MxMIndia

Category: MARKETING

  • After subdued sales over the last two months, buyers turn Santa for beleaguered retailers during Christmas 2013

    Santa Shoppers: Some retailers post higher sales than Diwali!

    By Writankar Mukherjee & Sagar Malviya

     

    Guess what Santa got retailers this Christmas? Double-digit sales growth and plenty of middle-class consumers in stores, making it the best-ever revenue season for several of them this calendar year. Sales are up from the Diwali period and even the year earlier, reflecting a newfound confidence among consumers.

     

    Retailers attributed this sudden surge in sales to several reasons – the return of middle-class consumers less worried about spending with vegetable prices cooling down, an improvement in consumer sentiment after assembly election results, a drop in temperatures in the north and east triggering sales of winter wear, and year-end festive spirits. Plus, banks have reduced interest rates on housing, consumer durables and personal loans in the last two months, adding to the seasonal bonhomie.

     

    This is reflected in footfalls at chains such as Spencer’s Retail, Woodland and The Mobile Store, which say sales in the past week have surpassed even the Diwali period in absolute revenue. Shoes and apparel maker Woodland said revenue in the week to Christmas was 30% up from what it was in Diwali, while it’s been 16% more at Spencer’s.

     

    Kishore Biyani

    “Consumer demand in most segments was crazy and shot up drastically in the last three days compared to subdued sales numbers during the last two months,” said Kishore Biyani, CEO of India’s largest retailer Future Group. “This year’s Christmas sales were high compared to last year, which were low due to the Nirbhaya impact. Yet, demand remains inconsistent.”

     

    Spencer’s Retail president and CEO Mohit Kampani said consumers are splurging on both fresh and processed food, staples, wine and beverages like never before.

     

    The high sales growth comes after a subdued festive season in October-November when most consumers shied away from heavy spending as rising food inflation and interest rates took a bite out of disposable income. Economic growth may be in the process of picking up, having risen 4.8% in the three months ended September compared with 4.4% in the quarter to June. Finance minister P Chidambaram last month pegged FY14 growth at 5% to 5.5%, which means a stronger second half may be under way. Growth last year hit a decade-low 5%.

     

    To be sure, it’s not clear if the year-end sales surge will translate into a sustained uptrend. “Sales fell into the negative territory post Diwali, but the last few days have been exceptional. The election results, too, seem to have boosted consumer sentiment,” said Mr Kampani. He said same-store sales at Spencer’s had jumped 20% nationally in the last 10 days compared to 7% to 8% during Diwali.

     

    At Future Group’s Food Bazaar chain, sales rose 30-40% in most categories on Christmas Day over last year. Sales of categories such as chocolates and biscuits grew 50% while soft drinks went up by 30%, more than double the usual growth. Devendra Chawla, chief executive at Food Bazaar, said while most retailers run offers and promotions only around Diwali and other festivals, it ran a special ‘best of the year’ offer during Christmas, which led to many consumers upsizing or upgrading, which, in turn, increased the ticket size.

     

    Middle-class consumers are back in the market, said Himanshu Chakrawarti, CEO of The Mobile Store, India’s largest cellphone retail chain. That has pushed up demand for mid-segment handsets in the Rs 6,000-15,000 range. “Be it Micromax or Samsung’s mid-range Galaxy series, the mid-segment handsets have triggered revenue, which is up by almost 30% over the same period last year. Without accounting for Dhanteras sales, revenue has been much higher now over the Diwali sales,” Mr Chakrawarti said.

     

    The colder weather in parts of India has also led to higher numbers. While seasonal demand kicked in a bit late this time, the last few days have seen strong growth for winter wear, said Shoppers Stop managing director Govind Shrikhande. Woodland MD Harkirat Singh said jacket sales usually pick up around Diwali, but this year, they didn’t due to the festival of lights coming early and the late onset of winter. “Hence, the full impact of winter wear sales is felt now and has pushed up average billing sizes over Diwali since jackets have higher ticket prices,” Mr Singh said.

     

    Even consumer durable and television sales have risen in the last few days. Sales have been buoyant in certain territories such as the south and the metros, which have boosted revenue in a year that the market was relatively weak, said Sanjeev Agarwal, sales head at India’s largest electronics company LG Electronics. “It’s like an unexpected, last-minute flip in sales for the industry,” he said.

