India Retail News.

Kaya now has 65 clinics, including nine in the Middle East, with a target of opening 15 new clinics every year. The company added 10 clinics during Q4FY2008. Are you now wondering what kind of Revenues Marico must be generating from the Kaya brand ? It has reported a revenue of Rs 100 crore, yes that's correct $25 mn. Kaya
fairness day cream and Kaya fairness night cream were added to its existing product basket, which contributes around 13% to Kaya's revenues.

Kaya expanded beyond skin care solutions by introducing Kaya Life that offers weight loss and wellness solutions. On the back of extensive response from Kaya customers, the company opened two more Kaya Life clinics in Mumbai during Q4FY2008.

Catalogue retailing is slowly catching up in India. Infiniti's Croma was the first one to test it out during last festival season in Pune and Mumbai. Mr. Ajit Joshi of Croma Electronics said,

Catalogs are add-on-media and we think it works best within a particular catchment or city. Catalogues enable one to exactly zero in on the desired item to look before purchasing it.

For example, lets say someone is considering buying a Refrigerator. It normally takes a customer 30-45 minutes to look into and decide. However, with catalogues already sent to the customer, the customer zeroes in on two/three models and will complete his transaction within 15 minutes.

Catalogues help in advertising new product range on offer and services like extended warranty and other in-store promotions. Also for any retailer that has a large loyal customer base, mailing these catalogs is very effective marketing tool.

However, what we fail to understand is retailers don't embrace the power of Internet. They have poorly designed websites or some don't even bother to have them [Reliance Retail]. Any affluent shopper will definitely have access to the Internet and retailers should embrace the new media.

US Pizza under rapid $125 mn expansion spree has announced that it will now localize its offering and is launching two more brands to cater to the fast food lovers.

The company has announced the launch of ToastyZ sandwich brand and will open its first outlet 3 weeks from now in Hyderabad. These outlets would take the form of small cafes that serve coffee, tea, drinks and sandwiches made of multi grain bread and baguettes.

The other yet unnamed brand will get off the ground in late Q2 will be a localized Indian fast food.

Mr. Akbar Khwaja, MD of US Pizza said,

In India fast food is fragmented. It could be a "Vada Pao" in one region, a "Kathi" roll in another. Our fast food can be packed, edible on the go, non messy and in the Indian context could mean "Samosa", "Kachodi", "Stuffed Parota" or "Vada Pao".

Jumbo King is the only food retail chain that is currently offering localized fast food.The company hopes to run 1,000 outlets in the next 3 years. 45% of them will be takeaway and express counters while 20-25% is likely to be dine-in formats.

Labels: ToastyZ-sandwich

With the beginning of IPLT20 league matches in India, brand retailing has kicked off. King Khan along with Juhi Chawla of the Kolkata Knight Riders have launched TAG Heuer professionals sports watch for Cricketers in India.

Vijay Mallya of Royal Challengers had approached Aditya Birla Group for the manufacture of branded apparel through its Lifestyle brand, Louis Phillipe. The Louis-Phillipe Royal Challengers collection was unveiled in Bangalore last night and will be available in all Louis Phillipe showrooms shortly.

Labels: Royal-Challengers-Appreal-Collection

Bharti Wal-Mart neighborhood supermarket opened shop under the brand name "Easy Day". The launch was a very low profile one mainly to put-off resistance from local vendors. [Learning from Reliance and Wal-Mart's lessons] Also, Sunil Mittal promoter of Bharti group who hails from the strictly vegetarian Marwari community will face resistance from them because of stocking meat in Easy Day stores. We have exclusive photographs of the store, for the first time in any print and global media.


Store at Model Town Extension.

Another Store at Dugri Urban Estate

Labels: Bharti-Wal-Mart-Easy-Day, Easy-Day-Supermarket

It is well known fact that no Government in India want to put the Kirana [Small neighborhood grocery stores] out of business. In a situation where Food Bazaar, Reliance Fresh, Spencers, Subhiksha, More For You retail, etc are competing with Kiranas, Vishal retail has chalked out a strategy to embrace the same. Here is a case study which our analyst has conducted about Vishal Retail with Kiranas.

• Vishal Retail will takeover the supply chain of Kirana stores and provide them with technology, new practices, visual merchandising skill and special promotional schemes on offer in Vishal Megamart
• Vishal will offer a minimum guarantee to all Kirana stores
• The partnership will help Kiranas survive the onslaught of organized retail
• Vishal hopes to build a strong goodwill with these Kiranwalas. However, the going will not be so easy as Kiranas in cities like Bangalore and Kolkata are already flocking to Metro Cash'n'Carry.

