Gateway Retail operates catalogue, stores and internet retail, under franchise from Home Retail Group.
The company's comments came close in the wake of its announcement last week to close down two of its stores in Mumbai and Jodhpur, respectively.
"We are in the process of re-negotiating rentals with many of our property owners and are looking at achieving 25-50 per cent reduction in rentals, in line with the downslide in realty prices," Vishal Retail Group President Ambheek Khemka told PTI. "We are also planning to relocate stores, which are economically not viable or whose rentals are more than market rates and resize others to make them more profitable," he said.
He said the company is undertaking a study to look at economic viability and rental state of all its stores.
"We are identifying stores to find out where we need to resize them, close down or relocate to some other location. The process will take some time to complete," he said. Vishal Retail's latest stand comes a few months after the retail giant cut down its turnover target to Rs 1,500 crore for the current fiscal, down from Rs 1,800 initially planned.
The company, which has currently around 185 stores, including hypermarkets and small-format stores across India, had clocked a turnover of just over Rs 1,000 crore in 2007-08.
When asked about plans to close down any more stores, Khemka said: "Not immediately. We will first finish the viability study and then look into the matter." He admitted that the company's stores, specially the ones in metros and Tier I cities, have witnessed reduction in footfalls and sales.
TxBusiness Standard
However, this time around, more consumers than ever are redeeming and entering promotions online. The latest figures from Nielsen Online show that those websites tapping into consumer concerns about the economy by giving opportunities to save money are the fastest-growing.
This includes portals for using promotional codes and e-vouchers for online shopping discounts, such as MyVouchercodes.co.uk.
It was Walkers Crisps, however, which claimed Nielsen's number one spot in June, with its web traffic figures growing by 2575%, as people visited its 'Brit Trip' site in droves to take advantage of the snack brands' on-pack offer of discounts on days out and holidays (see case study).
'When times get tough, promotions benefit, as brands take marketing spend from above-the-line activity to below-the-line to get instant results,' says Graham Howarth, director of sales promotion at integrated marketing communications agency P&MM. 'What's interesting, however, is that the credit crunch is not just about consumers wanting greater value for money. It is also driving audiences to look further for rewards that create the feel-good factor, or to replace goods and items they might have bought previously with their disposable income.'
P&MM has run value-added online and mobile promotions with Lipton Ice Tea, offering 'Ice Cool' holidays and breaks to global destinations such as Sri Lanka, Sweden and Santa Claus' Village in Lapland.
Txmm
Comet's owner, Kesa Electricals, plans to upgrade 15 of the brand's 250 UK stores by the end of the year, with the aim of converting a further 100 over the next five years.
The changes are intended to put pressure on catalogue retailers such as Argos.
Terry Duddy, chief executive of Home Retail Group, the owner of Argos and Homebase, recently claimed that Argos has overtaken Comet as the second-biggest UK consumer electronics retailer, following a 45% rise in the group's annual profits.
Comet also faces competition from US chain Best Buy, which will launch in Europe this year as part of a £1.1bn deal with Carphone Warehouse.
Txmm
LONDON: Coca-Cola has relaunched its online loyalty rewards scheme Coke Zone to make it easier to navigate and offer the consumer a richer media experience.
The website, which launched this time last year, claims the highest unique visitor numbers of any grocery brand website every month from October-to-December 2008, according Nielsen figures.
Carlson Marketing, the lead agency on Coke Zone, has designed the new site, alongside digital design agency Flourish, with Sapient responsible for web integration.
Tx:BR
The uber chic Triumph store spread over an area of almost 2000sqaure
feet, including the ground and mezzanine floor, is a statement in
international styling. It is not just the first Triumph standalone
store in Delhi, but in fact the first of its kind in Connaught Place.
The store is modeled on the lines of other Triumph international
stores across the globe. Done in white with red accents it exudes
warmth with its appealing European style wooden flooring. As soon as
you step into the store, its peaceful ambience engulfs you promising a
leisurely browsing experience. The store will showcase international
styles of Triumph including the sloggi range. With so many styles to
choose from, the store promises an exciting lingerie buying experience
for every category of Delhi's woman shoppers. To further enrich this
experience, Triumph has specially trained its all-woman staff at par
with international standards to give individual attention to customers
depending on their varying needs. The staff will help them select the
right fit and style from the vast range of Triumph's international
designs available for the first time in India through their standalone
stores.
