressure as well, most acutely in poor countries that are struggling to feed their populations as food costs climb. Wages for China's factory workers are rising sharply.

Some 50 nations, representing 42 percent of the world's population, currently have inflation rising at double-digit rates, according to Morgan Stanley research. That helps explain why U.S. import prices posted their biggest three-month rise since 1990 through May.

The cost of imports from China were up 4.6 percent for the year ended in May, the largest annual increase since that index was first published in December 2003. The end result is that each US dollar buys less than it did last year. US Labor Department data shows that it now takes $104.48 to deliver the same buying power as $100 last year. From 2006 to 2007, that change was a more modest $2.85.

The China connection is perhaps most visible inside the largest US retail chains. Wal-Mart Stores Inc, Target Corp and other mega-stores have ramped up imports from China over the past decade, one of their sharpest weapons in the battle for the lowest prices.

Imports now account for nearly 18 percent of the US aggregate demand, up from 10 percent in the late 1980s, US Federal Reserve Vice Chairman Donald Kohn said on Thursday. The reason is simply price.

In 1997, a dozen men's shirts cost retailers on average $59.15, according to US Commerce Department data analyzed by Sanford Bernstein & Co. In 2007, they cost $42.14. The rise of China as an exporting powerhouse was a big reason behind that fall in retailers' costs.

But more recent data shows prices are rising inside the stores that have long prided themselves on lowering prices. JPMorgan analysts conduct a monthly pricing survey at chains including Wal-Mart and Target. In May 2007, a basket of 23 identical goods cost $106.92 at Wal-Mart and $110.21 at Target.

In May 2008, those same goods cost $108.79 at Wal-Mart, and $111.93 at Target. Lena Michaud, a spokeswoman for Minneapolis-based Target, said the retailer was starting to see inflation on clothing and housewares it is buying for the second half of the year.

"In all cases, we will attempt to maintain our gross margin rate on affected items but of course the outcome depends on the market's response to any cost increases," she said. Uta Werner, retail sector analyst with Sanford Bernstein, said retailers were searching for other regions to replace China, but their profit margins would likely take a modest hit in the meantime.

HENKEL EYES RS 100 CRORE BUSINESS

Henkel India today said it is expecting a business of Rs 100 crore from its 'Pril' brand of utensil cleaners by the end of this year, besides planning to capture 25 percent market share in household cleaners segment.

"We are anticipating a turnover of Rs 100 crore from our utensil cleaning segment in 2008 against the sales of Rs 75 crore in 2007," Henkel India, Category Manager (Laundry and Home Care), Debashis Das said.

The company's strength in the utensil cleaner segment could be gauged from the fact that sales have grown 500 percent in this segment to Rs 75 crore in 2007 from Rs 12.5 crore in 2003.

The company is quite hopeful that the newly launched 'Pril Multi Degreaser' — a specialty cleaner would significantly contribute to the sales of Pril brand products.

Giving details regarding the size of the market, he said presently, the household cleaners segment is divided into floor cleaners, multipurpose cleaners and specialty cleaners with Rs 226 crore which is growing at 18 percent per annum.

"We are looking to capture 25 percent market share in the first year," he said.

ITC EXITS GREETING CARDS BIZ

Facing up to the reality of a digital age in which interest in greeting cards is diminishing, ITC has exited the category. Launched in the year 2000 under the brand Expressions when the category was estimated at Rs 300 crore and growing at 15-20 percent, the move comes in the wake of the market size shrivelling to Rs 100 crore.

ITC has also re-branded this business as the Education & Stationery Products Business (earlier known as Greeting, Gifting & Stationery) to accurately reflect its current focus on the Rs 9,000-crore market that comprises notebooks, copier and printer paper, writing instruments and ‘scholastic products’ (erasers, geometry boxes, sharpeners and the like). In the previous fiscal, greeting cards contributed only 5 percent of the business unit’s turnover. Cheaper telephony and cell phone SMS services have proved to be a double whammy for greeting cards, while e-greetings has also contributed to the decline.

Chand Das, Chief Executive, ITC-Education & Stationery Products Business, told Business Line that the company decided sometime last year to withdraw from the category and has since stopped production. ITC’s paperboards and speciality papers facility at Bhadrachalam has invested in equipment worth Rs 500 crore that will manufacture and supply the paper.

Das said ITC is the largest national player in the Rs 3,000-crore notebooks market with a market share of 8 percent, followed by Navneet Publications at 5 percent and Ballarpur Industries Ltd (BILT) at 2 percent. Considering that these national brands account for just 15 percent of the market, there is a huge opportunity for turning a commodity market into a branded market, he said. Also, given that the segment is growing at 9-10 percent every year, he expects it to double in size over 6-7 years.

“The notebooks, branded Classmate and PaperKraft, will cater to the student and executive segment. The printer and copier paper will also be branded PaperKraft. This category is estimated at Rs 1,800 crore, where JK Paper, BILT and Tamil Nadu Newsprint and Papers account for 70 percent of the market. ITC’s notebooks business has been growing at 100 percent every year for the last three years, Das said, pointing out, though, that the growth came on a small base. In general, branded notebooks are priced 10-20 percent higher than unbranded ones.

Most of the categories that are aimed at students will go by the Classmate name, including pencils and scholastic products, some of which will be outsourced from China. Of the Rs 9,000-crore market, writing instruments are the next biggest category, estimated at Rs 2,500 crore. Between October and December of this year, ITC will launch pens and pencils (the latter a Rs 400-crore market) that straddle the low-end, mid-range and premium segments of this category, Das said. This business unit has, over the years, set up a separate distribution chain to market its stationery products.

Das expects the education and business products unit to cross the Rs 1,000-crore turnover mark in five years from now. The business unit ended the previous financial year with a turnover of Rs 180 crore and expects to double that by the end of the current fiscal.