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

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  • The move is yet another sign of modern retail's inability to effectively take on neighbourhood stores in India

    Reliance Retail to turn hypermarkets into wholesale stores, to court kirana shops

    By Rasul Bailay

     

    Mukesh Ambani’s Reliance Retail is converting some of its big hypermarkets into wholesale cash-and-carry stores, in an apparent sign of modern retail’s inability to effectively take on neighbourhood stores in India.

     

    The Reliance Mart hypermarket in Bhopal’s Aashima Mall is currently under renovation and getting refitted to be reopened in February in a new avatar, as a cash-and-carry store.

     

    This 44,000-sq-ft hypermarket is among Reliance’s big-box stores, including one in Ludhiana and another in Aurangabad, that are being converted into cash-and-carry formats.

     

    The company has realised that in some locations, low-frills wholesale stores have better prospects of making money sooner than consumer-centric hypermarkets, which have wide margins but also are more expensive to operate, two people with knowledge of the development said on condition of anonymity

     

    So, in order to convert the adversaries – the mom-and-pop stores in this case – into allies, Reliance is adopting a simple strategy: It is courting them.

     

    In the cash-and-carry format, companies sell to bulk buyers, such as neighbourhood or kirana stores, who are their members. Reliance is setting up its wholesale stores in places where the concentration of kiranas is high as it is easier to make them customers than competing with them. The business also offers huge potential.

     

    Industry experts estimate cash and carry in India to become a $22-billion (about Rs 1.4-lakh crore) annual opportunity by 2017, and the market leader in the segment is expected to corner $4 billion to $5 billion of this. The main rival for modern cash-andcarry stores in India is “wholesale retailers” – thousands of small retailers crowded into large markets, such as the Sadar Bazar in Delhi.

     

    “Reliance Retail continues to evaluate its offerings and realign them in specific locations in order to establish sustainable relevance of the business with the consumer ecosystem,” a Reliance Retail spokesman said in an e-mailed reply to queries on the company’s plans on its cashand-carry business. In the traditional retail segment, the going hasn’t been smooth for organised players.

     

    Over the past five years, Reliance Retail, Aditya Birla Retail, Spencer’s Retail and others shuttered hundreds of smaller convenience stores to focus on expanding big boxes as the smaller stores faced direct competition from kirana stores.

     

    But hypermarkets, generally spread over 40,000 sqft to 60,000 sqft, come with their own set of challenges, such as high cost structure associated with a large number of staff, look and feel of the store as well as logistical cost that ultimately eat into overall profitability On the other hand, cash-and-carry business generates much higher volumes – as customers buy in bulk, albeit at low margins – with smaller operational cost. Cash-and-carry stores can be low-frills in terms of look and feel and ambience, and they save on logistical costs as companies and distributors would supply merchandizes directly to these stores.

     

    Generally, Reliance Markets, as Reliance’s wholesale stores are called, allows only bulk buyers through memberships.

     

    But the store at Bhopal’s Aashima Mall is also likely to sell to consumers apart from traditional kirana stores even after it is turned into a Reliance Market, according to Ashish Jain, marketing manager of the company that owns and runs the mall. “Since it is in a mall with a heavy consumer footfall, it will also cater to consumers,” he said.

     

    Reliance, in fact, is undertaking an aggressive plan to expand its cashand-carry chain. It entered this business with a store in Ahmedabad in 2011 and the pilot was tested for the next one-and-a-half years before opening another one in Bangalore. In the past nine months, however, Reliance has opened about a dozen cashand-carry stores. Plans are also afoot to make an upcoming store at Mohali in Punjab, which was originally planned to be a Reliance Mart, into a wholesale store as well, one of the persons cited earlier said. In comparison, Germany-based Metro AG, a pure cash-and-carry player that has so far opened 17 stores in India since its entry into the country a decade ago.

     

    An industry analyst said converting a hypermarket into the cash-and-carry format may not work in some cases. Hypermarkets and cash-and-carry stores are two entirely different formats with different demands and economies, Amitabh Mall, partner at Boston Consulting Group, said.

     

    “Converting any hypermarkets into cash-and-carry has to negate the disadvantages of lower margin at the cash-and-carry with the high rentals (of the existing hypermarkets),” Mr Mall said. “That is the equation someone needs to solve. It could work in some cases and may not in others. So it’s a mixed answer.”
    One of the anonymous persons cited above said Reliance has plans to convert many more hypermarkets into cash-and-carry in the coming months. However, Reliance denied this and said the conversion is limited and selective.

     

    Further, as a conscious approach, locations and stores are identified as opportunities for the entire retail business and the precise format or offering is finalised after due consideration of the consumer demography,” the company spokesman said.

