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July 9, 2012
Suneera
Tandon, MINT (A Wall Street Journal Partner)
New
Delhi , 9 July 2012
For Penguin Books India Pvt. Ltd publisher Chiki Sarkar, nothing is quite as beautiful as paper. Her current favourite is Pineider, the 200-year-old Italian fine stationery brand that she picked from Rome.
Sarkar is in good company in the world of letters. Pineider’s website informs visitors that it was the stationer of choice for writers from Lord Byron and Percy B. Shelley to Giacomo Leopardi and Charles Dickens, and that Napoleon Bonaparte was among the travellers who entered the Pineider shop.
The Mediterranean blue and baby pink boxes of Pineider “have the most beautiful envelopes with different inlay paper”, Sarkar says. She uses the paper for writing small notes by hand—“Thank yous and condolences.”
“I can’t do complex writing by hand,” Sarkar explains. “I have a terrible handwriting and I fool myself that it looks better when I use a fountain pen.”
Sarkar is among a growing tribe of connoisseurs of luxury stationery — which they are buying on trips abroad as well as from an increasing number of retailers stocking such products in India — for their personal use.
Although luxury paper and fine writing instruments are still
a minuscule part of the Rs. 10,000-12,000 crore Indian stationery
market, they are part of a segment that’s growing at a yearly
pace of 20-25%, say industry experts.
Aakriti Mandhwani, a 26-year-old M. Phil student at Delhi University, treasures her Moleskine diaries, which the company’s website says were used by artists and authors including Vincent Van Gogh, Pablo Picasso, Ernest Hemingway and Bruce Chatwin to write their memoirs and stories and draw their sketches. “If I were to record my life, I would write it down in a Moleskine diary,” Mandhwani said.
Moleskine products, which enjoy a cult following, include notebooks, which typically come with an elastic band to hold them closed, as well as diaries, planners, bags and writing instruments. They are based on notebooks that were first produced and marketed by French bookbinders in the 19th and 20th centuries and which were used by Van Gogh, Picasso, even Chatwin; Moleskine itself was launched in the late 1990s by an eponymous Italian company that read a description of the notebooks in a book by Chatwin.
Mandhwani’s first Moleskine in red paper was a gift from a friend in London. “There is an aura around Moleskine. Only those with an aesthetic sense can appreciate it for what it is,” says Mandhwani. In India, Moleskine products are distributed by William Penn, the retail chain that stocks luxury pens.
Delhi-based retail consultant Devangshu Dutta, chief executive at Third Eyesight, attributes the growing popularity of luxury stationery among well-heeled Indians to changing aspirations.
“People want to appear more professional,” Dutta said. “As they move up the socio-economic ladder, the consumption of stationery, which is a utility product, is becoming more expensive. It’s more about the brand and being conscious about what you are seen with.”
Shailesh Karwa, co-chief executive officer of Staples Future Office Products Pvt. Ltd, says there has been an influx of brands in the luxury category and the premium is growing faster than the mid-to-low-priced brands.
“Pens have been seeing a growing demand in the market”, he adds.
No surprise then that the high-end retail chain William Penn, which sells writing instruments such as Sheaffer, Pelikan and Caran d’Ache, has been growing at 20-25% over the last five years.
Started in 2002 by Nikhil Ranjan, who quit his tech job at International Business Machines Corp., the company has seen the market evolve.
“The personal gifting and consumption of pens has gone up dramatically, driven by growth in spending power” says Ranjan, who uses a Sailor 1911 fountain pen to sign his cheques. Currently, the company has 15 stores in six cities and five shop-in-shops and stocks products that range in price from Rs. 750 to Rs. 1 crore and more. The La Modernista from Caran d’Ache is what costs a cool Rs. 1 crore. The Shri Ganesh from Sailor is more affordable; it costs Rs. 4.5 lakh.
Over the years, the chain has seen both its sales by volume and average ticket size go up. Sales volumes are driven by writing instruments priced between Rs. 3,000 and Rs. 5,000. Gifts account for almost 50% of sales.
Every now and then Ranjan gets requests for customized products. Recently, he was asked to inscribe a family name on the nib of a Caran d’Ache, a Swiss brand, as well as on the box to be passed on to future generations. Such services are provided at a 100% to 500% premium, says Ranjan.