Archies, a leading player in the greeting cards business, which has a 50 percent plus market share, has also seen a steady decline in its profit margins in this business over the past few years. Between 2003-04 and 2006-07, even though Archies’ greeting cards sales rose from Rs 34 crore to Rs 38 crore, its profits from this business slid from Rs 9.78 crore to Rs 8.12 crore.

DREAMING BIG IS THE KEY TO SUCCESS

A fledgling Ahmedabad-based garments and fashion accessories company, Liverpool Retail India Ltd (LRIL) made a splash in the retail space by launching 151 outlets of a new brand ‘Barcelona’ across the country covering 15 states in one day.

Its chairman, 50-year-old Vijaysingh Rathore may well is another retail czar in the making to take on the likes of Future group chairman Kishore Biyani. That’s largely because, like Biyani, Rathore is a man who has unerringly got his finger on the pulse of the consumer.

Recounting his days as a struggling entrepreneur, Rathore recounts how the idea of launching affordable but value-for-money readymade garment stores for the fashion-conscious aam aadmi came to him while visiting a sale in a small town. “I saw how poor quality garments were selling like hot cakes largely because they were at discounted prices.

For the rate-conscious lower and lower middle-class consumer, price is a major factor while buying a product. That’s what gave me the idea of trying my hand at selling good quality, readymade garments which would offer value for money at really affordable prices,” he confesses.

What he has also factored in while giving a final shape to his retail dream is the fact that the Indian consumer, apart from being extremely price-conscious, is also a sucker for discounts. “That’s the reason that ours are essentially discount stores which offer hefty discounts for eight to nine months in a year,” reveals Rathore.

TESCO CHARGED OF GROSS UNDER-PAYMENT AT INDIAN FACTORY

A charity group today accused British retail giant Tesco, which has been mulling an India foray for long, of exploiting workers at a Bangalore garment factory, saying employees are paid only half the minimum wage.

War on Want, a group fighting against poverty in developing countries, charged that workers making clothes at a factory in Bangalore for the top UK retailer are toiling long hours for as little as 16 pence (Rs 14) an hour.

The investigation was conducted by an Indian labour rights organisation, Cividep, and its report will be presented at Tesco's AGM tomorrow.
The charge against Tesco follows a BBC TV report earlier this month, which showed some of India's poorest people, including children, working long, gruelling hours on Primark clothes in slum workshops and refugee camps.

Last week, Primark reportedly sacked three suppliers in India after finding that they were sub-contracting work to companies, which used children for embroidery work.

War on Want said the new investigation found "employees at a large Tesco supplier factory in Bangalore struggling to survive on less than 1.50 pound a day for a 60-hour week, with a 20 percent hike in rice prices making life even harder."

Employees in the factory earn on average 38 pounds a month, and the lowest paid receive just 30 pounds, while the Bangalore Garment and Textile Workers Union last year calculated the minimum wage as at least 52 pounds a month.

"Employees complained that bosses forced them to work overtime or face the sack and they receive only half the extra hours recorded," it noted.

RRL OPENS ITS SIXTH STORE IN AHMEDABAD

Reliance Retail Limited (RRL) on Thursday launched its sixth Reliance Super store, a Minimart format here. Shoppers will have the option to choose from a wide variety of products in every category including fresh produce food and grocery, home care products, apparel and accessories, non-food FMCG products, home appliances and automotive accessories and lifestyle products, a company release said.

Reliance Super, which will carry a range of over 13,000 products across 15,000 sq ft area. The store will also host Reliance's own apparel brands in select categories along with products that will be exclusively available in Reliance Super stores only, the release added.

"The launch of Reliance Super is yet another step by RRL towards providing an international shopping experience to customers," said President and CEO-operations of RRL Raghu Pillai, after the launch. RRL is a subsidiary of Reliance Industries Limited and operates 590 stores in 57 cities in 13 states

RELIANCE RETAIL SET TO ENTER BENGAL IN 4 WEEKS

After waiting for almost a year because of political resistance to its entry, Reliance Retail Ltd, a subsidiary of Mukesh Ambani-controlled Reliance Industries Ltd, is set to launch its stores in West Bengal in about a month.

“We should be there, hopefully, in the next four weeks,” said Reliance Retail’s chief executive Raghu Pillai. “We’ll launch in Kolkata first.”

Reliance couldn’t launch its retail business in West Bengal last year because of resistance from the Forward Bloc, which is part of the ruling Left Front and controls the agriculture ministry. The Forward Bloc, which runs the state’s agricultural marketing board, wouldn’t let Reliance source farm products from rural wholesale markets.

In August, Forward Bloc supporters vandalized two outlets when Reliance tried to launch its retail business in the state. The Forward Bloc defended the action, saying Reliance’s entry would kill small retailers.

“We are doing a legitimate business, and there are so many others doing the same business. So why should people try to stop Reliance alone from entering Bengal. I appreciate there’s some anxiety, but such things happen all over the world. We’ll have to address it,” said Pillai.

SMALL SHOPS CRY ‘INFLATION!' BIG BOYS SAY ‘NO PROBLEM...YET

Small kirana stores have started feeling the heat of inflation wave. At over 11 percent, inflation has resulted in lower stocks and falling sales, casting doubts on their medium-term existence. Some have shut shop, while others are considering getting into new businesses.

"We have started keeping lesser stocks (reduced by up to 25 percent) owing to inflation," said Bharat Shah, owner of Jatin Traders in Kandivli, a suburb in North Mumbai. "Prices of products like rice and pulses have gone up by more than 1.5 times. The sales are clearly falling."

Compared to a monthly business of Rs 5-6 lakh, Shah's current monthly turnover is down by a third to around Rs 3.5-4 lakh. "It is fine if business improves, otherwise many of us are in a situation where we may have to close down." The challenges for small retail and departmental stores are not limited to any one city to retailers across Delhi, Ahmedabad, Hyderabad and Kolkata, inflation has hit low-income groups hard, which in turn has taken its toll on the business of retail stores. From 5 litre packs, consumers are shifting to 1litre packs and preferring cheaper brands for all their purchases.