     

    Source:The Economic Times

    Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

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  • Indian marketers rate a better overall customer experience as their top priority, notes a Paul Writer study

    Customer service top priority for marketers: Paul Writer Study

    By A Correspondent

     

    The Paul Writer community of marketers released the findings of a research project sponsored by SAP on Customer Engagement. Based on a LinkedIn poll taken by over 600 senior marketers in India, the findings suggest that for Indian marketers, customer experience is emerging as a top priority.

     

    The LinkedIn poll asked senior marketers in India where they believe customers would like them to invest their budgets in the coming year. The majority said clients would want them to spend on improved products/services (33 percent) and a “better experience overall” (43 percent). This suggests that the Indian marketers are clearly becoming more tuned into the importance of building a strong customer experience, before they venture into more sophisticated initiatives such as targeted offers and mobile access.

     

    Commenting on the relevance of customer experience today, Rajesh Kumar, Head of Marketing, Indian Subcontinent, SAP, says, “Customer experience emerged as the top priority for CEOs in building and maintaining their competitive edge. Organizations need to address the customers’ journey with their brands holistically rather than trying to address it as a point problem. We are seeing innovative CMOs taking the lead and leveraging technology to understand, track and deliver the experience that customers expect.”

     

    When Paul Writer spoke to Ganesh Vasudevan, CEO, indiaproperty.com, on the importance of customer engagement in his business today, he said: “The customer engagement challenge to my mind is to keep meaningfully conversing with your consumers- from when he or she is an early suspect right up to the post purchase servicing stage and beyond into the repeat purchase stage, and today’s technologies have created a rich milieu of new touch points both virtual and real for marketers to start these conversations.”

     

    The respondents of the LinkedIn poll point out that best customer experience combines quality, relevant products and price. Also, they suggest that it’s time to give the customer better products, service and the best quality at an optimum cost. Some respondents pointed to technology’s role in providing compelling customer experiences, using analytics to unearth customer preferences and integrating systems to achieve consistency across all channels, including phone, web, mobile, instant messaging and in-store.

     

    Survey respondents also indicated they are looking over the horizon at giving customers greater mobile access and improving targeted offers. Additionally, prevailing marketing techniques vary considerably from industry to industry. In business-to- business markets, for example, many companies need to build and maintain loyalty in their dealer network, and targeted offers greatly aid in that pursuit. “In the cement industry, companies do everything to make dealers loyal. For that, better targeted offers is the most suitable method,” said one respondent.

     

    Said Jessie Paul, CEO of Paul Writer India, “Till recently the Indian customer was accustomed to lip service from brands. But rising prosperity and increased competition have given them a voice and businesses are becoming customer centric.”

     

  • Vserv.mobi claims a 3x growth in Indian and South East Asian markets given growth of the mobile as a marketing medium

    Vserv claims 3x growth with Unilever in bag

    By A Correspondent

     

    Vserv.mobi has announced that its client portfolio of advertisers and brands has witnessed a 3x growth in the Indian and South East Asian markets over the last one year.  With, mobile becoming a dominant factor in the media consumption habits of consumers across India and South East Asia, advertisers are aggressively using Vserv.mobi mobile ad exchange to implement mobile ad campaigns to reach their users effectively, adds a communique.

     

    Said Vikas Gulati, VP, Southeast Asia, Vserv.mobi: “We are thrilled and proud to establish this unique marketing partnership with Unilever. The strategic nature of the relationship clearly signals the mainstream stature mobile marketing has achieved. Mobile platforms are favoured by brands to achieve higher levels of engagement with customers across product categories, geographies and demographics. Backed with smart advertising via use of rich media, Unilever brands will garner greater impact and drive engagement from their consumers.”

     

    Talking about previous Unilever campaigns handled by Vserv.mobi, Mr Gulati added, “These campaigns suggest that greater brand awareness, recall and engagement can be achieved by combining consumer insights and constant innovation. As a market leader we will continue to raise the bar and make our contribution to growing the size of the mobile ecosystem.”

     

  • Ex-Wrigley/Nokia/Pepsi/HUL marketing honcho now joins Tupperware

    Tupperware appoints Chandan Deep Singh Dang as CMO

    By A Correspondent

     

    Tupperware India has appointed Chandan Deep Singh Dang as its new Chief Marketing Officer with effect from January 2. In his new capacity, Mr Dang will be responsible for conceptualising, designing and implementing strategic initiatives to drive the company’s growth in India. Mr Dang will also handle  institutional sales for the company.