Speaking on the occasion Mr. Thorsten Allenstein, Managing Director,
Triumph International (India and Sri Lanka), remarked, "After the
launch of Triumph's exclusive stores in Mumbai and Gujarat, we are
pleased to inaugurate our flagship store in the national capital. This
is our third stand alone store in India and through this retail
expansion we are now firmly entrenched in the Indian Lingerie market.
The Indian women specially the cosmopolitan crowd with their exposure
and experience of international brands have already been enjoying our
exclusive styles and perfect fits through various retail stores. Due
to our 100 years of experience and success, we are in a lucky position
to offer any bra from first to last, that a woman would wear. This
stand alone store in Connaught Place will only widen the Triumph
range, stocking many Triumph styles that were not available here
earlier."
In line with this marketing strategy for India, Triumph has already
set up a state of art technology plant in Tamil Nadu. Triumph is keen
on expanding its retail footprints in India by setting up its flagship
stores. Apart from the three standalone stores already set up in
metros, Triumph is looking at reaching its customer through opening
more stores in Tier I and Tier II cities also. Triumph has already
marked its presence in India through 700 'points of purchase' in
multi-branded stores across 60 cities in the country. About 95% of the
lingerie industry in India is unorganized and Triumph has a 34% share
in the organized lingerie industry. This gives Triumph a vast
opportunity to further tap the market and expand its base in India.
About Triumph International
Triumph International is one of the world's largest underwear
manufacturers. The company enjoys a presence in over 120 countries
with its core brands Triumph(R), sloggi(R), Valisère(R) and HOM(R).
Triumph employs more than 43,000 people and achieves a turnover of INR
16,000 crores.
TxBT
As part of the retail distribution agreement with Redington India, BlackBerry smartphones and service plans from supported carriers will initially be available in retail and modern trade outlets across nine cities. This includes Mumbai, Delhi, NCR, Hyderabad, Chennai, Bangalore, Kolkata, Pune and Ahmedabad. Redington intends to expand the retail footprint in a phased manner and will offer a wide range of BlackBerry smartphones beginning with the BlackBerry Pearl series, the BlackBerry Curve series and the BlackBerry Bold smartphone.
A slowdown in India doesn't seem to have so far weighed on the entry of international brands, mostly from advanced countries in the grip of recession.
A senior official in the ministry of commerce and industry said there has been greater interest among foreign brands to invest in India after an initial slow start in 2006. The government had allowed 51% FDI in single-brand retail in early 2006.
"India remains the most important destination for international brands outside their home markets due to its solid economic fundamentals and growth opportunities," said Benetton India MD Sanjeev Mohanty. Several marque brands in different segments, including fashion, apparel, footwear, watches, sportswear, sport equipment, luggage and home furnishings have entered India in the past two years either through joint venture route or licensing agreement with a local partner.
Fendi, Nike, Llardo, Rino Greggio, Damro, ETAM, Zegna and Lee Cooper were among the first to get FDI permission under the single-brand retail window. Premium fashion brands such as Armani, Dolce & Gabbana, Louis Vitton, Salvatore Ferragamo, sportswear retailer Puma, Lerros and S Oliver, luggage brand Piquadro, Marks & Spencer, La Perla, Jimmy choo and Toy Watch have also set foot in India. A few others like Diesel and Starbucks are waiting in the wings.
Meanwhile, there are several brands that have been waiting for the government to allow 100% FDI in retail. Furniture retailer Ikea says it will wait for the policy to change rather than choose a partner for its India entry. Most foreign companies would like to have complete control over their operation in India. And there have been instances, where joint ventures have withered as the two partners struggled for control.
Also, foreign brands may impose certain restriction on local partner that may cause business to falter. "In cases, where the local partner is expected to procure goods from overseas, chances of survival of joint ventures become slim. Imports make goods more expensive and thus makes business less viable," said Arvind Brands' CEO Suresh J.
In the short term, retailers feel a significant dip in rentals in malls and high street may actually encourage more brands to look at India. "Entry barriers seems to be getting reasonable owing to correction in real estate," says Mr Mohanty.
