Retail giants on a property signing spree

Retail giants like Reliance Retail, AV Birla Retail and RPG are rapidly signing properties for their convenience store format, which has emerged as the most popular format for retailers given the high returns per square foot of retail space. This despite the decline in the global percentage share of fruits and vegetables format from a whopping 60% to 52% in the last 10 years.

Reliance Retail has till date signed up 1,300 properties for its convenience store, Reliance Fresh at an average rate of Rs 80 per sq ft, with around 60 properties in Delhi and Mumbai at rates ranging from Rs 125 - Rs 300 per sq feet. AV Birla Retail in turn, has signed close to 30 properties for its recently launched 'More' stores in the Capital, while the RPG Group has signed around 60 properties in the NCR for its Spencer Fresh and Spencer's Daily at a rate of Rs 90-95 sq ft.

According to industry sources, Kishore Biyani-led Pantaloons, which at present is the country's largest retailer, would soon foray into the convenience store segment.

The size of these convenience stores varies across retailers.

While large retail chains like Reliance Retail, AV Birla and the RPG Group's stores start at 2,000 sq ft, the relatively smaller and regional chains like Big Apple which are targeting around 100 convenience stores by early next fiscal, have signed dozens of properties starting at 500 sq ft.

According to retail analysts, this is the most popular segment, despite the wafer thin margins because it services the hourly needs of customers and is the only retail format which can be opened in such a small area.

Printo to open 250 retail outlets entailing Rs.100 crores investment

Printo Document Services Pvt. Ltd (Printo), India's first organized retail venture in the Rs. 17,000 crores market for print and document services, today announced its retail expansion plans at a press conference. The company plans to open 250 retail outlets over the next three years covering major

Date Released: 06/13/2007

Bangalore, June 13, 2007: Printo Document Services Pvt. Ltd (Printo), India's first organized retail venture in the Rs. 17,000 crores market for print and document services, today announced its retail expansion plans at a press conference. The venture which will induce a tectonic shift in the hitherto unorganized space is already off to a start with 6 stores in Bangalore. The company plans to open 250 retail outlets over the next three years covering major cities in India in a phased manner entailing close to Rs.100 crores investments. On the occasion, the company also announced that Naresh Malhotra, CEO, Café Coffee Day will be joining its Board as an active member from July 1, 2007. The expansion move, to penetrate the hitherto untapped market and the induction of a seasoned veteran credited with building one of India's leading retail brands augurs well for Printo which got incepted only in 2006. Talking to media persons, Manish Sharma, Co-founder & Chief Executive Officer, Printo, said, "Globally the print and document services market is an organized business worth hundreds of billions of dollars dominated by large chains that operate across geographies. In India, despite the market growing at an exponential 80% year-on-year, there has been no organized attempt in this space. In that sense, Printo was a venture that was bound to happen and going by initial market response the timing of the venture has been perfect coming close on heels of India taking to organized retail as a format in a big way. The introduction of branded retailing in this space is sure to change the market contours radically in the coming years." According to Srivats Asur, Head, Operations, Printo, "While it is innovation on the go with everything that we do, we recognize that for this format to succeed, achieving certain scale and efficiency quickly is critical. Over the next three years we plan to open 250 stores that would allow us to touch and service a consumer where ever they need us. That will lay the foundation for us to make the next big push which then combined with our growing bouquet of packaged and value-added services would give us a competitive edge." Announcing the induction of the new member to the board, Lalana Zaveri, Co-founder & Director, said, "A person of the stature of Naresh Malhotra accepting to join our Board and taking active interest is important in that it clearly validates the immense potential of our business model and this space. Besides, from the point of view of the team at Printo, we are all excited about having him amongst us since we will have the benefit of the expertise and experience that Naresh has of building one of India's biggest retail success stories from scratch." In his comments, Naresh Malhotra, CEO, Café Coffee Day, said," Printo represents the next frontier for organized retail in India - prizing open hitherto untapped or mostly unorganized spaces which have significant market size and potential. Personally, it is exciting to be able to work on retail formats in two very different sectors and being able to play my role in driving the evolution of the organized retail space in India in the service sector. I thank the team at Printo for having me and look forward to contributing to the success of the venture." Printo is India's first branded retail chain for print and document services which leverages digital and internet technologies to reduce people dependency in delivering print products of international standards. Besides regular services, the company has a novel concept wherein customers could pick and choose from its template bank, on the internet as well as in-store, and customize it to their choice - be it marketing brochures, event collaterals, business cards, brochures, posters or invitations. This approach not only helps customers in getting customized print products but also helps them source it with minimum lead-time. Importantly, the modern store design, well-trained staff, cutting-edge digital printing equipment, and internet technology would provide customers with world-class print outsourcing solutions right in their neighbourhood. Printo's retail blitz is targeted at both the corporate and retail walk in customers. The company scouts for and identifies such locations where footfall for print and document services is perceived to be high for each of its stores. Founded in 2006, Printo Document Services Pvt. Ltd. is an innovative venture that seeks to capitalize on the opportunity presented by the unorganized Rs.17,000 crores market for print and document services in India. Promoted by Manish Sharma and Lalana Zaveri, who between them have 23 years of expertise in digital printing, manufacturing, and IT services, Printo is experiencing exponential growth in all its areas of operations. The start-up has the backing of Pravin Gandhi (co-founder, Infinity Ventures and SeedFund), Naresh Malhotra (Café Coffee Day), and Raju Venkatraman (President & COO, ICICI OneSource) as advisors and investors

Indo Arya to ink warehousing deal with Birla Retail, talks to Wal-Mart

The latest entrant in the retail race Aditya Birla Retail, which recently opened its first 'More' supermarket outlet in Pune on June 1, is in advanced talks with Indo Arya Logistics for exclusive warehousing space. The logistics company will also provide transport and value added packaging services.

"We have been working with a few other Aditya Birla group concerns like Hindalco . Right now, talks are on for an exclusive warehouse for its retail operations," said Indo Arya Logistics director Yogesh Arya. The size of the warehouse will be between 50,000 and 1,00,000 square feet, he said.

Initially, the retailer is looking at an exclusive warehousing facility and the number may gradually be increased in accordance with the company's growth plans. The negotiations will be hammered out in the next few months, Arya said. The logistics company has announced the launch of India's largest Regional Distribution Center (RDC) at Hassangarh, Haryana, with an area of 5.14 lakh sq.ft. This RDC would take care of its retail clients Pantaloons, ITC, Reliance Retail — offering services from source to destination delivery, assembling and packaging. "Such high technology warehousing provides great strategic competitive advantages and is core to a company's business. Companies have started strategising growth plans in synergy with the high quality warehousing space available in the country," said Arya.

