| From the Editor's Desk |  | |
The cluster growth strategy in Indian retail
While Bharti-Walmart seems to be folllowing a well-defined cluster strategy (most of its Easy Day stores are in the Punjab-Delhi-Haryana region), other retailers like Reliance Retail and More have followed a nationwide expansion approach. There are pros and cons to both these approaches. The target customer for a Retail concept could be across the country. For example, the SEC A customer is present across the top cities in the country which vary from Chandigarh to Chennai. With high urban density and scarcity of prime retail locations, retailers like Future Group have managed to get some good properties at low rentals across the country. However, in a country with such high regional diversity as India, a strategy of focusing and understanding the needs of the customer in a specific region before expanding to other regions holds credence as well. This is what Bharti-Walmart seems to be doing. Another advantage of a cluster-based approach is the focus on building a regional supply chain. With the poor logistics infrastructure in the country and archaic laws that make inter-state movement difficult, a regional focus on the supply chain could provide efficiencies that translate to lower costs and profits in the long run.
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Headline, Apparel, Accessories, Specialty, ..Food, QSR, ..Trends and Insight
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The Micro, Small and Medium Enterprises (MSME) ministry has proposed allowing only up to 18 percent FDI in multi-brand retail, while cautioning that entry of global retailers could harm interests of kirana stores, small farmers and consumers. In its reply to the comments sought by the Department of Industrial Policy and Promotion (DIPP), the MSME ministry said that even if FDI in multi-brand retail is allowed, it should be less than 18 per cent, official sources said. |
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Kishore Biyani-led Pantaloon Retail (India) Limited said its core retail business net profit jumped 62.38 per cent to Rs 42.76 crore, for the quarter ended on September 30 (Q1 FY 11), as against Rs 26.33 crore the year ago-period. The company's core retail business includes all the retail business of the company and its wholly-owned subsidiaries in value, lifestyle and home retailing segments. The retail chain posted a turnover of Rs 2581.42 crore in September quarter, as compared to Rs 1954.21 crore last year, the company said in a statement. |
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Ermenegildo Zegna Group, the world leader in luxury menswear, launched its first store in Hyderabad at Taj Krishna. This is the fourth store launch, forming an integral part of Zegna's worldwide expansion strategy and establishing yet another pillar for Ermenegildo Zegna in India.The retail presence will be expanded further in the future with new stores opening in the country. Ermenegildo Zegna Group has recently set a joint venture with Reliance Brands Ltd, a part of the Reliance Group, to develop the Zegna brand in India. |
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Aditya Birla group company, Madura Fashion and Lifestyle (MFL) said it will open exclusive outlets for the fashion accessories range of the international lifestyle brand, Esprit. MFL, which distributes the brand in India, plans to have ten points of sale for Esprit accessories by next year and is eyeing a total turnover of Rs 100 crore this fiscal from the entire Espirit range of products, including apparel. "We are planning to roll out a new format, exclusively for Esprit accessories. In the beginning of next fiscal the company will set up small mono brand stores, counters and shop-in-shops only to sell accessories," Madura Fashion and Lifestyle Chief Operating Officer (Esprit), Manjula Tiwari said. |
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Gold jewellery maker and exporter Shree Ganesh Jewellery House Ltd (SGJHL) is in talks to acquire a few brands, either in Italy or Saudi Arabia, and hopes to seal a deal this fiscal, a top company official said. SGJHL, the owner of GAJA brand, is looking at strengthening its retail presence globally through such an acquisition, the official said. On its domestic expansion, the company plans to scale up the retail outlets to 43 in the next three years, from its current count of seventeen. |
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 | New York-based hair and skincare brand Kiehl's has partnered with speciality retailer Quest Retail, to distribute and run its retail operations in the country. Founded in 1851, Kiehl's is a family-owned business with a range of skin and hair care products. It was taken over by the L'Oreal Group in 2000 and its products are currently sold through 800 retail outlets in 38 countries. |
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Canon is augmenting its retail initiative through the launch of the brand's first stand-alone store, Canon Image Square, in Noida, a suburb of New Delhi. The focus at the exclusive store will be the brand's consumer digital imaging range, where one can choose from 80 stock-keeping units, including D-SLRs and lenses, camcorders, photo, ink-jet and laser printers and digital accessories. The store will be a springboard for the brand's ambitious plans to establish a footprint of 300 exclusive outlets in the country, in the next three years. |
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The Bosch group is planning to double the production capacity of its Bangalore plant over the next couple of years, on the back of growing demand. The power tools division of the company opened its 32nd Bosch System Specialist outlet in Visakhapatnam. This a premium retail concept, which enables an authorised Bosch power tools dealer to display the latest company products. Said Vijay Pandey, Vice President, Bosch power tools division, "By December, we will add six more such outlets in the country. Our aim is to have 100 specialist outlets over the next three years." |
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HyperCity, the hypermarket chain of K Raheja Corp Group, is expanding the number of its stores by the end of this financial year (2010-11). HyperCity currently has a presence in six Indian cities - Mumbai, Bangalore, Hyderabad, Jaipur, Amritsar and Bhopal, through eight outlets. HyperCity officials did not divulge the investment needed for this expansion, but in 2007, the retail major had reportedly invested around Rs 1,100 crore for expansion till 2010. |
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Cafe Coffee Day retail chain owner, V.G. Siddhartha has ventured into the logistics business by acquiring majority control of Sical Logistics Ltd for around Rs.200 crore, thus effectively ending the logistics run of one of Chennai's oldest business families, the M.A. Chidambaram Group. Tanglin Retail Realty Developments Pvt. Ltd, a group company of Coffee Day Resorts Pvt. Ltd, which operates close to 1,000 Cafe Coffee Day outlets across India, will acquire majority control of Sical Logistics through a combination of a direct stake purchase from the promoter Ashwin C. Muthiah, a preferential issue of shares and through an open offer, a person familiar with the development said. |
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| Retail Trends | | |
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Anil Gupta, IIM-Ahmedabad professor and Founder of India's Honeybee Network, has selected the seven most powerful rural Indian entrepreneurs for a compilation in Forbes magazine. Mansukhbhai Jagani, Mansukhbhai Patel, Mansukhbhai Prajapati and Madanlal Kumawat are among Forbes' list of seven most powerful rural Indian entrepreneurs, whose "inventions are changing lives" of the people across the country. Next on the list is Future Group Chairman Kishore Biyani. Called the "Sam Walton of India," Biyani's company operates about three million square feet of retail space in 25 Indian cities. |
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The consumer electronics retail business in India is characterised by low margins. The recent increase in the prices of raw material such as aluminium, copper and steel has added to the margin pressure. However, one expects margin improvements with increasing reliance on private labels, better after-sales service and retailer-provided guarantees. There is huge potential for consumer electronics retailing, as retailers scale up. |
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| Retail Insight | | |
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| Defining Twenty First Century Merchandising |
| SAP, SAS, Groupsoft, Retail Systems Research |
After a series of fits and starts, the retail thought process has irrevocably changed. Science-supported process is now core to the merchandising discipline. However, faith in science is not always grounded in an understanding of what it can do (even for the largest retailers), leaving us with some concerns about unrealistic expectations and a backlash later in the decade. To help prevent this backlash and create the most opportunities for success, RSR has defined seven critical tenets for 21st century merchandising |
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