Leading retail players like Reliance Retail, Subhiksha, Aditya Birla Retail, Bharti does not have a dedicated website of their own. They just have a press release or media kit as the only source of information about the venture.

To top it all, a consumer even in this era cannot find a location of the nearest retail store or what all the store has to offer in terms of product range. Only Future Group’s Pantaloon have a good presence clearly stating its lines of business and store locations to add to its online business portal, futurebazaar.com.

Even websites of big mall developers lack in terms of information regarding presence of retailers in their malls. Though Hypermarket Chains like Spencers, Westside, Shopper’s Stop maintain a well-designed updated website.

It is difficult to single out what goes behind the minds of retail companies to not give information about their company on website. Even websites of global retail giants like Walmart, Tesco cannot be said to among the most informative and distinctive as compared to websites of world’s leading brands.

Maybe the retail companies think that their business is highly offline and does not feel the need for having an online presence. Another line of thinking could be that once the business achieves scale and nationwide presence, they could ramp up their online presence.

Apparently, emerging retailers are increasingly adopting IT solutions for merchandising and supply chain needs, multi-channel requirements, store-level innovations and planning as well as for business intelligence solutions. Interestingly, even mom-and-pop stores are starting to invest in tech infrastructure.

So much so that IBM has identified the mid-to-small chains to drive its retail business vertical in India. The company has set up a business development team in India to deploy its own solutions as well as those developed by its ecosystem partners like SAP and Oracle.

“Going forward, shopping malls will be an area of important focus for DLF. This will help us to make the maximum leverage of the retail boom in India,” DLF Retail managing director Arvind Nair said.

He, however, did not divulge investment to be made in development of 22 million sq ft of shopping mall space. According to a company source, DLF is planning to develop around 20 large shopping malls in the next three-four years, which would entail an investment of Rs 16,000 crore.

Online Sales of Video Games, Consoles & Accessories Explodes

The top-gaining e-commerce category in Q2 versus year ago was video games, consoles & accessories, which jumped 159 percent on the strength of Nintendo Wii and PlayStation 3 sales. Sport & fitness also saw substantial gains (up 58 percent), followed by consumer electronics (up 51 percent) and event tickets (up 44 percent).

The chart below shows the top 10 eCommerce Categories for Q2 2007 vs. Q2 2006:

1. Video Games, Consoles & Accessories (159%)
2. Sport & Fitness (58%)
3. Consumer Electronics (excl. PC Peripherals) (51%)
4. Event Tickets (44%)
5. Jewelry & Watches (32%)
6. Furniture, Appliances & Equipment (25%)
7. Music, Movies & Videos (24%)
8. Computer Software (excl. PC Games) (23%)
9. Books & Magazines (22%)
10. Apparel & Accessories (20%)

Source: comScore, Inc.

U.S Online Consumer Spending Likely to Reach $200 Billion in 2007

Total U.S. online consumer spending reached $170.8 billion in 2006, with non-travel spending accounting for $102.1 billion and travel spending accounting for $68.8 billion. Based on the first-half growth rates, total U.S. online consumer spending is on track to reach $200 billion in 2007.

Rakesh Biyani, Director, Pantaloon feels that as India enforces the MRP system, the retailer has very little profit margin. Large retail outlets such as Big Bazaar and Pantaloon have investments in RFID, CCTV and antennas to reduce retail shrinkage. RFIDs in particular are being adopted widely by these retail majors. “If somebody steals goods without paying, it is the public who ends up paying for it. We identify compulsive shoplifters and often catch them three or more times in the same month. We try not to involve the police especially when teenagers are involved. This is where RFIDs are useful in protection of goods,” explains Biyani.

Dharmesh Lamba, Country Head, Checkpoint echoes the sentiments. He points out that India’s organised retail is only 3 percent while 97 percent is unorganised. “India is the second largest growing economy in retail, after China. Around 300 plus shopping malls are coming up in 2006 alone. New products launched globally are now launched simultaneously in India as well,” says Lamba.

In this context it is interesting to see that players like Checkpoint are entering the Indian market with their RFID solutions. John Davies, President, Global Apparel, Checkpoint plans to manufacture RFIDs and CCTV solutions in India. “As the retail segment in India keeps growing exponentially, RFID and other retail security products will play a more prominent role to control and combat retail shrinkage,” says Davies.

However, RFID has its own share of defects. Some RFID tags cannot be detected by the antennas if they are shielded by the hand or the body. A solution suggested is that the RFID label should be integrated in the package or the product itself so the exact location of the RFID tag is not known. Another issue is threat to privacy. RFID can be used to trace customer behaviour or find customer specific information. The tags can be read even if they are kept in the cars or homes of the customer.

