Future Group + My Dollar Store for Discount retailing

In September, we were the first one to report that My Dollar Store is looking for partners in India. Kishore Biyani's Future Group has picked up 28% stake in Discount Retailer Sankalp Retail Value Stores, a franchisee of the US based discount format MyDollarStore.

The discount format will be part of large format Big Bazaar stores. Senior Executives in the company are working on setting up this new format inside Big Bazaar stores. They will offer huge array of imported goods at reasonable prices.

Mr. Rakesh Biyani, Director, Pantaloon Retail said,

We are working closely with My DollarStore to create a concept of imported goods in Big Bazaar outlets. This is an area where we see a huge retail consumption opportunity.

MyDollarStore prices its products approximately at Rs 99 in India. Most products do offer value for money and you can never compare directly by converting a dollar to rupee as it will be equvalent to $2+ here in India.

We hope that this section doesn't become the dumping ground of rejected goods in the Western Market ;-)

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Reliance Digital Ambitious Sales Projections

Reliance Digital opened the third consumer electronics store in the IT Capital of Asia, Bangalore / Bengalooru. The store measures 23,000 sft and offers 4,000 products for consumers. It is a one stop shop for all consumer electronics, IT products, mobile phones and consumer communication products and also consumer durables.

The company has set an ambitious target to achieve a sales turnover of $5 billion by 2011, approximately Rs 20,000 crore by today's dollar value or if you consider Rs 35 / dollar, then a sales turnover of Rs 17,500 crore by 2011. The figure sounds little bit too ambitious as there are several early players in the market like Next, Viveks, e-Zone, Electornics Bazaar and Tata Croma.

Mr. Baijal, President of Consumer Durables said,

We plan to open a total of 150 Reliance Digital stores across 70 cities over the next three to four years.

Reliance is also a Master Franchisee for Apple products in India. Reliance iStore is located on MG Road in Bangalore. Their are speculations that they plan to introduce the iPhone in India.

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Brands that hit the shelves past week

Burberry fragrances launched Burberry Brit Sheer, fruity floral fragrance. It is available in 50ml and 100 ml bottles and it starts from Rs 2,400.

Lemongras launched casual shirts using 100% cottons, jacquards, linens in stripes, checks and denims. The collection is priced between Rs 595 and Rs 995.

Philips and Swaroski launched Active crystals collection in India. The collection consists of USB Memory Sticks and earphones made of silver metal and transparent crystals. prices start from Rs 4,500.

Dr. Batra launched conditioner with Indian gooseberry to help stop hair loss. The product is enriched with vitamin C and is available in 100ml and 250ml packs.

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Arrow Shirts - Race Against Time Offer

If Terminator 2 was about Battle Acorss Time, it is now Race Against Time by shopping at Arrow exclusive showrooms.

Arvind Brands' owned Arrow Shirts just a while ago has informed us about a holiday offer - Exclusive Arrow brand outlets will run a huge discount sale on Dec-22, Saturday on PAN India basis.

This one day sale has been split for happy shopping hours. If you check out between 7:00AM and 11:00AM you get Arrow vouchers equal to your purchase value. If your check-out timei s between 11:01 AM and 4:00PM you are eligible for 75% value of the bill in Arrow cash vouchers. After 4:00PM a flat 50% of the purchase value will be given back as gift vouchers. These gift vouchers can be redeemed only between Jan-1st and Jan-15th 2008 :-)

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Why Indians Prefer Organized Retail ?

In continuing our coverage on Retail India survey and rankings, here is what majority of the Indians think about Organized Retailing and why they prefer it.

• One Stop Shopping - 31%
• Better Quality - 22%
• Fresh Items -12%
• More Variety - 6%
• Reliable Brands - 6%
• Less time consuming while shopping - 6%
• Reasonable Rates - 5%
• Better prices - 4%
• Attractive Discount 4%

Aggregating the results for analysis, data suggests that many Indians prefer organized retailing for obvious choice - shopping under one roof - 37%, Quality & Freshness 34% while only 13% are bothered about the prices. Here is a word of caution for retailers / prospective retailers, don't take the Indian consumer for a ride by dumping cheap quality Chinese goods, he is looking for good quality products now :-)

In the same survey, 71% of respondents prefer large format stores while only 24% preferred other formats and 5% had no opinion.