He plans to expand the product line, enthused by the growing market for premium stationery. He has introduced Rubinato quill pens from Italy and a range of stationery and accessories from Dalvey. The growing league of individuals who relish the idea of well-crafted stationery is pulling more cult brands into the market.
Retail experts say that the pen market, estimated at Rs. 3,000 crore a year, is seeing a lot of traction.
“As the country moves towards higher levels of literacy, we are seeing demand for stationery products go up. Also as the economy matures, per capita expenditure on such categories will continue to go up,” says Sushil Patra, associate director of retail at consultancy Technopak Advisors Pvt. Ltd.
The desire to use expensive stationery is on the upswing despite the advent of tablets and hand-held devices changing the way people communicate. For instance, Suresh Mohankar, national planning head at Dentsu Communications Pvt. Ltd in Bangalore, is a self-professed stationery addict who prefers putting to paper his work-related ideas instead of typing them out on his laptop. “I’ve always been used to writing, so I still use diaries or journals to make points for my ppts (PowerPoint presentations) and proposals.”
Mohankar’s personal collection comprises 50 fountain pens with Montblanc, Conway Stewart and Sheaffer among them. “I never use office stationery, I get my own. It’s the feel-good factor of writing on good paper with a good pen,” says Mohankar, who picks up stationery from outlets at airports and from retail chains.
Like Chiki Sarkar and Mohankar, Jaya Bhattacharji Rose, an international publishing consultant, also finds good stationery sensually appealing. “It’s addictive,” she says. Her personal collection consists of Moleskine journals, Paperblanks (diaries) collected from her trips to Europe and diaries produced by Roli Books Pvt. Ltd and Penguin Books India.
There are others who swear by Rubberband launched five years ago by Mumbai-based design consultant Ajay Shah. Rubberband imports pulp from Indonesia and Russia to make its notebooks, which sell at 50 outlets in India. Available in bright colours, the notebooks and writing pads cost between Rs. 160 and Rs. 1,500.
Buyers are typically professionals such as architects, graphic and interior designers, photographers and storyboard artistes, Shah says. He also sees growing interest for his brand among lawyers, doctors, executives and those working in the hospitality sector.
(This article was published in Mint on 9 July 2012.)
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July 8, 2012
Pia
Heikkila, The National
8 July
2012
The
Swedish company Ikea’s furniture is well known across the world
for being inexpensive and flat-packed, and featuring functional
Scandinavian design.
People either love it or hate it – Ikea’s DIY furniture that looks oh-so-simple in the picture but often needs several hours of careful assembling.
Now the Nordic giant wants to bring its collapsible furniture to India and plans to conquer the country with a massive plan that includes a nearly US$1.8 billion investment drive.
"Ikea has a long-term vision for India. The investment plans as outlined in the application are estimations based on previous experience in other markets and our belief that India has a huge investment potential," says Malin Pettersson Beckeman, a spokeswoman for Ikea.
"India is a very interesting and important market for us and we are eager to set up our first store in the country."
Ikea is hoping Indians will fall for its Billy bookcase or Klippan sofa because on paper the Indian furniture market offers a massive opportunity. The market for household goods – including furniture and decor – is worth $18.5bn and is growing at a rate of 10 to 12 per cent annually, according to figures from the management consultancy Technopak.
Initially, Ikea’s fans would be young and urban.
"India has a young population which would likely be more open to buying DIY furniture than an older population," says Seema Desai, an analyst at Eurasia Group researchers.
Today Indians have more money to spend on furniture than ever before.
"The rapidly growing middle class in India, higher discretionary spending power, migration and urbanisation as well as changing family structures and consumer tastes including growing enthusiasm for western brands are all major growth drivers," she says.
India’s $450bn retail market is dominated by small family-owned stores, and only about 10 per cent of the total retail market revenue originates from chain stores. Indians are used to buying their tomatoes, electronics and of course their furniture from small, independent retailers, not from huge malls.
This could work to Ikea’s advantage.
"The home decor retail market in India is quite fragmented, and there are very few stores that offer everything under one roof," says Devangshu Dutta, the chief executive at the consultancy Third Eyesight. "An all-in-one retail concept such as Ikea offers consumers convenience through the width of products categories."
It all looks promising. But it’s not been plain sailing for the Swedes’ Indian odyssey so far. The company has been planning to come to India for several years.