The company is also in talks on handling of logistical operations for Walmart in India. "But nothing has been finalised yet and the talks are at a primitive stage, where it will be very difficult to comment," said Arya.

The increasing investment in infrastructure, booming manufacturing sector and development of the organised retail sector are providing huge business potential for the logistics services, he said. Looking beyond India, Indo Arya is planning acquisitions in the international freight forwarding business, with operations in Europe, South Asia and South-East Asia by mid 2008. "It is time we leveraged the supply chain network internationally, grow with our clients and go global," said Arya.

By 2010, it plans to bring an IPO to fund its Rs 200 crore expansion plans to open RDCs in cities like Kolkatta, Chennai and Mumbai with a total space of 1 million sq ft. In 3 years, Indo Arya has plans to expand its reach to six other cities in India with a 2 million square feet capacity .

Organized retail print player Printo to open 250 outlets

Print and document services are an unorganized industry in India. Printo Document Services, (PDSPL), a Bangalore based company formed with angel funding has announced plans to ramp up their outlets from the current six in Bangalore to 250 over the next three years or even earlier.

The document services and print market in India is about Rs 170 billion per year, and growing even at conservative estimates by about 80 per cent annually. The market is expected to touch 1.6 per cent of the GDP and beyond according to industry speculation. Printo claims to be the first player in India on this scale. They have chalked out their growth in three phases – the first phase was opening on six outlets in Bangalore, which has already been completed. The second phase which is expected to be complete over the next 12 months is targeting 54 outlets in the metro cities in India. The focus however is more towards the south of the country. During the third phase Printo plans to open up to 250 outlets, 60-70 of which would be through the franchisee route. The total investment would be in the range of Rs 1 billion.

Organized retail will help reduce food wastage, Crisil report says

This wastage may occur in the form of food simply rotting or not getting its full market price because of gaps in the current food supply chain

Adding yet another conflicting data point to the simmering controversy of whether organized retail will benefit or hurt the average Indian, credit rating agency Crisil Ltd has come out with a report saying that around Rs1 trillion worth of food is not being used in the country because of wastage, poor storage and middlemen commission costs.

This wastage may occur in the form of food simply rotting or not getting its full market price because of gaps in the current food supply chain, the report says, suggesting the emergence of organized retail will only strengthen the supply chain, increase farm incomes and reduce food spends for consumers.

Food and grocery sales form just 18% of organized retail revenues, according to the report. But with many new players, including Reliance Industries Ltd, the Aditya Birla group and Bharti Enterprises setting up retail operations, food and grocery retail could form 25% of revenues for organized retail. This could bring wastage down from the current level of 25% to 15%, which is as much as is wasted in more developed retail environments.

That could then boost farm incomes by as much as 37% and reduce the country's food spending by 3.5%, the report estimates.

"We are already seeing that there are less layers and less wastage of food in organized retail," says Ajay Dwivedi, director, Crisil Research, in a conference call to discuss the report's findings.

The findings of the report come against the backdrop of the Left parties asking for regulations to curb organized retail as they believe that the shift to organized retailing could lead to an elimination of jobs in the unorganized retail. After agriculture, organized retail is India's second largest employer.

Faced with such concerns, the government has commissioned a study on the impact of organized retail on unorganized retail, by the Indian Council for Research on International Economic Relations.

"We do not have enough evidence to show the extent of wastage caused by middlemen," says Reena Desai, campaign director of the FDI Watch campaign, which opposes opening up India's retail sector to domestic and foreign organized retailers.

"Many livelihoods will be lost where these companies are entering. Besides, there are also implications of having a few companies controlling the entire supply chain of food," Desai added.

Currently, just about 1% of food and grocery is sold in an organized retail environment. But, with organized retailers increasing their presence and customers' shopping habits changing, food and grocery retail in an organized set-up will grow at 37% over the next five years, compared to 26% for the entire industry.

Punjab farmers entering new field to reap the retail harvest

The great Indian retail revolution seems to be catching on. First it was corporate houses and now it's the enterprising Punjab farmer.

Baljeet Singh Dosanjh, a farmer based in Doaba, has joined hands with other growers to launch Veggie Wonders, a retail chain of fresh food items. The maiden store covering 2,300 sq feet opened recently in Jalandhar. Dosanjh plans to come up with four more in the next few months.

So far the results have been heartening with 150 customers walking into this store every day. "The response is so good that we have now opened another Veggie Wonders outlet in the city," Dosanjh said.

What is most notable is the place and timing — Veggie Wonders opened around the same time as Reliance Fresh, both in Jalandhar. Dosanjh now claims the Reliance store has not affected his business and customers appreciate the high quality stuff sold at his store.

Another example is Sandhu Organics, a retail store selling organic food in Jalandhar's Model Town area. Owner Kulwant Singh Sandhu found it convenient to sell his own produce, which he grows in his fields in a nearby village. Sandhu plans to open a new outlet in Ludhiana. But he cautions that the retail business is tricky. "Better be the first than the best" does not always work in this field, he said. "I started my retail business around two years ago when organic food was not in vogue and people were not used to purchasing vegetables from a proper shop, but all that has changed," Sandhu said.

That explains why the Potato Growers Association of the district is all set to come up with its own fresh food retail chain. Group head Jaswinder Singh Sangha gave the business model: "We are a group of around 150 farmers with large tracts of land. We also have our own warehouses and a well-developed transport network. We will allot different crops to different farmers. So, one farmer will do tomatoes, while the other grows green chillies, for instance, to save us procurement hassles."

Namdhari Seeds, which started as a group of farmers growing crop on community land, is also making inroads into the agro-retail sector. "We already have a big farm in Malwa, now we are planning to set up a retail store in Ludhiana and Chandigarh," said Uday Singh, chairman of the Namdhari Group. The Namdharis already have 15 stores in Bangalore and five in Delhi.

Ask these farmers what's prompting them to jump into a field dominated by the powerful corporates, and they cite their expertise in the field and wide network. As Dosanjh puts it: "We have seen companies like Subikhsha and ITC setting up their retail stores in the region with goods that are far from satisfactory. It's not easy to run a supply chain. But as farmers, it would be easy for us to procure the best possible produce for the shop racks."