     

    Before joining Tupperware India, Mr Dang was with Wrigley as Sales Director (India & South East Asia) for a year and a half. He started out as a Management Trainee with Hindustan Unilever (8 years), moved to Pepsico as GM (Marketing and Category Head for Indian snackfoods) and later Nokia.

     

    “Tupperware has built a strong brand and business in India with its unique combination of fascinating and innovative products, a motivated team, and a wonderful direct selling system. It is a privilege to be associated with Tupperware and I look forward to developing the business to the next level and beyond”, Mr Dang said in a communiqué.

     

  • Top media and marketing pros are set to run the Mumbai Marathon on Sunday. Some are stressing about it, some running to destress & many others just for fun

    Marathon time for Mumbai’s media mavens

     

    By Shobhana Nair

     

    “I ran just once in my college when I saw a wild elephant,” says Ravi Rao, Leader, South Asia -Mindshare, “After that it’s going to be the Standard Chartered Mumbai Marathon that I will be running for!”

     

    Members of the advertising, media and marketing community are regulars at marathons held in various cities across the country. Especially the Standard Chartered Mumbai Marathon which sees them enter in reasonably large numbers. Sunday, January 19 promises to see an encore. Mr Rao may be debuting this time, but there are several others who’ve been running for some years now. For Sudhanshu Vats, Group CEO, Viacom 18, running has been a passion and he re-discovered it some 10 years back. Last year, Mr Vats did the full run in three hours, 59 minutes. Breaking his own record is not on the agenda but having a good run tops the list! “I think it is a great addiction and I am addicted to it. I would invite others to get addicted to it as well,” beams Mr Vats.

     

    It’s interesting to see many top captains for whom stress at work is never really a bother getting the heebie-jeebies. Well, almost. Says Times Television Network MD and CEO Sunil Lulla who is also a debutant: “I am completely stressed out right now and getting a lot of anxiety. I have no other expectations and want to have a good run, start well and finish well.”

     

    For many, running the Marathon is not just about fitness, but there’s a good cause as well.  S Yesudas, Managing Director, Indian Subcontinent, Vizeum has been offering support and commitment to two causes that are close to his heart. “An old age home and orphanage at Malad, Swagat Ashram Charitable Trust in Mumbai and the other is a tribal school, Vidya Vanam at Coimbatore. The person who manages Swagat Ashram, Brother Stanley stays in the same shelter with his family.  His children grew up with the orphans, eating the same food. These are men of God and they need support from other God-believers.”

     

    The training for the marathon begins way before the actual date and that really tests one’s power to achieve what is often the impossible. And there are some who believe it actually helps easing work stress. “The aim is to keep yourself fit, keep enjoying the run for a longer period of time. Once you do a long run during the weekend, it sets you right,” says Amin Lakhani, Leader – South Asia, Mindshare Fulcrum.

     

    “The marathon is a lot about challenging your mind over your body. The fact is that you will be running a long distance but how you keep yourself mentally focussed on the objective? You become more focussed in your personal and professional lives. It gives you an adrenaline rush when you reach that finish line,”reasons Simran Hoon, National Sales Head, Colors.

     

    There are many who participate not for the run, but the fun element. Paritosh Joshi, Principal, Provocateur Advisory admits that he is not a runner but loves to participate to soak in the atmosphere around him. “There are people who come on the streets to run and then there are those who are present just to encourage the runners. The spirit and the energy is what I like to soak in. In fact, I click pictures & tweet them. That’s how I enjoy it.” And not surprisingly, this is Paritosh Joshi’s ninthth consecutive “fun year” at the Marathon.

     

    Sanjay Tripathy, Senior Executive Vice President – Head Marketing, Products & Direct Channels at HDFC Life has another motivational reason to get up and run, “It is a competition with yourself rather than with anyone else. I think it is only the Mumbai Marathon that gives you a chance to run on the Sea Link and that should motivate you. Run just to feel how beautiful Mumbai looks in the morning!”

     

    If this hasn’t motivate you enough, then this should: veteran mediaperson Bharat Kapadia started running when he was 54 and still continues to do so in his 61st year. In fact, he accepts that if he can run, anybody can. So get hold of those sports shoes and run to experience the spirit of Mumbai this Sunday. Or simply do the run around your building, the road, the promenade or a jog track near you. And get set for 2015 edition of the Marathon.

