admin
December 16, 2011
Sarah
Jacob , The Economic Times
Bangalore,
December 16, 2011
So what if the Walmarts and Carrefours can’t yet sell their wares directly to Indian consumers, the country’s retail industry is buzzing with activity as several honchos quit jobs to play entrepreneurs.
Former Hidesign CEO Kunal Sachdev and former marketing GM of Page Industries, Nischal Puri, are among the latest in a growing club of retail professionals who have traded in their huge pay packets for their own wall art chains, lingerie brand, beer cafes and so on.
Driving them are the new urban consumers, whose everincreasing demands and expectations create space for several niche businesses and new approaches. "Functional consumption is getting relegated to rural India; urban consumers are beginning to pay attention to the badge value of the brand, its packaging and retail experience," says Nischal Puri, who recently floated a lingerie brand, Beyouty.
Puri, who helped Page Industries introduce exclusive outlets of innerwear brand Jockey in the country, will open an exclusive Beyouty store in Bangalore early next year.
Sachdev, meanwhile, has launched Folia, a brand of wall art pieces that hold plants in them, with two standalone outlets in Bangalore and shopin-shops across home decor stores. He will soon take the brand to the UK, where his Hidesign experience helped him make many contacts. Their experience of playing key roles for top retail brands through their highs and lows are clearly a big advantage for these professionals-turnedentrepreneurs.
"The retail segment grew tremendously until 2008 after which the slowdown too gave several senior executives valuable experience to start out on their own," says Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
This experience gives them the courage to go ahead in spite of a slowdown in consumer demand and increasing competition from large national and international brands.
Indian retailers and brand owners such as Future Group, Reliance Retail, Aditya Birla Nuvo, Arvind Brands and Tata Group are expanding rapidly across lifestyle segments from apparel to footwear to food & beverage, while on an average 20 big international fashion brands have been entering the country every year since 2005.
Serving the young
But retail executives say existing brands have not kept pace with the young Indian consumer who spends easier but demands more. This is where a lot of opportunities lie.
"The economic conditions are tough today. But anytime is right for an entrepreneur with a good concept," says Pradeep Gidwani, who last year quit as MD of Carlsberg India to set up The Beer Cafe along with Reebok India’s former head honcho Rahul Singh.
The Beer Cafe, opened in Gurgaon late last year, introduced a new self-serve concept where consumers buy a swipe card and use it to pour their own beer; no reservation, no loud music, no bouncers. The two partners have now split with Singh buying out Gidwani’s rights in The Beer Cafe.
While Singh will focus on North India, opening 10 outlets in six months, Gidwani will take the beer cafe concept to cities such as Bangalore, Mumbai, Pune, Hyderabad and Kolkata under a new brand name. It will be yet another venture for Gidwani, who had been part of the start up team of Foster’s, Diageo, Red Bull and Moet Henessey in India.
For Singh, besides The Beer Cafe he has set up a 44,000 sqft indoor golf lounge called Golfworx in Gurgaon. The golf lounge operationally broke even this year and will soon be taken to Bangalore and Mumbai, says Singh, who brought Nike Golf and apparel brand Greg Norman Collection to India.
Opportunities galore
While these professionals attribute their decision to turn entrepreneurs to their urge to take on new challenges, some experts call it stagnation at the top.
"As the retail industry in India consolidates, senior executives are finding it harder to move up the ladder. They are either tying up as distributors of international brands or setting up their own," says Gaurav Marya, president of Franchise India Holdings.
In any case, there are opportunities galore in the emerging consumer society. "There were far too many opportunities in retail," says Jaydeep Shetty who quit Future Group as its new business development head to launch his own women’s western wear brand Mineral.
"Even average and poor concepts were succeeding in the market," says Shetty, who helped the country’s largest retailer launch concepts such as Central malls, lingerie brand Etam and accessories brand Holii.
The goodwill of having worked with Shoppers Stop and Future Group helped him open western wear brand Mineral’s shop-in-shops at these department stores.
Mineral will add outlets at High Street Phoenix, in Colaba, Thane and Bangalore next year. Some analysts, however, are critical of concepts that are not tried and tested, particularly when rentals, raw material costs and loan rates are high and consumer demand is slowing.
admin
December 14, 2011
C.
J. Punnathara, The Hindu – BusinessLine
December
14, 2011
FDI in retail will usher in changes in the shopping experience, believe experts. But, even without it, Kerala’s textile retailers have been dressing up in style. A look at the action.