The trend is also going beyond raw food to cooked food. Sangha, for instance, owns the SubWay outlet in Jalandhar. Similarly, the McDonald's outlet in the city is owned by a prominent farmer.

Jalebi Junction and Glassy Junction, two of the most popular eating joints in Jalandhar and Phagwara, are owned by Manmohan Singh, a farmer of repute. Singh sums up the popular sentiment: "Why should we rein in our entrepreneurial potential? We know we can perform well in more than one field."

Walmart on hunt for storage biz partners?

Walmart is in talks with an Indian company to set up warehouses and cold chains. With retail expected to grow at 12%, the logistics industry will see Rs 5,000 crore of investment in the next three years, reports CNBC-TV18.

 
 

India will spend approximately 11% of its GDP or about Rs 5,00,000 crore on logistics and related services by 2010. According to a Goldman Sachs study, a lion's share of the investment will be made by three key sectors - FMCG, consumer durables and retail. Almost Rs 5,000 crore will be pumped into setting up the logistics infrastructure for these growth drivers in the next three years.

 
 

The largest warehouse in the country was recently launched by Indo Arya, one of India's leading logistics company. It will soon offer a cold warehouse facility too. Indo Arya is in talks with some top retailers, including Walmart and Tesco to construct and operate warehouse facilities for them.

 
 

"We are already in talks with Walmart, Aditya Birla Retail and we are talking to Tesco on a very primary stage, as of now. We are trying to take it forward with them," said Yogesh Arya, Director, Indo Arya.

 
 

Indo Arya is also in talks with Reliance Retail for repackaging of its staple food. It is already doing so for Reliance in Hyderabad and is hoping to duplicate it in other cities like Delhi and Jaipur.

 
 

Cold warehousing currently makes up only 3-4% of the industry, but with retailers going big on fruits and vegetables, the demand for cold chains is set to increase. Currently, the logistics industry is seeing 15% growth and with a few foreign logistics providers looking at getting into JVs with Indian companies, this sector is expected to grow faster than the retail sector.

 
 

Newer businesses are also likely to come up. Some logistical companies are open to setting up exclusive warehouses and service center for retail players.

Valuation of Vishal Retail looks reasonable vis-a-vis peers

Vishal Retail, VRL is open for subscription with an initial public offering, IPO of equity shares aggregating Rs 110 crore.  

The price band for the 100% book built issue has been fixed between Rs 230 - Rs 270 per equity share of Rs 10 each. The issue closes on June 13.

 
 

Sharekhan report on Vishal Retail IPO:

 
 

Company background

As of April 30, 2007, VRL has been operating 50 retail stores, including two stores that are operated by franchisees. These 50 stores are spread over about 1,282,000 square feet and located in 18 states across India.

VRL started as a retailer of ready-made apparels in Kolkata in 2001. In 2003, it acquired the manufacturing facilities of Vishal Fashions Private and M/s Vishal Apparels. Subsequently, with the evolution of the retail industry in India and the change in consumer aspirations, the company diversified its portfolio of offerings to include other retail goods. Currently, it sells ready-made apparels, and a wide range of household merchandise and other consumer goods such as footwear, toys, watches, toiletries, grocery items, sports items, crockery, gift and novelties.

Key positives

Targeting the tier-II and tier-III cities

The company is increasing its geographical presence in tier-II and tier-III cities where the major retail giants are neither present nor have any intention of going in the near term. This eliminates competition for VRL and enables it to capture market share in locations where a majority of its target customers are located.

Focusing on middle class group

The company believes in the concept of "value retailing", targeting the middle-income and lower middle-income groups, which constitute the majority of the population in India. It sells a vast range of merchandise across apparels and accessories, fast moving consumer products, food products and consumer durables with over 74,000 stock keeping units.

Backward integration to help reduce costs

In order to reduce costs and take advantage of economies of scale VRL has embarked on backward integration of its products. It has an apparel manufacturing plant located at Gurgaon, Haryana. For ensuring efficiency in the supply chain, it has set up seven regional distribution centres located around Kolkata (West Bengal), Thane (Maharashtra), Jaipur (Rajasthan), Ghaziabad (Uttar Pradesh), Ludhiana (Punjab), Gurgaon (Haryana) and Delhi.

These distribution centres spread over - 4,71,426 square feet - give a proper back-up and facilitate replenishment in a shorter time period. It also has an in-house fleet of 41 trucks which helps it to transport and deliver its products in a cost and time efficient manner.

Key negatives

Competition

The Indian retail industry is highly competitive. Competition is characterised by many factors, including assortment, advertising, price, quality, service, location, reputation, and the availability of credit and retail space. VRL also faces competition from the other retail formats including Internet sales, door-to door sales and the sale of household products directly from home.

Negative cash flows in recent fiscals

VRL has had negative cash flows for the last three years and in FY2007 its inventory piled up significantly. As per the management, the shifting of the management information system to the SAP ERP system has resulted in delayed and improper receipt of critical sales data which has led to some inventory build-up to overcome the replenishment requirements of the stores.

Closure of stores

During FY2007 VRL opened 27 stores, shifted one store and closed down three stores. In FY2006 it had opened 11 stores and closed down one store whereas in FY2005 it had opened four stores and closed down two stores. Further, in FY2003 it had opened seven stores and closed down five stores.

Valuations

VRL offers its share in a price band of Rs 230-270, which leads to a market capitalisation of Rs 600 crore (at the higher band of Rs 270). The FY2007 earnings per share works out to Rs 11 on the post-issue equity capital. At Rs 270, the stock is trading at 25x FY2007 earnings and the valuation is reasonable when compared with its peers.

Given the fact that foreign investment is not permitted in domestic initial public offerings, the expected buying interest from foreign investors post-issue could be a trigger for the stock.

Oswal Group plans retail expansion for women's intimate wear

The Punjab based women's intimate wear retail chain of Oswal Group, Straps plans to increase the number of retail stores to 40 by March 2008, Mr Adish Oswal, Managing Director, Oswal Retail Pvt Ltd said here on June 11.   

He clarified that the expansion plan is part of the rapid expansion plans being drawn up by the company across the country with increasing number of malls in the country has also lured to tap the opportunities available.

The industry experts estimates that the organised intimate wear market in the country is around Rs 2000 crore and is further expected to grow at 70 percent per annumby 2011.

Mr Adish added that Straps is expected to garner at least five percent of the market share by 2009 and is targeting a turnover of Rs 150 crore by March 2010; whereas they are also investing close to Rs 35 crore in the project and is looking at an investment of another Rs 50 crore by March 2009.