The brand has entered into an agreement with Zingari synonymous for being the distributor of state-made Cuban Havana cigars and cigar retailing in India. The first S T Dupont luxury retail outlet will be in launched in Delhi in the next 3-4 months and there will be a total of 8-9 retail outlets in India in the next two years.
Better known for its cigarette lighters, the iconic mens' accessories brand is seen in the movie Casino Royale where Bond is wearing the OO7 bullet cufflinks and carrying the Xtend James Bond Torch Flame Lighter from the house of S T Dupont.
The agreement will also see Indian skilled craftsmanship from Rajasthan being exported to Europe to cater to European tastes. Zingari will provide S T Dupont with skilled craft workmanship talent base in Rajasthan, where the latter will make limited edition products with Indian craftsmanship having a European design. The craftsmen will work on designs by S T Dupont for lighters, cufflinks, and other accessories that will be featured in global S T Dupont stores.
Fourth quarter pre-tax profits rose 9pc to $1.4bn as the company benefited from consumers trading down in the face of the economic crisis.
However, quarterly revenues fell 3pc to $5.6bn as the fast food chain was hit by the strength of the dollar.
Growth accelerated in the fourth quarter, with same-store sales 7.2pc ahead, fuelled by strong growth in Asia, the Middle East and Africa where revenues were 10pc ahead year-on-year. In Europe same-store sales grew 7.6pc, while the US saw a 5pc increase.
Full year revenues rose 3pc to $23.5bn while pre-tax profits were up 72pc at $6.2bn.
McDonald's, which has a market value of $66bn, said it had returned $5.8bn to shareholders in 2008 via dividends and share buybacks. The company increased its fourth quarter dividend by 33pc to 50 cents a share.
The company has returned $11.5bn to shareholders since the beginning of 2007, in line to meet its target of a $15bn to $17bn return by the end of 2009.
Chief executive Jim Skinner welcomed the strong results. "McDonald's begins 2009 with six years of momentum, a business model that has delivered even in challenging economic conditions and January sales that remain strong," he said.
McDonald's shares fell 1.37pc to $56.65 in early trading.
Tx:telegraph
The company had to shelve retail plans because the government declined to support it by subscribing to oil bonds. These bonds are key to the survival of the three government-owned companies that control the fuel retail market — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — and sell petrol, diesel, kerosene and LPG at subsidised prices.
Without oil bonds, it is not possible for public or private players to compete with these three companies. Lat year, Reliance Industries decided to close two-thirds of its 1,400 petrol pumps around the country citing unfair price competition from the government-supported giants.
MRPL operates a 9.69 million tonne refinery at Mangalore in Karnataka.
Other players with fuel marketing rights include Reliance , Shell, Essar, ONGC and Numaligarh Refinery. Like MRPL, several are planning a re-entry.
Tx:Business Standard
Times are tough for retailers, as the failures of Circuit City, Mervyns and Linens 'N Things attest. And that pain is translating into headaches for their landlords.
Owners of shopping centers are expected to see a jump in vacancies and declining revenue as even more stores shut down after a dismal holiday shopping season.
Holiday sales can amount to as much as 40 percent of annual revenue for retailers, and sales fell 2.8 percent this past season.
For those retailers still in business, many are seeing revenue shrink as financially strapped consumers spend less. So now some are trying to renegotiate rents with landlords to cut costs.
That puts pressure on landlords who already may have seen substantial revenue reductions from the loss of other tenants such as Circuit City, which went bankrupt in November. The company said this month it would close its remaining 567 stores nationwide.
In San Diego County, the collapse of Circuit City, Mervyns and Linens 'N Things put roughly 1 million square feet of retail buildings on the market. The three chains had a total of 25 stores in the county.
Yet despite the store closures, the news isn't all bad for the owners of San Diego retail centers. The ones in the best locations are attracting the attention of the handful of retailers still in expansion mode.
"We don't have a lot of big boxes that become available," said Reg Kobzi, a senior vice president with CB Richard Ellis. "Even in this economic climate, there are tenants willing to backfill those if they're in great locations."
Department store chain Kohl's, for example, recently assumed the leases of three former Mervyns stores in San Diego County – one in the College Grove Shopping Center, another in Mira Mesa and a third at an undisclosed location, according to bankruptcy court records.
In addition, the former Linens 'N Things building in Carmel Mountain Ranch reportedly has offers from three or four prospective tenants for the roughly 70,000-square-foot structure, according to brokers.