"While earlier we used to clock sales of Rs 8000 daily, now it reaches only Rs 6000," said C.H. Srinivasa, proprietor and owner of a 300 sq feet medical and general store in Hyderabad, who is feeling the pinch. "Consumers purchase medicines in the form of individual units instead of buying the whole pack." These retail shops are hit as salaries of people who do small-time jobs have not risen in proportion to the rise in inflation.

"After the recent fuel hike, sales have been immediately hit by 25 percent," said Darshan L. Mehta, whose brother runs a 100 sq feet kirana store in Paldi, Ahmedabad. "In fact, some small shops have also shut down, especially those located in and around malls."

PANEL TO EXAMINE VAT STRUCTURE, DEVIATIONS

The Economic Times

State tax regime could be in for a facelift. State governments have finally come around and have decided to evolve common value-added tax rates sans deviations.

The empowered committee of state finance ministers that discussed the issue at its last meeting early this week has set up an expert group to look into the VAT structure and deviations in rates that existed across the states, sources said. The expert group comprises commissioners of sales tax from all states.

Bihar deputy chief minister and finance minister Sushil K Modi said, “The panel has set up a committee to examine the issue of deviation in detail. The committee will give its recommendations in three months.”
The empowered committee has permitted each state to exempt 10 items out of a list of about 50 items of ‘goods of local importance’ to charge an appropriate rate of tax.

Industrial intermediate goods and raw materials are to be taxed at the floor rate of 4 percent while the rate of 12.5 percent is the general VAT rate. Most of the state governments have surpassed the empowered committee permissible level of 10 items. States like Kerala, which has imposed higher value-added tax rate of 20 percent on certain luxury items.

Some other states have imposed a lower rate of VAT on certain consumer goods that impacts businesses in neighbouring states. The deviation issue has been hanging fire for some time now with the centre has asking the states, time and again to bring about uniformity in the rates.

Various industry bodies and trade associations have also demanded that states to correct the deviation in the structure. It may be pointed that under the unified goods and service tax regime that is to roll out from the 2010, such deviations would not be possible except for petroleum products.

RETAILERS MOOT STEPS AS SHIELD AGAINST INFLATION

The Economic Times

Though inflation is in full swing, retail majors are yet to witness dwindling footfalls. But they are definitely bracing for long haul in the wake of rising prices, and cutting costs, wherever possible, to improve efficiency.

Across the board, top retailers in India are looking closely at supply chain, logistics and brand performance to protect their margins. Shoppers Stop CEO Govind Shrikhande says although the impact of high inflation and tightening of consumer spends is not immediately evident at the stores, plans are afoot to look at ways and means to counter the slowdown.

So, when it comes to replenishment, Shoppers Stop is looking to shorten the turnaround time. “If one can get the turnaround time of replenishment from 18-12 hours, it gives us a chance to sell goods the very next day. It assumes significance considering that one gets an additional day of trade,” he said.

At Croma, the consumer durables retail chain of Infiniti Retail; officials are looking at ways to bring in efficiencies in logistics. The plan is to work closely with major vendors supplying to the chain and implement measures, which is beneficial to both the retailer as well as the manufacturers.

“Woolworths does most of our sourcing and they are talking to vendors like LG, Samsung, Sony and HP to work together of reducing overheads,” says Infiniti Retail CEO Ajit Joshi. Joshi says that the warehousing facility of one of the vendors in Mumbai can be used as a distribution centre instead of taking delivery and routing it to Croma’s distribution centre.

“Every Re saved will improve bottom line. So, one will have to look at every aspect of the business closely and see where one can save costs,” says Joshi.

Route optimisation and efficient transport from farm to shelf is high on the contingency plans of retailers in case the going gets tough in the time to come. Hypercity business head (food & grocery) Ashutosh Chakradeo believes reducing wastages through better planning in logistics will come into play if inflation keeps moving northwards.

“From procurement to delivery, one will have to aggregate and ensure maximum efficiency. Which simply means making the most out of lesser number of trips from market to the store,” says Chakradeo.

At Sabka Bazaar, the food and grocery format of Wadhawan Retail, route optimisation involves clubbing delivery to more stores than earlier in a single trip. The chain is looking to open the store an hour before scheduled opening for deliveries which will enable the chain to service more stores than before.

Shrikhande says that performance appraisal will become shorter as brands which are not witnessing off take will be taken off to be replaced by ones which have high off take potential. “Though performance of brands is a regular exercise, the period of review will come down from six months to every quarter,” he says.

Sabka Bazaar CEO Salil Sahu says if the downturn persists, the chain will look at focussing more on economy range of brands on the shelves. “One will have to get economy brands in planned categories. For example, economical tea brands will be given more space on shelves than premium brands,” says Sahu.

'Bag’ging to go green from the retail store (Final part)

Say it loud – I'm green and I'm proud.

We’ve replaced ‘black’ with ‘green’ in this famous James Brown number, as what we had assumed to be a less-talked-about issue among our retail community, is appreciatively being talked about and pondered upon. The first two parts of this series plainly put forth the idea of encouraging the use of handmade and biodegradable shopping bags. These two stories, in the last two days, easily had more than double the expected impact. Retailers approached Indiaretailing to know about the makers of such bags, and vice versa, while some also shared their experiences and reasoning for not being able to find alternatives.

Responsible alternative:

Here it is, the final part, discussing some alternative ideas, acknowledging those interested in using biodegradable bags and appreciating the ones taking pains in creating the same.

Chander Shaker Baddam of Luxor Writing Instruments mailed to Indiaretailing enquiring about Jan Sandesh, the NGO that sells paper bags handcrafted by needy women.