The retail chain offers 9-12 international brands in four different categories: lingerie, nightwear, swimwear and maternity wear.

Oswal Group is a premier textile group of Northern India, mainly into spinning & dyeing of all types of yarn in different blends & manufacturing of garments.

First Bharti retail store by March

Bharti Enterprises is set to open its first retail store in the country by the March 2008 and plans to open a minimum of six stores by the end of that year.

Sunil Bharti Mittal, chairman and CEO of the Bharti group, on Saturday said the branding process would be completed soon and discussions were on with Bharti's back-end partner Wal-Mart. Speaking on the sidelines of a meeting organised by the Confederation of Indian Industries (CII), he said: "The process is going according to plan and we are looking at a cluster of stores by early 2008. You will see half-a-dozen stores coming up within the year."

Mittal said during his visit to the US earlier this month as president of a CII delegation, he met Mike Duke, chairman of Wal-Mart Stores Incorporated, in Washington separately. Mittal also held a meeting with Carlos Gutierrez, secretary, US Department of Commerce.

Foreign direct investment in multi-brand retailing is not yet allowed in India. Only 51 per cent FDI in single-brand stores and 100 per cent in the cash-and-carry wholesale business are allowed. The existing policy also allows FDI in franchises.

Bharti and Wal-Mart have started recruitment and expect to sort various issues, including legal ones, soon. "We are going ahead with legal issues like brand agreement. A franchise arrangement may take some time, but we are on track," Mittal said.

Last year, the Bharti group had announced an investment of $2.5 billion in its retail venture. According to an agreement with Wal-Mart, Bharti would manage the front-end and the US major would provide back-end and logistics support.

Mittal said US companies were keen on India opening its FDI policy in multi- brand retail chains. "In the beginning they will be happy to see it happening, may be with 26 per cent FDI," he added.

Satyam Computer, JDA Software in deal for retail, consumer packaged goods space

India's Satyam Computer Services Ltd said it has forged an alliance with US-based JDA Software Group Inc in the retail and consumer packaged goods space.

The company said the association will enable it to optimize JDA Software's products for its clients, adding that the retail and consumer packaged goods industry is booming in the Asia-Pacific region.

JDA Software offers supply and demand chain products to retailers, manufacturers, and suppliers.

500 overseas brands plan to enter via franchising

More than 500 brands, including 300 from the US, are waiting to venture into the Indian market through franchising, while more than 800 foreign brands are actively into it.

According to Sachin Marya, chief executive officer of Franchise India Holdings Ltd (FIHL), around 350 brands from the US and 200 from Australia are keen to have their presence through franchisees. Several other brands from Europe and south-east Asian countries like Malayasia and Singapore are also interested.

Estimated at Rs 10,000 crore, the franchise industry has about 1,500 home grown franchisers. According to FIHL estimates, the franchising market is growing at 30%-35% now.

Marya said, "India is now the world's second largest franchise market and sectors such as retail, food, information technology and education set to witness a boom in franchising."

According to him, half of the retail boom would be through franchising. "It would open up new opportunities for the kirana shops. They have the localities and the client base. All they need is to upgrade them."

Marya was here to attend the 'Franchise & Retail Opportunities 2007', one of Asia's biggest franchise show, in Kolkata. According to FIHL, India ranks first, ahead of Russia, in terms of emerging market potential in retail and is deemed as a 'priority-one' market for international retail.

The companies prefer franchising as it spreads business and risks while giving high-value income. Moreover, freedom from staffing and operational involvement gives them more chance to invest in research and development.

"In India franchising has great potential as the franchisers have minimum risks," said Marya.

As the retail business in India is trying to move from 3% under organised sector to 5%, it opens up huge opportunities for franchising. "Franchising being a relatively nascent concept in India, there has been a lack of information and knowledge. It would grow at 40% in next few years," he said.

India may get its first Apple Store

Mukesh Ambani-led Reliance Retail is actively negotiating with the $19.3-billion Apple Inc of the US to bring its high-end Apple Store to India. If the deal falls into place, India will be only the second Asian country after Japan and the sixth country outside the US to have an Apple retail outlet. Given that an Apple Store is a single-brand retail outlet, Apple Inc can hold up to 51% equity in the venture.

Apple Inc, which started its flagship outlet in California in 2001, has over 160 stores in the US. It also has Apple Stores in Britain, Canada, Italy and Japan. The stores carry Apple computers, software, iPod music players, third-party accessories, and other consumer electronics such as the Apple TV and the eagerly awaited iPhone, to be released this month end.

Apple Stores are renowned for being the destination hangouts for its brand loyalists and are famous for their architectural features and in-store designs. They feature a theatre for presentations and workshops, a studio for training with Apple products, while offering a Genius Bar for technical support and repairs, as well as free workshops available to the public.

Reliance Retail's consumer durables and information technology (CD&IT) vertical recently launched Reliance Digital at Ghaziabad in the national capital region. Reliance Retail at present has 170 Reliance Fresh stores, which sell groceries and FMCG products.

Its next phase of expansion will see hypermarkets and more CD&IT stores coming up. According to sources the company is very keen on signing Apple and has held various rounds of talks in this regard.

When contacted, a Reliance group spokesperson declined to comment.

RIL likely to invest $20 bn over 5 yrs

India's largest private sector company Reliance Industries Ltd (RIL) is likely to invest $20 billion over the next five years. According to a recent report by Macquarie Research, a major part of this investment will be in the proposed 2 mtpa greenfield cracker at Jamnagar along with its retail venture and KG Basin field development. RIL will invest around $3.9 billion and $4.1 billion in the greenfield project and in organised retail, respectively.

The report also reveals that RIL will spend Rs 22,470 crore in petrochemical expansions and expansion in petrochemical facilities, Rs 13, 400 crore in auto-fuel retailing by establishing 800 new retail outlets by FY 2010 and Rs 1,71,141 crore in RPL's (Reliance Petroleum Ltd) export-oriented refinery.

According to company sources, "RIL's strategy is to enhance vertical integration in the energy sector and capture value in the sector. The company is likely to invest more and more to strengthen its exploration, development and production activities." Reliance is the major exporter of petroleum products in the country and exports are expected to have accounted for 57% of RIL's total production is in the first three quarters of FY07. However, the retail petroleum marketing business is relatively smaller compared to the company's refining capacity. The company has earmarked Rs 7,000 crore for the expansion of its retail network, but the plan slowed down due to negative domestic marketing margins.