A Circuit City store soon will be available in the same shopping center, and a Mervyns is available next door.
RPG Enterprises' retail arm Spencer's Retail is continuing with its Rs 1,500 crore expansion plan, envisaged for the next two years, despite the economic slowdown.
The company, which said it planned to open 400 new stores in the next two years, is eyeing Rs 1,250 crore sales turnover by the end of the current financial year. "We are continuing to expand (our business) with more and more stores, including hypermarkets. We will open as many stores as necessary and wherever they are required. Our expansion will continue," Spencer's Retail President Vineet Kapila told media.
Last November, Spencer's Retail announced a Rs 1,500 crore expansion to add 400 more stores by the end of 2009-10 fiscal. It was planning to set up stores across the country, including Tier II and III cities. The company has currently 350 stores across India, including 34 large format hypermarkets.
Stating that current economic slowdown has not affected the company's operations as it deals with mostly essential items, he said: "Our main items of retailing are FMCGs, fruits and vegetables."
Asked about the company's profit margin, Kapila said:"The profit margin is not very big but the retail business is more about managing costs. We have been successfully managing our costs."
RPG Publications is set to beat the slowdown gloom and is readying to launch its feature and current affairs weekly magazine, 'Open', by the end of March 2009. The magazine, priced at Rs 40, will be targeting metros with an initial print run of one lakh copies. RPG Publications is the newly floated print media venture of the RPG Group, one of the largest business groups with presence in key sectors of the economy and a turnover of $3.25 billion.
Commenting on the content and the differentiating factor of 'Open', its Editor Sandipan Deb said, "I don't think we are going to compete with India Today and Outlook, except that we are weekly. We are not positioning ourselves as a news magazine, we calling ourselves as a feature and current affairs magazine. My reader, I expect, has already been overloaded with information newspapers, which are thicker than ever before, news channels, and the Internet, so we are not looking at feeding our readers with the news of the week once more. We will concentrate more on features, which is trends; we go beyond what is already known to the reader. If we cannot add any value to the information that our reader is familiar with, we will not make it the cover story."
He further said, "We will do more think pieces that are more of commentary and essay rather than just reporting. The reporting would be through the photographs. We don't want to be 'me too', instead want to create a category for ourselves. We will have 60 pages of editorial and 10-15 pages of advertisement initially. 'Open' is modeled on the lines of 'Time' and 'New Yorker'."
On the target audience for the magazine, Umesh Kumar, Publisher, RPG Publications, said, "We are looking at person who is well-educated, is more likely to be a post graduate professional or self employed or in a MNC set-up, a person who is career-focused and who wants to enrich his knowledge. We are looking at a person who is well aware and evolved in terms of his media consumption."
Talking about the distribution, Kumar said, "We will be present on newsstands and will be outsourcing our distribution."
Commenting on the marketing and advertising plans, Kumar said, "We have a Delhi-based advertising agency called 'Shop', which is headed by Freddy Birdy and Naved Akhtar. We will be taking a complete 360-degree initiative and will be advertising across platforms. The promotions will happen close to the launch of the magazine."
Deb added here, "We will have a strong web strategy. The name of the site is still in the process of being finalized, but we do assure to bring in completely new stuff that no other magazine website has done."
Explaining the pros and cons of entering the market when it is in the grip of a slowdown, Kumar said, "I believe it is both ways; it's a good time because it gives you a lot of opportunity to hire good talent, because the market is down and nobody is really hiring, so can acquire good talent. Secondly, on the marketing front, at this time if one is able to innovate and do things in a different way, the cost of entry could be lower."
Monthly store sales have declined for six straight months. In the midst of the longest recession in decades, the industry has lost more than three times the 163,000 manufacturing jobs shed by the auto industry last year.
Marshal Cohen, chief retail analyst with NPD Group, said he's especially concerned about this significant erosion of retailing jobs. Unlike with the auto industry, Cohen fears the issue of retail job losses either isn't getting its fair share of attention from Washington or keeps "getting swept under the rug."
"When the industry is losing 34,000 jobs every couple of weeks, you better pay attention," Cohen said. He was referring to Circuit City's announcement last month that the electronics retailer, which employs 34,000 people in the United States, was going out of business.
