admin
April 7, 2023
Akanksha Nagar, Christina Moniz; Financial Express
April 7, 2023
Reliance Retail’s (RR) launch of an omnichannel beauty and personal care (BPC) retail platform Tira this week brought the fight in the $27-billion market right to the doorstep of entrenched brands such as Nykaa, Sephora, Shoppers Stop, Tata Cliq, Myntra et al. Along with the app and website, the Isha Ambani-led company unveiled a 4,300 sq ft flagship store at Jio World Drive at BKC, Mumbai, and is working to set up stores in at least 100 locations across the country over the next few months.
RR already sells BPC products via its large network of department store chains and on its JioMart platform and last year, acquired a controlling stake in makeup and personal care brand Insight Cosmetics. RR was also in talks with Arvind Fashions to acquire Sephora, but media reports suggest the deal was called off earlier this year.
Clearly, RR has been working hard to capture the lion’s share of the fast-growing market.
According to Statista, revenue in the market will amount to $27.23 bn in 2023 and is expected to grow annually by 3.38% (CAGR 2023-27). Calling it a bottomless market, Samit Sinha, managing partner, Alchemist Brand Consulting, says, “There is definitely a huge untapped opportunity for beauty. Though we have seen a fair bit of growth in India over the past few years, we have barely scratched the surface. Its consumers are no longer just women, but also men. Additionally, differences between young female consumers in small cities and those in metro markets are reducing.”
Taking on competition
No doubt Tira has a lot going for it.
Reliance Retail Ventures Ltd, through its subsidiaries and affiliates, operates an omnichannel network of 17,225 stores and digital commerce platforms across categories including grocery, consumer electronics, fashion and lifestyle, etc.
Sinha points out that RR has a huge advantage in terms of its distribution reach and suggests it look at tapping the huge, pent-up demand in the smaller markets more than the metros, as consumers in these markets today have similar aspirations as metro consumers.
When it comes to categories like colour cosmetics or fragrances, consumers still will opt for offline retail than online, especially in smaller cities since they have limited retail outlets for product trials. That is what Reliance should be focussing on – creating a large offline footprint for its brand and if there is any company that can meet that need, it is the large corporates like Reliance, he adds.
Distribution apart, RR also needs to have a very clear positioning for the brand, notes Devangshu Dutta, chief executive, Third Eyesight. “Differentiation is the key and for that, it has to be clear about what segment of the market it is targeting and its offering. RR formats and the online presence provides a certain possible viable size of distribution, but beyond that, it has to create its own distinctive position in the market.”
Of course, competition hasn’t been sitting tight. Online market leader Nykaa, for instance, has 141 stores and plans to add another 50 in 2023; Tata Group too has announced the launch of over 20 beauty tech stores in the country.
While it has opened multiple outlets, experts say, Nykaa is still primarily an online brand. And this marketing is getting increasingly cluttered.
The online BPC market is roughly around Rs 10,000 crore in India (which is $1.2 billion) and could double in the next 3-4 years, points out Karan Taurani, senior VP, Elara Capital. That means the category could grow to reach $2.5 billion in 3 to 4 years with a CAGR of 25%.
Also, the BPC market requires a differentiated approach compared to other categories, with a lot of influencer-led campaigns and other marketing efforts to build consumer recall. “Other companies have struggled to acquire the kind of success and growth that Nykaa has seen,” he says.
That said, we have all seen how Reliance’s Ajio has given Myntra a run for its money in the fashion category with heavy discounting; so it is quite possible RR will play spoilsport in the online BPC marketplace and give Nykaa tough competition in the medium to long-term.
Tira is leaving no stone unturned. Its online platform has shoppable videos, blogs, tutorials, trend-setting tips, personal recommendations, and a virtual try-on feature, while its brick-and-mortar store offers beauty tech tools such as virtual try-on, skin analyser, fragrance finder and gifting stations to personalise purchases, along with trained beauty advisors.
Even as Tira is looking to differentiate itself via technology or by offering personalised services, Nisha Sampath, managing partner, Bright Angles Consulting, believes the only way Tira can truly stand out will be through the experience it offers. The proof will lie in how seamlessly it guides the customer through the purchase experience, she sums up.