On the other hand, in the exploration and production segment, the company has drilled 23% of the KG D6 blocks so far, resulting in 27 discoveries with an estimated in place reserves of 35.4 tcf.

Shopping for long-term

Vishal Retail is into the selling of ready-made apparels and a wide range of household merchandise and other consumer goods. In an endeavour to set up a one-stop shop, the company manufactures or directly procures from manufacturers (primarily from small and medium-size vendors). The company intends to offer around 40,74,074 shares at the high end of the price band (Rs 270).

It plans to expand its presence across major cities, which include the Tier-I, Tier-II, and Tier-III ones. However, it intends to flourish its expansion with a prime focus more in the Tier-III cities, which include Ajmer, Coimbatore, Ranchi, Mangalore, Lucknow, and Vijaywada. And for this, it intends to use around Rs 104.15 crore. As such, the company's sales and profit, for a five-year period, have grown at a CAGR of 64.54 and more than 100% respectively.

Investonomics

The retail segment in India is seeing a surge. With the announcement of Bharti-Wal-mart tie-up and many other entrants in the offing planning various major acquisitions, the sector has been garnering attention and investment like never before. In fact, according to an estimate, the organised retail industry in India is growing at the rate of 24-26% annually. And it is further estimated that the organised retail penetration in India will increase to 5.8% by 2007-08 from a meagre 3.5% in 2004-05.

So, companies like Vishal Retail have fair and better chances to cash in on the boom and make the most of it. However, in the sector dynamics like annual consumption and spending, exquisite service offers along with ambience, and better attractive pricing, Vishal Retail has to fight with formidable players. Players like Pantaloon Retail, Shopper's Stop and Trent (India), who have not only established brands but also have an attached base of customers. And the competition from these players cannot be ruled out.

It must be also noted that the company's promoters are also in the business of retailing and any conflict of interest cannot be pronounced insignificant.

Valuations

On the valuation front, the company is considering its annualised earnings quotes a P/E of around 24.30(x) and 20.70(x) at the higher and the lower end of the price band. While its peers like Pantaloon Retail, Shopper's Stop and Trent (India) quote a P/E of around 53 (x), 86.5(x) and 41(x), respectively. This adds a positive investing sentiment to the issue.

It must be also noted that the industry is seeing a trend wherein a bigger retail player acquires a potential smaller player. And players like Vishal Retail, with their strong base, have good possibility of being a strong acquistion target in this trend.

More so, the company stands a good chance to excel on their own, if it exhibits strong adaptability in new locations along with one-stop attractive offerings.

Pump In $: Coke plans varsity in India

After Kellogg's sustained support for India's big B-school - ISB; it's now Coke's turn to pump in dollars into education here. Coca-Cola, in fact, plans to go a step further and set up a university in India.



The concept of corporate universities has been around since the late '80s with many companies setting up their own universities around the world. But the Atlanta-based cola giant won't stop right there.



According to sources, with the growth of modern trade, Coca-Cola would be developing a unique concept of a retail university. It would also teach kirana shop-owners some tricks of modern selling and storage techniques.



While the company is keeping its cards close to its chest, sources say the university is expected to come up in a year or so. When it does, it would be a combination of virtual and brick and mortar classrooms.



Companies are increasingly recognising that developing people is a top priority in today's competitive environment. Additionally, a corporate university offers a unique branding opportunity.



There are foreign universities such as Charles Schwab University, Disney University, General Electric's Crotonville, McDonald's Hamburger University, Motorola University, Oracle University and University of Toyota. Even back home there are company backed educational institutes.



In India we have institutes like the Bharti Telecom school at IIT Delhi, Nirma's business school, Amul backed Indian Institute of Rural Management, Pantaloon's retail school initiatives and Gujarat Energy Research & Management Institute (GERMI) promoted by the Gujarat State Petroleum Corporation.



Corporate universities offer a powerful model for learning that compels learners to grow and develop. Most importantly, they can have long-term positive effects on a company's financial health and stability.



For instance, perhaps some of the most powerful advantages are derived from the marketing possibilities that a corporate university offers. There are opportunities to develop a university name, a logo, print publications, Web sites, degree or certification programmes, faculty and guest faculty designations and communication vehicles.



According to marketing experts, with pesticides controversies and health issues hounding them, in a few years time, colas brands are bound to become socially ostracized. And an university in Coca-Cola's name will help in giving it a benign brand image.



An institute with a company's brand name helps. N V Vasani, vice chancellor of Nirma University says, "If the institute stands for educational excellence, it adds value to the brand name of the company as well."



In fact, with the kind of business opportunities that India's retail market promises Coca-Cola's initiative can prove to be fruitful in the long run. V S Sitaram, executive director, Dabur India Limited (Consumer Care Division) says, "The emergence of modern trade will fuel demand growth for FMCG companies in the urban markets."



Mr Sitaram further predicts, "While the emergence of modern trade has altered the retail scenario in India, the fact remains that a bulk of FMCG sales still come from our kirana shops. Regardless of consumers' lifestyles, the kirana stores would continue to serve consumers as before, probably with a significant change in the range of products stocked and with new strategies in place.



So, the importance of neighbourhood stores and traditional trade would still remain." And kirana stores also have some distinct advantages over their big-ticket counterparts in terms of reach and convenience. Hence, grooming them in modern trade practices can only have a symbiotic effect for FMCG companies. And this might eventually reflect on their bottom line.

Southern retail market set for growth

The southern Indian states of Karnataka, Tamil Nadu and Andhra Pradesh, with their relatively lower real estate costs, peaceful social environment and stable governments have helped organised retailers expand their businesses faster in the region.

The retail market in South India was valued at Rs 2,62,930 crore at 2006 prices.

Of this, the size of the organised retail market in 2006 stood at Rs 12,825 crore, representing 4.9 per cent of the total retail market.

Only 4.6 per cent of the Indian retail market was organised in 2006 and only 0.8 per cent of the Rs 743,900 crore food and grocery (F&G) retail in India was organised.

About 1.4 per cent and 1.3 per cent of the retail segment was organised in Andhra Pradesh and Karnataka respectively.

According to 'The South India Retail And Realty Report: 2015 and Beyond' brought out by international real estate consultants Cushman & Wakefield for 'Images Retail', quality real estate space is a key concern of the retail sector in India.

With the changes in the regulatory environment, the opening up of the market and the growth of private equity, and the rising demand for high-end residential and commercial premises is gradually transforming the traditional real estate sector into a more transparent and accessible market.

The same held true for real estate sector in southern India.

