Ratna Bhushan, The Economic Times
New Delhi, 2 May 2015

In an unprecedented move, beverage maker Coca-Cola is sponsoring Reliance Retail’s ongoing five-day ‘Big Jackpot’ sale across its 600-plus food and grocery stores and has ended up promoting rival PepsiCo’s products.
The sale across categories includes foods, beverages, shampoos, detergents and fruits and vegetables. The ad-sharing, co-promotion deal, being run nationally across Reliance Retail stores, is a rare example of a large brand sponsoring a sale at a retailer, including a rival’s products.
"When a brand sponsors a big sale, which would run across as many as five days on a long weekend, in normal circumstances it would be rival-exclusive. That’s the purist approach," said Harish Bijoor, founder of consultancy Harish Bijoor Consults Inc.

"When a brand and retailer are expecting to create big buzz, the brand would normally be very careful not to include competition in the same basket."

Emails to Reliance Retail seeking details of the association with Coca-Cola elicited no response till the time of going to press. Coca-Cola and Reliance Retail will be tying up for future co-promotions as well, according to two people with knowledge of the matter.

"The deal factors in a larger contractual arrangement between the two companies and would involve the brand supplying the retailer at big discounts in return for high-decibel branding in ads and upfront placement of products and visibility across all its stores," one of the people said.

The April-June quarter is peak season for beverage makers, contributing 40 per cent to annual soft-drink sales, and the companies spend aggressively on marketing and trade promotions. Although they are trying to achieve uniform sales levels across seasons, both Coca-Cola and PepsiCo depend heavily on this quarter to drive volumes.

"While we are unable to comment on the specifics of our partnership terms with Reliance Retail, we do value our long-standing association with Reliance Retail and are always mutually exploring opportunities that are to the advantage of the consumers," a Coca-Cola spokesperson said. "We hope that consumers will exercise choice and opt for the best deals and discounts at the Big Jackpot sale." The spokesperson did not comment when asked why Coke is sponsoring the sale that clearly shows rival PepsiCo’s products in the basket of items.

"Generally, such tie-ups would be drive footfalls for the retailer and in-store visibility for the brand. It’s a market-share game and shelfspace game," said Devangshu Dutta, chief executive at retail and consumer products consultancy, Third Eyesight. Unlike restaurants and hotels, which associate with either of the beverage partners exclusively, there is no such product or brand restriction in modern trade stores.

Almost all big retailers including Big Bazaar and Spencer are running discount sales to cash in on the current extended weekend, though these are not sponsored. Retailers have been banking on ‘big days’ such as long weekends and Republic Day to increase sales as online rivals Flipkart, Snapdeal and Amazon widen their heavily discounted offerings across categories including apparel and home accessories.

Reliance Retail operates 616 value food and grocery stores across formats such as Reliance Fresh, Reliance Super and Reliance Mart. Revenue at India’s largest retailer increased 21 per cent to Rs 17,640 crore in the year ended March 31.

Big Bazaar, which pioneered the ‘big days’ concept, has previously partnered with Axis Bankand others for co-promotions, mostly linked to cash-back offers or additional discounts on payments through specific credit or debit cards.

(Published in The Economic Times.)

Varun Jain, The Economic Times
Delhi, 1 May 2015

Bestseller, which runs 120 exclusive stores in India, will launch Selected on one of the online marketplaces initially before taking it to the brick-and-mortar format at a later stage, Sharma said.

One reason for the online-first strategy is that most Bestseller’s customers in the country are young people who are increasingly getting accustomed to online shopping. "Across all three brands, our customers will range from 18 years to 28 years and they are always online," Sharma said. "On ecommerce space we have grown from 1% to 10% in the course of one year," he said.

It is estimated that the Indian e-commerce industry is worth $3 billion, or about Rs 18,900 crore.

Sharma said the high discounting model followed in the ecommerce space is not sustainable. "Our brand is such that we would not want to discount our products. And when we sell online we try to keep a check on the discounts too," he said.

Devangshu Dutta, chief executive of retail consultancy firm Third Eyesight, said the online-first strategy will help the brand test the market better. He said that in the fashion space consumers are accustomed to huge discounts offered by many brands. "So for any new brand, which is launching in the market and have prices higher than the other brands, the online marketplace would present them an opportunity to test the markets better," he said.

Dutta said online marketplaces are now looking for exclusive tieups with brands to differentiate themselves from competition. "It will help reduce the price and discounting pressure on the e-tailer when the product is desirable and is not available anywhere else," he said.

(Published in The Economic Times.)