"Retailers are the largest group of private employers in the country," Ullman said during a panel discussion last week at the National Retail Federation's (NRF) annual convention in New York.
"We lost twice the number of workers last year than automakers and we hired 45% fewer holiday workers last year," he said. "If that doesn't (press) the point, I don't know what would."
Said Cohen, "Consumer spending at retailers fuels 75% of the economy. So you have to make sure these people have jobs. "If not, the ramifications are so overarching that it's enough to put the economy in a tailspin," he said. "These people losing jobs are full-time workers, part-time workers, college kids, senior citizens. They aren't only employees. They are consumers and taxpayers too."
Scott Hoyt, senior director of consumer economics for Moody's Economy.com, said he doesn't have a "good answer" as to why the the retailing industry hasn't been as effective as other industries in highlighting the issue of escalating jobs losses.
"If we put it in perspective, although the number of actual jobs lost in retailing is much bigger, the percentage of the total is not as high as for the auto industry," Hoyt said.
The retailing sector employed 15 million Americans in 2008 versus 800,000 jobs in the U.S. auto manufacturing industry, according to the Labor Department.
Txcnn
As per industry data released on Tuesday, the country had 346.89 mobile phone users as of December 2008-end compared to 233 mn in the corresponding period a year ago.
As per sector regulator Trai, the total number of telephone connections (mobile and fixed) has touched 385 million as of December-end, taking the telecom penetration to over 33%. This implies, one out of every three Indian has a telephone connection.
On the other hand, fixed-line numbers continued to tumble. The landline customer base was down by 3% in 2008 to 37.90 mn. Mobile customers now out-number landline users by around 9 times. Despite registering close to 75% growth in its broadband subscriber base, the penetration of high-speed internet connections remains dismally low. A mere 5.5 mn users have a broadband internet connection.
The growth in 2008 was led by Bharti Airtel, the country's largest communications provider. Bharti had 85.6 million customers as of December-end, when compared to 61.3 million of Reliance Communications and about 61 million of Vodafone Essar.
In fact, Bharti has more customers than the state-owned BSNL's mobile and landline users combined. The PSU finished 2008 with 46.2-million mobile subscribers and 29.5-million landline customers.
Telecom companies estimate growth in 2009 to be higher: "We are extremely bullish that the growth will continue in 2009. This year, the number of additions will be in excess of 130 million.
Tx:ET
However looking at global meltdown impact, the prices of retail and office spaces have been reduced by about 25% in the commercial sector for Ludhiana Galleria. This was announced by Ajay Khanna, MD, DLF Commercial Complexes Ltd.
The Galleria is coming up on 2.25 acres of land on Ferozepur road, which will cater to a catchment area including Sarabha Nagar, Rajguru Nagar, Aggar Nagar, BRS Nagar, Model Town, Kichlu Nagar, Rishi Nagar, Pakhowal Road, Gurdev Nagar, Mullanpur, Jagroan, Moga and Ferozepur among other areas.
Khanna, said, "The commercial complex will comprise of seven floors in which shopping arena will extend over the ground and first floors. The second floor will also house a mini air-conditioned market. There will be a space for restaurants and a multi-cuisine food court. Office areas will be spread from the second floor to the seventh floor."
The company, a subsidiary of Raymond, is planning to open 100 stores under its new chain Neckties & More. Raymond Apparel, one of the largest players in the menswear segment in India, has decided to launch the format after recording a strong growth in their accessories business in the past few years.
According to Shreyas Joshi, president, Raymond Apparel, the company has been recording over 30% year-on-year growth in the accessories segment. At present, accessories contribute 5% to the total business and the company expects this to go up to 10% in the next two years.
Goldman Sachs expects India's economy to grow 5.8% in FY 2010 due to fall in external demand and a slowdown in investments. The US, EU and Japan are likely to experience a significant contraction in economic activity in 2009 and possibly in 2010.
Significantly, Prime Minister Manmohan Singh too had expressed a cautious note on the outlook for the economy while speaking at the The Economic Times Awards For Corporate Excellence, on Saturday. However, the CEO of the largest private bank in the country, ICICI Bank, is more optimistic. Mr KV Kamath predicted at the same event that the economy will clock a growth of around 7% for FY '10.