The small like it big. So Kerala — going by its shopping complexes — is going for the maximum. Textile showrooms in God’s Own Country have been outdoing one another in setting up extravagant outlets at a time when retailers everywhere else are downsizing.
Take the recently opened five-storied five lakh sq ft Emmanuval Silks showroom in Kochi. Its car park can accommodate 1,000 cars at a time; there’s a 5,000 sq ft children’s play area; a food court that stretches 4,500 sq ft, doctor-and nurse on-call, and areas to host fashion shows.
What’s more, there are fashion consultants to help shoppers choose their brocades. And for those who find shopping hell, but have to accompany their wives, there are VIP lounges to watch TV and read the newspapers or simply snooze.
This towering new complex in Edapally, a busy suburb, has just beaten in size many times over the 1.25 lakh sq ft Kalyan Silks showroom in Ernakulam, which claims to be the world’s largest silk saree showroom. Other textile retailers in the State such as the century-old Seematti Silks and Jayalakshmi Silks too have been dressing up grandly to woo customers into their fancy stores. Seematti offers its customers a choice of three lakh sarees at any given time.
YOU WANT IT, WE GOT IT
These new avatar mega textile showrooms that stock hundreds of brands across all age groups, gender and income brackets are creating a big buzz in retail circles. They are positioning themselves as complete family outing destinations rather than just functional shopping places.
“We are big, but bigger can also be beautiful and that is the general direction where we are headed,” says Govind Kamat, Managing Partner of Jayalakshmi Silks, whose outlets in Kozhikode and Thiruvananthapuram boast food courts and huge parking areas. As space becomes scarce in its Kochi showroom, it plans to open a food court besides its car park. “We are re-writing the old adage ‘shop till you drop.’ There are several gentlemen at our stores who drop off to sleep at our luxurious lounge, while the women and children indulge in their shopping sprees,” Kamat says.
So are they setting a new trend? After all, Kerala has always been a trendsetter in retail innovation.
As Devangshu Dutta, Chief Executive, Third Eyesight, a retail consultancy says, “Kerala has been ahead of format of the rest of the country right from the ’80s.” According to him, urbanisation, education and a consumption economy are all key factors for the success of modern retail and that’s why Kerala has been a successful retail experiment lab.
Consider some of the innovations. The Emmanuval Silks showroom has Chinese, Arabic and French speaking staff to cater to the demands of international clientele.
The question is will big format pay off? Talk to T. O. Byju, Managing Director of Emmanuval Silks, and he sounds optimistic. “We plan to do a turnover of Rs 300 crore from the new outlet in the first year,” he says. That is more than the combined turnover of their two existing showrooms — which together have a turnover of approximately Rs 200 crore. By 2015, he expects the turnover to touch Rs 1,000 crore.
WOOING THE WEDDING CROWD
Byju’s confidence stems from the lucrative wedding market the saree retailers are addressing. As he says, a wedding is not just the coming together of two families but extends to relatives, friends and neighbours. And the family indulges in a shopping spree when clothes are bought for family, friends and relatives, over and above those for the bride and the groom. The shopping experience tends to go on for days. And the whole family needs to wine, dine, rest, relax and enjoy themselves while they indulge in the shopping jamboree. Every member of the family has to be not only taken care of, but has to be pampered and cared for. Thankfully for the large showrooms, weddings in India are virtually a round-the-year phenomenon, says Byju.
LIFESTYLE CHANGES
The transformation in the textile showrooms is also the result of changing shopping trends. Earlier, almost 30-40 per cent of the family shopping was undertaken during the festival season — Onam in Kerala and Diwali in North India. Now, with changing lifestyles and fatter wallets, it is becoming a round-the-year shopping experience.
In Kerala, the shopping season commences with the New Year festivities, then moves into the summer vacations when the wardrobe of the whole family is refurbished, followed by the NRI season when expatriates descend on the State to shop for themselves, children, family and friends. The festival seasons of Onam, Ramzan and Deepavali follow, which is rounded off with the year-end Christmas season. And there is no demarcation between Christmas and New Year and the festivities and shopping continue.
Clearly, it’s God’s own retail lab.
admin
December 13, 2011
Sharleen
D`Souza & Raghavendra Kamath, Business Standard
Mumbai,
December 13, 2011
After the UPA regime’s move to suspend its decision on foreign
direct investment (FDI) in multi-brand retail, the industry is
turning nervous about the prospects of single-brand retail as
well. More so, since the government has yet to notify a Cabinet
decision raising the foreign investment level to 100 per cent,
from the current 51 per cent, for single-brand retail.
