admin
October 19, 2012
Sapna
Agarwal, MINT (A Wall Street Journal Partner)
Mumbai,
October 19, 2012
A
welcome sign in six languages—Hindi, Marathi, Tamil, Gujarati,
French and English—greets customers at the entrance to India’s
first Starbucks store, which opened Friday at Horniman circle
in south Bombay, offering a glimpse of the localization that the
Tata group and Starbucks Corp. are attempting.
The atmospherics are spot on. There’s the aroma of freshly-roasted coffee; the decor is identifiably Indian, thanks to the signature jali (lattice) design; the mugs are emblazoned with Starbucks India along with an image of India Gate; iron trunks and jute bags stamped with Tata Coffee Ltd line the walls.
The pricing has been aligned with that of Café Coffee Day and Barista, starting at Rs.85 for a cup of brewed coffee excluding taxes. There are 42 items on the mixed menu but no pork or beef items.
The first Indian store is a big deal for Starbucks, which needs to make sure that it can pack in more international customers as markets back home get saturated and habitues gravitate towards other brands and stand-alone coffee shops.
Howard Shultz, founder and chief executive officer of Starbucks, was on hand at the opening.
“This is the largest market in the world for Starbucks and we will make significant investments here and build a leadership business,” he said. The company had waited for many years to come to India and had been frustrated that its entry was getting delayed due to the financial crisis and a lack of suitable partners.
Shultz declined to give details of the investments planned or the roll-out strategy. In January, when the firm announced its joint venture with Tata Global Beverages Ltd, Starbucks said it would roll out 50 stores by the end of the year. That target may be difficult to achieve.
Starbucks plans to open two more stores in Mumbai next week at the Oberoi mall and the Taj Mahal Palace annexe—before launching in New Delhi early next year.
“India is a complicated and complex market; it has become easier to enter due to Tata,” Shultz said.
Globally, Starbucks has 18,000 cafes in 60 countries. It has 700 in China, 800 in the UK and 1,000 in Japan.
“They have got their pricing similar to the other coffee chains present in India,” said Devangshu Dutta, chief executive, Third Eyesight, a retail consultancy. A localized menu is a must in India as food is a big part of café culture, he said.
The Starbucks café also offers Himalayan water beverage packs besides tea that’s branded Tata Taazo.
In its 40-year history, India is the first location where Starbucks is sourcing and roasting its coffee locally. A sign in the shops says: “Be prepared to be delighted. Our rich expresso made with coffee beans, grown in India, for India.”
“The decision to locally source is not because of economics,” said Shultz. Sourcing locally is a part of being “respectful” to the country and taking advantage of the huge coffee plantation heritage of the Tatas, he said.
The organized food market which includes fine dining, quick service restaurants, cafe chains is a $2 billion market, of which the cafe business—which consists of chains such as Cafe Coffee Day, Costa Coffee and Barista—is already a $230 million market, according to an October report by Technopak Advisors, a retail consultancy firm.
“There are close to a dozen coffee shop brands, with 1,700 cafes in India and at least another 10 coffee retail firms looking at setting up here at the moment,” said Siddharth Bafna, a partner and head of the corporate finance and transaction services practice at Lodha and Co., a consulting firm that helped Costa Coffee set up operations in India.
The high growth is also attracting many firms from the US, Australia, Thailand and Hong Kong. In May, Dunkin’ Donuts opened its first store in India and has plans to open 10 in its first year of operations. Krispy Kreme, another coffee and doughnuts retail chain, plans to open 80 stores in India in the next five years. Jubilant FoodWorks Ltd is the master franchise for Dunkin’ Donuts in India.
The promoters of HT Media Ltd, which publishes Hindustan Times and Mint, and Jubilant are closely related. There are no promoter crossholdings.
admin
October 18, 2012
Sagar Malviya, The Economic Times
Mumbai, October 18, 2012
Mahindra Group plans to rejig its retail business by changing the product mix at its stores with more apparels, expanding aggressively through franchisee stores and even setting up stores abroad.
