Infiniti Retail: Tata’s second retail venture October 4, 2006
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After having registered its impressive presence in apparel retail and hyper markets, through Westside and Star Bazar stores owned by Noel Tata headed Trent, the Tata Group is setting up Infiniti Retail its second foray in retail to spearhead the group’s
entry into consumer electronics and durables market. Infiniti Retail- a 100 per cent subsidiary of Tata Sons, with proposed initial capital investment of Rs 400 crores, plans to set up 100 mega stores of 15,000-20,000 square feet each by
March 2010. The first of these mega stores, branded Croma, will open in Mumbai next week and the company plans to have a national presence with 30 stores in the next 18 months, reports Business Standard.Infiniti has entered into a technical and sourcing arrangement with Australian retail giant Woolworths, who will manage the entire back-end operations of Croma and provide technical support and strategic sourcing facilities from its global network. The tie-up will give Infiniti access to about 6,000 products across eight categories. Woolworths already runs a cash-and-carry operation in India through its Mumbai headquarters.
“The collaboration with Woolworths will capture a slice of exploding demand in India,” said Kumar.
The company has also tied up with logistics service provider DHL to take care of product delivery to customers. Kumar said the company was also looking at developing private label retailing at Croma at a later stage.
Vijay Sales in the west and Viveks in the south are major organised players in the durables market. Earlier, Raymond India had ventured with Plugin chain of durables retail stores.
Carrefour and Lifestyle in talks to open 200 stores in India October 4, 2006
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Carrefour, europe’s largest and world’s second largest retailer with annual revenues in excess of Euro 75 Billion, is in talks with Dubai’s Landmark Group about opening up to 200 stores in India, Landmark Chief Executive Micky Jagtiani said.
Landmark’s India unit, Lifestyle International Pvt. Ltd, is in the early stages of talks about acquiring a Carrefour franchise as economic growth in India spurs retail demand, Jagtiani told Reuters in Dubai on Sunday. They could conclude the discussions as early as November, he said.
“We are in India and food retail is a natural extension for us,” Jagtiani said, declining to say how much the plan may cost. Landmark is also in talks with as many as two other retail companies about developing outlets, Jagtiani said, declining to identify them.
Organised retail to contribute 20% of GDP in India September 28, 2006
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Organised retail is showing signs of traction, a sign of coming of age said Raghu Pillai, President and Chief Executive of Operations and Strategy, Reliance Retail, according to a report published in the Economic Times.
Pillai who was a participant at the CII’s Marketing Summit also said that organised retail would move from the current level of 10 per cent of the country’s GDP to 20-25 per cent of GDP in the next 5-10 years.
Pillai, however, stressed that while retail was essentially urban-centric, the rural population could not be ignored. He was alluding to famous economist C K Prahalad’s theory of wealth at the bottom of the pyramid. He stressed: “We need to start with respect for the bottom of the pyramid”. Pillai cited several examples where companies both in India and abroad have reaped financial windfalls by catering to the poorest of the poor. He considered that a shift in mind-set combined with innovation and design to suit the lives of the poorer members of society would be instrumental in accessing this very large consuming class. (more…)
Reliance to emulate Wal-Mart in hiring September 28, 2006
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Reliance Retail (RRL) seems to be clearly emulating Wal-Mart in structuring its business model. Driving its lowest-operating cost structure further, RRL plans to outsource most of its 500,000 manpower requirements through a franchisee-managed stores model, reports the Economic Times.
A network of multiple agencies in each state would be roped in to source the front-end requirement for the business with very few employees being a part of Reliance’s pay roll.
The maintenance of each store including employee management will be the responsibility of franchisee, who will operate on an incentive and commission basis. The strategy is to keep operating costs variable and enable quick decisions on stores that would not get in the required numbers in the long run.
When contacted, Reliance officials declined to comment. However, sources close to the company said it is looking at ways of ‘mitigating the negative effects of collectivism,’ a phrase popular among the top management.
Clearly, unionisation of employees is a key concern within the group while managing such a large business. The scale and scope of managing 500,000 people directly or indirectly will to keep pace with the service sector. (more…)
Combating retail shrinkage with RFID September 28, 2006
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Retail shrinkage is the difference between book stock and actual stock. It is the unaccounted loss of retail goods. Its main causes are theft by employees, administrative errors, shoplifting by customers or vendor fraud.
Rakesh Biyani, Director, Pantaloon feels that as India enforces the MRP (Maximum Retail Price) 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 reports Network Magazine. 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. (more…)
Leading Indian retailers form association September 28, 2006
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India’s leading retailers have come together to launch an association — Retailers Association of India (RAI) — with a vision to develop, facilitate and propagate practices and processes that will grow the Indian retail industry reports Hindu Business Line.
The agenda of this body will be to have a strong charter and code of conduct for its members with a strict self- regulatory mechanism. The three main aims of this body would be development, facilitation and propagation.
RAI”s founder members comprise Pantaloon India, Shoppers’ Stop, Trent, Globus, Piramyd, RPG Retail, Vivek’s and Subhiksha. The CEOs of these retailers have pledged to make RAI the leading voice of retailers across the country and a model association which will benefit society and the common man. It will organise activities such as conferences, seminars, training programmes, interaction with Governmental and legislative decision makers to achieve its goals. (more…)
Indian retail majors planning online retail blitz September 28, 2006
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Reliance Retail and Future Group (Pantaloon) have decided to build up significant
online channel to run parallel to their physical formats, adopting the highly successful online model of Wal-Mart reports Business Standard. Online sales of Wal-Mart has been growing faster than sales of eBay and Amazon. This, therefore, is a clear warning signal to fledging online retailers in India.
Given the muscle of Reliance and the hunger for growth of the Future Group, these players are aggresively setting up online channel to tap the fast growing e-commerce pie.
Currently this market is worth around US$240 million (Rs 11 bn.) and is expected to touch US$ 500 million (Rs 23 bn.) in the one year. Though a majority of this is accounted for travel and ticketing, the retail sale through these channels is doubling. (more…)
Retail sector in India to offer two million jobs September 28, 2006
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The organised retail sector in India will require an additional 2 million professionals in two years reports Business Standard.
The Retail Association of India (RAI), which represents the country’s US$ 20 Billion (Rs 900 Billion) organised retail sector, estimates that the current personnel requirement at the front-end alone is about 1.25 million. It will go up to 3.25 million by 2008-09. According to RAI, the total employee base in the organised retail sector currently is one million and it expects that the current initiatives will produce another 1 to 1.5 million trained manpower by 2008. To meet the immediate manpower requirement, big retail houses such as Pantaloon, Wadhwan, Pyramid and Shoppers’ Stop, Lifestyle, Arrow, Landmark among others have initiated massive recruitments and the newcomers, including Reliance, Raymonds, Aditya Birla and a few other corporates, are also on an extensive head-hunt. In addition, existing retail companies Westside, Spinach,Oddisey, Depot are also looking for countrywide expansion in the next few years. However, the dearth of trained personnel and retail professionals in the country has just started.This has forced many retail houses to start inhouse training programmes as well as management courses with the support of RAI and various universities and business management schools. (more…)
