Category Archives: Retail

Will Indian Retailers Allow FDI?

There seems to be no end to the controversy surrounding FDI in retail for the Indian Government as mass protests across all the states are not soothing out. While parliament is not reaching at any consensus at all on the same, there are over 6,000 traders in Shimla who have closed their shops to oppose the decision.

Adding fuel to the fire in the joint opposition by Bharatiya Janata Party (BJP) in the state and Communist Party of India-Marxist (CPI-M), which are hell bent to jolt the government. As of now, no reports of violence have been received.

“We have got very good response from across the country and 5 crore traders will not open their shops tomorrow. They will hold protest in their own markets. We will not hold demonstrations in front of foreign stores”, said Praveen Khandelwal, Secretary-General of the Confederation of All India Traders association. Backed by support from other states, there seems to be no early breather for the government.

Apparently, there are confirmed reports that several Bharti-Walmart stores would be shut down on Thursday to avoid any violence. Even security has been escalated at stores of World’s second largest retailer Carrefour in Delhi and Jaipur as a part of precautionary measures. Meanwhile, such similar shutter down operation was seen in Karnataka against the government’s decision to allow 51% the FDI in retail.

Nonetheless, the government has assured that there decision in favor of public interest, there are lingering fears in the minds of retailers that there would be threat to their presence in case such malls are being set up in their states.

There are countries like US where such decisions have affected many small stores, and that’s what has made retailers to put up strong opposition for the entry of foreign players in the retail market. While government would be putting up their best efforts, it would be interesting to see how they would seam through the fierce attack of retailers and opposition parties.

Wal-Mart Might Not Function Under Its Name in India

It has been revealed in a recent report that Wal-Mart might not be able to function under its brand name from now on. This was recently revealed as the brand is ready to launch its operations in India. It was revealed by Rajan Bharti Mittal, from MD Bharti enterprises that when the brand comes to India, it will be adopted in an Indian model and will be named according to the specific requirements of the Indian markets.

Wal-Mart is a huge chain of enterprises primarily from the US and functions in a few other nations as well. It is the first tie it is entering the Indian retail market, due to huge potential in the country. It is a matter of time to see how the shopping fanatics of the country will find solace in this world renowned brand and will make it an instant hit in no time.

For now, it is functioning in countries like Mexico, Japan and a few other nations, under different names, suiting the needs of those nations.

“Our partnership with Wal-Mart will take a natural progression and we will start having a dialogue on how to take it forward keeping in mind the fresh development on FDI”, revealed Mr. Mittal. It was further added that they hope the firm will bring great success to the nation’s retail business and will work well for both the partners.

Wal-Mart sure wants to be functioning under their own brand name in India, but time will tell what is more suited according to the needs of the Indian markets, and then the decision will be taken accordingly. Many know about the huge brand name but many still don’t. This might be one of the contributing factors towards making a decision.’

Indians Slam Apple for Launching iPhone 4S at Much Higher Price than its US Retail Cost

The anguish and frustration of Indian mobile fascinates and users, who had long been waiting for the launch of iPhone 4S in India, erupted within a matter of few hours of announcement of the cost of iPhone 4S on the websites of Aircel and Bharti Airtel on Friday.

In no time, the social networking media was overflowing with comments disdaining the smartphone maker Apple. The launch price of iPhone in India is Rs 44,500 and evidently, it will be much more costly in India than in the rest of the world. Though various online shopping sites, like ebay, are claiming 10% off on purchase and shipment of iPhone 4S in India, the customers are fuming with the fact that the retail price of Apple iPhone 4S in India is much more than its retail price in the United States.

On micro-blogging site Twitter, comments started rushing in soon after the official announcement of the price was made by Bharti Airtel and Aircel. Some of the interesting tweets even mentioned few items that are shockingly cheaper than the latest smartphone by Apple.

A few of them included: LED television sets, one year’s petrol bill and return tickets plus three-day stay in Colombo/Dubai/Bangkok, etc. Tweets mostly condemned Apple for being harsh on Indian users, as the price of iPhone 4S in India is shockingly 35% more than that in the United States.

However, the situation holds no novelty for Apple or Indian users, for that matter. Starting from iPods, Apple products have always been priced considerably higher in India as compared to other nations like Singapore, Hong Kong and the United States.

While expressing his opinion in this regard, an industry executive, who has long been eventful in monitoring response of Indian users for such international gadgets, said: “Most customers who wanted the 4S are internet savvy. They took price cues from other markets”.

Aditya Birla Nuvo’s Textiles Revenue To Increase Two Fold By Next 5 Yrs

Diversified Aditya Birla Nuvo anticipates its textile section to more than double its income to Rs 750-800 crore by the next four-five years.

The textiles biz of the company falls under Jaya Shree Textiles, a completely-owned division that brings in 14% to the company’s manufacturing biz.

At present, the textiles biz, which makes linen fabric and yarn, has revenue of Rs 300 crore.

Aditya Birla Nuvo has retail stores under the brand Linen Club, which retails fabric and ready-made garments. It plans to open 14 new outlets in the current fiscal year from 46 currently.

S Krishnamoorthy, president, textiles division, stated, “Our focus is to expand our retail footprint going forward and in the next five years we plan to have 200 stores. It will all be franchisee outlets.”

The company is eyeing a promotion operation for Linen Club and has outlined a capex of Rs 15 crore for the existing fiscal.

The stores are likely to see a same-store sales expansion of 15% in the existing fiscal as against an average of 15-20% during the last years.

Aditya Birla Nuvo also proposes to lift up linen fabric capacitance by 30-40% by 2013.

“We will add capacity in our existing plant in West Bengal. The total linen capacity at the plant is 9 million metres per annum now,” Krishnamoorthy added.

Aditya Birla Nuvo also stated that it is eyeing an increase in raw material costs and has already augmented costs of fabric by 7-8% during the past six months.

On August 19, the stock of the company declined 1.9% to end the week at Rs 853.50 on the Bombay Stock Exchange (BSE).

The share price has seen a 52-week high of Rs 969.70 and a low of Rs 728.05 on BSE.

Current EPS & P/E ratio stood at 84.57 and 10.09 respectively.

Woodland Plans To Make Investment Of Rs 100 Cr To Set Up Facility, New Stores

Footwear and apparel giant Woodland announced that it will make an investment of more than Rs 100 crore during the existing financial year to establish a new manufacturing unit at Greater Noida and open 60 more exclusive stores in the country.

Woodland Managing Director Harkirat Singh stated, “We are commissioning a new unit for denim and woven garments at Greater Noida with an investment of about Rs 60-70 crore. The production is likely to start in the next 3-4 months.”

Mr. Singh added that the company will also establish 60 new exclusive Woodland stores crosswise the country, with concentration on Tier II and Tier III cities, involving an investment of around Rs 40 crore.

At present, Woodland runs more than 300 exclusive outlets and also sells its products at more than 400 multi-brand stores.

“Almost 50% of the new stores planned would be large format spread across 10,000-12,000 square feet,” Mr. Singh added.

At present, the company possesses or functions 10 manufacturing facilities in North India for outdoor shoes.

The company outsources production of fashion footwear array to Vietnam and China.

For the existing fiscal year, the company anticipates 30% expansion to touch hit revenue of Rs 800 crore.

Mr. Singh also said that in addition to flourishing the physical retail footprint, the company is betting big on online retail.

“In the next two years, we expect our online sales to contribute 10% to our total turnover,” he said.