admin
October 21, 2019
ndustry reports suggest that Italian cuisine is the second most popular international cuisine in India, after Chinese, due to the presence of several QSR chains. It isn’t, therefore, a surprise that companies like Del Monte want to ride this wave.
Written By Devika Singh
To boost growth, Del Monte has taken its offerings to smaller towns. But is the market ready for gourmet Italian food products?
For long, Del Monte has had a B2B focus, mostly seen as an accompaniment to meals in quick-service restaurants (QSRs). The company now strives to remodel itself as a consumer brand by employing a consumer-focussed marketing strategy, and has made its way into smaller towns with its Italian range of products. While the company has a retail presence in the top 50 cities, metro markets have been its focus thus far.
“Consumers have been exposed to Italian cuisine through out-of-home consumption in smaller towns; and now it is finding its way into their homes. We want to tap this demand as homemakers are known to experiment,” says Yogesh Bellani, CEO, FieldFresh Foods — a joint venture between Bharti Enterprises and Del Monte Pacific, which markets Del Monte products in India.
Industry reports suggest that Italian cuisine is the second most popular international cuisine in India, after Chinese, due to the presence of several QSR chains. It isn’t, therefore, a surprise that companies like Del Monte want to ride this wave.
Making its presence felt
Del Monte’s presence in towns beyond tier I was hitherto limited to modern trade stores, but it now plans to tap into general stores or kiranas as well as the online marketplace. Currently, Del Monte products are present in 75,000 modern, general and cash-and-carry stores; the company plans to add another 25,000 general stores over the next 12 months. The South, West and Northeast markets will be the company’s key focus areas, as it already has an optimal presence in the North.Apart from Amazon and Flipkart, Del Monte has tied up with e-grocery player BigBasket and hyper-local players such as Milkbasket. The company claims to garner 8-10% of its retail business from e-commerce currently.
But given the premium imagery of the brand and its pricing, Del Monte has had to make a few tweaks — primarily, introducing smaller package sizes and cheaper variants of products. “We have introduced olive oil in 100 ml, 200 ml and 500 ml variants. While we have an imported gourmet range of pasta, we have also introduced a more affordable domestic range,” Bellani shares. A 500gm pack of pasta from the domestic range is priced at Rs 110, while that from the gourmet range is priced at Rs 175.
Foremost on its agenda is to raise awareness about the products for which the company has leveraged its B2B presence. Del Monte has tied up with QSRs and restaurants in the smaller towns to develop recipes using its products, which are then displayed on their menus.
The company recently launched a mass media campaign — Can’t Get More Italian — after a gap of eight years, in a bid to position itself as an ‘authentic’ brand, and to showcase its products. Below-the-line marketing activities and digital media are two other areas the company is bullish on.
“We have created lots of digital content, recipe videos, most-asked questions, etc, to inform people about the products. Then there are tie-ups with influencers and bloggers to give users an idea about how to use our products,” says Anshu Anand, head of marketing, FieldFresh Foods.
No smooth ride
Del Monte’s journey into smaller towns through kirana stores will not be without roadblocks. According to Devangshu Dutta, chief executive, Third Eyesight, general store owners in smaller towns are “conservative and reluctant to stock new products”, as they don’t see a high demand for them. Hence, ensuring product availability on shelves would be a challenge for Del Monte.
The company will have to appeal to these retailers by offering deals or a promise of buyback in cases of unsold inventory, says Alagu Balaraman, partner and MD, Indian operations, CGN Associates. “Till the brand identifies the pockets where there is demand, selling in these cities will be an expensive proposition,” he adds.
Even the e-commerce route won’t be as easy for Del Monte. As consumers in these markets are only discovering products through online channels, encouraging them to make a purchase would need an extra push by the company.
Anurag Mathur, partner and leader, consumer goods and retail, PwC, points out that Del Monte will have to keep up with local players such as Bambino and Double Horse, which offer products in a lower price range. “Since consumers are experimenting with this cuisine, they are more likely to go for cheaper products,” he adds.
Source: financialexpress
admin
October 16, 2019
Written By ET Bureau
BENGALURU | MUMBAI: Walmart-owned Flipkart is entering food retail in India, where consumers spend about $500 billion on groceries annually.
Newly registered Flipkart FarmerMart, with an authorised equity capital of Rs 1,845 crore, will sell items produced locally. Sales will initially be online, although the company can also sell through physical stores.
“In line with the government of India’s FDI (foreign direct investment) policy,
Source: economictimes
admin
October 7, 2019
Indian tea brands want a piece of this steaming hot business.
Written By Devika Singh
The company now plans to expand to the North Indian cities of Gurugram, Chandigarh, Amritsar and Lucknow, among others.