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eZone + Electronics Bazaar to Triple Store Count

Pantaloon Retail India Ltd which added retail space at snail's pace in 2007 due to skyrocketing realty prices is still talking high like any other retailer in India. eZone and Electronics Bazaar - are the lifestyle and value segment consumer durables and electronics stores from Future group.

eZone is currently the number two retailer in its category behind Next retail. Currently there are 26 eZone stores and they would like to take the count to 100 within the next 24 months. The store count of Electronics Bazaar is planned to cross 200 by 2010. The company plans to invest $100 to $120 million in this expansion.

Mr. Manoj Kumar, CEO of eZone and Electronics Bazaar said,

The last one and half years have been an exciting journey from eZone and Electronics Bazaar. From zero to 104 stores across 48 cities, especially in the highly competitive marketplace is an achievement that we take pride in. We will continue to provide a superior shopping experience and great deals to consumers to focus on dominating this space.

Their private labels - Koryo and Sensei have received fantastic response from consumers. 15% of their revenues come from these private labels and are backed by after sales service network at 52 centers across 45 cities.

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Retail India - Survey + Rankings

Here is an exclusive abstract from CLSA Equity Research on the retail sector in India. We are a little bit surprised by the findings :-)

Top 10 Food and Grocery retailers in India as chosen by respondents [Multiple selections were allowed]

Apna Bazaar - 42%, Subhiksha - 26%, Reliance Fresh - 21%, Trinethra / More Retail - 11%, Food Bazaar - 11%, Hypercity -10%, Metro - 7%, Spencer's 6%, Big Apple - 5% and Sabka Bazaar - 3%. It was really interesting to note that Apna Bazaar was the most sought after place for Food & Groceries.

Top Lifestyle Store Retailers in India [Multiple selections were allowed]
Big Bazaar - 52%, Vishal Megamart - 17%, Shopper's Stop -13%, Landmark - 12%, Pantaloon - 10%, Globus - 8% , Westside -3% and Trent - 2%.

Most Frequently Visited Book and Music Store:
Crossword - 5%, oxford Bookstore -2%, Plant M - 2% and Books and Beyond - 2%.

Most Frequently Visited Consumer Electronics Store:
Next - 11%, e-Zone - 4%, Reliance Digital -3% and Future Bazaar 2%. I am not sure why don't we see Tata Croma electronics in this segment.

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Longines Luxury Watches in India

Longines, luxury Swiss Watch manufacturer since 1832 is expanding its retail presence in India by adding 10 exclusive stores by 2010. The number of multi brand outlets which stock Longines is also expected to from 65 to 120 by 2010.

Mr. Charles Viloz, VP of Longines said,

The market for watches in general depends upon the retail environment. the retail environment in India has been changing drastically in the past few years. As the retail environment evolves we may also spread out to Tier-II cities.

Setting up of each showroom involves cost of Rs 1 crore to Rs 4 crore depending on the location. Longines has introduced 3 pillars and 6 core collections in India. A total of 180 products under the affordable luxury brand are available. Products are priced between Rs 21,000 to Rs 81,000. Longines will introduce the Retrograde Collection within the next 3 months and will be priced upwards of Rs180,000.

In a separate development in the Watch industry, Deepika Padukone endorsed another luxury swiss watch brand, Tissot. Deepika is all excited by the launch as can seen in the picture below [Thanks to Rohtas from New Delhi for the lovely Pictures]
Deepika Padukone, a multi talented, dynamic and always open to ideas will be the "Face of Tissot" worldwide. These limited edition watches went on sale today starting at a price tage of Rs 36,000.

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Levis Signature for Value Segment

America's leading jeans company, Levi Strauss is determined to compete with Indian denim retailers in the Value segment. Levis has roped in upcoming Bollywood actress Deepika Padukone as the brand ambassador. [Below, Deepika posing at a Levis Signature Press Conference in Mumbai]
Levis also announced the "Dart to Win Contest". Winner of the contest will get a date with Deepika. Mr. A Ramani Business Head, Levis Signature said,

We are targetting the standard value segment with our Signature brand and have assigned Deepika Padukone till the year 2008 as the brand ambassador.

Mr. Ramani had spoken about the introduction of Signature brand, earlier in May this year. Levis will compete with other denims like Trigger, NewPort and Pepe all prices starting at Rs 699 upwards.