     

  • PepsiCo already has pouring rights of seven of the eight teams in the IPL, besides title-sponsorship rights for the cash-rich league

    No Coke at IPL stadia as Pepsi likely to be beverages partner of Mumbai Indians

    By Ravi Teja Sharma & Ratna Bhushan

     

    PepsiCo is close to signing a deal to become the beverages partner of Indian Premier League team Mumbai Indians, potentially shutting out rival Coca-Cola’s products from stadiums hosting the country’s most popular sporting event.

     

    The US beverages and snacks maker is expected to shell out close to Rs 11 crore for a three-year pouring rights deal with Mumbai Indians, an official closely involved with the developments said. It gives the firm exclusive rights to serve its beverages at teams’ home matches.

     

    PepsiCo already has pouring rights of seven of the eight teams in the IPL, besides title-sponsorship rights for the cash-rich league. Coca-Cola, which had been holding the pouring rights for Mumbai Indians for three years till last season, has also been in talks to renew its contract with the team.

     

    “But Coca-Cola is unwilling to pay a premium for the rights and since PepsiCo is already associated strongly with the IPL as title sponsor and with the rest of the teams, PepsiCo has been more keen on the rights,” the official quoted earlier said. A spokesman for Mumbai Indians declined to comment on the potential deal with PepsiCo.

     

    Spokespersons for PepsiCo and Coca-Cola too declined comment. Cricketer Sachin Tendulkar, who retired last year, represents Mumbai Indians and is also associated with Coca-Cola’s social campaigns. But his contract with the firm is up for renewal this year.

     

    The firm did not comment on whether it would continue its association with him. Coca-Cola had paid about Rs 5 crore for its three-year deal with the Mumbai franchise.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

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  • Consumer goods companies upped their media spends on the mobile platform in the past one year as smartphone penetration, coupled with a spurt in data usage, grew exponentially in the country.

    Higher smartphone use rings in FMCG mobile ad growth

    By Samidha Sharma

     

    Consumer goods companies upped their media spends on the mobile platform in the past one year as smartphone penetration, coupled with a spurt in data usage, grew exponentially in the country. InMobi, a mobile advertising network, said spends by FMCG companies, which are clubbed as traditional advertisers, grew 175 per cent on its network last year. Similarly, Vserv.mobi, another mobile ad network, registered a 300 per cent increase in ad dollars while Vuclip, a mobile-focused aggregator of video content, saw its FMCG clients double their ad spends in 2013.

     

    In India, FMCG saw a high uptake in the last two quarters of 2013, as five major advertisers including ITC, Reckitt Benckiser, HUL, Mondelez and Nestle ran more than 30 campaigns at a reasonably good scale as opposed to 2012 where only one consumer goods company utilized mobile effectively, said Dippak Khurana, CEO & co-founder of Vserv.mobi.

     

    Buoyed by a slew of mobile-only content, the Indian mobile advertising market is estimated to reach Rs 2,800 crore by 2016 from a mere Rs 180 crore according to estimates by Avendus Capital, a Mumbai-based financial advisory firm. The Indian advertising industry is pegged at around Rs 28,000 crore with FMCG as the biggest contributor on mediums such as television and print as well.

     

    “With the growth of mobile solutions companies, apps and other mobile technologies, we have seen FMCG advertisers tap the mobile in a big way over the past year. With over 800 million mobile subscribers, these advertisers targeting rural consumers find the medium extremely effective as mobile reaches even the remotest geographies,” said Basabdutta Chowdhury, CEO of Platinum Media, a division of Madison, which buys media for FMCG majors like P&G, Marico and Godrej.

     

    What is significant is that India could currently have as much as 50 per cent or more mobile-only internet users, much above the global number, making the medium an attractive one for even traditional advertisers.

     

    Consumer products companies are increasingly adopting a mobile-first strategy. Our growth has come from engagements with more than half of the top 25 FMCG brands, including a partnership with Unilever, said Atul Satija, VP & MD (Asia-Pacific and Japan) at InMobi.

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

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  • The leading brand of innerwear, leisurewear, sportswear and swimwear for men and women has appointed Law & Kenneth as its creative agency

    Jockey opens new page with Law & Kenneth

    By A Correspondent

     

    Page Industries Ltd, the brand custodians of Jockey in India, have appointed Law & Kenneth Communications as their brand communications partner after an extensive multi-agency pitch process.

     

    Confirming the news,   M C Cariappa, Senior General Manager -Sales and Marketing, Jockey India said,  “Law & Kenneth give us the confidence with their understanding, insights, effective go to market strategy and clear vision for the brand. We look forward to an exciting and  fruitful association and are confident that the brand will move to greater heights”.