Speaking to ET, Tushar Poddar of the Asia Research Team, said. "India will be the second fastest growing major economy in the world after China. However, due to rapidly falling exports and slowing investments, we have maintained an under-weight on the Indian stock market." He further said, "Four important themes — spending by the rural consumer, government spending, low inflation and low-cost housing — are identified as themes which the investor can play for downside protection in 2009."
He said, the rural consumer demand is largely unaffected by the global crisis since rural India has not borrowed much. Besides, agriculture has done relatively well and the government has assisted the rural population through schemes like waiver of agricultural loans and National Rural Employment Guarantee Scheme (NREGS) which provides every rural family with paid employment.
Low inflation is also going to translate into a lower import bill and low input cost. "In an environment of rapidly falling input costs, sectors which have a high proportion of variable cost compared to fixed cost are likely to benefit from falling input prices," the report said.
The supermarket chain's
American convenience store chain Fresh & Easy, which opened on the West Coast in
November 2007, is harnessing the text-based messaging service to interact with customers and inform them of new offers and store openings.
In addition, it is answering customer queries about missing products in certain stores, and about services offered.
A sample Twitter exchange from earlier this week involves a customer called "songrytr" noting that stock levels had seemed "a
little sparse" on recent visits to his local branch, to which Fresh & Easy responds that levels tend to be a bit low at the end of the year due to shipping schedules.
Though perhaps not gripping correspondence, Twitter does help to establish loyalty by giving customers an active way of communicating with the company's management.
The Fresh & Easy Twitter feed has 915 followers – a fair number given that a chain the size of Starbucks only has 30,591 followers.
While it is increasingly common to find US companies on Twitter – cable company Comcast and airline JetBlue to name two, in addition to Starbucks – uptake by British companies is less common.
This may be because the technology is in its infancy – the site only opened in 2006 – or because it started life with a different aim in mind – to enable friends to tell each other what they were doing by answering quick, simple questions.
Nevertheless, a recent survey – the Cone Business in Social Media Study – found that 93pc of those questioned expected to see companies online.
The six-year-old company, touted as the second largest south Indian mobile retail chain next to Chennai-based UniverCell that has 180 stores, plans to increase its number of stores to 200 by March 2010. Big C currently has 54 outlets – 50 in Andhra Pradesh and four in Bangalore.
"We are targeting to take our total store network to 100 in Andhra Pradesh and Karnataka by March 2009. The second phase of expansion will see our foray into Kerala and Tamil Nadu markets in 2010, with our network touching the 200-store bar by then," M Balu Chowdary, chairman of Big C Mobiles, told Business Standard.
Mobile retailing, including handsets and accessories, is currently a Rs 75,000-crore market in India, of which the organised sector comprises about 30 per cent. The organised sector, which is growing at 10-12 per cent year-on-year, is expected to grow at a fast clip of 50 per cent in the next three years, he said. "With the mobile users in the country expected to touch 500 million by 2010 with additions of about 9 million subscribers every month, there is a huge opportunity for mobile retailing," he added.
Chowdary said the company was eyeing tier-I and tier-II cities such as Mysore, Hubli, Mangalore, Coimbatore, Thiruvananthapuram, Madurai and Salem, where music-enabled and FM phones are moving faster, for its second phase of expansion with each store having a carpet area of between 450 sft and 2,200 sft.
"We plan to fund the expansion through a mix of debt and internal accruals," Chowdary said, adding the company was in the processing of developing an online mobile store, which will be launched within a month.
Future Group has initiated the move for its Big Bazaar format because it is the largest chain in the group and far more localised, according to a top company official. The initiative has been launched in two stores in Mumbai of the 102 Big Bazaar outlets across the country.
Influential people of the community like local doctors and lawyers would be roped in to part of the CABs and customers could voice their opinions about the store through them. The board in turn could advise store managers and be incentivised through special discounts at Big Bazaar.
Speaking on the occasion, R Chandramouli, president, sales and marketing for RECC, said, "The tie-up offers a synergy as Reva car is a clean, green, technology product that is also plug and use, like the products sold through Reliance Digital stores.
Reva will deliver a greater driving experience, reduce pollution and meet the needs of city driving for people in a cost-effective way."