Sharing plans of supplying eco-friendly plastic bags to corporate retailers, Gaurav Vora, director, Black Sheep Ventures, the company that has been supplying bags to various leading retailers, told Indiaretailing: “We are planning to introduce the concept of a ‘lifetime bag’, wherein a customer will have an option of buying a long-lasting plastic bag. These bags will not be dumped by the consumer; instead, he will bring it back to the outlet every time he comes to shop. If damaged, this bag will also be replaced free of cost, while the worn-out bag can be sent for recycling, ensuring its further utility and also preventing it from harming the environment.”

Retailers including Westside, Planet M, Globus and Reliance source bags from Black Sheep Ventures, and are probably considering the company’s proposal of introducing the ‘lifetime bag’.

TS Ashwin of Odyssey expressed his support of biodegradable shopping bags and told Indiaretailing that for the last four years, Odyssey has been intermittently sourcing such bags from an NGO. He said, “All our products – toys, for instance – cannot be sold in a paper bag, as they have varied sizes and shape. However, we do use them for smaller items, and plan to introduce biodegradable bags at all our express-format stores that sell smaller products.” Ashwin assured he will engage an NGO to get such bags, while also making it a point to remind that it’s not just plastic that is harmful – even paper is not environment-friendly as it’s obtained from trees. He stated that the company is exploring options to have a 100 per cent eco-friendly solution.

People Tree is another retailer who, in association with an NGO, has been using green bags. Speaking to Indiaretailing about their idea of introducing environment-friendly bags, Satyajit Ranjan of People Tree said, “Since our inception, our motive has been to introduce environment-friendly products through our shops. We have identified tremendous potential in Jan Sandesh and, hence, are sourcing bags from them. In a month, we take around 700-800 bags from them.”

People Tree retails garments, jewellery, books and accessories. The company operates through a franchisee in Great India Place mall in Noida and also has its own outlets in Pondicherry and Surajkund.

Literacy India introduced itself to Indiaretailing, claiming it has an eco-friendly solution. Speaking to Indiaretailing, Indrani Singh, founder of Literacy India, a charitable organisation that has been supplying waste-paper bags to various corporate groups, said, “We have been delivering paper bags to Revolutions, a fashion retailer based in Noida, and Tupperware, a direct-selling company and manufacturer of kitchen ware. Till date none of the retail biggies have contacted us, though we do have the potential of delivering such products to them.”

Literacy India is a Gurgaon-based NGO that focuses on providing education and self-employment opportunities for the needy children in villages.

It is to be noted here that NGOs that are in the process of making paper bags actually craft these by using waste newspapers (newsprint) generally obtained from junk dealers, and this paper is biodegradable and can be recycled to produce paper maché handicraft.

By Ranjan Kaplish and Satrajit Sen

ALOK IND MAY LAUNCH IPO FOR RETAIL BIZ

Alok Industries, a Rs 2,160-crore textile company, is planning an initial public offering (IPO) for its retail business to raise Rs 500-600 crore, sources said.

Alok, which entered the $15-billion organised retail sector in the country in 2006, operates 23 retail stores called ‘H&A’, short for Home & Apparel, in Mumbai, Bangalore, Vapi, Hyderabad, Ahmedabad, Silvassa and others.

A few days ago, chief financial officer Sunil Khandelwal had said that Alok would set up 100 new stores in FY09 with an investment of Rs 40 lakh per store. So the total investment marked is Rs 40 crore.

The expansion would be funded through a mix of internal accruals and debt. By 2010-11, the company hopes to take the number of stores to 400. The retail business presently contributes 1% to the company’s turnover.

In April, Alok’s board had approved the spin-off of the H&A business into a separate subsidiary called Alok Homes & Apparels.

“The fact that Alok is heavily increasing the number of stores means it wants to generate awareness about its retail presence and list the business as a separate entity,” said a source.

MODI-REVLON ENTERS PROFESSIONAL BEAUTY PRODUCTS BIZ

Modi-Revlon is widening its product basket by introducing an array of professional beauty products targeted at the beauty salons. The company is also upping its ante to have a larger presence in the new format stores, which it hopes will be a major revenue churner in the future.

“In the next couple of years, we hope at least 70 percent of our sales will come from modern retail outlets. We are scaling up our presence in these outlets as it generates considerable impulse buys,” Deepak Bhandari, Director- Marketing, Modi-Revlon, said. Modi-Revlon is a joint venture between the Modi Group and Revlon of the US.

Speaking on the professional beauty range, Bhandari said the Revlon Professional range will be a key growth driver for the company. “The professional beauty products market in India is estimated to be close to Rs 350 crore and is witnessing a 20 percent growth annually. We hope to capture at least 10 percent market share in the first year of launch,” he said.

The range comprises 44 stock keeping units, including hair colour creams, conditioners and nail enamels, which will be sold directly to salons.

The new range would be marketed in Sec A and B cities with a slew of below the line marketing initiatives. The products will be manufactured at the company’s plant in Guwahati

TITAN PLANS NEW KIDS RANGE

Titan Industries, one of India's leading retailers of watches and jewellery, is planning to launch 40 colourful watches under a completely new brand for kids this financial year.

According to Rajiv Verma, regional sales manager, the company earlier sold kids' watches under the brand ‘Dash', which was discontinued as the market for children's watches was not large enough at that time.

"But parents like to indulge their children these days, so we feel this is the right time to launch a children's watch brand. We will, however, find a different name for the children's brand this time," Verma added.

The company will tie-up with multiplexes and will look at school-level activities for promoting the kid's brand. It will also look at tying up with cartoon channels for promotions.

"We are in the process of finalising the price structure for the children's brand. It should start at Rs 500," Verma added.

The watch industry is estimated to be around Rs 3,000 crore, with 60 percent of the sales coming from the unorganised sector. Of the 35 million watches sold annually in India, less than 5 million watches are priced at over Rs 1,000.