In the south, capital values saw a sharp rise in the rates throughout the review period across all centres.

The rates were the highest in Bangalore at Rs 17,083 per square feet, with Hyderabad second with Rs 16,388 per square feet while Chennai stood third with Rs 11,014 per square feet.

Bangalore indicated the highest retail rentals, followed closely by Hyderabad, with Chennai with the lowest retail rental rates of the three.

Cushman & Wakefield said in its report that by 2007-08, an estimated 100 million square feet of quality shopping centre space was expected to generate retail sales of over Rs 50,000 crore ($11 billion).

In tandem with the growth in organised retail, the present two square feet-per capita retailing space would rise 15-20 per cent by 2010.

By 2011 roughly 300 million square feet of additional retail space was likely to be generated. At present, there were about 200 operational malls and this number was expected to rise to 600 by 2010-11.

Of the new malls coming up, about 40 per cent would be located in the country's smaller towns and cities.

The supply of shopping centre space in South India was at 14.1 million square feet in 2006-07, accounting for an increase of about five million square feet space in 2004.

On the basis of the projects announced, by 2007-end, the north zone would account for 41 per cent of the shopping space in India, followed by the west zone, accounting for 35 per cent share, with the South enjoying 16.8 per cent share and eastern India the remaining 7 per cent.

Bharti to open retail stores early next year

Bharti Enterprises and its back-end partner Wal-Mart will open their retail outlets some time early next year with the legal formalities on branding and franchise being worked out. "Work is going on as per plan. By early next year, a clutch of stores would be opened," Bharti Group chairman and CEO, Mr Sunil Mittal, who was recently in the USA, said. "You will see half-a-dozen coming up."

The Bharti Group had announced in November last year plans to invest $2.5 billion in the retail venture, partnering the US major Wal-Mart. While Bharti would manage the front-end, Wal-Mart would provide back-end and logistics support.

Meanwhile, the two partners have started recruitment and are busy sorting out the legal issues. "Legal issues like brand and franchise arrangement may take some time. But we are going ahead as per the plan," Mr Mittal said.

During his visit to the USA heading a CII delegation, Mr Mittal met Wal-Mart vice-chairman, Mr Mike Duke in Washington. Asked about the foreign direct investment (FDI) in retail as desired by the USA, the CII president said if large "big-box stores" could benefit farmers and the customers, the industry may convince the government and push for FDI, starting with a cap of around 26 per cent.

Currently, India does not permit FDI in multi-brand retail but allows 51 per cent in single brand retail and 100 per cent in cash and carry wholesale business. The existing policy also allows FDI through the franchise route.

The Bharti-Wal-Mart joint venture is being structured in consonance with the FDI policy.



Outsourcing

The outsourcing debate should not become an India debate, the CII delegation impressed upon US officials, senators and congressmen. "CII has allayed some of the fears and blunted some arguments against outsourcing," Mr Mittal said in a briefing on the recently concluded CII mission to the USA. "We made a good case. But it will remain an election issue."

The CII CEOs delegation raised three critical issues during the mission ~ outsourcing, based on the recent H1B visa debate; the Indo-US civil nuclear agreement; and the Doha Round.

The CII delegation impressed upon them how India was doing a remarkable job of providing the backbone to the US economy with the reverse outsourcing being currently witnessed.

Mr Mittal said that according to CII estimates, there would be a requirement of 17 million IT and knowledge professionals in the USA. This could be best served by India, he added. "In fact the Indian professionals are adding competitiveness to the US industry," he felt. "This is a partnership for competitiveness."

CII also highlighted that most of the US manufacturing industry had moved to China and was now feeding US consumption patterns without hurting the US economy or industry.

Agreeing that outsourcing would still be an election issue in the USA, Mr Mittal said there was a palpable fear of losing jobs and that there were clear undercurrents regarding this.

Stating that there was a recent trend of reverse outsourcing Mr Mittal gave the instance of IBM bagging a $1.1 billion order from Bharti. He said other telecom companies were also looking at outsourcing to the USA.

CITU backs Reliance's retail foray in WB

The West Bengal state committee of CITU on Saturday said it favoured granting of licences to organised retail trade, including Reliance, but was opposed to the entry of foreign players.



The trade union wing of the CPM, however, wanted the state government to impose some restrictions on the functioning of these big corporate entities entering the retail trader. This will help small retailers carry on business, state CITU president Shyamal Chakraborty told reporters.



He said the trade union did not have any objection to contract farming. "Contract farming takes place even now," Chakraborty said while releasing CITU's policy on entry of monopoly capital in retail trade. The government should ensure that farmers did not suffer because of contract farming, he said, adding if necessary, they should be allowed to form cooperatives while entering into such contracts."



Chakraborty said it should be mandatory for these corporate houses to obtain licences. The power to grant licences should be with municipalities or civic corporations

Refining experience

It's all on the experiential plane. Amidst the clutter that forms part of life today in India's metros and large cities — the mall is a space where brands, product categories, services, experiences and people jostle for mindshare. And age, sex, community, caste, income, nothing is a barrier. Of 802 people interviewed in 10 cities in a SundayET survey conducted by global market research company Synovate, a majority (69%) of the respondents agreed that the hypermarket visit was all about the sheer variety and volume — with something thrown in for everyone. Cities where malls and hypermarts were a big draw included Lucknow (90%), Pune (88%), Kolkata (84%) and Delhi (72%).



At the hypermarket, there's something that'll catch the eye of one and all — whether you're six or 60. Toys, books, movies, food, clothes, electronic gadgets, et al — and a variety of brands that would make the mind boggle. In fact, 78% of those who participated in the survey said they enjoyed the experience of shopping for music, books, movies, toys and games. This was the feeling in all the cities except Kochi where only 41% agreed. In the case of non-durable goods, including health and beauty care products and school and office supplies, an overwhelming 82% felt it was a great shopping experience — and this feeling cut across all 10 cities. For durable goods such as appliances and furniture, 77% seemed satisfied with the product information and the service at the stores.



Overall, 62% felt that there were too many choices — consumers in Delhi (79%), Kolkata (84%), Bangalore (77%), Pune (69%) and Lucknow (80%) were spoilt for choice. But not so in Chennai where 50% felt there weren't enough brands. In Hyderabad, the figure was as high as 77%. "It's actually an unprecedented level of choice and value options which traditional retail cannot match," says Damodar Mall, president, food business division, Pantaloons. Little wonder then that many come out feeling that they've splurged much more than they need to — 60% of the respondents in the all-India results felt that they overspend at hypermarts. Hyderabad (81%), Lucknow (79%), Kolkata (73%) and Delhi (70%) were self-confessed spenders let loose in a modern retail store, cities such as Mumbai (48%), Bangalore (39%), Ahmedabad (49%) and Kochi (46%) showed much restraint in spending patterns.



