2016 | | Retail Mantra

Retail Research

Improved access for Indian SMEs by eCommerce

October 4, 2016

According to the Economic Survey for 2016, “With 3.6 crore [36mn] units spread across the country, that employ 8.05 crore [80.5mn] people, Micro, Small and Medium Enterprises (MSME) have a contribution of 37.5% to the country’s GDP”. However, MSMEs’ share in manufacturing has been declining (even as the total share of manufacturing in India’s GDP remains stagnant) mainly because MSMEs in India must contend with the challenge of poor access to end-markets. The ministry of MSME, in its annual report for FY15, has noted that “MSMEs in India face constraints such as high cost of credit, low access to new technology and lack of access to national and international markets”.

The advent of e-commerce in India from CY10 has meant that the improvement in access to end-markets for SMEs in (more…)

News & Views

Aditya Birla Fashion Demand Muted

September 30, 2016

There is no evidence of a revival in consumer sentiment into the second quarter. The primary reason for contraction in revenues in the last 2 quarters has been the company’s reluctance to offer heavy discounts whereas others continue to do so. ABFRL believes that building a brand is more important than building a channel and, hence, has refrained from diluting the brand either by offering it across e-commerce channels at heavy discounts or by participating in the extended end-of-season sale.

Aditya Birla Fashion and Retail has adopted four fashion cycles in Madura as well as Pantaloons as against two earlier. The entire (more…)

Retail Brands

Aditya Birla Fashion & Retail – Expansion by Franchisee Route

August 24, 2016August 24, 2016

Kumarmangalam Birla Controlled Aditya Birla Fashion & Retail Ltd – [ABFRL] was carved out of merging Madura Garments and Pantaloon Retail. The strategy the management has explored is that Readymade garments are replacing demand for fabrics / stitched clothes with preference for western and casual wear combined with preference for brands with western positioning. In the women’s wear, they think that diminishing dominance of ethnic wear due to shift to casual wear and formal wear for women as more women join the workforce. Women’s wear market is mostly fragmented and unorganized. ABFRL has the following leading brands under its Umbrella.

Madura is predominantly a premium men’s wear player, housing India’s largest brands (Louis Philippe, Van Heusen, Allen Solly and Peter England) with 2.3 mn sq ft retail space and (more…)

Retail Research

Cafe Coffee Day Average Daily Sales Rise 4%, Goes Mobile

August 12, 2016August 12, 2016

Cafe Coffee Day CCD reported a 14% yoy growth in revenue driven by 13% growth in the retail operations and 25%+ growth in exports. The Average Sales Per Day came in at Rs 13,910, a growth of about 4% yoy while Same Store Sales Growth came in at 4.1%. Growth in ASPD continues to lag expectations and the company’s stated target of reaching close to Rs 20,000 over the next few years.

The management stated that the recently launched mobile app, the company’s foray into home delivery and constant innovation on the food menu side should help increase both footfalls and average ticket size thereby driving growth in ASPD. The management said (more…)

News & Views

How Patanjali is redefining FMCG Retail in India?

August 5, 2016August 5, 2016

Patanjali currently has a product portfolio spanning 800 SKUS in 37 categories, and now competes with every major FMCG in one or more categories. In addition, it is consistently adding new categories and setting up new plants across India – thereby broadening its manufacturing, customer, and revenue base. Currently, Patanjali has a reach of 200,000 outlets vs. 4mn for larger FMCGs; however, it is continuously expanding its reach by appointing new distributors. With the top management comprising majorly of visionaries, and middle and lower management recruited from top Indian/MNC FMCGs, the company is building the right human resource base for (more…)

Retail Brands

Titan embraces O2O with Carat Lane Purchase

May 28, 2016

Tata group promoted Titan acquired a majority stake in Carat Lane Trading Private Limited, which is involved in the business of designing, manufacturing, trading and retailing (largely online) of gems and jewellery. Titan’s focus on its OMNI-channel strategy, store expansion potential and recent successful product launches offers an underappreciated opportunity for brand Tanishq to recruit new customers.

Titan management, synergies with the jewellery business of Carat Lane is very high and are as listed below (more…)

Retail Research

Foreign Investment in Indian e-Commerce – New Guidelines

March 31, 2016

The Ministry of Commerce & Industry clarified yesterday through a press note that it would allow 100% FDI under the automatic route in marketplace model of ecommerce but would continue to disallow FDI in the inventory based model. Amongst the key points mentioned were – 1. such e-commerce marketplaces would be allowed to provide support services to sellers on their platform such as warehousing, logistics, order fulfillment, call center and payment collection. 2 – Not more than 25% of the sales through these marketplaces can be from one vendor or their group companies.

e-commerce entities providing the marketplace will not directly or indirectly influence the sale price of goods or services sold through the (more…)

News & Views

Developments in Internet Retailing in India in Last 12 Months

March 13, 2016

The last 12-18 months have seen a sobering effect on the Indian internet companies, wherein the focus has shifted from GMVs (Gross Merchandise Revenues) and growth at all costs model to per unit economics and long term sustainable profitability. While it has not meant that the internet companies are under undue pressure to turn profitable within an immediate short term, increasingly investors are demanding a clear path to profitability. Another issue that PE / VC investors are often facing is the lack of exit opportunities from their investments.

The funding issues notwithstanding, the fundamentals of the (more…)

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