Tag Archives: wal mart

India Lets Starbucks, Ikea Open Wholly Owned Stores After Wal-Mart Reverse

India abandoned a rule against foreign single-brand retailers operating stores without a local partner, paving the way for global companies including Starbucks Corp. and Ikea.

The government ratified a Nov. 24 cabinet decision to raise the ownership limit to 100 percent from 51 percent for single- brand, Trade Minister Anand Sharma said in a statement yesterday. The new rules take effect immediately and require the companies to use smaller Indian companies for at least 30 percent of procurement, he said.

Wal-Mart Stores Inc. , Carrefour SA and other foreign chains are still excluded from India’s $400 billion retail market after an attempt last year to change the law failed. Prime Minister Manmohan Singh’s administration has struggled to advance its initiatives amid opposition from its own allies and a corruption scandal that paralyzed parliament.

“This is a welcome move with a clear potential to lift the general mood in the economy,” Rajan Bharti Mittal, managing director at Bharti Enterprises, Wal-Mart’s Indian partner for wholesale hypermarkets, said in an e-mailed statement. “We hope the initiative is a precursor to further liberalization in the sector in the days to come.”

Pantaloon Retail India Ltd., India’s largest retailer, gained in Mumbai trading after the announcement. The stock rose as much as 10 percent, the most since Nov. 25, while Shoppers Stop Ltd.  surged 20 percent. Trent Ltd., which has a franchise agreement with Tesco Plc, rose as much as 6.9 percent. India’s benchmark Sensitive Index rose 0.4 percent.

Waiting for Multi-Brand

“People think that this would lead to a positive stance on multi-brand retail soon,” Sameer Narang, an Mumbai-based analyst with HDFC Securities Ltd. said in a telephone interview. “My opinion is that it’s not coming any time soon, given the way things went the last time the government tried to introduce it, I doubt a lot of traction will be seen on it.”

Starbucks would compete in India with operators including Lavazza SpA’s Barista Coffee Co. and closely held Cafe Coffee Day. The Seattle-based coffee chain said in November it intended to open its first store in India this year.

“Ikea welcomes the decision from the Indian government to allow 100 percent FDI in single-brand retail,” Nivedeeta Moirangthem, the furniture and housewares retailer’s India spokeswoman said in an e-mailed statement. India is a very interesting potential retail market for the Ikea Group.’’

Calls and e-mails to the Starbucks public-relations team in Seattle weren’t immediately answered. Starbucks signed an agreement with India’s Tata Coffee Ltd. in January 2011 to source beans and consider opening stores.

via India Lets Starbucks, Ikea Open Wholly Owned Stores After Wal-Mart Reverse – Bloomberg.

How to implement grocery retaling and e-tailing in India

We found this article by Avinder Batra, published on IndianRetailer.com very interesting because of its very detailed approach to the implementation of a home delivery service for those small groceries retailers that are facing the competition with by multinational like Wal-Mart. This is also a business model which is very sustainable, by lowering CO2 transportation emissions and by mainting vital the traditional small retail grocery business.

Batra identifies a big trend in the grocery business- home delivery- due to two main reasons:

-High fuel price: Indian families are not interested in spending time on these products
-Families want more leisure time for themselves: Since both the partners are working, shoppers find this activity as waste of time to collect groceries in weekends

“When most of the big retailers are fighting for larger space, opportunities can be foreseen where you do not have compact space and can still run successfully through Etailing the Grocery model” Batra says.

The solution could be a mix of website, mobile, IVR.

High rental costs have made the retail business cumbersome for the independent players.  As told by Ragib Hussain, VP, Vice President Strategy at e.Soft Technologies,  “This type of model does not need much of investments. Etailing models (having virtual shop) can help retailers in expanding the business thus by covering larger area & reap good volumes.”

Small independent retailers need to increase their customer base: Online services and then home deliveries would fetch revenues only when you have large customer base. Margins are the rewards which an investor gets and this is what he has to work on to have with minimum liable cost.

Develop tie-ups/partners: Developing partnership agreements with the kirana shopkeepers and others nearby shops in the area that would reach the consumers through home delivery systems. This should  be the initial step of building a strong network in the areas concerned you want to cover.

 Also, it would decrease the liability on the retailer—warehouse cost, maintenance cost, procurement cost, etc. 

Develop your own site and make a strong viable back-end system for smooth functioning of the business model: either by creating your own hosted website or by opting for cloud services, this is a very important step. Cloud services would play a vital role to make updated connections with your suppliers, logistics suppliers, CRM updates and drop shipping suppliers. Because time is a critical factor, efficient distribution is of utmost importance. Technology plays a key role in enabling an efficient dairy distribution model.

 This is the back bone of the whole concept when the business starts working and it is the most challenging part of the business to make real-time connectivity with them.

Home delivery services: By tying up with the partners in the local areas, investor can direct the orders to those shops and through delivery boys; the task can be executed smoothly. This would even increase the revenue prospects of the local partners.

 If the business model is churning profits, there is no harm in having your own warehouses and company owned shops in the localities. This could be the way to expand your business model and make it stronger.

Each small outlet should be centrally connected to the warehouse to record the sale and updates are on real time basis. This would help to replenish the goods which are going out of stock.

Delivery system: Tempos and other mini trucks can be used to provide deliveries in the located areas if orders come in bulk in particular area. (Source: IndiaRetailer.com)

7-Eleven embraces sustainability

As we at ECOFFEE are always saying, sustainability in the retail business is not a trend but it is a must if you want to be sucessful in the future. And when we read that giants such as Wal-Mart, Whole Foods Market, Castorama and Tesco, are actually changing their policies and store design to follow a more sustainable business we wonder when this will happen in Italy.

Today, our attention was caught by a very interesting article on the NYTimes about 7-Eleven convenience stores in Japan where fluorescent light bulbs have been replaced by the soft glow of light-emitting diodes, or LEDs, that consume half the energy and last much longer.

The 7-Eleven Japan program also includes photovoltaic panels on the store roof, and light-reflecting floor and sensors that automatically adjust the lighting.

The article also points out that this is going to be a very expensive program, being a green 7-Eleven store as much as 30 percent more expensive to build than a more traditional one. But Japanese customers are now more eco-conscious and shopping in a greener store can be more appealing to them. (Photo courtesy of Voice)

The retail business in year 2015? Just ask Nielsen!

Every now and then, I go back to the old the reports published by company leader in the market analysis and forecast, to see whether they did a good job – and it was worth buying thCPG Nielsen Reporte report – or it was just a "storytelling" exercise. When I read the Nielsen's report about the state of CPG (consumer packaged goods) industry in 2015 I just said: "Ok, I think there's something missing.." They wrote about mass supercenters and e-commerce experiencing the most dollar share gains through 2015. Drugstores, mass merchandisers and convenience stores will witness an increase in dollar sales, but will also experience share losses. Consumers will do their shopping via smartphones and digital and social marketing will be leading a company success and so on. But one thing was really missing, and this was sustainability. Wal-Mart is one of the leader in the retail business and they are taking big steps towards sustainability, do Nielsen think that they are wrong and by 2015 this issue will not be of much importance? Comments are welcomed! (Photo source: Flickr, Mazda6 (Tor)