(Published in Financial Express)
admin
March 25, 2023
Nivedita Jayaram Pawar, Moneycontrol
March 25, 2023
Campa Cola, that much-loved soft drink from the ’70s and ’80s, is set to return to supermarket shelves this summer. Mukesh Ambani’s newly floated FMCG flagship Reliance Consumer Products (RCP) bought the brand from its makers Pure Drinks in August last year, reportedly for Rs 22 crore. The cola will be re-launched in a new contemporised avatar this summer. Campa Cola, Campa Lemon and Campa Orange will be rolled out in phases starting with Andhra Pradesh and Telangana and then across the country. The company is on a drive to acquire and promote homegrown Indian brands with a deep-rooted connect with Indian consumers. RCP has also acquired a 50 percent stake in the 100-year-old legacy brand Sosyo from Hajoori Beverages Pvt. Ltd this January. Lotus Chocolate from the Pai family, Sri Lanka’s leading biscuit brand Maliban and its own JoyLand confectionery, and Independence and Good Life food brands are other important pieces of its portfolio.
The back story
Coca-Cola entered India in the 1950s but made a hasty retreat two decades later when the Indian government introduced a regulation that would have required it to reveal its formula. Interestingly, it was the Pure Drinks Group that first introduced Coca-Cola in India in 1949, and was its sole licensed manufacturer and distributor. The Group which also owns the Le Méridien hotel in Delhi, decided to launch its own cola in the market after the unexpected and overnight exit of Coca-Cola from India. Since the company already had the expertise and the infrastructure — 12 bottling plants, plus manpower in excess of 10,000 — this seemed the natural thing to do. Pepsi had not yet arrived and the only other competition was the state-owned Double Seven and Thums Up owned by Ramesh Chauhan’s Parle Bisleri.
Campa which promised “The Great Indian Taste” was launched using locally developed concentrate in three flavours — cola, orange and lemon. Though apple and jeera flavours were added later, cola made up almost 80 percent of the product mix. In the 15 years that followed Campa went on to rule the Indian soft drinks market. It even used the same Coca-Cola font. During its heyday, it was manufactured in over 50 factories across the country, including four in Delhi. However, Campa started to lose its fizz by the mid-’90s, when Coca-Cola returned and homegrown Thums Up started gaining ground. It gradually disappeared from stalls and shelves across the country. Production of the drink at the Delhi factory stopped in 1999. The heroic comeback of the ‘Made in India’ brand after more than three decades is making many Indians nostalgic. And the fact that it’s backed by a home grown conglomerate is only adding to the excitement.
Will nationalism and nostalgia alone suffice to throttle the strong base, aggressive marketing campaign and sprawling distribution network created by Coca Cola and Pepsi? Experts feel that nostalgia will definitely drive people to try the cola especially since its challenging international giants in the segment. But it will take a lot more than that believes Devangshu Dutta, founder of retail consulting firm Third Eyesight. “Though the brand has some latent awareness, it’s with a different segment — people in the late 40s and upwards. But the consumption pattern is driven by a younger profile. So Reliance will have to build the awareness and the stickiness for the product with the segment. And that’s a hard piece of work which is why I believe they have brought in the tried and tested tactic that they use — price wars. They have launched it at a price which has forced the incumbent two international brands to lower their prices.” Campa is priced at Rs 10 for a 200 ml bottle and Rs 20 for a 500 ml bottle.
Positioning will also play an important role in this, he adds. “Reliance will have to figure out how to position the brand correctly and make that positioning distinct from the existing players. Coca-Cola has always been about happiness, whereas Pepsi is all about the younger generation and Thums Up is about daring. Campa Cola will have to find its own distinct positioning. Without that they will just be a generic cola drink. Of course being the largest retailer in the country helps and their vast retail network will definitely be an advantage. But that can’t be the end of it.” According to sources, the company is expected to advertise Campa Cola heavily during the Indian Premier League (IPL).
According to brand strategy expert Harish Bijoor, Campa has the potential of emerging a viable competitor to the two big MNC colas Coke and Pepsi. “The brand has the power of being a local one, in an environment where the local is celebrated over the global. I do believe Campa can enjoy the power of desi-revival to give it wings,” he says but cautions that nostalgia won’t suffice. “The brand and its taste is long forgotten. It is important to stoke these dead embers. It is important to position the brand distinctly with USPs that scream the ‘desi taste’! Desi tone, desi tenor and desi decibel will help.”