The issue was that Ikea never wanted an Indian partner, which made it impossible for the company to operate in the country because Indian foreign direct investment (FDI) rules stipulated that a single-brand foreign retailer could enter only in partnership with a local entity.
Things changed in January this year, however, when the government allowed 100 per cent ownership of operations in India by foreign companies.
Ikea was first in line to say it was heading for India.
However, Ikea shifted its position yet again swiftly when it read the fine print – the government said that 30 per cent of supplies must come from India’s small businesses.
Eventually, Ikea came around to India’s way of thinking but still isn’t terribly happy.
"In the longer term, the mandatory sourcing of 30 per cent of the value of goods sold in India from domestic small industries remains a challenge … It is therefore important that the definition of small industries in the future is reviewed and provides flexibility," says Ms Pettersson Beckeman.
India last week rebuffed a request by Ikea to relax rules on local sourcing, Reuters reported, citing a government source. That raises the prospect of a delay in Ikea’s entering the market. The company said that a short delay would not affect its decision to open stores and that it hoped to start operations soon.
Ikea is already important to India, as last year the company sourced $450 million worth of goods from the country. Ikea has more than 70 suppliers and thousands of sub-suppliers in India from which it buys carpets, textiles and other materials.
It is not just sourcing that could be a headache for the Swedes.
"The challenges are many – including getting local approvals, labour issues and acquiring land in urban areas for stores," says Ms Desai.
The company’s concept was born in Sweden in the 1960s, but industry experts say the model has not been foolproof in developing economies.
"Ikea evolved its business model in high-cost, high-income economies in the West. This was about high sales volumes in large stores, proprietary products with offshore sourcing, and having customers taking assembly and delivery costs on themselves. When it entered China’s low-income economy with a similar strategy, it struggled," says Mr Dutta. In India, the most significant challenge for Ikea would be to create a business model that is right for a low-income economy
"Operating costs are higher here than in China," says Mr Dutta. "This includes getting affordable and high-traffic store locations of the size appropriate for Ikea’s business model, and pricing its products correctly."
Changing consumer demographics, potential sector growth and a massive increase in housing development means more international companies are looking to invest in India. Which means Ikea is not the only foreign furniture retailer eyeing the Indian market.
There are a few foreign furniture retailers already operating there.
Take Natuzzi – an Italian company that has been in India for less than two years but is already on an aggressive growth path, planning to add 20 stores this year.
"The overall furniture market currently is largely unorganised and very few players are operating in the premium segment," says Nitin Bahl, the Natuzzi Group country manager in India. "Our opportunity lies in these growing number of discerning Indian consumers with evolving lifestyles, those who are well travelled, aware of the global trends and make a statement with their personal living space."
Competition is getting tougher, the retailers admit.
"The market seems to be in a spending mode, and many brands are seeing top lines grow, because of which more players are entering India," says Mr Bahl. "With the easing of FDI norms in single-brand retail, we might see expansion in retail furniture space."
Increased competition also has benefits, industry experts say, as more entrants mean the market is likely to mature faster.
"With the entry of global brands in the sector, the market will get more educated on global designs, trends and innovation," says Mr Bahl. "With more players, the Indian furniture industry would gradually transform into a more organised and competitive sector."
(This article appeared in The National on 8 July 2012.)
admin
July 6, 2012
Sapna Agarwal, MINT
Mumbai, 6 July 2012
Indian women may take a bit of convincing, but there seems to be strong evidence to suggest that their urban male compatriots are getting fitter. Or, at the very least, they’re squeezing themselves into closer-fitting shirts, regardless of muscle tone or the lack thereof. While the picture this conveys may not be entirely wholesome, it does mean that companies have had to change the kind of fits they offer on shirt racks.
More seriously, the slim, super-slim and skinny fits that are gaining ground among the young urban male demographic are cut to accentuate narrow waistlines, broad shoulders and well-toned bodies.
Take Tejas Rane, a trim 28-year-old information technology professional, who hits the gym at least thrice a week and avoids fried food and carbonated drinks. He considers “looking sharp” and “dressing well” to be an integral part of his job. While shopping for shirts, Rane usually tries on a number of different sizes and fits and buys what suits him best. This is in contrast to his college days when he didn’t spend so much time trying and buying clothes. “I used to wear just about anything,” he says.