Titan's main brands for watches are Titan, Sonata and Fastrack.

In a parallel development, Titan Industries is exploring possibilties for associating itself more closely with Tanishq, its jewellery brand, to bring together their special collections during special occasions and market them as part of the same package.

Titan Industries is expecting a growth of 20 percent for its watches in 2008-09.

Titan Industries reported a turnover of Rs 3,046 crore for the year ended 2007-08. The watch division of the company has a domestic market share of over 70 percent of the organised market.

RADO EXPECTS INDIA TO BE ITS 3RD BIGGEST GLOBAL MKT IN 3 YRS

Expecting India to be the third biggest global market for its luxury watch brand 'Rado' by 2011, Swatch Group is embarking on an expansion drive to almost double its exclusive stores.

"We are looking for growth by increasing sales in our existing exclusive franchisee outlets, shop-in-shops and multi-brand outlets. Rado intends to be the biggest brand in the premium watch segment in India, where last years we were among the top two," Rado Vice President for Sales Peter Kaiser told PTI.

He said India is currently its eighth biggest global market and expects the country to occupy the third slot in next three years.

Kaiser said exclusive Rado brand stores would be almost doubled to 15 from the current eight, besides launching 6-10 new models by end of current fiscal to meet the target.

Among the new cities to be covered by exclusive outlets are Ahmedabad, Chandigarh and Bangalore.
"We are also launching three more shop-in-shops, up from the existing five, to cover new Tier II cities like Jalandhar and Ludhiana," he added.

SINGAPOREANS BIGGEST ONLINE SPENDERS: SURVEY

Singaporeans and South Koreans are the region’s biggest online spenders, a survey by MasterCard said on Tuesday. Singapore online shoppers spent $770.70 over a three-month period, followed by South Koreans who spent $707.50, the survey found.

It studied the behaviour of more than 4,000 people with bank accounts who used the Internet at least once a week, in Hong Kong, mainland China, Australia, Japan, India and Thailand as well as Singapore and South Korea.

Online shoppers in Thailand spent the least, at $406.30 over the three months, while those in Japan spent $581.00, the survey said. Shoppers in the region averaged 3.1 purchases during the period, it said.

It added that 63 percent of survey respondents said they made purchases online. That figure was even higher in Japan and South Korea, where 83 percent said they shopped using the Internet. The MasterCard study said that by 2010 China’s online shopping population is projected to increase to 480 million, contributing 58.6 percent of the region’s total online shopping population, up from 49.9 percent now.

COUTURE COMES IN STYLE TO THE MILLENNIUM CITY

To keep you well informed about what’s new in Gurgaon, I ventured out this week to see what’s been happening. Someone told me that Aditya Birla’s retail venture, called more, has opened near Epiccentre. It’s on the same lines as Spencer’s and Reliance Fresh. I drove all the way there, only to find that the bright orange lettering on a tall building was their corporate office. I don’t think their store has opened yet.

Next up was Gurgaon Central: the Future Group’s seamless mall. Located on MG Road, ahead of MGF Metropolitan on the same side (closest to Iffco Chowk), the Central was quite a revelation.

I had no idea it stocked brands such as FCUK, Calvin Klein, Tommy Hilfiger, Esprit, EDC, Lee, Levi’s, Converse, Bossini, Benetton, Wills Lifestyle, Van Heusen, Etam, UMM, Miss Players, Color Plus, Remanika and many, many more.

It’s divided into four floors: the ground floor has a wide variety of perfumes and cosmetics (Clarins, Estee Lauderx and even Jaun Paul Gaultier which is a brand I haven’t seen elsewhere)

RELIANCE SUPER OPENS IN AHMEDABAD

Reliance Retail Ltd opened its first Reliance Super in the mini-mart format at Ahmedabad. This is its sixth in Gujarat. Spread over 15,000 sq. ft it will house over 13,000 products, including food and grocery, home care, apparel and wellness products. "The launch of Reliance Super is yet another step by Reliance Retail towards providing an international shopping experience to our customers at unmatched affordability, guaranteed quality and choice of products and services," said Raghu Pillai, President and Chief Executive Officer, Operations and Strategy, at the launch

RASOI GROUP MULLS ACQUISITION IN FMCG SPACE

The $250-million Rasoi Group plans to acquire a mid-sized FMCG company before the end of this fiscal, a top company official said.

"We are looking at acquiring an FMCG company in the $10 million range. Talks are in the initial stages but we hope to seal the deal before the end of this financial year," Rasoi Group's Director, Varunn Mody said.

"We are looking at both organic and inorganic growth as part of our expansion plans," Mody said.

Besides the proposed acquisition, the Rasoi group was also in talks with a couple of overseas companies in the consumer durables and healthcare sector for forging partnerships, he said.

"We are in advanced stages of negotiations with some French and Spanish companies, which we hope to conclude shortly," Mody said.

The acquisition would be financed partly through internal accruals and partly through loans from the financial institutions, he said, adding 'the group is cash rich and there is lot of cash flow to fund the acquisition.'

J L Morison (India) Ltd, Rasoi Ltd and Hindustan Composite are part of the Rasoi Group with a presence in the personal and healthcare, edible and food products and real estate segments.

FUTURE GROUP'S HOMETOWN TIES-UP WITH AQUALIFE

Future Group's home improvement store, HomeTown, today announced its tie-up with Italy-based AQUAlife for selling the latter's luxury range of bath products.

AQUAlife's products would now be available at all HomeTown stores across the country, a press release issued here said.

"Through this tie-up, we are able to offer these luxury products at an unimaginable (low) price and thereby making the panache of Italian design and opulence very affordable to our customers," HomeTown's CEO, Mahesh Shah, said. Various AQUAlife products available at HomeTown are Calipso Dual, Igea Classic, Venere Classic and Vittoria.