The branded non alcoholic beverage market in India is pegged at Rs 450 billion with Coca Cola, PepsiCo, Parle, Dabur and ITC being the key players along with several regional brands. The strong wave towards healthier options will pose some problems for the iconic brand feels Angshuman Bhattacharya, national leader — consumer product and retail sector, EY India. “The carbonated soft drink (CSD) market is witnessing headwinds (4 percent growth) as consumers are moving towards healthier beverages (12-15 percent growth). In this context, CSD is a tough and highly competitive category, hinging on bottling and distribution strengths. Campa Cola is a brand which is familiar to Indians, but will need large investments to scale. However with the largest retail house backing the brand, it could well be a success story given the larger modern trade and general trade platform available to scale it up.”
The return of the cola
Though Campa was synonymous with cola in the 1990s, today’s urban 20-somethings have only heard of the drink through nostalgic ramblings of their parents and older cousins. Incidentally Campa Cola gave actor Salman Khan his first TV commercial, much before he became a mega star. The 1982 advertisement showed Khan guzzling on the cola while on a yacht along with Tiger Shroff’s mom Ayesha Shroff and other models, while a catchy jingle played in the background. This was a time when Bollywood actors used TV commercials to break into the industry. “The creative was pretty much left to me. I had suggested, for some strange reason, that we do it underwater. A lot of people had done beach scenes, a lot of people had done parties scenes, music, beach parties, stuff like that. It was something different and I also liked to travel while shooting ads,” says advertisement film-maker Kailash Surendranath who shot the ad in the Andamans.
“Campa Cola used to be a birthday party treat or a drink we had at get togethers. We would also pack crates of it for long drives and picnics. There was not much choice those days as Coke had just exited the country and Pepsi hadn’t entered. But above all it was a great tasting drink — not too fizzy like Thums Up or overtly sweet like Gold Spot. It was just right,” remembers Swati Roy, an advertising professional.
Aarti Khandelwal a housewife in Delhi remembers visiting the Campa factory in Connaught Place as a student. “We were packed in a school bus and led to this factory where we were dazzled with how colas were made. I remember we were even treated to a bottle each after the visit,” she says. “Ek cola dena actually meant ek Campa Cola dena,” recalls Shirish Date, who loved the soft drink and is eagerly looking forward to picking it up. “I will buy it just for the old times’ sake. It’s a part of my childhood. I just hope they don’t mess with the taste too much. The tag line then was ‘the great Indian taste’ and I hope they stick to that,” he says.
(Published in Moneycontrol)
admin
March 15, 2023
Faizan Haider, ET Bureau, 15 March 2023
Value apparel brands are set to grow in India.
The success of Tata Group’s Zudio that sells clothes below Rs 1,500 has prompted Reliance, Shoppers Stop and several global brands to enter the mass-priced retailing segment.
While Reliance Retail is planning to launch a value apparel format, likely to be named ‘Youth’ to compete directly with Tata’s Zudio and Landmark group-owned Max, Shoppers Stop is coming up with a mass-priced brand, internally called InTune, people in the know said.
Aditya Birla Fashion & Retail has been eyeing shoppers in tier-2 and -3 cities with Style Up, a similar format, while affordable French brand Kiabi is in talks with retail space providers and potential partners to enter the India market.
“Although there is a significant concentration of demand in the metro cities and tier-1 cities, these are also hypercompetitive markets. With economic growth spreading into the smaller cities and rising aspirations, especially among young consumers, there is an opportunity for brands to expand into these markets,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.
“However, keeping price-sensitive segments in mind, companies are creating new labels and brands, rather than pulling down their existing brands’ selling price,” Dutta said.
Trent, the Tata Group company that houses retail brands such as Westside, Zudio and Landmark, had earlier said that while Westside accounted for 70% of its standalone business, Zudio had the potential to outpace the department chain due to the size of the opportunity in the value segment.
“While the value format can offer growth in smaller cities, in metro cities the retailers are trying to target youth through this format. The youth is also aware of the sustainability part and most of these brands are focusing on it,” said Shriram PM Monga, who cofounded retail consultancy firm SRED.
Both Reliance and Shoppers Stop are looking for 6,000-9,000 sq ft space at malls and high street for their new brands, said a person familiar with the development.
Experts said India’s consumption structure was skewed in the past over a narrow base of rich consumers accounting for a large chunk of the market. However, as the economy is broadening across many more cities and the impact is reaching further down the income ladder, the opportunity for value formats and value brands is expanding.