"As shelf space increases, you find consumption also increasing. Also the fact that consumers have better spending power today — so you see many of them opting for cut vegetables despite the marked up price," says Mazyar Kotwal, senior manager, advisory services, KPMG. "The ambience, attractive pricing and the variety available makes it a great experience for the consumer," Kotwal adds.



And what is it that makes consumers visit a particular chain: for 35% polled it's the convenience of shopping everything under one roof, for 15% it's the ambience, for 16% it's the discounts and attractive schemes and for the rest of 37% it's a mix of all these three factors.



Special schemes or sales are a big draw and 80% of all those polled agreed that they made a beeline for the retail store on such occasions. Chennai bucked that trend — 54% said that they didn't want to go to a store just because it was offering a discount. Overall it's a euphoric feeling and what's more, people of all ages love it

Twist in retail: Get set for NextGen local stores

Savvy shoppers that they are, Indian consumers aren't completely taken with the glitz of the malls, and their hypermarts and supermarts. They love the shopping experience but they still drop by at their friendly neighbourhood kirana store. Besides, the bulk shopping that they do at these modern retails stores, there are the weekly top-ups to do at the local grocery, and the perishables that have to be bought daily.



A survey commissioned by SundayET to global market research company Synovate, has found that a sizeable 63% of the total respondents prefer to straddle both worlds: that of the mall as well as the local grocer. Only 26% talked about a marked preference for the mall alone, while there's still another 11% that's completely unmoved by modern retail and prefer their good ol' mom and pop store.



The survey was conducted among 802 consumers, comprising an equal number of men and women in the age group 20-45 years in Delhi, Mumbai, Chennai, Kolkata, Bangalore, Ahmedabad, Hyderabad, Kochi, Pune and Lucknow.



According to the survey, the entry of the modern retail chain seems to have even changed the way weekends are spent: 53% of the people interviewed said their weekend shopping behaviour had changed. What's more, a whopping 69% agree that shopping at malls were treated as weekend outings for the family.



Says Preeti Reddy, vice president, Technopak Advisors: "For the Indian consumer, the mall with their hypermarts are seen as a destination — not a place for one's regular shopping because of problems of transportation, shortage of storage space, weather conditions and the preference to eat and buy fresh. The local grocery is where most of the regular shopping is done. This isn't going to change for a very long time."



If the modern retail format was introduced on the premise of experiential marketing, consumers certainly seem to be loving the experience — 60% admitted they tended to overspend and the more they visited hypermarts and supermarts, the more they splurged. Not just that — with the entry of modern retail, 70% felt that their shopping spends had increased.



And would you believe it — 92% like the staff in modern retail stores and find them courteous and friendly? Their neighbourhood store couldn't have been all that friendly after all.



But in case you've felt that the quality of shop floor staff is rather low, this could be an eye-opener for you: 87% respondents felt that they displayed effective communication skills and 84% said that they made them feel important. So surprisingly, there are no complaints on that front, it seems.



But that doesn't mean consumers don't have an opinion on how to improve things. Raghu Pillai, president (operations) Reliance Retail, agrees that shoppers are enjoying the new ambience.

Krishna Lifestyle eyes luxury retail market

Krishna Lifestyle Technologies (KLTL), a dealer in 100 percent cotton yarns, open-end yarns, ring spun yarns, carded and combed for weaving and knitting, is now venturing into the luxury retail.



The Tayal Family Enterprise has tied up with international fashion and lifestyle brands like Calvin Klein, Tom Ford, Roberto Cavalli, Fendi, Kenneth Cole, Nike Vision and Tommy Hilfiger for this retail project.



Though Company plans to initiate this venture through a recently-set-up 20,000 square feet store in Mumbai, it has revealed plans to launch atleast 50 outlets in India within next three years.



The target venues will not only be the metros but also growing big cities like Pune, Nagpur, Baroda, Amritsar, Kolhapur and Ludhiana.

Vishal Retail IPO price band fixed

Vishal Retail, which has roped in high-profile investors like the Burmans of Dabur India, Munjals of the Hero group and HDFC, is all set to make a debut in the primary markets.



The price band has been fixed at Rs 230-270 per share and the IPO will open on June 11 and close on June 13. The proceeds raised from the issue will be invested in establishing 32 new retail stores.



At present, it operates 50 stores, spread over 12.82 lakh square feet, located in 18 states. In a statement issued to the media, Vishal Retail said that it proposes to deploy Rs 104 crore from the net proceeds of the issue towards setting up additional stores in fiscal 2008.



Vishal Retail that started as a retailer of ready-made apparels in Kolkata in 2001 broadened its business portfolio. It diversified its product offerings to include other retail goods such as footwear, toys, watches, toiletries, grocery items, sports items, gifts and novelties.



Unlike other large retailers like Pantaloon, Shoppers' Stop, Reliance Retail, which have a pan-India strategy including metros, Vishal Retail will focus its attention on tier-II and tier-III cities. Products in its malls will target an income group of Rs 5,000 to Rs 50,000 per month. R C Agarwal, chairman of Vishal Retail, said: "In the next 3-4 years, we expect that this market will grow faster than the big cities."



In FY07, the apparel business contributed 63% of revenues, while the non-apparel business contributed 22% and the FMCG sector 15%. The revenue mix is expected to change further with the company eyeing more into FMCG, Agarwal added.

The retail chain's IPO will coincide with India's biggest share sale by DLF.



DLF's issue opens on June 11. Once listed, Vishal will join a handful of Indian listed retailers, including Pantaloon Retail (India), Shoppers' Stop, Piramyd Retail and Trent among others. Organised retailing currently accounts for 3% of India's overall $300 billion annual retail market.



Bennett, Coleman & Co., the publishers of The Times of India and Economic Times, has equity interests in the retail chain.

India : Flawless Diamond ties up with 'The Bombay Store'

Flawless Diamond India Ltd has informed that it has tied up with "The Bombay Store" to open several outlets and initially at P M Road, Fort, Mumbai for sale of its AUM branded Jewellery. The Bombay Store is a chain of exclusive stores catering to discerning shoppers.