STATE GOVT THROWS ITS HAT IN RETAIL RING

In talks with Kendriya Bhandaars to set up mobile delivery vans to retail essential commodities

The Delhi government is planning to revive the mobile van service to retail essential commodities in collaboration with the Central Government Employees Consumer Cooperative Society, which runs the Kendriya Bhandaars.

The move would bridge the gap between consumers and retailers, and provide options to consumers, Chief Minister Sheila Dikshit said today.

“We have spoken to Kendriya Bhandaar and they have shown tremendous interest in the idea of launching mobile vans to retail essential commodities along with some other daily use items,” Dikshit said.

ROSEBYS TO INVEST RS 100 CRORE FOR 700 OUTLETS IN INDIA

The UK's store, which was acquired Gujarat Heavy Chemicals Limited in 2006, plans to pump in Rs 100 crore for expanding the chain in India, which will be positioned as 'affordable premium' stores targetting young working women.

Besides the stores roll-out, which is expected to start by September this year in three states, the company is also undertaking an aggressive brand building exercise by spending about Rs 30-40 crore. It has hired advertising agency Saatchi & Saatchi for the purpose.

"There is a huge potential to be tapped in the affordable premium home interiors and furnishings space in India. Our aim is to target young working women and we plan to open about 700 stores in the next three years," Rosebys Director Nikhil Sen told PTI.

He said the company would be adopting mostly franchise model for its stores. "The investments for the stores roll-out could be about Rs 100 crore in the next three years and we may spend about Rs 30-40 crore on brand building campaign," he added.

Sen said Rosebys would position its stores as a one-stop shop for both soft and hard home furnishings offering from bed and bath items to accessories and lamps. "We will also offer personal care products such as soaps and shampoos with our own private label and also kids range of products."

Borders lines up suitors for Paperchase

Borders is understood to have received indicative offers from Luke Johnson and WHSmith for its stationery chain Paperchase.

Sources said Risk Capital Partners chief Luke Johnson – who owns Borders UK – has offered about half the £80 million thought to be wanted by Borders US for the chain, which was put up for sale last month (Retail Week, May 16).

WHSmith is understood to have also made an offer and retail entrepreneur Theo Paphitis, who owns the Ryman chain, is believed to be interested, although it is unclear whether he has made a bid.

Private equity businesses previously linked to the sale, including HgCapital, Isis Equity Partners and Change Capital, are understood to be watching with interest.

The deal is complicated by the fact that Paperchase operates 40 per cent of its outlets as concessions in Borders UK stores.

"The business cannot survive without Luke Johnson," said one source, who added that Johnson's offer is likely to have been rejected.

Another source said: "The key to the puzzle is what will happen to the Borders concessions."

Johnson was unavailable for comment. WHSmith and Theo Paphitis declined to comment.

Zara forces Dhaka factory closure

Fashion firm Zara has forced the closure of a supplier's factory after workers told the BBC they had suffered harsh treatment there.

An inspection of the premises in Bangladesh's capital, Dhaka, prompted by revelations to the BBC, found "really poor conditions"

The factory did not make clothes for Zara, its owner Inditex said, but was part of a firm that supplied the chain. Inditex told the supplier it must close the factory and redeploy its workers.

Unions must also be introduced to its other plants.

'Abuse'

One woman worker told BBC World Service's Global Business: "The overall factory condition is not good, especially there is verbal abuse and the physical abuse as well.

If the guy wants to be our partner for the future he has to close this factory because it's like a gangrene

Javier Chercoles, Head of Corporate Social Responsibility, Inditex

"If we make any kind of small mistake they beat us and or they deduct our wages," she said. Another woman claimed they were not able to leave the firm as they were always owed outstanding wages.

"If I leave without permission they will not give my outstanding salary of the previous months. So that's the problem. It's not just easy to leave the factory," she said.

The two women said they had made clothes for Zara.

'Shocked'

Inditex's head of Corporate Social Responsibility, Javier Chercoles, told Global Business that Zara had not knowingly bought clothes from that particular plant in the past five years.

As a result of the allegations, he visited the factory in Dhaka.

Mr Chercoles said it took some time to be allowed in, but after a thorough search he established that clothes were not being made for Zara there, although he saw evidence of clothes being produced for other international brands.

We will provide transport to whoever is willing to move to the new premises

Spokesperson for the factory's owner

He said he was shocked by what he saw.

"The factory was really poor conditions. We realised that not any evidence for any garments of any seven brands of Inditex were placed there.

"[It] was full of other brands producing there, other international brands, but not for Inditex," he said.

'Clean-up'

However, Mr Chercoles discovered that this was a sister factory to a plant where clothes are made for Zara, a factory which he said has been monitored and where conditions are much better.

The two factories are some distance apart but he conceded that it was possible that work could have been passed between the two plants but without Inditex's knowledge or authorisation.

He told the owner of the company that if Inditex was to remain a customer he had to "clean up the situation", close the factory and move the staff to another plant.

"If the guy wants to be our partner for the future he has to close this factory because it's like a gangrene."

Independent monitors

The supplier's owner has agreed to close the sister factory and redeploy its staff within the group by 25 September.

He has signed an agreement that the workers will be protected, the process will be overseen by independent monitors and trade unions will be recognised and introduced at the other plants in the group.

Independent monitors have started work in the factory in the past few days.

A spokesman for the supplier said they were unaware of the physical and verbal abuse alleged by the workers who spoke to the BBC.

"We will provide transport to whoever is willing to move to the new premises and any worker who freely decides that they do not wish to transfer then we will pay them all the benefit," the spokesperson said.

The action taken by Inditex as a result of allegations put to them by the BBC illustrates just how sensitive retailers are becoming to revelations about working conditions in their supply chains, said Global Business' producer Caroline Bayley.

They know that consumers are becoming more aware of how and where their cheap clothes are made and realise that their reputations are on the line, she said.