A young workforce, coupled with health and fitness becoming a way of life, has seen rising sales for slim and super-slim fits, according to experts and the trade.
Raymond, an 87-year-old menswear brand, introduced slim fits three years ago and super-slim fits last year.
About two inches narrower in width than the regular fit, they now account for “60-75% of the overall (Raymond) business”, says Shreyas Joshi, president (group apparel) at Raymond Ltd, which has brands such as Raymond, Park Avenue, Parx and Notting Hill.
Likewise, at Allen Solly, size 40 and 42 regulars used to be the most popular shirt sizes, accounting for 70-80% of overall sales until a few years ago. That has changed to size 39 and 40, which have become the “most popular sizes” for the retailer, says Sooraj Bhat, brand head (Allen Solly) and chief operating officer at Madura Fashion and Lifestyle, a division of Aditya Birla Nuvo Ltd, which also has brands such as Van Heusen and Peter England, besides selling Esprit in India.
According to Joshi, the “good response” to the new fits reflects the “changing Indian consumer, who is more health conscious and fit”.
This expansion is also a reflection of the increase in the number of brands and awareness on the part of consumers, besides the availability of a wider range of styles and sizes to suit people.
For instance, concomitant with one segment of the population becoming super-slim, at the other end of the spectrum, a plethora of brands are offering a wide range of plus-size clothing off the rack.
The number of international brands in India trebled to 150 in 2008 from 50 in 2004, and there are now more 200 present in the country, says Devangshu Dutta, chief executive at Third Eyesight, a retail consulting firm.
With the growing attention to grooming and getting the right size, most men are no longer speed-shopping.
A male customer at the Van Heusen store in Mumbai’s upscale Phoenix Mall tries on three-four sizes and fits before deciding which shirt to buy.
The brand introduced the skinny fit last year, an inch narrower than the slim fit. “Consumers are experimenting with their look and are now becoming more aware of their size,” says the store manager, who’s seen a change over the last five years he’s been at the job. He didn’t want to be named.
Moreover, “consumers are also eager to receive information about styling, fabrics and colours to create customized looks”, says Amit Singh, store manager at the Raymond Shop on Warden Road in south Mumbai.
The change in style also reflects, “the aspiration of a younger country and a younger workforce (that) values looking good”, says Bhat of Allen Solly.
“Retail has evolved along with our lifestyle,” says fashion designer Nachiket Barve, while pointing to the evolution of the Indian male style from baggy shirts, high-waist jeans and mostly tailored clothes to shopping for ready-made garments.
“Urban Indians are becoming increasingly conscious of the fact that diet and lifestyle changes are beginning to take a toll on their health,” says Perpetua Machado, principal of Nirmala Niketan College of Home Science, which offers courses in health and nutrition. “The impact of this is apparent in the increasing number of urban Indians, who are now enrolling in gyms, yoga classes and opting for healthier food options.”
This is being reflected in diets as well, with urban Indians cutting down on polished rice and replacing it with the hand-pounded variety.
Likewise, the consumption of maida (refined flour) products has decreased in favour of chapattis made of unrefined atta, says Hemalatha R., deputy director and scientist at Union health and family welfare ministry.
This is a trend that’s also being taken advantage of by brands such as Dabur India Ltd’s Real juice, revenue from which has risen 25-30% year-on-year and which is now a Rs. 500 crore brand. Similarly, Marico Ltd’s Saffola Oats is growing 40% annually.
“Health, wellness, food and fitness categories are all growing,” says Abneesh Roy, associate director, institutional equities, research, at brokerage Edelweiss Securities Ltd.
(This article was published in Mint on 7 July 2012. The photo is a product shot of the fashion brand ‘Sher Singh’.)
admin
July 6, 2012
Anjali
Mathai, Channel News Asia
New
Delhi, 6 July 2012
India’s
recent policy change to allow foreign companies to wholly own
their businesses has relieved some pressure off the government,
which is seen as being unable to boost growth.
Two major international brands, IKEA and Coca-Cola, have announced plans to invest billions of dollars in the country.
Swedish furniture and home décor giant IKEA is setting up shop in India. It will invest about US$1.9 billion, opening 25 stores in the country over the next 15 to 20 years.