Issues notwithstanding, Gibson Vedamani, CEO, Retailer Association of India feels that RFID is responsible for transforming the retail scenario in India from traditional to modern. “The concept of shopping malls is gradually getting accepted not only in large metros but also in small townships. Consumers get a prominent display and open access to products, while RFID protects the retailer by providing product identification and security to prevent retail shrinkage,” he elaborates.

The world’s second-largest retail chain with presence in more than 30 countries, Carrefour intends to open the first cash and carry or wholesale store on its own by the second half of 2009, the officials added.

“Carrefour WC&C India is our 100-per cent subsidiary and will set up the cash and carry business in India. We are planning one or two stores by the second half of 2009 and add more as the business grows,” said Managing Director Herve Clec’h.

“Master Franchise Company, also 100 per cent-owned by Carrefour, will appoint the franchisee for retail trade business. We are talking to five-six Indian groups for this,” Clec’h, who recently took charge of India operations, told IANS.

Carrefour hopes to finalise the Indian franchisee for the multi-brand retailing business, in which no foreign equity is permitted in the country, over the next couple of months, added Gerard Freiszmuth, general manager for Carrefour India.

“We have not finalised the investment plan yet,” Clec’h said, when asked for the amount his group intends to invest in the country,” he added, “We are here for the long haul, so money will not be a constraint.”

India presently permits up to 51 per cent foreign equity in single-brand retail trade business but disallows foreign equity in multi-brand stores in a bid to protect domestic stores, predominantly run as neighbourhood mom-and-pop shops.

The policy, however, permits 100 per cent foreign equity in cash and carry or the wholesale business, as also in the area of extending technical know how, supply chain management and general support services to Indian retail companies.

Carrefour WC&C India will also enter these areas where the Indian franchisee can get the same technical expertise that go into running the retail trade stores of the French company across the globe, the two officials explained.

“The Indian retail stores will also have access to our global brand. They will all be Carrefour stores, even though we will have no equity participation in them, in line with present policy,” Clec’h said.

“But we see the franchising option as a transition to partnership,” he said, adding his group will be interested in acquiring equity in the Indian retail trade venture as and when the Indian government gives permission.

Freiszmuth, who expanded Carrefour’s sourcing operations in India from virtually nothing to a few years ago to a $450-million business today, said his group was more keen on the hypermarket segment of retail trade in India.

“These are stores spread over 5,000-8,000 square metres. The Indian customer can get the same experience of shopping in any of Carrefour’s stores be it Milan or Kuala Lumpur – but with lot of local flavour,” he said.

The two officials said the entry into India’s merchandise trading business does not mark an end to the group’s global sourcing operations from the country. “At present garments account for 90 per cent of our sourcing operations. But fruits and vegetables are also catching up fast,” Freiszmuth added.

The past year has seen keen interest from global players and domestic companies alike to enter the retail trade business in India that is estimated at over $340 billion at present and projected to touch $520 billion by 2010.

It has planned to invest Rs. 1,400 crores to achieve annual turnover of 5,000 crores within four years. In addition to internal accruals, the company could look at raising resources through promoters and public offering of shares after 12 to 18 months. The group has so far invested Rs. 125 crore in the business, says a DNA report.

Currently, the group is operating 90 food and grocery (F&G) and six home products stores. The group expects to increase the number of outlets to over 200 by March, 2008, says the report.

Wadhwans are quite aggressive on both organic and inorganic fronts. Besides, organic growth, the group in the recent past has bought out 13 stores chain operating under brand name of “S-Mart” in Bangalore and acquired Mumbai-based direct retail business ‘Sangam Direct’ of FMCG giant Hindustan Unilever Limited. Apart from this, the group also acquired control of Mumbai-based Maratha Co-operative Store and acquired Delhi-based retail chains operating under ‘Home Market’ and ‘Sab Ka Bazaar’ brand names.

In the meanwhile, the group’s flagship DHFL has picked up 19.9% stake in the company for an investment of Rs 5 crore.

The Indian retail juggernaut’s still emerging operations has identified certain business verticals where it would look for equity JVs for the requisite brand support, and wellness is one among them.

The development comes even as the domestic retail chain has rolled out Reliance Wellness stores in Hyderabad and is working on expanding the network to cover more markets. It plans to roll out over 300 wellness stores in three years. “This is market speculation and we have no comments at this stage,” a Reliance spokesperson said, when contacted.

This marks Boots’ return to Indian market after it exited a joint venture with Nicholas Piramal following the sale of its OTC medicines business to Reckitt Benckiser in 2005.

The still-at-works JV will help Reliance offer an array of activities from dispensing pharmacies to health and beauty services to healthcare check-ups under its wellness vertical.