For Lifestyle International, its value brands Max and Easy Buy have already outpaced the department stores by sales, indicating that consumers are increasingly seeking either lower-priced merchandise or opting for global brands such as Zara and H&M for fashion apparel instead of department stores.
(Published in The Economic Times)
admin
March 13, 2023
Tushar Goenka, Financial Express
March 13, 2023
Flipkart Supermart, the online grocery delivery platform of the Walmart-owned ecommerce company, is betting on regional brands to unlock the next phase of growth. Over the past few months, the e-tailer has been listing brands and making them more readily available in cities where their recall value is high.
The regional push targets staples and is pronounced across categories such as atta, tea, pulses, among others. So, instead of offering, say, just the Tata brand of tea, Flipkart also showcases local favourites like Nameri Tea for the residents of Assam. Similarly, instead of selling Nestle’s Maggi and ITC’s Yippie noodles across the country, Flipkart will also let customers pick brands selling Korean noodles, popular among north east teenagers.
The shift in focus is vital in a country whose grocery bill totals $600 billion, of which offline sales account for a staggering $592 billion, while online is a much smaller $8 billion. Further, of the total grocery bill, the share of regional brands at around 60% is much higher than organised national brands that stood at 40%, according to rough estimates from EY.
So far, the plan seems to have worked for the company. Smrithi Ravichandran, head of grocery, says her unit has grown 2.5X between June 2022 and February 2023.
The reason for this shift in focus is easy to understand. In Ravichandran’s own words, “The Indian palette changes every 150 kilometres.” Consider this. The kind of toor daal consumed in Chennai is different from that consumed in Madurai. That is, even within a single state (Tamil Nadu in this case) there is a huge difference in preferences. And that is true for most categories.
Next, look at the potential. Ravichandran’s department sees about 65-70% of its orders coming from Tier 2 and beyond, with metros and Tier 1 cities accounting for the rest.
Analysts believe Flipkart’s initiative is a step in the right direction. Says Devangshu Dutta, CEO, Third Eyesight, a retail consulting firm, “Focusing on regional brands makes eminent sense not just to cater to tastes in a particular geography but to also serve consumers who have moved away from their hometowns and might find it difficult to buy their chosen brands.”
That said, catering to regional preferences is easier said than done. “If one has the same selection even for the same state, it doesn’t help. But there is a cost in catering to that varied choice and we’ll need to operate more fulfilment centres,” Ravichandran adds.
From what to how
Flipkart’s plans to double down on the regional selection in grocery will mean partnering with some of them. Here consumer data available with Flipkart will come in handy, says Ravichandran.
Angshuman Bhattacharya, national leader, consumer product and retail, EY India, believes that by offering more regional brands in categories like atta, Flipkart will deepen penetration, giving smaller players a chance to tap a wider customer base. “Smaller, regional brands will be hungrier for growth and may end up offering healthier margins than what a nationalised player would do,” he adds.
In this, Flipkart’s approach is similar to that of Future Retail under Kishore Biyani, who underscored the importance of a regional brand-led strategy. “The Future Group had launched around 10 private labels of atta and that is no easy feat. A regional brand-led focus might prompt Flipkart to toy with the idea of launching its private labels at a later stage. Or it may even end up asking the regional brands to package staples under its brand, thereby yielding much higher margins,” Bhattacharya of EY points out.
Flipkart isn’t drawing the line just yet. The company will invest in technology to tell customers about the origin of the products they order. “Conscious consumerism is another aspect we will focus on. So, on the packet of a toor daal, consumers will have traceability regarding where and when exactly the daal was harvested,” Ravichandran adds.
This journey will not be a cakewalk for Flipkart. Analysts point out that to be able to partner with Flipkart and address its customer base of over 450 million, smaller brands must up their supply chain spends. That apart, there is always the fear that if the e-commerce giant does not get the desired results, it might discontinue such tie-ups, leaving the regional players in the lurch. Flipkart must allay these fears right at the outset.
(Published in Financial Express)
admin
February 23, 2023
India’s economy is in focus globally, and is also at an inflection point.
Join Devangshu Dutta at the Asia-Pacific conference of UFI, The Global Association of the Exhibition Industry. Registration Link: https://lnkd.in/dq89_rY3
See you at UFI Asia-Pacific Conference in Kuala Lumpur!