“We might look at apparel centric mother and kids store,” K Venkataraman, MD of Mahindra Retail, said. He said the company plans to increase the share of apparel in the total merchandise at its ‘Mom & Me’ stores to 60% from 40% now.
Mom & Me caters to children and expecting and new mothers across categories such as baby food, strollers, toys and apparel. Mahindra Retail also owns toys chain Beanstalk.
So far, the Rs 200-crore company has been selling apparels mostly through its own private labels along with some of its exclusive licensee brands such as Disney and Fisher-Price. It recently started stocking kids brands such as Benetton and Puma in their stores and plans to bring a few international brands in the country.
That’s because apparel offers almost double the margins compared to other merchandise such as toys and baby products. The product mix change will reflect in almost half their stores, said the company.
“This move will surely increase the viability of their stores,” Devangshu Dutta, chief executive of retail consultancy Third Eyesight, said. “But women’s wear is fashion driven and it requires more planning in merchandising and stocking needs to be appropriate compared to other products within the segment. Hence, the risk also increases,” he added.
In India, brands such as Lilliput, Gini & Jony, Catmoss and Benetton Kids account for nearly two-fifth of the total organised children’s apparel market worth Rs 3,000 crore. However, there is an influx of international brands in the segment since last year. Tommy Hilfiger, Zara Kids, Benetton Kids, Disney Mothercare, Chicco and Burberry Kids have steadily increasing their presence nationally and even in smaller towns.
Mahindra Retail plans to bring local entrepreneurship into play as it charts an ambitious expansion plan that will cover several small towns.
The car-to-creche retailer, which launched its first store in 2009, plans to add around 50 outlets, including franchisee stores, to its existing network of 100 Mom & Me stores. Mahindra Retail is also looking at some proposals to take Mom & Me to South Asia and Africa, Venkataraman said.
“It is something that we are considering actively but we have no clear-cut plans now,” he added. He said Mahindra Retail plans to remain focused on specialty formats and has no plans to enter crowded retail segments such as food and grocery. Experts too feel that specialty retail with a razor sharp focus is generally more viable in the long run.
admin
October 17, 2012
Raghavendra
Kamath, Business Standard
Mumbai,
October 17, 2012
After opening 100 stores in the last four years under ‘Mom & Me’ brand, Mahindra Retail, the low profile retailing arm of of $15.5 billion Mahindra Group, wants to go full steam.
The company, which retails maternity and baby products under ‘Mom & Me’, wants to open 50 stores under that brand, another 15 stores of its toy store Beanstalk in the next five and half months besides integrating e-commerce venture with physical stores and expanding its kidswear category by signing agreements with global brands.
The company has also set up ‘Destination Maternity’ store as a master franchisee of the latter which is based in US.
Besides, the company will also consider setting up franchisee stores in Middle East and Africa for which it has got requests, said its managing director K Venkataraman today.
The idea to integrate online and physical formats will be part of its ‘hub and spoke model’ where it has larger stores of 3,000 to 4,000 sq ft in cities and smaller on the peripheries, and aimed at increasing customer comfort besides saving on real estate costs.
“You can either click at home and collect products at the store after seeing it yourself or click at the store and get the products delivered at home.” Venkataram said.
The e-commerce sites will also help stores which are smaller in size, around 2,500 sq ft, which do not have the full range, he added.
When asked about the potential of e-commerce venture, he said: “There is a certain potential of e-commerce venture. We are developing the market first,” he said.
Consultants such as Devangshu Dutta, chief executive of Third Eyesight, a retail consultancy, believe that integrating both channels augurs well for the business.
“An offline retailer who has built that relationship with customer has better chance in online venture. You can encourage customers to cross shop across channels,” Dutta said.
Besides, the company is also looking to expand its stores via franchisee way. Currently, the chain has two franchisees out of 100 stores is also looking to have 10-15 stores out of the planned 50 stores, he said.
“Cities such as Mumbai and Delhi can take 40 to 50 stores each but due to expensive real estate costs, we need to go slowly,” he said. Mahindra Retail has 25 stores in Bangalore.