Devangshu Dutta, Chief Executive of Third Eyesight, said: "If you look at the markets globally, there are very few large markets that are growing in any significant way. India happens to be one of those markets.
"One of the interesting things about India is that despite the development in the last 20 years, there’s probably another 25 to 50 years of further development in the market.
So any brand that enters the market at this point of time has possibly a generation or two for its life cycle to be lived out. I think that’s a very powerful driver for any brand, any retailer, looking at markets around the world."
In January, the Indian government removed barriers to foreign direct investment in single-brand retail, allowing foreign firms to own 100 per cent of their businesses in the country.
But, the policy came with the caveat that foreign companies must source 30 per cent of their inventory from India’s small and medium-sized enterprises.
IKEA already sources US$450 million worth of textiles, carpets and hard goods from Indian SMEs. However, it said continuing to do so in the long-run will be challenging.
Mr Dutta said: "That may be doable, let’s say in the initial period, when maybe the business volumes are slow, the number of stores are small. But as the business grows, and if you look at the whole range of merchandise, it’s going to become difficult to source from only small businesses.
"The very fact that the small suppliers would grow with the business would take them beyond the league of SMEs at some point in time."
Still, the policy change has attracted big international names.
Days after IKEA announced its investment, the Coca-Cola Company declared that it would invest US$3 billion in India over the next eight years. This is in addition to a US$2 billion five-year plan that the soft drink firm announced in November 2011.
Foreign direct investment is still not permitted in some key sectors of the Indian economy. But the IKEA and Coca Cola developments, which came after one small step was taken, have shown that there is still some international faith in the long-term India story, spurring hopes that further changes are on the way.
(This story appeared on Channel News Asia on 6 July 2012.}
admin
June 27, 2012
Fashionunited
Mumbai,
27 June 2012
Global brands are betting big on India, this despite no clarity
on FDI in multibrand retail. In fact, statistics from Department
of Industrial Policy and Promotion (DIPP) the nodal agency that
clears such foreign investments reveal that a number of top brands
have put forth their proposals of either increasing stake in JV
or expanding their presence in India.
American apparel-maker Tommy Hilfiger is one of them. The brand plans to open 500 stores in India over the next five years to capitalize on the brand’s increasing popularity in the country. It has informed the Department of Industrial Policy and Promotion (DIPP) that it is looking at increasing the footprint in India.
In a separate DIPP application, French fashion brand Promod SAS has also filed for a 51 per cent stake in a joint venture with local Modex Trading. Modex is co-owned by Tushar Ved, the promoter of Major Brands, which currently owns Promod’s franchisee rights in India. It may be noted that a study by management consulting firm Booz & Co had revealed that around 100 multinational retail and consumer companies had entered India between 1990 and 2010. As many as 86 companies entered before 2009, and a little over a fifth of this (or 18 companies) changed their partnership model.
Retail analysts say it would be interesting to see whether there is scope for Tommy Hilfiger to open 500 stores in India and whether Promod with low recall value before it launched in India and a limited footprint would experience a game change post forming the joint venture since Major Brands’ portfolio also includes Mango, Charles & Keith, Aldo and now even Guess. The four-decade old brand, which claims to refresh its collection with 100 new products every two weeks, competes with women-centric, trendy brands such as Zara, s.Oliver and Esprit. Meanwhile, even Madura Fashion & Lifestyle (MF&L) is in the process of converting the distribution agreement it signed with Esprit in 2005 into a joint venture.
With MNC brands establishing themselves with the low-risk and low-return model through franchisees and distribution agreements, they are now looking at forming JVs by scouting for able partners. For instance, UK-based retailers Clarks, and Marks & Spencer, have extended their distribution or franchise agreements into joint ventures with Future Group and Reliance Retail respectively.
In the recent past, there have been major partnership reshuffles in India that included Giorgio Armani parting ways with DLF Brands and going for a franchisee deal with Genesis Luxury, Versace, Corneliani and Guess, who too are scouting for a new local partner to start afresh, and Guess planning a tie up with Major Brands, the marketer of Mango and Aldo in India.
As consumer goods and retail consultancy Third Eyesight explains, about one-third of the more than 150 international fashion brands launched in India over the past seven years have either changed partners or exited the market and around 26 brands have changed partners, while 23-26 exited the market with at least half of those later returning either as a wholly-owned subsidiary or with a new partner.