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Patnaloon Festive Sales Not Exciting

Festive sales of Pantaloon Retail India Ltd was not exciting enough. Our retail analyst on demand from readers, has filed this exclusive coverage.

Value Retail same store sales (SSS) growth rebounded in Nov'07 to 40% after a 25% decline in Oct'07, due to late Diwali this year. This implies a growth of mere 2.8% in the festive season (Oct-Nov’07 combined). Lifestyle SSS growth in Nov is at 30% as against a decline of 7% in Oct. Collectively in the festive season SSS growth is 9% compared to over 20% growth maintained for most of the months of the previous fiscal.

The chart below represents sales mix of Pantaloon Retail India Ltd. Big Bazaar and Food Bazaar still account for bulk of the sales for the company.
The company has added retail sales space aggressively in last financial year. In FY2005, the company added 1 mn sft while it declined to 0.85 mn sft in FY06 and zoomed to 2.7 mn sft in FY07. This FY, the company has been little bit slow due to unrealistic realty prices and has managed to add mere 1.5 mn sft till the end of Nov.

The company is expected to clock sales of Rs 7,400 crore for FY2008 but going by the recent reported numbers, a slowdown is imminent.

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Reliance TimeOut Opens in Bangalore

Reliance Retail has launched Reliance TimeOut store, the eighth format from its Retail stable. Below Biju Kurien, President Reliance Lifestyle at the opening of Reliance TimeOut store on Cunningham Road in Bangalore / Bengalooru.
Reliance TimeOut was setup at a cost of Rs 10 crore. This store will mainly stock books, music, toys, gifts etc. The book market is estimated to be worth Rs 3,900 crore while the stationary and gift market is expected to be Rs 5000 crore. Mr. Kurien said,

Indian fiction, self-help, academics and vernacular books and regional music is gaining importance in the country and we want to tap that segment.

Reliance will roll out two more TimeOut stores by March-2008, one in Delhi and the other in Kochi. Our retail analyst adds that Music market is fading away in favor of Internet and Mobile distribution medium and offline retailers may not see the light at the end of the day from this segment.

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Hypercity Argos Catalogue Shopping in Mumbai

We had first reported about HyperCity Argos' plans for Catalog retailing in August. It has finally gone live in Thane, suburb of Mumbai. Mr. Andrew Levermore, CEO HyperCity Retail India said,

This unique format of catalogue shopping is definitely suited for metros such as Mumbai where retail space is expensive and has been a deterrent for retailers to reach out to a large consumer base in an efficient manner. Hypercity Argos which is an integrated multi-channel capability encompassing stores, home shopping and the Internet, will give our consumers a new and convenient way to shop.

HyperCity expects to get atleast 25% RoI from this format within the next 5 years. According to our Retail Analyst, most Indians like to shop in stores such as HyperCity. The retail revolution in India has got a long way to go :-)

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Nautica's Price Point Marketing gimmick

Global Lifestyle retailer Nautica is trying to bump up its sales with a new Price Point marketing gimmick. No this doesn't mean lowering of prices, but just a sales gimmick. The company has now introduced Rs 1895 price point in woven shirts to tackle the gap between Rs 1695 and Rs 2295 price points said the company release.

Mr. Dhruv Bogra, Business Head Nautica said,

The Indian consumer is not price sensitive. He is willing to pay more as long as there is value for what he gets. But then again he is only willing to pay that much. We will continue to target high end of the market place.

Jeez!!! Bogra contradicts his own statements. Indian consumer is not price sensitive and Nautica is targeting high end customers. The high end Indian consumers never really bothered about price nor they ever thought about value for money shopping.

All we can say is this is Nautica's marketing gimmick to a recent Marks & Spencer price reduction across the board to woo Indian shoppers.

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Ebony to diversify into Home Adornments

Department stores retailer from North India[Chandigarh, Noida, Amritsar, Ludhiana, Jalandhar, Faridabad and New Delhi] - Ebony retail is planning to open home adornment format as a part of its foray into speciality retailing.

The company plans to open 15-18 stores in home adornment stores by the end of 2009 and around 50 by 2011. Each of the stores will be 25,000 sft to 50,000 sft in size. The first outlet will be opened in Delhi followed by Punjab and then entry into the Mumbai zone.

Mr. Manha Narula, Director of Ebony Retail said,

We will be retailing mostly branded items. In fact furnishings and textiles, which will form 20% of our stock keeping units will all be private labels.