Homegrown tea makers are foraying into quick-service restaurants (QSRs) to tap into the ‘eating out’ culture in India and grow the business. But competition is aplenty — global brands have a formidable presence in India’s QSR scene, even as start-up brands such as Chai Point and Chaayos are gaining traction. According to a report by CARE Ratings, the total market size of QSRs in India is approximately Rs 25,900 crore. The overall restaurant and food service industry is expected to grow at a CAGR of 10.4% between 2018 and 2020.
Indian tea brands want a piece of this steaming hot business. Society Tea, a brand predominantly present in Maharashtra, recently opened its first tea café in Mumbai. Goodricke Group has tied up with the Tea Board of India to launch tea lounges in Mumbai and Kolkata on the latter’s premises. Gujarat-based Wagh Bakri, which was among the first movers, plans to expand its tea lounge presence to 50 large and small format outlets, from the current 13, over the next four years.
What’s brewing?
When Wagh Bakri opened its first tea lounge in Ahmedabad in 2007, the company saw it only as another experiential marketing tool. “Initially, it was a place where people could explore different kinds of tea. But, over the years, we saw a demand for these lounges,” says Parag Desai, executive director, Wagh Bakri Tea Group. The company claims to receive a footfall of 300-400 people per day on an average in stores present in high-street locations.
“We have deliberately stepped out of food courts to keep our offering premium,” Desai adds. A Wagh Bakri tea lounge could entail an investment of Rs 50-75 lakh. The company now plans to expand to the North Indian cities of Gurugram, Chandigarh, Amritsar and Lucknow, among others.
Society Tea, meanwhile, plans to open 10 more stores — mid-size stores around corporate offices — in Maharashtra. Pricing will be its key differentiator. “We are not pricing the product at Rs 300 like other players, but offering a full glass of chai at Rs 50,” says Karan Shah, director, Society Tea.
Goodricke Group has five operational tea lounges in the country, with plans to open one more, its second, in Darjeeling by the year end. The aim is to first foster brand awareness via its presence in locations of high tourist interest.
Blending in
Is a QSR foray really their cup of tea?
According to Devangshu Dutta, chief executive, Third Eyesight, each player could be backed by a different motivation to enter this space. Some may want to use it purely as a marketing tool, while some others may look at it as an alternative source of revenue.
QSRs can be an effective marketing tool especially for brands that have limited access to customers through retail. “Such stores help increase visibility and offer insights about their customers, their spending patterns, etc,” says Pinakiranjan Mishra, partner and leader, consumer products and retail, EY India.
However, expanding footprint in the market and eyeing revenue from the QSR chain could entail substantial investments for tea brands. “If tea companies look at QSRs as an additional business stream, then besides tea, there are food items and cold beverages to be served, which cannot be sourced just from the gardens,” says Dutta.
Furthermore, it will be an uphill task in the presence of biggies Starbucks, Café Coffee Day and Costa Coffee, that are established names in the market, in addition to other upstarts like Chaayos, which has over 50 cafés across Delhi-NCR, Mumbai and Chandigarh, and Chai Point which has 100 cafés in eight cities.
To get an edge, Harsha Razdan, partner and head – life sciences and consumer markets, KPMG India, says that new entrants would have to go beyond metros “and should ensure competitive pricing as the market is price sensitive”.
Source: financialexpress
admin
September 29, 2019
Written By Deepti Chaudhary
More than 400 million Indians had access to cashback and EMI offers on Amazon.in. (Photo: iStock)
Bengaluru: The ongoing festive season sales have turned to be the latest battleground for India’s top two online retailers to achieve supremacy of this fast-expanding market.
Walmart-backed Flipkart and Amazon India have both claimed record sales on the first day of sales on the back of strong demand from cities beyond the major metros.
Flipkart’s The Big Billion Days (TBBD) started on Saturday night (8pm), while Amazon India’s Great Indian Festival sales began on Saturday noon for Prime subscribers and opened for all 12 hours later.
Flipkart claimed that it recorded two times sales growth on the first day of the festive sales, compared to last year’s opening day sales of the TBBD, as the number of transacting customers from Tier II, III, IV cities doubled. Travel is the fastest-growing category on Flipkart, with 12X growth compared to last year, according to the company.