Ajay Baijal, president and chief executive, Reliance Digital, said "We are extremely buoyant with this tie-up as it will be a unique initiative, a first-of-its-kind, wherein a technology retailer will move beyond its regular frontiers to promote and sell a forward-looking technology in the automotive arena. We at Reliance Digital have always believed in delivering and providing our customers with cutting-edge technology solutions that bring value for today and a better tomorrow."Sale of electric cars at Reliance Digital outlets is an initiative from Reva to look at alternative methods to reach customers apart from the conventional systems.
Reva has successfully implemented internet-based distribution in London to sell its cars, through its distributor 'Going Green'.
Reaching out
Launched in 2001, the initiative, Project Shakti , helped HUL reach the so-called media-dark regions by turning rural women into direct-tohome distributors of its mass-market products.
With emerging markets contributing roughly 44% to global revenues, Unilever—a Fortune 500 foods, home and personal care product giant with operations in about 100 countries—is betting on Project Shakti to reach to the bottom of the pyramid in Asian, African and Latin American markets.
The project is being customised and adapted to Sri Lanka, Vietnam and Bangladesh. In Bangladesh and Sri Lanka, it is being promoted as Joyeeta and Saubaghya, respectively.
The effort is expected to help Unilever tap fresh growth avenues in emerging markets in the face of recessionary trends in the US and Europe.
The rural micro-enterprise has helped the Rs 13,717-crore Hindustan Unilever to push growth rates in several categories such as personal wash, fabric wash, shampoos, oral care and skin care. Brands like Annapurna, Lux, Lifebuoy, Breeze, Wheel, Fair & Lovely, Lakme, Ponds, Clinic Plus and Pepsodent have sold good numbers in smaller markets, company sources said, Overall, around 50% of HUL's revenues came from the rural markets in India.
The project was started in 2001 to empower underprivileged rural women by providing income-generating opportunities, health and hygiene education. Shakti's ambit already covers about 15 million rural population. Several rural pockets are populated by less than 2000 individuals but are seen as unreachable and remain untapped by consumer goods makers.
Rural women are appointed as Vanis (communicators ) and trained to communicate in social forum such as schools and village get-togethers .
Shakti operates in fifteen states: Andhra Pradesh, Karnataka, Tamil Nadu, Gujarat, Madhya Pradesh, Chattisgarh, Maharashtra, Uttar Pradesh, Punjab, Haryana, Rajasthan, West Bengal , Bihar, Jharkhand and Orissa.
There are over 45,000 Shakti entrepreneurs covering over 135,000 villages across 15 states.
Industry officials say the awareness of rural consumers about products and brands is lesser than the urban markets. Also, urban business models are not really successful in tapping the full potential of several small clusters of consumers across remote markets.
Reaching to The Bottom
According to a newest report by IGD, British Tesco would become the world's second largest retailer in the next five years. It will grow quicker than Carrefour at the compound annual growth rate of 11% compared with 7% for Carrefour between 2007 and 2012. This would sit Tesco immediately behind Wal-Mart, which will grow its turnover by $ 100 billion in the same period.
Emerging markets are expected to draw an ever-greater attention in the future as retailers enter a new phase of globalization, suggesting a more cautious approach and a greater focus on asset performance. Low prices, a strong message on quality and an operating efficiency will contribute also to the success.
International expansion in markets such as China, United States and India is expected to contribute to Tesco generating a turnover of $ 157.1 billion by 2012.
Carrefour is also expected to generate a solid growth in markets with strong potential such as Brazil and China, helping to offset the slowdown in more mature regions such as Western Europe.
IGD estimates that in grocery retailing, Chinese and Indian markets are expected to grow each on a compound annual pace of 13.2% between 2008 and 2012 and estimates also that Indonesia, Ukraine and Vietnam are other emerging markets to watch.
2007-2012 turnover projections of leading global retailers : Wal-Mart, Carrefour, Tesco and Metro.
year Wal-Mart Carrefour Tesco Metro
2007
374.5 bil. $ 112.6 bil.$ 94.7 bil. $ 88.2 bil. $2012
476.2 bil. $ 157.0 bil. $ 157.1 bil. $ 119.9 bil. $Source : IGD Research
However, while taking into account the relatively weak financial position of the organized retail and the constraints in space of their expansion projects, this sector alone is not able to answer to the growing demand. Organized retailing now accounts for a small 4% of the total retail sector and is expected to grow much more quicker at an annual pace of 45 to 50% and to quadruple its total share to 16% in 2011/12.