It was on November 24 that a Cabinet meeting gave its nod to both moves. After that, the Centre, on December 8, formally put on hold its decision to allow up to 51 per cent FDI in multi-brand retail, succumbing to mounting pressure from its allies and Opposition parties. True, an announcement followed that there was no suspension on the decision on single-brand retail. Yet, with the government coming under attack from the Opposition parties on several issues, the industry is now fearing a delay in the notification of the pertinent decision. UK-based fashion retailer French Connection says it has not yet sensed a clear direction over the approval of the FDI in single-brand retail. “There is a huge debate and uproar on FDI in multi brand, but no one seems to talk about single-brand,” notes Nidhi Dua, the firm’s country manager.
The national body of retailers has taken a wait-and-watch policy. Says Kumar Rajagopalan, chief executive officer of Retailers Association of India: “Until the notification is out, our fingers are crossed.”
Third Eyesight, which works with national and international retailers, says many of these chains are “frozen” with regard to their plans. “This is because of uncertainty on the policy front,” notes Devangshu Dutta, chief executive of the retail consultancy. “Only if there is clarity can you take an appropriate route. Here, you are stuck in a limbo; it’s unproductive for everyone,” he adds. “There must be political clarity on this.”
Swarovski India also notes there is no clarity from the government at the moment. “It is a little too premature to pre-empt,” notes Sukanya Dutta Roy, its director (consumer goods business). “We all hope that FDI in single-brand retail passes through.”
Prominent among the firms keen on India entry are Sweden-based home products company Ikea, US-based GAP, UK’s Arcadia group and Italy’s Prada. Those already having a presence in this country include the UK’s Marks & Spencer and Spain’s Zara.
Technopak Advisors says the government, in a larger sense, is not taking any decision on any front. “Why would any investor want to invest in a country where economic, political and policy matters are going from bad to worse?” asks Arvind Singhal, chairman of management consultancy.
However, the government seems confident about pushing the changes in single-brand FDI norms. “The decision remains; it has been approved by the Cabinet,” says a senior official. “There is no change on that front. We are in the process of notifying the rules soon. I don’t see this going anywhere.”
As for the policy riders, the condition of 30 per cent sourcing from the small-scale sector will kick in the moment foreign equity exceeds 51 per cent in single-brand retail. But a senior executive from management consultancy says the government can make the conditions even more stringent to pacify the critics of retail FDI.
With inputs from Nayanima Basu
(Read: "Debate on FDI in Retail — More Heat than Light")
admin
December 12, 2011
Sarah
Jacob & Chaitali Chakravarty, The Economic Times
Bangalore/New
Delhi , December 12, 2011
Reliance Industries, a $50-billion-plus oil and gas giant, will
enter the fast-food business with its own brand next year, opening
yet another front to do business directly with India’s growing
young population after retail and 4G wireless services.
Mukesh Ambani has roped in Rishi Negi, COO of multiplex operator Fame India, which is partly owned by his younger brother Anil Ambani, to develop a quick service restaurant (QSR) concept within 3-4 months, two senior Reliance executives said.
Negi will spearhead Reliance’s entry into a segment that is growing at least 25% a year and where international brands such as McDonald’s and Domino’s jostle to introduce Indianised cuisines to take on popular local chains such as Jumbo King and Saravana Bhavan.
Reliance is exploring a scaleable model like McDonald’s and Domino’s, complete with a standardised menu and express delivery, the executives said. It plans both independent outlets and presence in food courts.
"The company is looking at anything suitable for Indian palate, be it Chinese, Italian or Indian cuisine," one of them said. The Reliance Industries spokesman declined to comment. The executives said the company has zoomed in on Delhi, Mumbai and Bangalore as the tentative locations to launch the business.
"With a hypermarket format already attracting a large number of consumers, it makes sense to bundle in food as well," one of the executives said. The company has already experimented with a fresh bakery at its hypermarkets, Reliance Mart.
The move is in line with Mukesh Ambani’s aggressive moves to build businesses for the country’s consumer class, dominated by demanding and aspirational youngsters. His retail arm, Reliance Retail, operates around 1,146 multi-brand outlets across the country through chains such as Reliance Fresh, Reliance Super and Reliance Mart.