     

    Commenting on the win, Anil S Nair, Chief Executive Officer and Managing Partner, Law & Kenneth Communications India, said “Winning Jockey business is the best possible start we could wish for in the new year. We are extremely excited about getting Jockey’s mandate. It’s a dream brand for us to have in our portfolio and we look forward to doing some exciting work for the brand.”

     

    L&K’s Mumbai office will handle the account.

     

  • Sensing that most of the growth and revenues will come from mobile-only shoppers, only shopping destinations are rushing to create specialised tools, such as personalised deal generators and local-language apps

    Online retailers rush to create applications, specialised tools to drive sales

    By Radhika P Nair

     

    The ancient Chinese military strategist, Sun Tzu, said not being prepared is one of the greatest crimes a strategist can make — a folly that online retailers in India are keen to shun as the battle to win new clients gradually shifts to the mobile screen.

    Sensing that most of the growth and revenues will come from mobile-only shoppers, these sites are rushing to create specialised tools, such as personalised deal generators and local-language apps, to capture this new and rapidly exploding customer base. Already, the evidence is overwhelming.

    Customers shopping through mobile devices now make up for up to a third of sales at online retail sites, up from a measly 7% even a year ago. “So far mobile was only an extension of the web, but now we are doing a number of experiments to create a smoother and unique experience on mobile,” said Sachin Bansal, co-founder of online retail site Flipkart, which is targeting $1 billion (over Rs 6,000 crore) in sales next year. “In the near future, we see Flipkart.com as an m-commerce-based marketplace.” Mobile users are now responsible for a fifth of Flipkart’s sales, and three out of four mobile shoppers access the site only through handheld devices.

    The potential for attracting clients who were so far out of reach is another reason. “In my opinion, we can add 25% more to sales from mobile shoppers,” said Ankit Khanna, vice-president (product management) at Snapdeal.

    Snapdeal’s Mr Khanna expects orders from mobile users to grow from 30% now to over half by next year. Most of these users have never accessed the site through a desktop. Snapdeal is also targeting revenues of $1 billion (over Rs 6,000 crore) next fiscal. Mobile-only shoppers are as valuable as desktop users, with average spends only marginally lower. At Snapdeal, the average order value of a mobile shopper is Rs 1,000 for apparel and up to Rs 3,500 for electronics, similar to that of desktop users.

    Even global players have realised that the mobile could be key for winning Indian clients. “Amazon is investing (in India) in creating a world-class mobile platform,” said Amit Agarwal, vice-president and country manager of Amazon India, who declined to share exact numbers. “We (Amazon India) are the fastest growing m-commerce site for Amazon globally.”

    Pragya Singh, vice-president at retail consultancy Technopak, said while growth has so far been without much effort, “companies will have to invest in unique user experience from discovery of the product right up to payments”.

    Something that is already work-inprogress at most sites. While Flipkart has launched a tool that allows mobile users to scan a product’s barcode and check its availability — a feature also available on Amazon India — Indiatimes Shopping is set to launch special promotions for mobile-based customers. “Indiatimes Shopping is adopting a mobile first strategy and is building products and processes to suit the needs of the mobile generation,” said Saurabh Malik, business head at Indiatimes Shopping, which is a part of the Times Group.

    Snapdeal, on the other hand, is attempting to personalise its mobile app according to a customer’s usage.

    It is also developing an in-site search engine for mobile and is revamping its mobile backend. Flipkart is also working on a tool that will use a customer’s location to provide tailor-made deals. Rahul Chowdhri, a director at Helion Venture Partners, said ecommerce firms will have to redo whatever they did on desktop to cater to the mobile-based market. “Mobile is very personal; we carry it with us all the time. The mobile helps pinpoint location and even the spend potential of the customer.”

    These firms attribute the spurt in mobile user numbers to customers from smaller cities and towns. “Here the mobile is the only screen, and in smaller cities and towns the mobile is already beating the desktop,” said Vivek Gaur, co-founder of web-only fashion portal Yepme, which aims to reach Rs 300 crore in sales next fiscal. Mobile shoppers accounted for more than a third of the company’s sales last quarter. Yepme is also working with Helion-backed startup LinguaNext to provide local language mobile apps. The firm will soon launch a Hindi version.

     

     

    Source:The Economic Times

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

    Licensed to republish

  • Averaging five new stores every six days, the Rs 10,800 cr subsidiary of Reliance Industries is inching towards profitablity

    Why (& How) Reliance Retail is expanding in a slow market

     

    By Kala Vijayraghavan

     

    From a quarterly basis, the brass of Reliance Retail, led by Mukesh Ambani’s lieutenant Manoj Modi, now assembles for review meetings on a monthly basis. The frequency of meetings might have changed, the modesty hasn’t: the presentations still make no mention of how competitors are faring.