The report underlines however that small shopkeepers located near organized retailers have registered declining sales and profits after arrival of large players. Consumers have benefited from the situation and their global spending has grown up.
While all income groups saved when shopping at organized retail stores, the report underlines that lower-income households saved more. Farmers were large beneficiaries while selling directly to organized retailers making about 60% profit more than while selling in the local markets.
The report gives also a few recommendations such as pushing cooperatives and non-organized retail associations to supply directly from farmers. It also recommends to facilitate cash & carry outlets to sell their merchandise to unorganized retailers and ease the license and modern store opening authorization towards a national uniform policy in all states facilitating the modern retail sector.
Source : The Economic Times
In the 1950s, stores gave customers redeemable Green Stamps based on how much they
bought. It was a crude precursor to today's loyalty programs. In addition to the old stalwart
frequent flier programs, now it seems as if every retailer wants customers to sign up for
their loyalty programs. If your keychain bristles like a porcupine with dozens of plastic fobs,
you're not alone. In 2000, Americans held 973 million loyalty program memberships. Today,
according to Colloquy's 2007 Loyalty Census that number is 1.3 billion -- or about a dozen
for every household.
To customers, there's not much to loyalty programs; on the surface they appear to be a
simple piece of plastic and a "Here's how much you saved" line at the bottom of a receipt.
But experts at the W. P. Carey School of Business say that for companies, the programs can
be phenomenally more complex and important than taking a trifling percentage off a
customer's bill.
Building loyalty with technology
The name -- loyalty programs -- belies the larger purpose behind them. While it's true that
companies want their customers to be loyal -- to always shop in their store or fly on their
airline -- there is now much more riding on these implementations. Companies don't just
want you to come back and shop again (although they hope you do); instead they also want
to know what you buy, when you buy it, why you buy it and what else you want to buy.
Companies want you to come back tomorrow, but they want to upsell you on the artisan
baguette versus the plain white bread, and while you're at it, they'd also like you to pick up
the olive tapenade and the imported brie. Not only will you like them, but their margins are
Your purchase is stored in a database which records everything you buy and have previously
bought. With the resultant mountains of data that accrue over time, a company can bring
data mining and analytics to bear to isolate trends and patterns. That data may be applied
at a macro level where a store will, for example, see that people buying upscale bread also
like fine cheeses and may, thus, conveniently place the two next to each other. On a micro
level, stores send coupons to individuals for specific products based on their own personal
shopping history.
In addition, tracking sales per individual lets a company see who's profitable and who isn't.
Casino loyalty programs look for high-spending customers who are good losers; not
surprisingly, more effort is put into attracting and retaining them versus gamblers who know
when to hold and when to fold.
On top of all of this in-store data, companies can now easily overlay outside information,
says Goul. This may be personal data that correlates your shopping with your credit report
or it may be broader data. Companies may correlate your soup-buying or ice-cream-eating
habits with the weather. In essence, companies now have a ton of data at their disposal.
Tx:wtn
Sharing similar sentiments, Amit Burman, vice-chairman of Dabur India Ltd, said that the industry will perform well in Q3 2008-09. "I expect the industry to post strong sales growth in Q3. The reason is simple-rural demands have increased in India as people are spending more on day-to-day needs. As oil prices have come down, we will be able to sustain our price points in 2009," he added.
Bharat V Patel, chairman, Procter & Gamble Hygiene and Health Care Ltd, is very optimistic about the growth of the industry in Q3.
"The industry will register growth in sales as well as profits in Q3. I think the growth momentum will continue in Q4. I expect the industry's sales growth to range 10-20% for different companies."
According to Patel, the industry is not affected by the economic slowdown as yet, as consumers need day-to-day goods. Sunil Duggal, chief executive officer, Dabur India, expects the industry to perform well in Q3.
"Despite sales growth, I think there will be pressure on margins on account of input costs. As inputs costs are coming down now, I expect better results in Q4," he added.
Sangeeta Talwar, executive director (marketing), Tata Tea Ltd, expects the industry to grow by 15% in the third quarter of 2008-09.
"I think the industry is doing pretty well, bucking the trend. As it is meeting the every-day demands of consumers, it will continue to grow. In the last two months, input costs have come down and this will reflect in Q3 and Q4 results," she added.