It has a special place in the hearts and minds of people having served an up market clientle for over 100 years. The AUM brand will get a tremendous boost with this association. One other major advantage is the international set of people for whom this place is a 'must' to pick up things before heading to different destinations around the globe.



The Bombay Store's premium location and the status it commands fits very well with Company's marketing strategy and brand development policy.



Further, after receiving very good response in its retail business and very good buyer response for its branded AUM Collection Jewellery from overseas, the Company is totally focused on its retail marketing strategy. Recently the Company has developed more than 5000 special new designs for its retail outlets.



These designs are very exclusive and would cater to all class of customers. The Company is going to launch this range for its domestic retail outlets and also for its overseas buyers and HNI's. Recently the Company has hired 100 artisans for developing its R & D division and to derive maximum benefit from its R & D works.



Mr. Bhawar U Jain, Managing Director says that "Company is very well equipped and well experienced, and all systems fully developed to launch successfully its first phase of opening up 25 retail outlets successfully and as fast as possible. We are looking for good growth in the near future."

MNCs, corporates to enter pharma retail

The country's highly disorganised drug retail, whose annual turnover of Rs 45,000 crore (Rs 450 billion) is shared by some 550,000 traders, is poised for a metamorphosis with some of the biggest names, including from overseas, having spotted it as a big opportunity.

The first off the block appears to be the Reliance Anil Dhirubhai Ambani Group (R-ADAG), which is investing Rs 1,200 crore (Rs 12 billion) in setting up a large drug distribution backbone.

As has happened frequently, R-ADAG may soon be joined by brother Mukesh's Reliance Industries [Get Quote]. The spokesperson for Reliance Industries said its retail arm, Reliance Retail, was exploring the option of sourcing directly from manufacturers to weed out spurious drugs from its proposed pharmacies.

The brothers are likely to have company in two multinationals: Zuellig Pharma, the $6 billion Hong Kong-based pharmaceutical and healthcare distribution and logistics specialist, and US-based Cardinal Health, which is behind the drug retail chain Medicine Shoppe.

Trade sources also mention plans being hatched by the Aditya Vikram Birla Group, retail chain Subhiksha and a leading unnamed pharmaceutical company.

At present, the only semblance of organisation in drug retail is the umbrella of the All India Organisation of Chemists and Druggists (AIOCD). Its structure involves tiers of stockists, wholesalers and retailers. Drugs are sold in accordance with the agreements specifying the margins between the associations of traders and manufacturers.

With the new entrants comes the inevitable churn of talent. Rajendra P Gupta, who had been heading R-ADAG's Reliance Health Venture, has quit and will soon join a similar venture of a top Indian corporate house. The R-ADAG venture is scheduled to take off in May.

Gupta said: "I have moved out of Reliance ADAG and am on vacation. I will finalise the options shortly. Healthcare including pharma retail and distribution will remain my key focus area."

The R-ADAG spokesperson confirmed the exit, but said: "The exit of an individual will not affect the business plans of an organisation like R-ADAG. We are going ahead with our project."

Zuellig is the largest drug logistics provider in Asia with extensive operations and warehousing facilities in a dozen countries. "India is a major market with vast potential," said Nike Ampton, managing director of Zuellig Pharma India, the Indian subsidiary that Zuellig has already set up. It has tied up with the Chennai-based logistics provider Sical for warehouse management and trucking services.

A team of Cardinal Health's senior executives visited Mumbai two months ago to assess the Indian market and held rounds of discussions with Indian companies for a partnership.

Gen-X are drivers of Indian retail boom: study

India's booming retail industry, estimated to become a $427-billion industry by 2010 from the current $328 billion, should increase its focus on the youth as the most potential consumer, says a study.

The retail sector in India is undergoing a major paradigm shift, boasting of a billion plus consumers of which over 50 percent are less than 25 years of age with an enormous appetite for quality products and have high purchasing power, said YouSumerism - Youth In India: Opportunity Knocks - conducted by leading global professional services firm Ernst and amp; Young.

Effective capitalisation of India's youth would help the global retailers, who are eyeing major investments in the sector, in securing their business in an emerging market like India where large-scale consumerism has yet not attained maturity.

'Those living in emerging markets still have the tendency to save money. However by 2010 it is expected that the per capita income in India will reach a tipping point which will then lead to accelerated consumerism in India,' Ashok Rajgopal, director (retail industry), Ernst and amp; Young said in a statement here.

'By targeting the youth population in India, retailers will be investing for the future as they will be able to influence and create loyalty from the start,' Rajgopal added.

According to the study, Indian youth can be classified into three age groups - 13-21, 22-28 and 29-35 - who have different behavioural patterns and thus distinct habits.

It also elaborates on how consumerism differs between the behaviour of youth in large cities and those in smaller towns, highlighting the fact that regional set-up and ethnic backgrounds also could be used as an effective tool to reach out to the youth.

'The Indian youth offers a huge lifestyle and luxury products and services consuming audience,' stressed Rajgopal.

He underscored that though the industry continues to be regulated, the retail sector has become the cynosure of a considerable amount of foreign investors.

Rajgopal said that India currently is most suitably poised for the retail revolution to occur, adding: 'The availability of quality retail spaces and brand communication are seen as positive factors inviting investment from retailers in the UK, Spain, Germany, Italy, France and some from the United States as well.'

Gulf firms eyeing booming Indian retail sector

With a retail boom sweeping India, private entities from the Gulf region are making a bee-line to invest in the sector but are wary of some challenges in the huge and diverse market, according to experts here.



"Over the next two years, India is planning to develop a staggering 518 shopping malls across the country. Typically every 100 miles, the food and language changes, which means that your communications has to be key," Srinath Sridharan, head of lifestyle business and strategic alliances at Wadhawan Holding Private Limited in India was quoted as saying by Gulf News.



The size of the country is another factor that could deter retailers from investing in India, said Shubhranshu Pani, president, retail services at Trammell Crow Meghraj Property Consultants.



He said Woolworths, a major department store in South Africa, was concerned about producing garments suitable for different climates existing at the same time of a year.



Susil Dungarwal, head of retail (west and south) at Emaar MGF, said the time is right for global companies to enter Indian retail market. But he too outlined several challenges facing these companies, including the ability to secure space in "legitimate and retail friendly properties" which are more than 500,000 square feet in size.



He also highlighted a lack of retail talent in India, but said the 15 million people in unorganised retail sector have the basic skills to make the jump into organised retail.



"By 2015 almost 72 per cent of the population would be under 35-years-old, which I think will contribute to the highest number of consumers in the world."