Also, Reliance Industries is the only pan-India licence holder to offer 4G services, which can provide internet connection at more than 100 mbps.
The company, which paid Rs13,000 crore for the licence, is expected to launch 4G data services within a couple of months at justRs10 per GB, or almost one-tenth of current 3G charges-an offer the Facebook generation may find hard to resist.
Negi is coming in with some experience in the restaurant business. He was the COO of Pizzeria Restaurants, which operated Pizza Hut a few years ago, and was food & beverage manager at Taj Coromandel, the Taj Group’s 5-star hotel in Chennai.
His task is to help Reliance get a foothold in the booming organized restaurant business in the country, which is estimated at Rs7,000-8,500 crore and is expected to grow to Rs28,000 crore by 2015, according to data published by the National Restaurant Association of India and management advisory firm Technopak last year. But experts warn that it’s not an easy business.
"There are plenty of break points where consumers can be dissatisfied or where a loss of margins is possible," says Devangshu Dutta, chief executive of retail planning consultancy Third Eyesight. "If a chain can get its delivery model right, the returns will be strong," he adds.
Ashok Bajpai, partner at Morris Street Advisors, a firm that is partnering the entry of international food brands, says, "It’s meant for companies who have the appetite to sink money in the initial years into brand building as profits begins to show only after 3-4 years."
Bajpai earlier headed Pizza Hut’s delivery business. While Reliance Industries will not have a problem with sinking money into the business, it will run into some formidable competition with every established company scaling up and more lined up to enter the business.
Most big international chains including McDonalds, KFC, Pizza Hut, Subway, Quiznos, Costa Coffee, Country Chicken and Taco Bell are already here, while others such as Starbucks, Dunkin Donuts and Pizza Express are all set to open shops here. Then there are numerous local chains, small and big. They are all attracted by India’s burgeoning middle class that increasingly eats out not just for entertainment but also as a necessity because more people live independently or in nuclear families and work long hours.
These youngsters, always pressed for time, rush to the nearest fast food joint for a quick grab or get it delivered to their workplace or home. "As consumers begin to travel, they tend to look for standardisation as it offers some sense of security. They know what to expect, which is why chains work," says Dutta of Third Eyesight.
That is a long-term growth trend that Reliance like many others would want to feed into, say analysts. Some Indian entities such as Amit Burmanowned Lite Bite Foods and Amul owner Gujarat Co-operative Milk Marketing Federation too have entered the restaurant business recently. Private equity firms have been upbeat on the sector.
India Equity Partners recently bought South Indian restaurant chain Sagar Ratna Hotels for Rs180 crore, while ICICI Ventures invested around Rs250 crore in RJ Corp’s Devyani International, which operates KFC, Pizza Hut and Costa Coffee.
Besides multi-brand chains, Reliance Retail owns specialty stores such as books and music chain Time Out, footwear chain Footprint, department store Trends, consumer durables chain Digital and home decoration through brand Living.
admin
December 10, 2011
Pragya
Singh
Outlook,
December 10, 2011
Single-brand retail OKed: as long as those UPA feet don’t
grow cold. With plans for raising FDI in single-brand retail from
51% to 100% getting the green signal, albeit with possibly more
riders, all is not lost for India Inc. Single-brand retailers
span the entire gamut of Indian consumer demand, from the luxury
segment that includes the likes of Louis Vuitton and Fendi, going
right down to mid-range consumer brands and sports outfitters
such as Nike, Reebok, Marks & Spencer, H&M, Office Depot
and Hamleys.
These firms can now either look to Indian shores expectantly, and some may even reconsider existing tie-ups to go it alone. “Single-brand retail, like a Nike or Adidas, will not directly compete with small kirana or independent stores. Hence, the attention of the party has been focused on preventing entry of multi-brand foreign companies,” says the CPI(M)’s Prosenjit Bose.
The biggest beneficiary of this segment will be the rapidly growing cash- surplus consumers seeking ‘luxury goods’. Next in line to benefit will be the millions of school-pass young workers, anxious for jobs with an address more chic than “chacha’s dukaan”.
On growth prospects, Devangshu Dutta, of retail consultancy
Third Eyesight, says, “Carefully select the market segment
as in the last 10 years many segments have matured, meaning that
growth will not be as fast and wide as it was.” Still,
be ready to welcome global biggies like home solutions major Ikea,
which is among those that have been eyeing the Indian retail market
currently worth about $450 billion.
(Read: "Debate on FDI in Retail — More Heat than Light")