Stuart Rose faces shareholder revolt at M&S annual meeting

Marks & Spencer shareholders are being urged to vote against the retailer's chairman Sir Stuart Rose at next month's annual meeting in protest at his promotion from chief executive.

Corporate governance research group Pensions and Investment Research Consultants (PIRC) has advised its clients - who include many local authority pension funds and faith-based investors - to show their disapproval of Rose's new role. His promotion to executive chairman in March contravenes the City code on boardroom standards. The code favours independent, non-executive chairmen appointed from outside the business. It says chief executives should not be promoted to the chairman's role and it also warns against an individual simultaneously holding the roles of chief executive and chairman.

Legal & General, one of the retailer's top five investors, described Rose's role as "potentially damaging".

In a bid to soothe angry investors Rose agreed to put himself up for re-election to the M&S board annually, rather than every three years as required by law. But PIRC's recommendation says: "The roles of chairman and chief executive are completely different and should be separated."

It adds: "Combining the roles represents a dangerous concentration of power that is potentially detrimental to board balance, effective debate and board appraisal".

PIRC says combining the roles can only be justified "on a temporary basis under highly exceptional circumstances". Rose intends to do both jobs for three years while he grooms a new chief executive from the ranks of his lieutenants.

M&S's rationale for the promotion is that it is impossible for the best successor to be identified while Rose is still in the job. But PIRC does not accept the retailer's reasoning and described the three-year timescale as "beyond a reasonable length of time". The research group also revealed that it had considered filing a special resolution to address the "specific question" of Rose's new job, so that shareholders could vote in favour of him as a chief executive but show their opposition to him being named as chairman too.

However, PIRC said: "despite being able to meet the ownership requirements to file, the costs involved within the timescale were prohibitive."

An M&S spokesman said that filing a resolution would have been free if it had been submitted by the end of March. However, the PIRC campaign was not announced until March 10 and it was April 3 when the then M&S chairman Lord Burns sent a letter to shareholders explaining the reasons behind the promotion. He has since stepped down, and is receiving a year's salary, £450,000, as a pay-off. Burns will not be fronting the annual meeting to explain why he allowed the move. Commenting on the PIRC voting guidance the M&S spokesman said: "They are entitled to their views. We have made our position clear."

The Association of British Insurers, has stopped short of recommending a vote against Rose. But in its voting guidance it gave the company an "amber top" - which urges shareholders to consider the issues carefully before voting.

Senior fund managers estimate that up to 20% of shareholders could vote against Rose at the annual meeting on July 9. There could also be a substantial vote against proposals to change boardroom incentive plans that will make it easier for directors to achieve big payouts.

China - Ministry Of Commerce To Build 5,000 Convenience Stores By August

To rebuild commercial outlets and ensure market supply in the Wenchuan earthquake areas, the Ministry Of Commerce has decided to build 5,000 convenience stores in these areas by the end of August 2008.

Chang Xiaochun, director of the Department of Market System Development, said that to resume the commercial operation of the seriously affected areas as soon as possible, the Ministry Of Commerce will support these areas in setting up temporary commercial outlets in two ways. One is to offer mobile goods sales vehicles. By June 16, the ministry had sent 370 mobile vehicles to 15 disaster areas in Sichuan and the accumulated sales was over CNY8.5 million.

The other is to set up tent stores with the help of the local civil administration departments. So far, there are a total of 2,455 tent stores in Sichuan and the average daily sales of each store is about CNY2,000. In addition, the ministry will build one to three 20 square meter convenience stores in every temporary settlement area. These convenience stores are made of portable plates and the lifespan of these stores is about two to three years.

At present, the first batch of 200 portable plate convenience stores has been set up in Chengdu, Deyang, Mianyang, Guangyuan, Yaan, and Aba. By the end of August, the Ministry Of Commerce will have set up 5,000 convenience stores and will extend the set up to Gansu and Shaanxi.

Baugur exits cash'n'carry to focus on retail

Baugur, owner of House of Fraser, has sold its 31.4% stake in the cash'n'carry operator Booker as it focuses on the retail sector. The Icelandic group's exit raised £100m, in a placing that saw the proportion of institutions' share rise from 23.7% to 43.7%.

The Icelandic bank Kaupthing sold its 6.2%, while its investment fund Kaupthing Capital Partners acquired 22%, agreeing not to sell for a year without the consent of Booker and its adviser Investec.

Tom Hunter's West Coast Capital and HBOS reduced their stakes to help accommodate institutional demand, according to Booker's chief executive, Charles Wilson; he bought 2m shares, taking his holding from 8.1% to 8.3%. The non-executive director Kevin Lyon bought 200,000.

Baugur held its 31.4% stake through its Milton investment vehicle but said it was the right time to sell, three years after being in the consortium that bought Big Food Group, the company behind Booker and the Iceland supermarket chain. Gunnar Sigurdsson, chief executive, said: "Given the exceptional turnaround ... and the fact Booker has now successfully made the transition back to the public markets, now is the right time for us to exit."

Baugur said earlier this year it would sell its media, technology and financial investments for £430m to expand in retail.

Booker, the UK's largest food wholesaler, returned to the stockmarket last year via a reverse takeover by the Aim-listed grocery wholesaler Blueheath. With greater institutional ownership, it now plans to switch to the main market of the London Stock Exchange next year. Shares in Booker closed down 1p, or 4.4%, at 21.75p, valuing the firm at £324.1m.

Pier 1 Withdraws Offer to Buy Cost Plus

FORT WORTH, Texas–Pier 1 Imports has withdrawn its proposal to buy rival Cost Plus for $88.4 million. Cost Plus had rebuffed the offer, saying it would go against the best interest of its shareholders.

The combined retailer would have generated over $2 billion in annual sales and operated about 1,400 stores.

“Our goal in pursuing a combination with Cost Plus was to create a stronger, more efficient company,” Pier 1 said in a statement.