“Out of 700 cities, top 100 are important for us but we have not decided how many stores we will open in the next three years,” he added.
The company which has got Rs 300 crore from the parent till now, looking at revenue of Rs 200 crore this financial year.
Mahindra Retail is looking at concluding licensing pacts with UK apparel brands in kidswear in the next couple of months.
The company is also looking other brands such as Benetton and Jiny & Jony to expand its kidswear segment, Venkataraman said. Mahindra already has exclusive agreement with US-based Disney and Fisher Price of Mattel.
“Till July last year, we had only private lables but we realized that older kids need more products and brands. We would like to add more brands,” he said.
Third Eyesight’s Dutta believes there is enough headroom in the segment given that there are not many brands in the segment and consumers want more choice.
admin
October 15, 2012
Sapna Agarwal, MINT (A Wall Street Journal Partner)
Mumbai, October 15, 2012
VIP
Industries Ltd, India’s largest listed luggage company, is
positioning itself as a lifestyle brand by diversifying into handbags.
“Forty years ago, there was no branded luggage company in
India. VIP created the category,” managing director Radhika
Piramal said. “Now with Caprese (handbags), we hope to do
the same thing,”
VIP has a 65% share in the branded luggage market that is estimated
to be anywhere between Rs.650 crore and Rs.1,000 crore, according
to Piramal.
Caprese aims to become a Rs.100 crore brand in five years and
hopes to generate revenue equal to VIP’s luggage business
within a decade, she said.
The company will also get into complementary categories such as clutches, wallets and leather bags.
“The idea is to be a lifestyle brand,” said Piramal, who took over the business three years ago as managing director. Since then, she has relaunched Skybags as a youth brand with a focus on backpacks and doubled revenue from the segment.
There are more than 200 international fashion and lifestyle brands in India and more are coming, according to Third Eyesight, a retail consultancy.
Lifestyle brands such as Espirit, Guess, Calvin Klien and Tommy Hilfiger sell everything from apparel and watches to handbags and accessories.
admin
October 11, 2012
The
Economic Times
Mumbai,
October 11, 2012
Swedish
furniture retailer IKEA is playing "a local carpenter"
by taking cues from Indian consumers on product design and function
as it waits for the government nod to open stores in the country.
"We have found that maybe we need to do things differently in India," Juvencio Maeztu, country manager of IKEA Retail India, said. "Maybe, we need to have different product function and quality in India that we don’t have globally," he said on the sidelines of the Indian Retail Forum on Wednesday.
A few months ago, a team from IKEA visited Indian homes across various income groups to understand what kind of design and products could work in India.
The world’s largest single-brand retailer has proposed to invest up to Euro 1.5 billion (more than Rs 10,000 crore) in two phases to open 25 stores in the country.
Experts say such a localisation strategy will help IKEA connect with Indian consumers.
"Food and home category require huge localisation and consumers can provide insights on what kind of products could sell," Devangshu Dutta, chief executive of retail consultancy Third Eyesight, said.
IKEA had faced initial hiccups in China when it entered the market with global products and ideas.
Maeztu, who worked for IKEA in Europe for 12 years before moving India, said the company will retain its global strategy of large-size store formats and build long-term partnership with its suppliers in the country.
"The beauty of India is that we have been working with the whole pipeline since the beginning," he said. IKEA sources goods from India for its global stores and many of its partnerships here were made more than 25 years ago.
India could be the 45th country to have IKEA stores.
Known for its affordable and modern furniture and home products, IKEA has 336 outlets with annual income of more than Rs 1.7 lakh crore in 2011.
After nearly four months of negotiations with the Indian government over a mandatory 30% local sourcing norm, IKEA Group this week said it will comply with the country’s newly diluted single-brand retailing regulations.
Once the government clears its proposal, it will take three years for IKEA to build a supply chain to roll out its first store in India. The company plans to invest Euro 600 million (about Rs 4,100 crore) in the first stage spanning over ten years to set up a chain of ten stores and its allied infrastructure. In the second phase, IKEA plans to bring in another about Rs 6,150 crore to open 15 outlets.