The company will retail furniture, furnishings textiles and related accessories through its home adornment stores for which it is yet to decide on a brand name. It may also tie-up with a foreign brand for this format. EBony retailer has obtained ISO 9001 distinction and is probably the first retailer in India to do so.

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Staples Future Office Open for Business in Bangalore

Last November we had reported about Future Group [Pantaloon Retail] and Staples Inc forming a joint venture to retail office supplies in India. Their first store is now open for business in Bangalore. It is located on Outer Ring Road, diagonally opposite to Home Town store.

The company expects to touch revenues of $135 million in the next 5 years and will add 50 standalone stores and 100 shop-in-shop outlets on PAN India basis. Mr. Rakesh Biyani, CEO of Future Retail said,

We have tied up with companies like Accenture and Citibank to supply office products to them. Through stores like this companies can actually bring down the cost of procurement of office products as they have a one stop solution instead of buying from several vendors.

This is the first of its kind store opened in India exclusively for Office supplies.

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Rajesh Exports Designer Jewellery ready for Launch

In March-2007, we had reported that Bangalore based, Rajesh Exports would launch Designer jewelery in the Indian market. The company has completed the design and manufacture of nine brands of diamond studded jewellery. The company will be launching all these nine brands in the third week of December. These nine brands of diamond jewellery have been designed by internationally acclaimed designers and the in-house R&D team of the company. It has taken more than two and half years of in-depth research of the taste and requirements of the cross section of people to visualize, design, prototype and manufacture these brands.

The diamond jewellery has been manufactured in 18 kts gold and a minimum quality of VVS1 GH colour diamonds have been used in the entire collection. The company will be launching these brands in India exclusively through its retail jewellery stores of laabh jewellers and shubh jewellers. The company will also be exporting these brands to various countries and distributing them directly to the International retail market through known and established diamond jewellery chain stores.

Based on designs and the quality of the product coupled with transparent pricing policy the company is confident that these nine brands of diamond jewellery would bring in a revolution and a complete change in the diamond jewellery buying pattern of the Indian consumers.

The company is currently the largest manufacturer of gold jewellery in the world with a live collection of more than 29000 designs of gold jewellery being distributed to the International and domestic jewellery markets. The launch of diamond jewellery brands will complement the gold jewellery of the company and will have a significant impact on the profitability of the company in the ensuing quarters.

Related Reading:
Reliance jewels shakes Bangalore Jewelery Market.

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Metro Cash & Carry Marching Towards Punjab

Metro Cash & Carry the German wholesaler which has tasted success of B2B retailing in Bangalore and Hyderabad is now marching towards the rich state of Punjab. They are looking out for locations in Amritsar, Chandigarh and Ludhiana to open new stores.

On the lines of Reliance, Metro is also exploring at the possibility of Punjab being a major sourcing hub of fresh produce for other centers across India. Mr. James Scott, Member of the Metro Board, said,

We should throw open the doors of Mumbai outlet by March and Kolkata store by April for business. The government has given us commitment that we can sell fresh produce in the city of Kolkata.

APMC has been abolished in Kolkata and the new law is yet to be put in place. The new law will enable B2B retailers to establish direct marketing centers for farm produce and develop supporting services to farmers.

Related Reading:
Metro Cash & Carry's Private Lable Business in India

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Tommy Hilfiger expands as Dolce Gabbanna enters India

Global fashion retailers are rushing to India as the local consumers have developed the taste and appetite for global brands. Our retail Analyst from Bangalore had the exclusive coverage of Manisha Lamba opening Tommy Hilfiger store in Bangalore. Tommy has presence in 7 Indian cities and hopes to achieve sales of $25 million by the end of this fiscal. Tommy Hilfiger will also expand its presence to 15 cities by 2010 and has over 50 sales outlets. Mr. Shailesh Chaturvedi, CEO of Tommy Hilfiger India said,

Currently we are in the second phase of expansion. We will be having 22 points of sale by the end of this year.

Dolce & Gabbana the Italian luxury brand which has been striving hard to get an entry into the Indian retail market has finally succeeded. The company has formed a joint venture with DLF. They together will retail under two brands Dolce & Gabbana and D&G Dolce & Gabbana as a requirement to fulfill Indian retail regulations for Foreign Direct Investment.

Related Reading:
Italian Luxury Brand Canali in India

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