Both retailers are emporiums of imported home goods and share a similar store concept and sourcing model.

“We have concluded, however, it is unlikely that we would be able to acquire a majority interest in Cost Plus at a price that would make sense for our shareholders,” the statement said.

Some analysts said the timing of the purchase was premature as Pier 1 is still in the midst of carrying out its own turnaround.

“Even if Pier 1 is on target, this transaction would distract management form the tricky task of executing at Pier 1,” said Matt Fassler, a Goldman Sachs analyst, in the research note at the time Pier 1 made its offer for Cost Plus.

“We wish to assure our shareholders that our turnaround is on track and we remain confident about the future of Pier 1 Imports,” Pier 1’s statement said.

How The Supplier And The Government Are Handling Inflation

Aditya Rao

Inflation figures for the past week showed that the inflationary disease had grown to an astounding 11.05%.A dramatic rise of almost 3% from the previous week. So the question must be asked how come you’re still paying more only for food products and fuel but the exact same price for consumer and retail goods?

The answer is in the fine print.

Granted, some goods do cost more than before like mosquito repellant or moisturizing lotion but most everyday household goods still cost the same. The catch is that unknown to most consumers producers of these goods have been slowly decreasing the quantities of the goods they sell.

So if you pick up a bottle of cleaning phenyl for about forty five rupees for a bottle containing half a litre of it earlier. You are still paying the same forty five rupees but unknown to you the quantity of the product has been decreased from 500 ml to 475 ml. A simple case of the company hoping that you won’t notice the slight decrease in quantity and be satisfied that despite inflation you are still paying the same amount as before.

Few might blame them .The Indian supply chain is extremely difficult to comprehend. Inflation hits each arm of the chain. The link between the direct manufacturer of the product and the store that you buy it from is extremely long with many stops. At each stop of the chain inflation eats into the quantity of the product and its price.

The finance department is clearly worried. The finance secretary came out with a statement earlier that describes the inflation curse as “Clearly Worrying”. In bureaucratic circles those words are only used to describe a situation that can lead to a government’s fall.

The cabinet seems to have taken note. Proposals are on to hike the CRR and interest rates by another 25 to 50 points, a second hike in a month. The government’s aim is to stem the supply of money flowing into the economy and to keep borrowing to a minimum.

For the first time the finance minister has openly stated that inflation is being caused by rising fuel prices. The dramatic increase in the cost of crude has put a lot of pressure on fuel consuming countries. In India the situation has become so drastic for the Manmohan Singh government that he will personally be sending the Finance And Petroleum ministers for a meeting between the Saudi government and oil consuming countries in the upcoming Jeddah oil summit to persuade the Saudis’ to increase oil production.

The oil price increase has hit India’s supply chain massively. Even the wholesaler has openly increased prices. Every commodity is being sold at a higher price and those that aren’t as said earlier are being done so at smaller quantities.

It’s no wonder then that the markets in turn are falling. The Sensex’s amazing Bull Run is definitely over for quite some time. Big or small if the investor is paying more on fuel and food there is no way he’s going to put the same money into the markets.

Which means that as of right now, both you and I will have to pay more for less.

Genesis Colors gets Rs 110cr investment from US consortium

Genesis Colors Pvt. Ltd. has received an investment of Rs110cr from a US based consortium: Sequoia Capital Fund, Mayfield Fund and Silicon Valley Bank. The investors are being issued a minority stake in the company in return. The Company plans to utilize the funds to expand retail operations of Satya Paul which which is on a rapid expansion spree in India and overseas. The first Satya Paul international store is opening in Singapore in July 2008. The money will also be used for investments in technology – ERP solutions and a CRM program.

Bata India targets 200 new outlets

Bata India Ltd is on an expansion spree and is targeting 200 new outlets. These will come up primarily in areas where Bata is not adequately represented. The Company will focus on four formats: up market flagship stores, trendy city stores, large super stores and traditional family stores. Bata already runs 1100 stores and refrains from franchising. Product wise, the Company hopes to focus on its traditional weakness - women’s shoes category.

My Maspar Home in Pune

Maspar has launched its ninth exclusive store in Pune at the Ishanya Arcade. The store, which is spread over 3000 sqft, offers the latest Maspar Home Fashion collection with 400 varieties of fabrics for curtains and upholstery and 8 bed collections with themes such as Moulin Rouge, Placid Beauty, Enchanting Nature and Caravan Collections. The launch had artists draped in Maspar fabrics jiving and dancing the Salsa and Rumba

Estee Lauder to venture into Indian market

New Delhi: Estee Lauder, one of the world's leading manufacturers and marketers of beauty products is venturing into the Indian market. With the growing number of well-to-do Indians, the popularity of beauty products is increasingly on the rise in India. Estee lauder will be setting up the first of its four exclusive outlets in Mumbai, and later enter the Delhi and Bangalore markets over next six months. It plans to open 20 outlets over the next three years, spreading out into other Indian cities like Pune, Hyderabad, and Kolkata.

"The timing is right to bring Estee Lauder to India," said John Demsey, Group President, The Estee Lauder Companies. "Many Indian women are already aware of Estee Lauder, and we are thrilled to bring them their brand of choice, and introduce the brand to a whole new generation of women. I am confident that Estee Lauder will be a huge success in India," he added.

Keeping in mind the Indian and Asian preference for skin brightening creams, the company is introducing a skin care range called Cyber White, which prevents skin discolouration, age spots, and improves the overall texture, colour and tone of the skin.

The company’s internationally well known products like Re-Nutriv luxury skin care line, Advanced Night Repair, Double Wear long-lasting liquid and powder foundations, Signature Hydra Lustre lipstick and fragrances like 'Pleasures' and Pure White Linen, would also be included in Indian outlets, said Demsey. He also added that along with India specific products, the brand's best selling global products would also be sold from all Indian regions.