The format currently offers products across categories such as allopathic, ayurvedic and homeopathic pharmaceuticals, personal care, beauty solutions and healthcare products. Reliance Wellness also has OTC health foods, self-help medical and fitness equipment in its portfolio. The wellness vertical at Reliance Retail is spearheaded by Ninu Khanna, who also looks after the company’s FMCG business.

Boots, UK’s biggest pharmacy chain, operates around 3,100 dispensing outlets worldwide.

Its current international operations are spread across Norway, Netherlands, Thailand and Switzerland. In UK, it also runs health and beauty destination stores across highstreets and edge-of-the-city centres. Interestingly, Boots also has a significant eye-care business apart from manufacturing and marketing health and consumer products under Boots, No 7 and Soltan brands.

Alliance Boots was formed through the merger of Boots Company with Alliance UniChem. However, a private equity consortium led by KKR acquired Alliance Boots earlier this year for around $22 billion. It was the first FTSE100 Index company to be acquired by private equity funds.

In this context, it may be mentioned that Reliance was earlier rumoured to be in talks with VisionCare for an alliance in the eye-care market. Meanwhile, it is believed that Reliance Retail’s equity JV strategy – with the company holding majority or at least 50% stake in each of them – will be restricted to certain sectors. Sources said key business verticals like hypermarket chain, consumer durable and fashion apparel will be fully-owned operations.

NEW DELHI: Home grown FMCG major Dabur India on Tuesday said it is targeting a turnover of Rs 1,000 crore over the next three years from its beauty and lifestyle subsidiary – H&B Stores.

“We are aiming a turnover at about Rs 1,000 crore by 2,010 and around 150 H&B Stores. On an average, we are expecting a turnover of nearly Rs 22,000 per sq ft per annum from the outlets,” Dabur India CEO Peter Braker told reporters.

The company is planning six retail outlets in the Delhi NCR region by the end of January and by next financial year the number would go up to 50.

“Currently, we are focusing on the Northern India and will soon open stores in Chandigarh, Amritsar and Ludhiana. We also have plans to open shop in Bangalore by January and foray in the Southern part,” Braker added.

When asked how the company would compete with the existing retail outlets, Braker said, “We will offer products at a price which is 20-25 per cent cheaper than the Maximum Retail Price (MRP). This would attract the customers as this promotional price will be made available through out the year.”

The company’s market size is about Rs 25,000 crore and is now targeting customers in the age group of 16-45 years.

The retail initiative of H&B Stores is not only confined to selling only Dabur products, Braker said and added, “products of other FMCG majors, both national and international will be available in the outlet.”

The store size would vary in the range of 1,200 – 6,000 sq ft. The company would be investing about Rs 140 crore for streamlining its operations by 2010.

The lifestyle retail section of the H&B would be operating under the brand name of ‘new u’.

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The company may not stock fruit and vegetables in some states, Orissa being one of them. Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decided not to compete with local vendors partly due to political reasons, and partly due to its inability to create a robust supply chain.

This is quite different from what the firm had originally planned. When the first Reliance Fresh store opened in Hyderabad last October, not only did the company said the store’s main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its “farm-to-fork’’ theory. The idea the company spoke about was to source from farmers and sell directly to the consumer removing middlemen out of the way.

“The company underestimated the might of the middlemen and the small vegetable vendors in the current political scenario,’’ said a source. “Also, the strategy to constantly talk about low prices was not such a great idea after all,’’ the source added.

Though the rollout has been fairly quick and 400 Reliance Fresh stores have been launched in a year’s time, it has not been able to meet its internal targets in terms of critical parameters, said a source. This is largely to do with political pressures from two large states: West Bengal and Uttar Pradesh which are totally opposed to large retailers entering organised retail. This has slowed down expansion in other states for fear of a trickle down effect.

The Reliance spokesperson however says all targets are being met. “Reliance Fresh stores have received an excellent response from the customers and meeting all business targets. Our expansion is progressing as per plan. We also deny that there is any March deadline or plan to exit any business.’’

Following the Mayawati government’s diktat not to sell fruits and vegetables from standalone shops and public outcry in West Bengal, the company has decided not to operate Reliance Fresh stores in these two states.

Perhaps the public antipathy is the reason why Reliance Fresh has not responded to Mother Dairy’s price cuts on a dozen odd vegetables, though smaller competitor Subhiksha has cut prices on some select vegetables. “The priority and focus has clearly changed for Reliance Retail. And this will continue until the general elections in 2009,’’ the source added. var RN = new String (Math.random()); var RNS = RN.substring (2,11); b2 = ‘ ‘; if (doweshowbellyad==1) bellyad.innerHTML = b2;