     

    Judging by what Reliance Retail did in the last quarter, the numbers for which it announced on January 17, and what others retailers did, it need not have. For now at least. The retail landscape in India is strewn with the remains of expansions gone awry (Future Group), or a victim of anxiety (Walmart) or put on hold (Croma, from the Tata stable). Amid all this, in the September to December quarter, Reliance Retail found a new gear.

     

    Giving into religious sentiment, it shut down all its Delight stores, which stocked non-vegetarian food products. But, across other formats, it averaged five new stores every six days. The expansion helped it increase revenues 38 per cent, which though is below the 50 per cent target it has set for itself for the next three to four years to grow to a $6.5-8 billion (Rs 40,000-60,000 crore) entity.

     

    The Rs 10,800 crore Reliance Retail, which is currently a subsidiary of Reliance Industries, is also inching closer to profitability. At the results announcement, Reliance Group CFO Alok Agarwal said that the company had reported its first quarterly profit at an operating level, of Rs 106 crore. It’s still a long haul to turn profitable at the net level, and sustain it from quarter to quarter, but Reliance has its tail up.

     

    Among the Indian groups in this business, Reliance was among the last to enter, about seven to eight years on, in 2006, backed with a deep war chest from its rich parent.

     

    BS Nagesh, vice-chairman of Shoppers Stop, one of the early entrants, says that evolutionary difference is showing up. “Everybody is consolidating their learnings and getting into cautious growth,” he says.

     

    Adds Kishore Biyani, CEO of Future Group: “It is a tough, mature market, and retailers will have to work out ways to find new growth opportunities.” Mr Nagesh, whose company competes with Reliance in several formats, adds that store addition is not the only metric of expansion. “I do not see an unusual aggression in Reliance Retail,” he says.

     

    “Addition of one store a day may not be significant in comparison. For instance, Reliance adding one store a day of 3,000 sq ft and a HyperCity (the hypermarket arm of Shoppers Stop) setting up a 100,000 sq ft store in a couple of months.”

     

    Harminder Sahni, founder of Wazir Advisors, a retail consultancy, points out that most retailers have had to deal with distractions—of retiring debt, of raising funding, of rules and propriety, of profitability, of online competition. “It (Reliance) is not a distracted player,” he says. “It has just focused on doing retail. It has been going rock steady, it hasn’t dropped formats frequently and it is focused on supply chain the way no other player has done in India.”

     

    According to a Reliance spokesperson, there’s a momentum building. This, he adds, is essentially the outcome of the company, after a period of trial and error and on reaching some scale, being surer of what it wants to become and how it wants to reach there.

     

    While Reliance has not dropped too many formats, it has shifted from big stores only to include small stores, from fresh-food only to overall foods. The format portfolio of Reliance shows that, since March 2013, the big store expansions have come in gadgets and consumer durables (Reliance Digital, up from 139 stores to 212) and in garments (Reliance Trends, 448 to 508).

     

    Now, says the Reliance spokesperson, the stickiness is more than ever. “Today, everybody inside knows what the business is about,” he says. “It is now a more anchored strategy.” “It has worked out an interesting mix of diversified categories,” says Kumar Rajgopalan president of Retail Association of India, a grouping of Indian retailers of which Reliance is not a member. “It is learning lessons fast and is able to create scale at a more rapid pace.”

     

    Reliance’s mainstay remains its value offerings. These include Reliance Fresh (neighbourhood stores) and Reliance Market (wholesale stores). Unlike some retailers, Reliance is not vacating the neighbourhood supermarket space, especially in the top 15 cities. “At least 25-30 per cent of the grocery business in top metros comes from hypermarkets,” says Abneesh Roy, associate director, Edelweiss Securities, a brokerage.

     

    The long term in mind, Reliance is challenging this narrative. “As markets mature, customers will opt for grocery shopping in neighbourhood supermarkets, which ties in with our cluster strategy of catering to middle-class and upper middle class consumers in the top 15 cities,” says Damodar Mall, chief strategy officer, value retail, Reliance.