“We started this festive season by setting audacious targets for ourselves and our teams. By all indications, this is going to be the biggest festive season that India has witnessed,” said Kalyan Krishnamurthy, chief executive, Flipkart in a statement. “There is no doubt that e-commerce has not only lifted consumer sentiment but has also driven the industry to set new benchmarks. Affordability and value-driven themes clearly are the pulsating chords for India and Bharat. We are in the centre of it all and are able to serve the ecosystem for their unique needs”
On 2 September, Mint reported that Flipkart hopes to double sales during its flagship TBBD event because of an increase in sellers’ base, new products and pocket-friendly financing options, among other reasons. The company is also aiming at a gross merchandise volume (GMV) of about ₹1 trillion (about $14 billion) this fiscal year, up at least 45% from the previous year. Flipkart is yet to start its mobile and electronics sale, but Amazon India said fashion and smartphones were its top two selling categories. “Because of the availability of very strong affordability and exchange programmes, a record number of customers upgraded to premium phones on Amazon. When we just look at the slice of premium phone brands OnePlus, Samsung, and Apple on Amazon, their sales exceeded ₹750 crore within 36 hours,” said Amit Agarwal, global senior vice president and country head, Amazon India, over phone on Sunday evening. Amazon Fashion recorded a 4.6 times jump in unit sales compared to its unit sales on day one of Great Indian Festival sale last year. It did not specify any unit numbers. The first day of the latest Great Indian Festival has been Amazon’s biggest opening ever wherein it also had a record number of Prime signups, Agarwal said, without elaborating.
Source: livemint
admin
September 23, 2019
Realising that sourcing within India helps cut costs, Uniqlo established an office in Bengaluru in 2016 to identify and work with partner factories in India. The company currently procures cotton fibre from India, as a result.
Written By Venkata Susmita Biswas
The Indian retail landscape is abuzz with East Asian retailers. The likes of China-headquartered retailer Miniso, Korean lifestyle brand Ximiso, and Japanese retailer of household and consumer goods, Muji — all known to be low-cost retailers — have set foot in India to grow their businesses. Besides, Japanese apparel retailer Uniqlo, known to make functional clothing, is set to open its first offline store in India in October.
However, carrying forth the mass-market and low-cost positioning from their home countries to India — a $670 billion retail market — will be a challenge for these brands.
Priced to entice?
Muji which prides itself on being “lower priced for a reason” is hardly a low-cost brand by Indian standards. For instance, a 24-sheet notepad at Muji costs around Rs 100, while a pair of ankle-length socks costs Rs 390.Uniqlo, which has a mid-market positioning in Japan, has priced its most basic t-shirts in the range of Rs 990-1,990. It is worth noting that a basic t-shirt from Uniqlo costs ¥990-1990 in Japan (Rs 658-1,323). In comparison, t-shirts at H&M and Zara start at Rs 399 and Rs 450, respectively.
Devangshu Dutta, chief executive, Third Eyesight, says that any international fashion brand tends to have a premium tinge in India even if it is a mass/mid-market brand in its home country. “In addition to perception, there are multiple reasons for this. Average household incomes in India are far lower than those in markets like Europe. Therefore, even maintaining price parity of products leads to international mass/mid-market brands turning into premium brands in the Indian market. Furthermore, sourcing from outside India and having local partners, too, drive prices up.”
Miniso and Ximiso sell everything from nail paints and earphones to stuffed toys and bento boxes, and are similar to dollar stores or the Japanese 100 Yen stores. According to Rajat Wahi, partner, Deloitte Consulting India, these retailers are addressing an untapped market in India. “They offer a host of products in the range of Rs 100-500, similar to the neighbourhood kirana and stationery stores, but in a better retail environment. This is a real sweet spot for retailers in India who want to scale up volumes,” he adds.
However, offering value for money is critical when selling such products. Tyrone Li, India head, Miniso, says that the retailer maintains its global positioning of being a “budget brand” in India, with an aim to make high quality designer products available to the masses. Miniso’s highest selling products in India are cosmetics and nail paints. Nail paints at the store cost Rs 190, while the average price of Miniso products is approximately Rs 280.
When in India…
Wahi believes that retailers that position themselves as prestige or even masstige brands will take longer to scale up here.
Functioning in a price-conscious market like India has driven each of these retailers to tweak their businesses. Muji reduced prices of more than 450 items across departments while launching its India operations. “We made our supply chain more effective, reduced a few unnecessary costs that did not add value to the products or customer experience, and optimised operational costs,” says a Muji spokesperson.
Dutta says improving pricing flexibility and introducing India-specific products that have better margins will in turn drive better engagement. This explains why Uniqlo, which competes with foreign retailers like H&M and Zara, has introduced a premium cotton kurta collection to not just adapt to India, but also differentiate itself from competitors.
Realising that sourcing within India helps cut costs, Uniqlo established an office in Bengaluru in 2016 to identify and work with partner factories in India. The company currently procures cotton fibre from India, as a result.
Meanwhile, Miniso has a more hands-on approach. Based on feedback from a consumer, the retail chain lowered the price of a product by making amends to its supply chain. The retailer is also consciously expanding its presence beyond malls. “While the mall culture is booming in India, it is still not the most accessed place by Indian shoppers,” Li reasons.
Source: financialexpress