Vishal however thinks its a win-win situation as it can expand fast under this franchise model and take on Future Group, Reliance, Bharti-Wal-Mart. The deal will spare Vishal Retail of the pain of acquiring real estate, dealing with abnormally high attrition rates and pilferage in the store. Looking at it in another way, Vishal wants to enter the Cash'N'Carry format like Costco and Sams Club by servicing Kiranas. Its good that atleast someone is thinking out of the box in the heard mentality of Indian retailers :-)

Labels: Vishal-Cash-Carry-Format

Future Brands, a subsidiary of Pantaloon [PRIL] plans to not only take existing PRIL private labels national but also do brand consulting and launch international brands in India. Future Brands plans to select some of PRIL's private label brands such as John Miller and take them national by launching both Exclusive Brand Outlets and selling through multi brand outlets. Future Brands will focus on building the brand and appoint a national distributor for each brand to roll out distribution. For John Miller, the company has appointed Indus League as their national distributor.

Future Logistics is likely to manage PRIL's entire supply chain from supplier to store warehouse for a fee that is likely to be lower than PRIL's existing supply chain cost. PRIL has already transferred all its existing 40 warehouse operations to Future Logistics. The immediate action plan for Future Logistics is to consolidate the number of warehouses to around 6-7 in the next 2-3 years and simultaneously bring in supply chain efficiencies in apparel sourcing. It is implementing conveyor systems to alter the delivery of apparels in cartons to hangers. This should not only reduce the operational cost but also improve inventory management, thereby reducing working capital required to run the business. Future Logistics currently has 2 msf of warehouse space, the plan is to build nearly 8 msf over the next 3-5 years.

Future Bazaar is PRIL's internet-based retailing company. The company is expected to have clocked revenues of around Rs200 mn in February and March 2008 itself. The company is also combining the online portal with catalogue retailing through kiosks located in malls and shopping centres. The company has also launched a small 300 sq ft store branded as Big Bazaar Unlimited in Dombivali where consumers canbrowse catalogues as well as place orders on the internet with Future Bazaar. The pilot store already contributes to around 10% of Future Bazaar's revenues. PRIL has already received private equity funding for Future Bazaar.

Future Media is going slow on LCD TV roll out as it believes that rentals demanded by retailing and real estate companies are likely to make the business unviable. However, it is hopeful that rentals will slide as sanity will prevail in the market. The company is expanding its business by managing ads in movie halls and advertising in malls. Future Media is expected to clock around Rs350 mn in revenues in F2008, with around 75% of its revenues likely to be generated from the space rented by PRIL. Future Media does not generate any revenues from PRIL.

Home Solutions is 75% owned by Pantaloon Retail India Ltd. Home Solutions Retail is their very successful format of Home Improvement stores, expects to break even in F2009. The roll out plan is on track and the most successful format for the company has surprisingly been the consumer electronics store, E-zone. Given the company intends to spin off its subsidiaries once they get to a certain size, we believe Pantaloon could potentially unlock value in Home Solutions through a listing in the next three years.

India's first and leading retailer RPG Spencer's has turned its attention towards specialty retailing - MusicWorld [Music and home video and accessories], Books & Beyond [Books, Home Videos and Stationaries] and RPG Cellucom [Mobile Phones and Accessories].


The Music World chain is doing extremely well according to company sources as they have seen a growth rate of 14% YoY and they claim is above the industry average. This brand currently has 100 stores in 42 cities and 150 shop-in-shops. This chain had a turnover of Rs 100 crore for Fy07-08.

Mr. K.Das, President of Spencer's Retail said,

We currently have 160 RPG Cellucom stores in 15 cities. With the focus on Tier-II cities now we target to take the total number of stores to 500 by the end of this financial year.

As far as Books & Beyond stores, the company currently has just 3 stores in Bengaluru, Kolkata and Gurgaon. They plan to add 7 more by the end of this fiscal taking tht total tally to 10. They are still testing the waters on how to make this brand more interesting and successful in the market.

To beat the unrealistic Realty prices, Raheja's Inorbit Mall is moving to rural India. Located 12 Kms away from Uppal, Hyderabad the first village value retail mall Pocharam will be operational from August 2008. The mall is approximately 400,000 sft in size and is positioned as a family destination offering shopping experience, entertainment areas and eateries.

Speaking on the new concept of retailing, Mr. Rajiv Bhatia, CEO of the Mall said,

You can go there in the morning and do your shopping, while your kids play. It will also have cultural shows with popular artists representing various streams performing throughout the year.

This mall is an outcome of the survey conducted by the Inorbit group where people have indicated that they don't mind traveling a little further provided they get best shopping experience. The local and international brands who will retail here are expected to offer more than 20-50% discount.