     

    “Supermarkets in a catchment area ups the customer service quotient in the neighbourhood and everybody upgrades accordingly.” Reliance Market, its wholesale stores catering to smaller retailers and business establishments, is emerging as a useful hedge to its neighbourhood stores. It opened its first wholesale store in Ahmedabad, in September 2011. Now, it has 15 such stores, including six in the last three months: in Anand, Bengaluruangalore, Chennai, Faridabad, Guntur and Mumbai. “These are cash guzzlers and only the Reliance Group has the ability to stay put,” says Mr Roy of Edelweiss.

     

    Bijou Kurien, former chief executive and president (lifestyle), Reliance Retail, feels the challenge for the company will be to create new markets beyond the top 80-90 cities. “All the good markets and stores have been covered in the first phase,” he says. “In smaller potential markets or smaller towns, it is not easy to change deeprooted habits of consumers easily.”

     

    According to Mr Kurien, one challenge before Reliance is to create a pipeline of differentiated offerings, which it is trying to do. At Reliance Digital, for example, Reliance is trying to take responsibility of installation and after-sales service from manufacturers.

     

    So, it is training about thousands of electricians to handle televisions, refrigerators, mobiles and washing machines, among other things. “We have committed huge investments there,” says the Reliance spokesperson. “Will it get us immediate returns? It will not, but it will secure our future customer.”

     

    As Reliance gets surer of more pieces in the business, the kind of people it wants is also changing: from those who will build the business to those who will run the business. In the kind of people it has sought, Reliance has gone through three phases.

     

    The first phase, between 2006 and 2009, comprised retail veterans who had proven themselves in building businesses: late Raghu Pillai came from Pantaloons, Bijou Kurien from Titan Industries, Rajeev Karwal from Electrolux, Sanjeev Asthana from Cargill, Gunendar Kapur from Unilever Nigeria. The second phase, from 2009, revolved around expats with rich operating experience in global retailers.

     

    Leading them was Gwyn Sundhagul, who came from Tesco Thailand. In 2011, Sundhagul was replaced by two senior officials from Walmart China: Rob Cissell and Shawn Gray. The third phase is currently underway. In this, the focus is on neither high-profile stars nor expats. It’s on people who build processes. “We don’t want stars,” says the Reliance spokesperson. “We want experts who can build sound systems and processes that don’t hinge on one person.”

     

    The very nature of the retail business, says Sahni, does not allow for a fancy rank and file. “It is all about trading in somebody’s brands, not about creating networks and building brands,” he adds. “After power, utilities and ACs, not much can be done on an 8 per cent margin. I, therefore, discourage MBAs with high expectations from retail.”

     

    The new mindset is empowering officials at the middle and lower levels, and creating interesting possibilities for them. “Shop-floor attendants are today store managers or cluster managers,” says the Reliance spokesperson. “The focus is on decentralising the operating side and consolidating at the category level.” One part of Reliance Retail that draws even the competition’s envy is its supply chain. It’s the most expansive among retailers in India, commanding clout, for example, while sourcing fruits and vegetables directly from farmers.

     

    Industry officials say any retailer, Indian or foreign, will need at least three years to build something of this scale and intricacy in diary products and fresh foods. “We have invested in systems and processes ahead of its time,” claims the Reliance spokesperson. “When the market is ready, we will be is prepared to do that well.” At the moment, it is gaining at the expense of others. “The competitive intensity is lessening,” says Roy of Edelweiss.

     

    “Other players are cutting down expansion plans.” Mark Ashman, CEO of HyperCity, which is taking a gradual expansion path, feels different models work for different groups. “Some try to achieve it through scale and therefore push expansions,” he says. “We have been focused on refining the model in our big-box retail strategy by driving higher-margin categories. We may have fewer stores, but those would be more profitable.”

     

    At Reliance, the diktat from the group at the top that does the monthly review is: all formats have to be profitable by mid-2014. Parent Reliance Industries has so far invested about Rs 6,000 crore in the retail business. After a period of hesitancy and doubt, followed by a period of rebuilding and consolidation, the retail business appears to be beginning to look more like how Reliance businesses have been known to look.

     

    Source:The Economic Times

     

    Copyright © 2014, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

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  • Late entrant Videocon’s DTH service celebrates 10 million connections in four years

    Videcon claims 10mn d2h connections

    By A Correspondent

     

    Videocon d2h may have been a late entrant in the direct to home television distribution space, but if a communiqué from the company is to be believed, the service has crossed 10 million connections.  d2H was launched pan-India in 2010.

     

    Said Saurabh Dhoot, Director, Videocon group: “Our commitment is to deliver the best to our customers and the encouraging response of the customers is an endorsement of our services.”

     

    Added CEO Anil Khera: “We are continuously differentiating ourselves from competitors by offering quality.”